10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 31, 2006

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to              .

Commission File Number 0-14625

TECH DATA CORPORATION

(Exact name of Registrant as specified in its charter)

Florida	59-1578329
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
5350 Tech Data Drive Clearwater, Florida	33760
(Address of principal executive offices)	(Zip Code)

(Registrant’s Telephone Number, including Area Code): (727) 539-7429

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12 (g) of the Act:

Common stock, par value $.0015 per share

Indicate by a check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by a check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):    Large accelerated filer  x    Accelerated Filer  ¨    Non-accelerated Filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

Aggregate market value of the voting stock held by non-affiliates was $2,103,605,994 based on the reported last sale price of common stock on July 29, 2005, which is the last business day of the registrant’s most recently completed second fiscal quarter.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Class	Outstanding at February 28, 2006
Common stock, par value $.0015 per share	56,229,882

DOCUMENTS INCORPORATED BY REFERENCE

The registrant’s Proxy Statement for use at the Annual Meeting of Shareholders on June 6, 2006, is incorporated by reference in Part III of this Form 10-K to the extent stated herein.

PART I

ITEM 1. Business

Overview

Tech Data Corporation (“Tech Data,” “we,” “our,” “us,” or the “Company”), ranked 110th of the FORTUNE 500 in 2005, is a leading distributor of information technology (“IT”) products, logistics management and other value-added services worldwide. We serve more than 90,000 value-added resellers (“VARs”), direct marketers, retailers and corporate resellers in more than 100 countries throughout the United States, Europe, Canada, Latin America, the Caribbean, the Middle East and Africa. Throughout this document we will make reference to the two primary geographic markets we serve as the Americas (including the United States, Canada, Latin America and export sales to the Caribbean) and EMEA (including Europe, the Middle East and export sales to Africa).

We offer a variety of products from manufacturers and publishers such as Acer, Adobe, American Power, Apple, Autodesk, Canon, Cisco Systems, Epson, Fujitsu-Siemens, Hewlett-Packard, IBM, Intel, Kingston, Lexmark, Lenovo, Logitech, Microsoft, Nortel Networks, NEC, Samsung, Sony, Symantec, Toshiba, Viewsonic, and Xerox. Products are generally shipped from regionally located logistics centers the same day the orders are received.

Customers are provided with a high level of customer service through the Company’s technical support, electronic commerce tools (including on-line order entry, product integration services and electronic data interchange (“EDI”) services), customized shipping documents and flexible financing programs. While we strive to provide our customers with a full array of services, revenues generated from the direct sale of services contributed less than 10% to Tech Data’s overall net sales.

History

Tech Data was incorporated in 1974 to market data processing supplies such as tapes, disk packs, and custom and stock tab forms for mini and mainframe computers directly to end users. With the advent of microcomputer dealers, we made the transition to a wholesale distributor in 1984 by broadening our product line to include hardware products and withdrawing entirely from end-user sales. From 1989 to 1994, we expanded internationally through the acquisition of privately-held distribution companies in Canada and France.

In July 1998, we substantially enhanced our European presence with the acquisition of 83% of the voting common stock of Europe’s leading technology products distributor, Computer 2000 AG (“Computer 2000”). With a presence in significant geographic markets in Europe, the Middle East and Latin America, the purchase of Computer 2000 expanded Tech Data’s presence to 26 countries worldwide. In April 1999, all of the shares of Computer 2000 were integrated into Tech Data Germany AG and the remaining minority interests in Computer 2000 were acquired in the third quarter of fiscal 2003.

In May 1999, we nearly doubled our Canadian business through the acquisition of Globelle Corporation (“Globelle”), a leading publicly-held Canadian distributor. The purchase of Globelle provided critical mass and a complementary product and geographic focus to our Canadian operations.

In March 2003, we expanded our presence in the European networking and communications market through the acquisition of all of the outstanding stock of Azlan Group PLC (“Azlan”) for approximately $224.4 million plus acquisition-related expenses of $2.6 million, for a total purchase price of $227.0 million. The Azlan acquisition strengthened Tech Data’s position in Europe with respect to networking products and value-added services.

In May 2005, the Company announced a formal restructuring program to better align the EMEA operating cost structure with the current business environment. In connection with this restructuring program, the Company has recorded and will continue to record charges for workforce reductions and the optimization of facilities and systems. Excluding external consulting costs, total cash charges associated with the restructuring program are estimated to be in the range of $40.0 to $50.0 million, comprised of $24.0 to $30.0 million related to workforce reductions and $16.0 to $20.0 million related to the optimization of facilities and systems. We expect initiatives related to the restructuring to generate annualized savings in the same range. The restructuring program is anticipated to be complete by the end of the third quarter of fiscal 2007.

During the fourth quarter of fiscal 2006, in order to dedicate strategic efforts and resources to core growth opportunities, we made the decision to sell the EMEA Training Business (the “Training Business”). In March 2006, we closed the sale of the Training

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Business to a third-party (the “Purchaser”) for total cash consideration of $16.5 million and $0.5 million of additional consideration which is contingent upon the satisfaction of certain post-closing conditions. The sale of the Training Business includes net assets with a book value of approximately $7.3 million at January 31, 2006, comprised primarily of accounts receivable, property and equipment, accrued expenses and other liabilities. The results of the Training Business have been reclassified and presented as discontinued operations in the fiscal 2006 Consolidated Statement of Operations and all prior periods presented have been restated and reported as discontinued operations. We are in the process of finalizing the closing balance sheet as of the sale date with the Purchaser, including the allocation of any EMEA goodwill, and do not anticipate the gain on the sale of the Training Business to be material to our consolidated operating results or financial condition.

Industry

The wholesale distribution model has proven to be well suited for both manufacturers and publishers of IT products (also referred to throughout this document as “vendors” or “suppliers”) and resellers of those products. The large number of resellers makes it cost efficient for vendors to rely on wholesale distributors to serve this diverse customer base.

Similarly, due to the large number of vendors and products, resellers often cannot or choose not to establish direct purchasing relationships with vendors. As a result, they frequently rely on wholesale distributors, such as Tech Data, who can leverage purchasing costs across multiple vendors to satisfy a significant portion of their product procurement, logistics, financing, marketing and technical support needs.

Through collaborative supply chain management initiatives, we continue to advance the efficiency of our distribution model. By leveraging our infrastructure and logistics expertise, vendors benefit from a cost-effective alternative to selling directly to resellers. Our ability to provide a “virtual warehouse” of products for resellers means they no longer need to hold inventory, which reduces their costs and risks associated with handling products. In addition to enabling fast reseller access to a comprehensive hardware and software offering, we frequently ship products directly to end-users on behalf of our customers, thereby reducing the resellers’ costs of storing, maintaining, and shipping the products themselves. We facilitate this approach by personalizing shipping labels and packing documents with the resellers’ brand identities (e.g., logos), marketing messages and other specialized content.

The increasing utilization of electronic ordering and information delivery systems, including the ability to transact business over the internet, continues to have a significant impact on the cost efficiency of the wholesale distribution model. For example, we have established a seamless supply chain in which end-user orders flow immediately from reseller internet sites to our logistics centers in closest proximity to the order destination. Advances like these are possible due to the financial and technical resources available to large-scale distributors, such as ourselves, enabling a reduction in both our customers’ and our own transaction costs through more efficient purchasing and lower selling and delivery costs.

In summary, the IT distribution industry continues to address a broad spectrum of reseller and vendor requirements despite certain vendors, such as Hewlett-Packard Company (“HP”), continuing with direct sales of certain products to end-users and/or resellers. New products and emerging market opportunities have helped to offset the impact of vendor direct sales on IT distributors. Further, vendors continue to seek the logistics expertise of distributors to penetrate key markets like the small- and mid-sized business (“SMB”) sector, which rely on VARs—our primary customer base—to gain access to and support for new technology. The economies of scale and global reach of large industry-leading distributors are expected to continue to be significant competitive advantages in this marketplace.

Products and Vendors

We sell more than 100,000 products from the world’s leading peripheral, system and networking manufacturers and software publishers. These products are typically purchased directly from the manufacturer or software publisher on a non-exclusive basis. Conversely, our vendor agreements do not restrict us from selling similar products manufactured by competitors, nor do they require us to sell a specified quantity of product. As a result, we have the flexibility to terminate or curtail sales of one product line in favor of another due to technological change, pricing considerations, product availability, customer demand, or vendor distribution policies.

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We continually strengthen our product line in order to provide our customers with access to the latest technology products. However, from time to time, the demand for certain products that we sell exceeds the supply available from the manufacturer or publisher. In such cases, we generally receive an allocation of the available products. We believe that our ability to compete is not adversely affected by these periodic shortages and the resulting allocations.

It is our understanding that our vendor agreements are in the form customarily used by each manufacturer. Agreements typically contain provisions that allow termination by either party upon 30 days notice. In most instances, a vendor who elects to terminate a distribution agreement will repurchase from the distributor the vendor’s products carried in the distributor’s inventory.

Most of our vendor agreements also allow for stock rotation and price protection provisions. Stock rotation rights give us the ability, subject to certain limitations, to return for credit or exchange a portion of those inventory items purchased from the vendor. Price protection situations occur when a vendor credits us for declines in inventory value resulting from the vendor’s price reductions. Along with our inventory management policies and practices, these provisions reduce our risk of loss due to slow-moving inventory, vendor price reductions, product updates or obsolescence.

Sometimes the industry practices discussed above are not embodied in agreements and do not protect us in all cases from declines in inventory value. However, we believe that these practices provide a significant level of protection from such declines, although no assurance can be given that such practices will continue or that they will adequately protect us against declines in inventory value (see also Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)—Asset Management).

While we sell products in various countries throughout the world, and product categories may vary from region to region, over the past three years, sales within our consolidated product categories have remained fairly consistent within the following ranges:

Peripherals	43% – 46%
Systems	23% – 26%
Networking	14% – 19%
Software	13% – 18%

We generated approximately 27% of our consolidated net sales in fiscal 2006 from products purchased from HP compared to 28%, and 32% of consolidated net sales in fiscal 2005 and 2004, respectively. There were no other vendors that accounted for 10% or more of our consolidated net sales in fiscal 2006, 2005 or 2004.

Customers and Services

We purchase products directly from manufacturers and publishers in large quantities for sale to an active reseller base of more than 90,000 VARs, direct marketers, retailers and corporate resellers. While we sell products in various countries throughout the world, and customer channels may vary from region to region, over the past three years, sales within our consolidated customer channels have remained fairly consistent within the following ranges:

VARs	55% – 59%
Direct marketers and retailers	22% – 27%
Corporate resellers	16% – 21%

No single customer accounted for more than five percent of our net sales during fiscal 2006, 2005 or 2004.

The market for VARs is attractive because VARs generally rely on distributors as their principal source of computer products and financing. This reliance is due to VARs typically lacking the resources to establish a large number of direct purchasing relationships or stock significant product inventories. Direct marketers, retailers and corporate resellers may establish direct relationships with manufacturers and publishers for their more popular products, but utilize distributors as the primary source for other product requirements and the alternative source for products acquired directly. We have also developed special programs to meet the unique needs of direct marketers and retailers.

In addition to a strong product offering, we provide resellers a high level of customer service through our training and technical support, suite of electronic commerce tools (including internet order entry and EDI services), customized shipping documents, product configuration/integration services and access to flexible financing programs. We also provide services to our vendors by giving them the opportunity to participate in a number of special promotions, and marketing services targeted to the needs of our resellers. While we believe that services such as these help to set us apart from our competition, they contribute less than 10% to our overall revenues.

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We provide our vendors with one of the largest bases of resellers throughout the Americas and EMEA, delivering products to customers from our 28 regionally located logistics centers. We have located our logistics centers near our customers which enables us to deliver products on a timely basis, thereby reducing the customers’ need to invest in inventory (see also Item 2—Properties for further discussion of our locations and logistics centers).

Sales and Electronic Commerce

Currently, our sales force consists of approximately 1,300 field and inside telemarketing sales representatives. Our sales force is provided comprehensive training regarding our policies and procedures and technical characteristics of our products. These training programs are supplemented by product seminars offered by manufacturers and publishers. Field sales representatives are located in major metropolitan areas. Each field sales representative is supported by inside telemarketing sales teams covering a designated territory. Our team concept provides a strong personal relationship between our customers’ representatives and Tech Data. Territories with no field representation are serviced exclusively by the inside telemarketing sales teams. Customers typically call our inside sales teams on dedicated toll-free numbers or contact us through various electronic methods to place orders. If the product is in stock and the customer has available credit, customer orders are generally shipped the same day from the logistics center nearest the customer or the intended end-user.

Increasingly, customers rely upon our electronic ordering and information systems, in addition to our product catalogs and frequent mailings, as sources for product information, including availability and price. Our on-line computer systems allow the inside sales teams to check current stocking levels in the Company’s logistics centers. Through our website, most customers can gain remote access to our information systems to check product availability and pricing and to place orders. Certain of our larger customers have EDI services available whereby orders, order acknowledgments, invoices, inventory status reports, customized pricing information and other industry standard EDI transactions are consummated on-line, which improves efficiency and timeliness for ourselves and our customers. During fiscal 2006, approximately $9.0 billion (44%) of our consolidated net sales originated from orders received electronically, compared to approximately $7.3 billion (37%) in fiscal 2005 and approximately $5.9 billion (34%) in fiscal 2004.

Competition

We operate in a market characterized by intense competition, based upon such factors as product availability, credit availability, price, delivery and various services and support provided by the distributor to the customer. We believe that we are well equipped to compete effectively with other distributors in all of these areas.

We compete against several distributors in the Americas market, including Ingram Micro Inc., Synnex Corp., and several regional and local distributors. The competitive environment within EMEA is highly fragmented, with market share spread among many regional and local competitors such as Actebis, and international distributors such as Ingram Micro Inc. and Westcon/Comstor.

We also compete, in some cases, with manufacturers and publishers who sell directly to resellers and end-users. However, we may become a business partner to these companies by providing supply chain or other services tailored to the IT market. We believe manufacturers and publishers will generally continue to sell their products through distributors rather than directly due to our ability to provide suppliers with access to our broad customer base in a highly efficient manner. Our network of logistics centers and our sales and product management expertise worldwide allow our suppliers to benefit by lowering their selling and inventory costs.

Employees

On January 31, 2006, we had approximately 8,200 employees. Certain of our employees in various countries outside of the United States are subject to laws providing representation rights to employees on workers councils. We consider relations with our employees to be good.

Foreign and Domestic Operations and Export Sales

We operate predominately in a single industry segment as a distributor of IT products, logistics management, and other value-added services. While we operate primarily in one industry, because of our global presence, we manage our business based on our geographic segments. Our geographic segments include the Americas (United States, Canada, Latin America and export sales to the Caribbean) and EMEA (Europe, Middle East, and export sales to Africa). In fiscal 2006, 2005, and 2004, 60%, 62% and 60%, respectively, of our consolidated net sales were derived from operations outside of the United States.

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Over the last three fiscal years, we have entered new markets or expanded our presence in existing markets and exited certain markets based upon our assessment of, among other factors, risk and earnings potential. We continue to evaluate our risk exposure (e.g., risks surrounding currency rates, regulatory environments, political instability, etc.) and earnings potential around the world. To the extent we decide to close additional operations, we may incur charges and operating losses related to such closures, write-off a portion of our EMEA goodwill or recognize a portion of our accumulated other comprehensive income (loss) as a non-operating foreign currency exchange gain or loss (see Note 13 of Notes to Consolidated Financial Statements for further information regarding the geographical distribution of our net sales, operating income, depreciation and amortization, capital expenditures, identifiable assets and goodwill).

Additional Information Available

Our principal Internet address is www.techdata.com. We provide our annual and quarterly reports free of charge on www.techdata.com, as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). We provide a link to all SEC filings where current reports on Form 8-K and any amendments to previously filed reports may be accessed, free of charge.

Executive Officers

On January 18, 2006, we announced a plan to expand our senior management team by splitting the executive roles of Chairman of the Board and Chief Executive Officer. In parallel, we have initiated a search for a new CEO. Steven A. Raymund will remain as Chairman and CEO until his successor is appointed, at which time he will continue as Chairman of the Board.

The following table sets forth the name, age and title of each of the persons who were serving as executive officers of Tech Data as of March 31, 2006:

Name	Age	Title
Steven A. Raymund	50	Chairman of the Board of Directors and Chief Executive Officer
Néstor Cano	42	President, Worldwide Operations
Jeffery P. Howells	48	Executive Vice President and Chief Financial Officer
Kenneth Lamneck	51	President, the Americas
Joseph A. Osbourn	58	Executive Vice President and Worldwide Chief Information Officer
Alain Amsellem	46	Senior Vice President European Finance and Operations
Charles V. Dannewitz	51	Senior Vice President, Taxes and Treasurer
Thomas J. Ducatelli	40	Senior Vice President, U.S. Sales
Andrew Gass	41	Senior Vice President, European Enterprise Division
Lawrence W. Hamilton	48	Senior Vice President, Human Resources
Thomas F. Huber	40	Senior Vice President, Managing Director, DACH Region
William J. Hunter	46	Senior Vice President and European Chief Financial Officer
Robert G. O’Malley	60	Senior Vice President, U.S. Marketing
William K. Todd, Jr.	61	Senior Vice President, Logistics and Integration Services
Joseph B. Trepani	45	Senior Vice President and Corporate Controller
David R. Vetter	46	Senior Vice President, General Counsel and Secretary
Gerard F. Youna	52	Senior Vice President, European Operational Design and Performance
Mike Zava	59	Senior Vice President, Credit and Customer Services, the Americas
Benjamin B. Godwin	54	Corporate Vice President, Real Estate and Corporate Services

Steven A. Raymund, Chairman of the Board of Directors and Chief Executive Officer, has been employed by the Company since 1981, serving as Chief Executive Officer since January 1986 and as Chairman of the Board of Directors since April 1991. He has a Bachelor of Science Degree in Economics from the University of Oregon and a Masters Degree from the Georgetown University School of Foreign Service. Mr. Raymund currently serves on the Board of Directors of Jabil Circuit, Inc. and of WESCO Distribution, Inc.

Néstor Cano, President, Worldwide Operations, joined the Company (via the Computer 2000 acquisition) in July 1989 as a Software Product Manager and served in various management positions within the Company’s operations in Spain and Portugal from 1990 to 1995, after which time he was promoted to Regional Managing Director. In March 1999 he was appointed

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Executive Vice President of U.S. Sales and Marketing, and in January 2000 he was promoted to President of the Americas. He was promoted to President, Worldwide Operations in August 2000. Mr. Cano holds a PDG (similar to an Executive MBA) from IESE Business School in Barcelona and an Engineering Degree from Barcelona University.

Jeffery P. Howells, Executive Vice President and Chief Financial Officer, joined the Company in October 1991 as Vice President of Finance and assumed the responsibilities of Chief Financial Officer in March 1992. In March 1993, he was promoted to Senior Vice President and Chief Financial Officer and was promoted to Executive Vice President and Chief Financial Officer in March 1997. In 1998, Mr. Howells was appointed to the Company’s Board of Directors. From 1979 to 1991, he was employed by Price Waterhouse. Mr. Howells is a Certified Public Accountant and holds a Bachelor of Business Administration Degree in Accounting from Stetson University.

Kenneth Lamneck, President, the Americas, joined the Company in March 2004 as President, the Americas. Prior to Tech Data, he served in various management positions at Arrow Electronics Distribution Division and most recently served as President of the Arrow Richey Electronics division since 1999. Mr. Lamneck holds a Bachelors Degree in Engineering from the United States Military Academy at West Point and a Masters Degree in Business Administration from the University of Texas at El Paso.

Joseph A. Osbourn, Executive Vice President and Worldwide Chief Information Officer, joined the Company in October 2000. Prior to joining the Company, he was Senior Vice President and Chief Information Officer at Kmart Corporation from September 1999 to September 2000, Vice President of Information Services at Walt Disney World Company from September 1989 to September 1999, and with Price Waterhouse for ten years, most recently as a partner in Management Consulting Services. Mr. Osbourn holds a Bachelors Degree in Physics from the University of Louisville and a Masters Degree in Business Administration from Memphis State University.

Alain Amsellem, Senior Vice President, European Finance and Operations, joined the Company in 1994 through Tech Data’s acquisition of French distributor, Softmart International, S.A. Mr. Amsellem was promoted to Senior Vice President in August 2004 and is currently responsible for European Finance and Operations. Prior to his promotion, Mr. Amsellem was Tech Data’s Director of French Operations. Mr. Amsellem is a Chartered Accountant and holds a degree in management and chartered accountancy from Paris Dauphine University.

Charles V. Dannewitz, Senior Vice President, Taxes and Treasurer, joined the Company in February 1995 as Vice President of Taxes. He was promoted to Senior Vice President of Taxes in March 2000, and assumed responsibility for worldwide treasury in July 2003. Prior to joining the Company, he was employed by Price Waterhouse for 13 years, most recently as a Tax Partner. Mr. Dannewitz is a Certified Public Accountant and holds a Bachelor of Science Degree in Accounting from Illinois Wesleyan University.

Thomas J. Ducatelli, Senior Vice President, U.S. Sales, joined the Company in February 2005. Prior to joining Tech Data, he was Senior Vice President of Sales and Business Development for CompuCom Systems Inc. Mr. Ducatelli joined CompuCom in 1994 and held several leadership positions including National Sales Manager and Vice President of Business Development and Supply Chain before his promotion to senior vice president. Mr. Ducatelli holds a Bachelor’s Degree in Marketing from Southern Connecticut State University.

Andrew Gass, Senior Vice President, European Enterprise Division, joined the Company (via the Computer 2000 acquisition) in October 1995 as Finance and Operations Director of UK operations and was promoted to Deputy Managing Director in October 1998. From February 2000 to August 2001, Mr. Gass was a Managing Director at Sage Enterprise Solutions. He returned to the Company in 2001 as Senior Vice President and is currently in charge of the European Enterprise Division. Mr. Gass is a Chartered Accountant and holds a Bachelors Degree in Commerce from Edinburgh University.

Lawrence W. Hamilton, Senior Vice President, Human Resources, joined the Company in August 1993 as Vice President, Human Resources and was promoted to Senior Vice President, Human Resources in March 1996. Prior to joining the Company, he was employed by Bristol-Myers Squibb Company from 1985 to August 1993, most recently as Vice President—Human Resources and Administration of Linvatec Corporation (a division of Bristol-Myers Squibb Company). Mr. Hamilton holds a Bachelor of Arts Degree in Political Science from Fisk University and a Masters of Public Administration, Labor Policy emphasis from the University of Alabama. Mr. Hamilton currently serves on the Board of Directors of HomeBanc Mortgage and is chairman of the compensation committee.

Thomas F. Huber, Senior Vice President, Managing Director, DACH Region, joined the Company in February 2005. Prior to joining the Company, he was Director of Consumer Products at Accenture from 2001 to 2004. Mr. Huber was Deputy Chairman of Supervisory Boards with Vienna-based Billa/Rewe Group of food retailers. During his 12 years with Billa/Rewe

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Group, his positions included both Chief Operating Officer and Chief Financial Officer. Mr. Huber holds both a Doctorate and Masters Degree in Business Administration from the University of Vienna and a Masters Degree in Computer Science from the Technical University of Vienna.

William J. Hunter, Senior Vice President and European Chief Financial Officer, joined the Company in April 1994 as Assistant Controller. In September 1996, he was promoted to Director of International Finance and in June 1997 became the Vice President and Controller for Europe. Effective June 1999, Mr. Hunter was promoted to Senior Vice President and European Chief Financial Officer. Prior to joining the Company, he was employed by Price Waterhouse from January 1989 to April 1994. Mr. Hunter holds a Bachelor of Arts Degree in Philosophy from Tulane University and a Bachelor of Science Degree in Accounting from the University of South Florida.

Robert G. O’Malley, Senior Vice President, U.S. Marketing, joined the Company in March 2005. Prior to joining the Company, he most recently served as a consultant working with technology manufacturers to develop distribution and marketing strategies. In 1999, Mr. O’Malley became President of Intermec Technologies Corp and was later appointed as Chairman, Chief Executive Officer and President of Immersion Inc. Mr. O’Malley also served as President of MicroAge Inc. and has over 19 years of experience with IBM, where he served in several senior leadership roles. Mr. O’Malley holds a Bachelor’s Degree in Aeronautical Engineering from the University of Minnesota in Minneapolis and a Masters Degree in Business Administration from Arizona State University.

William K. Todd, Jr., Senior Vice President, Logistics and Integration Services, joined the Company in June 1999 as Vice President and General Manager of Configuration and Assembly and was promoted to Senior Vice President, Logistics and Integration Services in April 2000. Prior to joining the Company, he was employed by Entex Information Services from September 1992 to June 1999 as the Senior Vice President of Distribution and Manufacturing. Mr. Todd holds a Bachelor of Science Degree in Business Management from New Hampshire College.

Joseph B. Trepani, Senior Vice President and Corporate Controller, joined the Company in March 1990 as Controller and held the position of Director of Operations from October 1991 through January 1995. In February 1995, he was promoted to Vice President and Worldwide Controller and to Senior Vice President and Corporate Controller in March 1998. Prior to joining the Company, Mr. Trepani was Vice President of Finance for Action Staffing, Inc. from July 1989 to February 1990. From 1982 to 1989, he was employed by Price Waterhouse. Mr. Trepani is a Certified Public Accountant and holds a Bachelor of Science Degree in Accounting from Florida State University.

David R. Vetter, Senior Vice President, General Counsel and Secretary, joined the Company in June 1993 as Vice President and General Counsel and was promoted to Corporate Vice President and General Counsel in April 2000. In March 2003, he was promoted to his current position of Senior Vice President, and effective July 2003, was appointed Corporate Secretary. Prior to joining the Company, he was employed by the law firm of Robbins, Gaynor & Bronstein, P.A. from 1984 to 1993, most recently as a partner. Mr. Vetter is a member of the Florida Bar Association and holds Bachelor of Arts Degrees in English and Economics from Bucknell University and a Juris Doctorate Degree from the University of Florida.

Gerard F. Youna, Senior Vice President, European Operational Design and Performance, joined the Company in 1994 through Tech Data’s acquisition of French Distributor, Softmart International, S.A. as the Managing Director. In 1999, he was promoted to Regional Managing Director for France and Israel. In September 2000, he was promoted to Senior Vice President of Southern Europe and since December 2005, Mr. Youna has been in charge of European Operational Design and Performance. Mr. Youna received a degree in IT Engineering from the Institute Informatique d’Entreprise in Paris, France.

Mike Zava, Senior Vice President, Credit and Customer Services, the Americas, joined the Company in April 1985 as Credit Manager. In 1989, he was promoted to Director of Credit and in February 1995, he was promoted to Vice President, Credit Services. Mr. Zava was promoted to his current position in April 2005. Prior to joining Tech Data, he worked with Westinghouse Credit Corporation in fixed asset finance and spent seven years as National Credit Manager for a division of Jim Walter Corp. Mr. Zava is a Certified Credit Executive and holds a Bachelor of Science Degree from Virginia Polytechnic Institute and State University with a major in Management.

Benjamin B. Godwin, Corporate Vice President, Real Estate and Corporate Services, joined the Company in August 1997 as Vice President of Real Estate and Corporate Services and was promoted to Corporate Vice President in March 2003. Prior to joining the Company, he was President of Godwin Real Estate, Inc., a real estate brokerage and appraisal firm he founded in 1985. Mr. Godwin holds a Bachelor of Business Administration Degree from Georgia State University, the MAI designation from the Appraisal Institute and is a Certified Financial Planner.

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ITEM 1A. Risk Factors

The following are certain risk factors that could affect our business, financial position and results of operations. These risk factors should be considered in connection with evaluating the forward-looking statements contained in this Annual Report on Form 10-K because these factors could cause the actual results and conditions to differ materially from those projected in the forward-looking statements. Before you buy our common stock or other securities, you should know that making such an investment involves risks, including the risks described below. The risks that have been highlighted below are not the only risks of our business. If any of the risks actually occur, our business, financial condition or results of operations could be negatively affected. In that case, the trading price of our common stock or other securities could decline, and you may lose all or part of your investment. Certain risk factors that could cause actual results to differ materially from our forward-looking statements include the following:

Competition

The Company operates in a highly competitive environment. The computer wholesale distribution industry is characterized by intense competition, based primarily on product availability, credit availability, price, speed of delivery, ability to tailor specific solutions to customer needs, quality and depth of product lines and training, service and support. Weakness in demand in the market intensifies the competitive environment in which the Company operates. The Company competes with a variety of regional, national and international wholesale distributors, some of which have greater financial resources than the Company. The Company also faces competition from companies entering or expanding into the logistics and product fulfillment and e-commerce supply chain services market.

Narrow Profit Margins

As a result of intense price competition in the industry, the Company has narrow gross profit and operating profit margins. These narrow margins magnify the impact on operating results attributed to variations in sales and operating costs. Future gross profit and operating margins may be adversely affected by changes in product mix, vendor pricing actions and competitive and economic pressures. In addition, failure to attract new sources of business from expansion of products or services or entry into new markets may adversely affect future gross profit and operating margins.

Dependence on Information Systems

The Company is highly dependent upon its internal computer and telecommunication systems to operate its business. There can be no assurance that the Company’s information systems will not fail or experience disruptions, that the Company will be able to attract and retain qualified personnel necessary for the operation of such systems, that the Company will be able to expand and improve its information systems, that the Company will be able to convert to new systems efficiently, or that the Company will be able to integrate new programs effectively with its existing programs. Any of such problems could have an adverse effect on the Company’s business.

Restructuring Activities

In May 2005, the Company initiated a restructuring program in the EMEA region. We may experience delays or greater than expected costs in implementing our restructuring program, and our efforts may fail to achieve the desired improvements in our EMEA operating and gross profit margins. Changes in organizational structure, personnel, job duties and processes related to this restructuring program will require significant management resources and may reduce productivity during implementation of the program. Because the Company operates with narrow operating margins and gross profit margins, lower productivity could have a material adverse effect on our results of operations, particularly if it occurs during seasonal peaks in our business.

Acquisitions

As part of its growth strategy, the Company pursues the acquisition of companies that either complement or expand its existing business. As a result, the Company regularly evaluates potential acquisition opportunities, which may be material in size and scope. Acquisitions involve a number of risks and uncertainties, including expansion into new geographic markets and business areas, the requirement to understand local business practices, the diversion of management’s attention to the assimilation of the operations and personnel of the acquired companies, the possible requirement to upgrade the acquired companies’ management information systems to the Company’s standards, potential adverse short-term effects on the Company’s operating results and the amortization or impairment of any acquired intangible assets.

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Exposure to Natural Disasters, War, and Terrorism

The Company’s headquarters facilities and some of its logistics centers as well as certain vendors and customers are located in areas prone to natural disasters such as floods, hurricanes, tornadoes, or earthquakes. In addition, demand for the Company’s services is concentrated in major metropolitan areas. Adverse weather conditions, major electrical failures or other natural disasters in these major metropolitan areas may disrupt the Company’s business should its ability to distribute products be impacted by such an event.

The Company operates in multiple geographic markets, several of which may be susceptible to acts of war and terrorism. The Company’s business could be adversely affected should its ability to distribute products be impacted by such events.

The Company and many of its suppliers receive parts and products from Asia and operate in many parts of the world that may be susceptible to disease or epidemic that may disrupt the Company’s ability to receive or deliver products or other disruptions in operations.

Dependence on Independent Shipping Companies

The Company relies on arrangements with independent shipping companies, such as Federal Express and United Parcel Service, for the delivery of its products from vendors and to customers. The failure or inability of these shipping companies to deliver products, or the unavailability of their shipping services, even temporarily, could have a material adverse effect on the Company’s business. The Company may also be adversely affected by an increase in freight surcharges due to rising fuel costs and added security. There can be no assurance that Tech Data will be able to pass along the full effect of an increase in these surcharges to its customers.

Labor Strikes

The Company’s labor force is currently non-union with the exception of employees of certain European and Latin American subsidiaries, which are subject to collective bargaining or similar arrangements. The Company does business in certain foreign countries where labor disruption is more common than is experienced in the United States and some of the freight carriers used by the Company are unionized. A labor strike by a group of the Company’s employees, one of the Company’s freight carriers, one of its vendors, a general strike by civil service employees, or a governmental shutdown could have an adverse effect on the Company’s business. Many of the products the Company sells are manufactured in countries other than the countries in which the Company’s logistics centers are located. The inability to receive products into the logistics centers because of government action or labor disputes at critical ports of entry may have a material adverse effect on the Company’s business.

Risk of Declines in Inventory Value

The Company is subject to the risk that the value of its inventory will decline as a result of price reductions by vendors or technological obsolescence. It is the policy of most of the Company’s vendors to protect distributors from the loss in value of inventory due to technological change or the vendors’ price reductions. Some vendors, however, may be unwilling or unable to pay the Company for price protection claims or products returned to them under purchase agreements. Moreover, industry practices are sometimes not embodied in written agreements and do not protect the Company in all cases from declines in inventory value. No assurance can be given that such practices to protect distributors will continue, that unforeseen new product developments will not adversely affect the Company, or that the Company will be able to successfully manage its existing and future inventories.

Product Availability

The Company is dependent upon the supply of products available from its vendors. The industry is characterized by periods of severe product shortages due to vendors’ difficulties in projecting demand for certain products distributed by the Company. When such product shortages occur, the Company typically receives an allocation of product from the vendor. There can be no assurance that vendors will be able to maintain an adequate supply of products to fulfill all of the Company’s customer orders on a timely basis. Failure to obtain adequate product supplies could have an adverse effect on the Company’s business.

Vendor Terms and Conditions

The Company relies on various rebates, cash discounts, and cooperative marketing programs offered by its vendors to support expenses associated with distributing and marketing the vendors’ products. Currently, the rebates and purchase discounts offered by vendors are influenced by sales volumes and percentage increases in sales, and are subject to changes by the vendors. Additionally, certain of the Company’s vendors subsidize floorplan financing arrangements for the benefit of our customers. Terminations of a supply or services agreement or a significant change in supplier terms or conditions of sale could negatively affect our operating margins, revenue or the level of capital required to fund our operations.

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The Company receives a significant percentage of revenues from products it purchases from relatively few manufacturers. As has historically been the case, a manufacturer may make rapid, significant and adverse changes in its sales terms and conditions, such as reducing the amount of price protection and return rights as well as reducing the level of purchase discounts and rebates they make available to us, or may merge with or acquire other significant manufacturers. The Company’s gross margins could be materially and negatively impacted if the Company is unable to pass through the impact of these changes to the Company’s customers or cannot develop systems to manage ongoing supplier programs. In addition, the Company’s standard vendor distribution agreement permits termination without cause by either party upon 30 days notice. The loss of a relationship with any of the Company’s key vendors, a change in their strategy (such as increasing direct sales), the merging of significant manufacturers, or significant changes in terms on their products may adversely effect the Company’s business.

Loss of Significant Customers

Customers do not have an obligation to make purchases from the Company. In some cases, the Company has made adjustments to its systems, vendor offerings, and processes, and made staffing decisions, in order to accommodate the needs of a significant customer. In the event a significant customer decides to make its purchases from another distributor, experiences a significant change in demand from its own customer base, becomes financially unstable, or is acquired by another company, the Company’s receipt of revenues may be significantly affected, resulting in an adverse effect on the Company’s business.

Customer Credit Exposure

The Company sells its products to a large customer base of value-added resellers, direct marketers, retailers and corporate resellers. The Company finances a significant portion of such sales through trade credit. As a result, the Company’s business could be adversely affected in the event of a deterioration of the financial condition of its customers, resulting in the customers’ inability to repay the Company. This risk may increase if there is a general economic downturn affecting a large number of the Company’s customers and in the event the Company’s customers do not adequately manage their business or properly disclose their financial condition.

Need for Liquidity and Capital Resources; Fluctuations in Interest Rates

The Company’s business requires substantial capital to operate and to finance accounts receivable and product inventory that are not financed by trade creditors. The Company has historically relied upon cash generated from operations, bank credit lines, trade credit from its vendors, proceeds from public offerings of its common stock and proceeds from debt offerings to satisfy its capital needs and finance growth. The Company utilizes various financing instruments such as receivables securitization, leases, revolving credit facilities and trade receivable purchase facilities. As the financial markets change and new regulations come into effect, the cost of acquiring financing and the methods of financing may change. Changes in our credit rating or other market factors may increase our interest expense or other costs of capital, or capital may not be available to us on acceptable terms to fund our working capital needs. The Company will continue to need additional financing, including debt financing. The inability to obtain such sources of capital could have an adverse effect on the Company’s business. The Company’s credit facilities contain various financial and other covenants that may limit the Company’s ability to borrow or limit the Company’s flexibility in responding to business conditions. These financing instruments involve variable rate debt, thus exposing the Company to risk of fluctuations in interest rates. Such fluctuations in interest rates could have an adverse effect on the Company’s business.

Foreign Currency Exchange Risks; Exposure to Foreign Markets

The Company conducts business in countries outside of the United States, which exposes the Company to fluctuations in foreign currency exchange rates. The Company may enter into short-term forward exchange or option contracts to hedge this risk; nevertheless, fluctuations in foreign currency exchange rates could have an adverse effect on the Company’s business. In particular, the value of the Company’s equity investment in foreign countries may fluctuate based upon changes in foreign currency exchange rates. These fluctuations, which are recorded in a cumulative translation adjustment account, may result in losses in the event a foreign subsidiary is sold or closed at a time when the foreign currency is weaker than when the Company initially invested in the country.

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The Company’s international operations are subject to other risks such as the imposition of governmental controls, export license requirements, restrictions on the export of certain technology, political instability, trade restrictions, tariff changes, difficulties in staffing and managing international operations, changes in the interpretation and enforcement of laws (in particular related to items such as duty and taxation), difficulties in collecting accounts receivable, longer collection periods and the impact of local economic conditions and practices. There can be no assurance that these and other factors will not have an adverse effect on the Company’s business.

Potential Asset Impairments from Declines in Operating Performance

The Company assesses potential impairments to long-lived assets, including property and equipment, certain deferred tax assets, certain intangible assets and other long-lived assets, when there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable. The Company assesses potential impairments to indefinite-lived intangible assets, including goodwill and deferred tax assets, at least annually and more frequently if current events and circumstances indicate a possible impairment. The Company’s operations in the EMEA region have been considerably more challenging as a result of somewhat weaker demand in certain countries in Europe and slowing IT demand. As a result, the Company has launched a formal restructuring program for the EMEA region. Should the operating performance in EMEA not improve, the Company may be required to recognize an impairment charge related to its long-lived and/or indefinite-lived assets. A significant impairment loss could have a material adverse effect on the Company’s operating results for the period during which the impairment is recorded.

Changes in Income Tax and Other Regulatory Legislation

The Company operates in compliance with applicable laws and regulations. When new legislation is enacted with minimal advance notice, or when new interpretations or applications of existing laws are made, the Company may need to implement changes in its policies or structure.

In addition, recent legislation requires all member states of the European Union to adopt the European Directive 2002/96/EC regarding Waste in Electrical and Electronic Equipment (“WEEE Directive”) and 2002/95/EC regarding restrictions of the use of certain hazardous substances in electrical and electronic equipment (“RoHS Directive”) into national law. The manner and timing of adoption of these laws may impact the Company as it remains unclear to what extent the Company will be deemed a producer subject to compliance with these regulations and the financial costs and guarantees thereby required.

The Company makes plans for its structure and operations based upon existing laws and anticipated future changes in the law. The Company is susceptible to unanticipated changes in legislation, especially relating to income and other taxes, import/export laws, hazardous materials and electronic waste recovery legislation, and other laws related to trade, accounting, and business activities. Such changes in legislation, both domestic and international, may have a significant adverse effect on the Company’s business.

Changes in Accounting Rules

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States. These accounting principles are subject to interpretation by the Financial Accounting Standards Board, the Public Company Accounting Oversight Board, the Securities and Exchange Commission, the American Institute of Certified Public Accountants and various other bodies formed to interpret and create appropriate accounting policies. A change in these policies or a new interpretation of an existing policy could have a significant effect on our reported results and may affect our reporting of transactions before a change is announced.

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Volatility of Common Stock Price

Because of the foregoing factors, as well as other variables affecting the Company’s operating results, past financial performance should not be considered a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods. In addition, the Company’s participation in a highly dynamic industry often results in significant volatility of the common stock price. Some of the factors that may affect the market price of the common stock, in addition to those discussed above, are changes in investment recommendations by securities analysts, changes in market valuations of competitors and key vendors, and fluctuations in the overall stock market, but particularly in the technology sector.

ITEM 1B. Unresolved Staff Comments

Not applicable.

ITEM 2. Properties

Our worldwide executive offices are located in Clearwater, Florida. As of January 31, 2006, we operated a total of 28 logistics centers to provide our customers timely delivery of products. These logistics centers are located in the following principal markets: Americas – 13, and EMEA – 15.

As of January 31, 2006, we leased or owned approximately seven million square feet of space worldwide. The majority of our office facilities and logistics centers are leased. Our facilities are well maintained and are adequate to conduct our current business. We do not anticipate material difficulty in renewing our leases as they expire or securing replacement facilities.

ITEM 3. Legal Proceedings

Prior to fiscal 2004, one of our European subsidiaries was audited in relation to various value-added tax (“VAT”) matters. As a result of those audits, the subsidiary received notices of assessment that allege the subsidiary did not properly collect and remit VAT. It is our opinion, based upon the opinion of outside legal counsel, that we have valid defenses related to a substantial portion of these assessments. Although we are vigorously pursuing administrative and judicial action to challenge the assessments, no assurance can be given as to the ultimate outcome. The resolution of such assessments could be material to our operating results for any particular period, depending upon the level of income for such period.

We are subject to various other legal proceedings and claims arising in the ordinary course of business. We do not expect that the outcome in any of these other legal proceedings, individually or collectively, will have a material adverse effect on our financial condition, results of operations or cash flows.

ITEM 4. Submission of Matters to a Vote of Security Holders

There have been no matters submitted to a vote of shareholders during the last quarter of the fiscal year ended January 31, 2006.

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PART II

ITEM 5. Market for the Registrant’s Common Stock, Related Shareholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the NASDAQ Stock Market under the symbol “TECD”. We have not paid cash dividends since fiscal 1983 and the Board of Directors has no current plans to institute a cash dividend payment policy in the foreseeable future. The table below presents the quarterly high and low sale prices for our common stock as reported by the NASDAQ Stock Market, Inc. As of February 28, 2006, there were 405 holders of record. We believe that there are approximately 43,000 beneficial holders.

	Sales Price
	High		Low
Fiscal year 2006
Fourth quarter	$	42.10	$	34.21
Third quarter		39.50		33.80
Second quarter		39.11		33.04
First quarter		43.56		33.82
	High		Low
Fiscal year 2005
Fourth quarter	$	46.00	$	39.90
Third quarter		40.50		33.82
Second quarter		41.13		32.60
First quarter		42.80		33.41

Equity Compensation and Stock Purchase Plan Information

The number of shares issuable upon exercise of outstanding options granted to employees and non-employee directors, as well as the number of shares remaining available for future issuance, under our equity compensation and stock purchase plans as of January 31, 2006 are summarized in the following table:

Plan category	Number of shares to be issued upon exercise of outstanding options	Weighted average exercise price of outstanding options		Number of shares remaining available for future issuance under equity compensation plans
Equity compensation plans approved by shareholders for:
Employee equity compensation	5,680,989	$	34.97	1,408,068
Employee stock purchase	—		—	612,995
Non-employee directors’ equity compensation	102,500		34.80	—
Total	5,783,489		34.96	2,021,063
Employee equity compensation plan not approved by shareholders(1)	1,408,714		36.99	758,014
Total	7,192,203		35.36	2,779,077

(1) The 2000 Non-Qualified Stock Option Plan of Tech Data Corporation was included as an exhibit to our Registration Statement on Form S-8 (file no. 333-59198) filed on April 19, 2001, under which underlying shares of our common stock were registered. This exhibit is incorporated by reference. On March 29, 2006, the Board of Directors passed a resolution that prohibits the Company from issuing any future grants from this plan.

Unregistered Sales of Equity Securities

None.

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Issuer Purchases of Equity Securities

In March 2005, our Board of Directors authorized a share repurchase program of up to $100.0 million of the Company’s common stock (increased to $200.0 million in November 2005). The share repurchases are made on the open market, through block trades or otherwise. The number of shares purchased and the timing of the purchases is based on working capital requirements, general business conditions and other factors, including alternative investment opportunities. Shares repurchased by the Company are held in treasury for general corporate purposes, including issuances under employee equity incentive plans.

The following table presents information with respect to purchases of common stock by the Company under the share repurchase program during the quarter ended January 31, 2006:

	Issuer Purchases of Equity Securities
Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plan or programs		Maximum dollar value of shares that may yet be purchased under the  plan or programs
November 1 – November 30, 2005	$	—	$	—	$	—
December 1 – December 31, 2005		200,000		40.08		200,000
January 1 – January 31, 2006 (1)		361,146		40.48		296,001
Total	$	561,146	$	40.34	$	496,001	$	80,000,000

(1) Included in the January 2006 activity are 65,145 shares purchased in the open market, outside of the share repurchase program, at an average price per share of $40.44.

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ITEM 6. Selected Consolidated Financial Data

The following table sets forth certain selected consolidated financial data. In the fourth quarter of fiscal 2006, in order to dedicate strategic efforts and resources to core growth opportunities, management made the decision to sell the EMEA Training Business (the “Training Business”). The results of operations of the Training Business have been reclassified and presented as “income (loss) from discontinued operations, net of tax”, for all periods presented below. The balance sheet data has not been reclassified as the net assets of the Training Business are less than 0.5% of the total net assets of the Company. This information should be read in conjunction with the MD&A and our consolidated financial statements and notes thereto appearing elsewhere in this Annual Report.

FIVE YEAR FINANCIAL SUMMARY

(In thousands, except per share data)

	Year ended January 31,
	2006		2005			2004(1)			2003			2002
Income statement data:
Net sales	$	20,482,851	$	19,730,917		$	17,358,525		$	15,738,945		$	17,197,511
Cost of products sold		19,460,332		18,667,184			16,414,773			14,907,187			16,269,481
Gross profit		1,022,519		1,063,733			943,752			831,758			928,030
Selling, general and administrative expenses		828,278		832,178			771,786			612,728			677,914
Restructuring charges(2)		30,946		—			—			—			—
Special charges(3)		—		—			3,065			328,872			27,000
Operating income (loss)		163,295		231,555			168,901			(109,842	)		223,116
Loss on disposition of subsidiaries, net		—		—			—			5,745			—
Discount on sale of accounts receivable		5,503		—			—			—			—
Interest expense, net		23,996		22,867			16,566			24,045			55,419
Net foreign currency exchange loss (gain)		1,816		(2,959	)		(1,893	)		(6,942	)		(143	)
Income (loss) from continuing operations before income taxes		131,980		211,647			154,228			(132,690	)		167,840
Provision for income taxes(4)		109,013		52,025			47,040			67,128			57,063
Income (loss) from continuing operations		22,967		159,622			107,188			(199,818	)		110,777
Income (loss) from discontinued operations, net of tax		3,619		2,838			(3,041	)		—			—
Net income (loss)	$	26,586	$	162,460		$	104,147		$	(199,818	)	$	110,777
Income (loss) per common share - basic:
Continuing operations	$	0.40	$	2.74		$	1.88		$	(3.55	)	$	2.04
Discontinued operations		0.06		0.05			(0.05	)		—			—
Net income (loss) per common share – basic	$	0.46	$	2.79		$	1.83		$	(3.55	)	$	2.04
Income (loss) per common share - diluted:
Continuing operations	$	0.39	$	2.69		$	1.86		$	(3.55	)	$	1.98
Discontinued operations		0.06		0.05			(0.05	)		—			—
Net income (loss) per common share - diluted	$	0.45	$	2.74		$	1.81		$	(3.55	)	$	1.98
Weighted average common shares outstanding:
Basic		57,749		58,176			56,838			56,256			54,407
Diluted		58,414		59,193			57,501			56,256			60,963
Dividends per common share		—		—			—			—			—

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	Year ended January 31,
	2006		2005		2004(1)		2003		2002
Balance sheet data:
Working capital	$	1,392,108	$	1,488,617	$	1,525,432	$	1,399,283	$	1,390,657
Total assets		4,404,634		4,557,736		4,167,886		3,248,018		3,458,330
Revolving credit loans		235,088		68,343		80,221		188,309		86,046
Current portion of long-term debt		1,605		291,625		9,258		1,403		1,092
Long-term debt		14,378		17,215		307,934		314,498		612,335
Other long-term liabilities		38,598		45,178		46,591		16,155		4,737
Shareholders’ equity		1,760,307		1,927,471		1,658,489		1,338,530		1,259,933

(1) See Item 7 - MD&A for effects of Azlan acquisition and adoption of Emerging Issues Task Force Issue (“EITF”) No. 02-16, “Accounting by a Customer (including a Reseller) for Certain Consideration Received from a Vendor.”

(2) See Note 6 of Notes to Consolidated Financial Statements for discussion of restructuring costs incurred in fiscal year 2006.

(3) See Note 14 of Notes to Consolidated Financial Statements for discussion of special charges incurred in fiscal year 2004. A special charge of $328.9 million was recorded in fiscal year 2003 for the impairment of goodwill. The special charges of $27.0 million incurred in fiscal year 2002 related to a $14.3 million write-off of inventory management software, a $5.8 million write-off related to a variety of small software enhancements and tools that were no longer being used, a $5.4 million impairment charge on equity investments and a $1.5 million charge associated with the development of a new logistics center in Germany which was postponed indefinitely.

(4) See Note 9 of Notes to Consolidated Financial Statements for discussion of a $56.0 million increase to the deferred tax asset valuation allowance in fiscal 2006 and the reversal of $11.5 million of previously accrued income taxes in fiscal 2005.

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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Annual Report on Form 10-K, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contains forward-looking statements, as described in the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties and actual results could differ materially from those projected. These forward-looking statements regarding future events and the future results of Tech Data Corporation are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances, are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Readers are referred to the cautionary statements and important factors discussed in Item 1A. Risk Factors in this Annual Report on Form 10-K for the year ended January 31, 2006 for further information. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

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

• competition

• narrow profit margins

• dependence on information systems

• restructuring activities

• acquisitions

• exposure to natural disasters, war and terrorism

• dependence on independent shipping companies

• labor strikes

• risk of declines in inventory value

• product availability

• vendor terms and conditions

• loss of significant customers

• customer credit exposure

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

• foreign currency exchange rates; exposure to foreign markets

• potential asset impairments from declines in operating performance

• changes in income tax and other regulatory legislation

• changes in accounting rules

• volatility of common stock price

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Overview

Tech Data is a leading distributor of information technology (“IT”) products, logistics management and other value-added services. We distribute microcomputer hardware and software products to value-added resellers, corporate resellers, direct marketers and retailers. Our offering of value-added customer services includes training and technical support, external financing options, configuration services, outbound telemarketing, marketing services and a suite of electronic commerce solutions. We manage our business in two geographic segments: the Americas (includes the United States, Canada, Latin America and export sales to the Caribbean) and EMEA (includes Europe, the Middle East and export sales to Africa).

Our strategy is to leverage our efficient cost structure combined with our multiple service offerings to generate demand and cost efficiencies for our suppliers and customers around the world. The IT distribution industry in which we operate is characterized by narrow gross profit as a percentage of sales (“gross margin”) and narrow income from operations as a percentage of sales (“operating margin”). Historically, our gross and operating margins have been impacted by intense price competition, as well as changes in terms and conditions with our suppliers, including those terms related to rebates and other incentives and price protection. We expect these competitive pricing pressures to continue in the foreseeable future, and therefore, we will continue to evaluate our pricing policies and terms and conditions offered to our customers in response to changes in our vendors’ terms and conditions and the general market environment. As we continue to evaluate our existing pricing policies and make future changes, if any, we may experience moderated sales growth or sales declines. In addition, increased competition and changes in general economic conditions within the markets in which we conduct business may hinder our ability to maintain and/or improve gross margin from its current level.

In the fourth quarter of fiscal 2006, in order to dedicate strategic efforts and resources to core growth opportunities, we made the decision to sell the EMEA Training Business (the “Training Business”). In March 2006, we closed the sale of the Training Business to a third-party for total cash consideration of $16.5 million and $0.5 million of additional consideration which is contingent upon the satisfaction of certain post-closing conditions. Our results of operations for the Training Business have been reclassified and presented as “income (loss) from discontinued operations, net of tax” in our Consolidated Statement of Operations for all periods presented. The reclassification of the Training Business had the effect of reducing previously reported gross margin and SG&A as a percentage of sales by approximately .20% to .23% of consolidated net sales for all periods restated. The impact on previously reported operating margin was relatively insignificant. The assets and liabilities of the Training Business have not been reclassified in our January 31, 2006 Consolidated Balance Sheet as the net assets of the Training Business are less than 0.5% of the total consolidated net assets of the Company.

From a balance sheet perspective, we require working capital primarily to finance accounts receivable and inventory. We have historically relied upon debt, trade credit from our vendors, and accounts receivable financing programs for our working capital needs. We believe our balance sheet at January 31, 2006 was one of the strongest in the industry, with a debt to capital ratio (calculated as total debt divided by the aggregate of total debt and total shareholders’ equity) of 12%.

Our business continues to perform well in the Americas; however, we have been disappointed with our results in EMEA. In May 2005, in response to a weaker demand environment in EMEA, we announced a formal restructuring program for our EMEA operations (further discussed below). We believe our challenges in the EMEA region over the last several quarters are the result of a combination of factors, including somewhat weaker demand conditions in certain countries, competitive pricing pressures, declining average selling prices and, most notably, the diverted focus of our management team in the region. Specifically, the combined effect of the completion of the final phases of our comprehensive IT systems upgrade and harmonization project, further integration of our Azlan operations and, most recently, the implementation of our EMEA restructuring program, diverted the focus of our management team in the region from executing appropriate pricing, purchasing and sales management practices.

We are beginning to see the benefits from our actions to restructure and optimize our operations in the EMEA region. These actions have included: engaging external consultants to provide a fresh perspective and detailed recommendations, such as the implementation of a new, simplified EMEA management organizational structure; assigning dedicated resources across the region to improve our pricing, purchasing and sales management practices; and implementing our restructuring program. In addition, both the Azlan integration and our IT systems upgrade and harmonization project were substantially complete at the end of fiscal 2006, which is expected to alleviate further diversion of management resources to these initiatives.

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With respect to our restructuring program, we have recorded charges for workforce reductions and the optimization of facilities and systems. Excluding external consulting costs, total cash charges associated with the restructuring program are estimated to be in the range of $40.0 million to $50.0 million, comprised of $24.0 to $30.0 million related to workforce reductions and $16.0 to $20.0 million related to the optimization of facilities and systems. We expect initiatives related to the restructuring program to generate annualized savings in the same range. Through January 31, 2006, the Company has incurred $30.9 million related to the restructuring program, comprised of approximately $18.9 million related to workforce reductions and approximately $12.0 million for facility costs. The remaining charges are expected to be incurred over the next three quarters with all U.S. dollar amounts being approximated using an exchange rate of .837 euros per U.S. dollar. Costs related to the restructuring program have been funded by operating cash flows and our credit facilities. Costs recorded in each quarter may vary depending upon the timing of certain actions. The costs related to this restructuring program, other than the external consulting costs, are reflected within the Consolidated Statement of Operations as “restructuring charges”, which is a component of operating income. In addition, during the nine months ended January 31, 2006, the Company incurred approximately $9.6 million of external consulting costs related to the restructuring program. These consulting costs are included in “selling, general and administrative expenses” in the Consolidated Statement of Operations. The Company expects to continue to incur external consulting costs related to the restructuring program in fiscal 2007. These consulting costs, along with the costs of internal personnel dedicated to the implementation of the restructuring program and other incremental costs indirectly related to the restructuring program, will partially offset the savings we expect to realize from the EMEA restructuring program during fiscal year 2007 (see further discussion below and in Note 6 of Notes to Consolidated Financial Statements for related discussion of our restructuring program).

Critical Accounting Policies and Estimates

The information included within MD&A is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an on-going basis, we evaluate these estimates, including those related to bad debts, inventory, vendor incentives, goodwill and intangible assets, deferred taxes, and contingencies. Our estimates and judgments are based on currently available information, historical results, and other assumptions we believe are reasonable. Actual results could differ materially from these estimates. We believe the following critical accounting policies affect the more significant judgments and estimates used in the preparation of our consolidated financial statements.

Accounts Receivable

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. In estimating the required allowance, we take into consideration the overall quality and aging of the receivable portfolio, the existence of credit insurance and specifically identified customer risks. Also influencing our estimates are the following: (1) the large number of customers and their dispersion across wide geographic areas; (2) the fact that no single customer accounts for more than 5% of our net sales; (3) the value and adequacy of collateral received from customers, if any and 4) our historical loss experience. If actual customer performance were to deteriorate to an extent not expected by us, additional allowances may be required which could have an adverse effect on our consolidated financial results.

Inventory

We value our inventory at the lower of its cost or market value, with cost being determined on the first-in, first-out method. We write down our inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value based upon an aging analysis of the inventory on hand, specifically known inventory-related risks (such as technological obsolescence and the nature of vendor terms surrounding price protection and product returns), foreign currency fluctuations for foreign-sourced product, and assumptions about future demand. Market conditions or changes in terms and conditions by our vendors that are less favorable than those projected by management may require additional inventory write-downs, which could have an adverse effect on our consolidated financial results.

Vendor Incentives

We receive incentives from vendors related to cooperative advertising allowances, infrastructure funding, volume rebates and other incentive agreements. These incentives are generally under quarterly, semi-annual or annual agreements with the vendors; however, some of these incentives are negotiated on an ad-hoc basis to support specific programs mutually developed with the vendor. Unrestricted volume rebates and early payment discounts received from vendors are recorded as a reduction of inventory upon receipt of funds and as a reduction of cost of products sold as the related inventory is sold. Incentives received from vendors for specifically identified cooperative advertising programs and infrastructure funding are recorded as adjustments to selling, general and administrative expenses, and any reimbursement in excess of the related cost is recorded in the same manner as unrestricted volume rebates, as discussed above.

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Actual rebates may vary based on volume or other sales achievement levels, which could result in an increase or reduction in the estimated amounts previously accrued. We also provide reserves for receivables on vendor programs for estimated losses resulting from vendors’ inability to pay or rejections of claims by vendors. Should amounts recorded as outstanding receivables from vendors be uncollectible, additional allowances may be required which could have an adverse effect on our consolidated financial results.

Goodwill, Intangible Assets and Other Long-Lived Assets

The carrying value of goodwill is reviewed at least annually for impairment and may also be reviewed more frequently if current events and circumstances indicate a possible impairment. An impairment loss is charged to expense in the period identified. We also examine the carrying value of our intangible assets with finite lives, which includes capitalized software and development costs, purchased intangibles, and other long-lived assets as current events and circumstances warrant determining whether there are any impairment losses. If indicators of impairment are present and future cash flows are not expected to be sufficient to recover the assets’ carrying amount, an impairment loss is charged to expense in the period identified. Factors that may cause a goodwill, intangible asset or other long-lived asset impairment include negative industry or economic trends and significant underperformance relative to historical or projected future operating results. Our valuation methodologies include, but are not limited to, estimating the net present value of the projected cash flows of our reporting units. If actual results are substantially lower than our projections underlying these assumptions, or if market discount rates substantially increase, our future valuations could be adversely affected, potentially resulting in future impairment charges.

Income Taxes

We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized. In assessing the adequacy of a recorded valuation allowance, we consider all positive and negative evidence and a variety of factors including, the scheduled reversal of deferred tax liabilities, historical and projected future taxable income, and prudent and feasible tax planning strategies. If we determine we would be able to use a deferred tax asset in the future in excess of its net carrying value, an adjustment to the deferred tax asset would be made to reduce income tax expense, thereby increasing net income in the period such determination was made. Should we determine that we are unable to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax asset would be made to income tax expense, thereby reducing net income in the period such determination was made. However, the recognition of any future tax benefit resulting from the reduction of the $6.3 million valuation allowance associated with the purchase of Azlan would be recorded as a reduction of goodwill.

Contingencies

We accrue for contingent obligations, including estimated legal costs, when the obligation is probable and the amount is reasonably estimable. As facts concerning contingencies become known, we reassess our position and make appropriate adjustments to the financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal, and other regulatory matters such as imports and exports, the imposition of international governmental controls, changes in the interpretation and enforcement of international laws (in particular related to items such as duty and taxation), and the impact of local economic conditions and practices, which are all subject to change as events evolve and as additional information becomes available during the administrative and litigation process.

Recent Accounting Pronouncements and Legislation

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

Results of Operations

Except for the section relating to discontinued operations, the Results of Operations discussion below relates only to continuing operations.

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The following tables set forth our net sales and operating income, by geographic region for the years ended January 31, 2006, 2005 and 2004:

	2006		% of net sales		2005		% of net sales		2004		% of net sales
Net sales by geographic region ($ in thousands):
Americas	$	9,464,667	46.21	%	$	8,482,512	42.99	%	$	7,839,425	45.16	%
EMEA		11,018,184	53.79			11,248,405	57.01			9,519,100	54.84
Worldwide	$	20,482,851	100.00	%	$	19,730,917	100.00	%	$	17,358,525	100.00	%

	2006		2005		2004
Year-over-year increase (decrease) in net sales (%):
Americas (US$)	11.6	%	8.2	%	(6.0	)%
EMEA (US$)	(2.0	)%	18.2	%	28.6	%
EMEA (Euro)	(0.6	)%	9.0	%	7.1	%
Worldwide (US$)	3.8	%	13.7	%	10.3	%

	2006		% of net sales		2005		% of net sales		2004		% of net sales
Operating income ($ in thousands):
Americas	$	154,839	1.64	%	$	140,690	1.66	%	$	120,413	1.54	%
EMEA		8,456	0.08	%		90,865	0.81	%		48,488	0.51	%
Worldwide	$	163,295	0.80	%	$	231,555	1.17	%	$	168,901	0.97	%

We sell many products purchased from the world’s leading peripheral, system and networking manufacturers and software publishers. Products purchased from HP generated 27%, 28% and 32% of our net sales in fiscal 2006, 2005 and 2004, respectively. There were no other manufacturers or publishers that accounted for 10% or more of our net sales in the past three years.

The following table sets forth our Consolidated Statement of Operations as a percentage of net sales for each of the three most recent fiscal years:

	2006		2005		2004
Net sales	100.00	%	100.00	%	100.00	%
Cost of products sold	95.01		94.61		94.56
Gross profit	4.99		5.39		5.44
Selling, general and administrative expenses	4.04		4.22		4.45
Restructuring charges	0.15		—		—
Special charges	—		—		0.02
Operating income	0.80		1.17		0.97
Interest expense	0.16		0.14		0.13
Discount on sale of accounts receivable	0.03		—		—
Interest income	(0.04	)	(0.03	)	(0.04	)
Net foreign currency exchange loss (gain)	0.01		(0.01	)	(0.01	)
Income from continuing operations before income taxes	0.64		1.07		0.89
Provision for income taxes	0.53		0.27		0.27
Income from continuing operations	0.11		0.80		0.62
Income (loss) from discontinued operations, net of tax	0.02		0.02		(0.02	)
Net income	0.13	%	0.82	%	0.60	%

Net Sales

Our consolidated net sales were approximately $20.5 billion during fiscal 2006, an increase of 3.8% when compared to fiscal 2005. On a regional basis, during fiscal 2006, net sales in the Americas increased by 11.6% over fiscal 2005 and decreased by 2.0% in EMEA (decrease of 0.6% on a euro basis). Our performance in the Americas is primarily due to stronger sales to direct marketers and retailers and a general improvement in demand for IT products and services compared to the prior year, somewhat offset by declining average selling prices of many products we sell. As previously discussed in this MD&A, our performance in EMEA can be attributed to a combination of factors, including somewhat weaker demand conditions in certain countries, competitive pricing pressures resulting in declining average selling prices and, most notably, the diverted focus of our management team in the region.

During fiscal 2005, we saw our consolidated net sales grow to $19.7 billion, a 13.7% increase over fiscal 2004. This growth can be attributed to strong demand in both the Americas and EMEA. Our performance within EMEA was further enhanced by the strengthening of the euro versus the U.S. dollar, which contributed approximately half of the 18.2% sales growth we reported in

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the region. Our sales growth in EMEA was also positively impacted in fiscal 2005 from the inclusion of twelve months of operations of Azlan compared to including only ten months of operations in fiscal 2004. Azlan, one of the leading European distributors of networking and communications equipment, was acquired by Tech Data in March 2003. Our legacy operations (i.e., excluding Azlan) in EMEA also experienced sales growth in the high single digits, reflecting the strong demand for IT products during the fiscal year.

Gross Profit

Gross profit as a percentage of net sales (“gross margin”) during fiscal 2006 was 4.99%, a decrease from 5.39% in fiscal 2005. The decrease in gross margin is primarily attributable to the highly competitive pricing environment and operational challenges in our EMEA operations, as discussed above, and to a much lesser extent, changes in customer and product mix in both EMEA and the Americas. We continuously evaluate our pricing policies and terms and conditions offered to our customers in response to changes in our vendors’ terms and conditions and the general market environment. As we continue to evaluate our existing pricing policies and make future changes, if any, we may experience moderated sales growth or sales declines. In addition, increased competition and changes in general economic conditions within the markets in which we conduct business may hinder our ability to maintain and/or improve gross margin from its current level.

Gross margin during fiscal 2005 was 5.39%, compared to 5.44% in fiscal 2004. This decrease is the result of the highly competitive pricing environment in both the Americas and EMEA, partially offset by the effect of Emerging Issues Task Force No. 02-16, “Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor” (“EITF Issue No. 02-16”). EITF Issue No. 02-16 requires, under certain circumstances, consideration received from vendors be treated as a reduction of cost of goods sold and not as a reduction of selling, general and administrative expenses. EITF Issue No. 02-16 further requires the recognition of such consideration be deferred until the related inventory is sold. As the guidance was applicable only to vendor arrangements entered into or modified subsequent to December 31, 2002, it was effective for all vendor arrangements throughout fiscal 2005; however, it had only a partial impact during fiscal 2004. As a result, gross margin in fiscal 2005 included 45 basis points of vendor consideration reclassified from selling, general and administrative expenses compared to 26 basis points being reclassified in fiscal 2004.

In addition to the impact of EITF Issue No. 02-16, the inclusion of a full twelve months of Azlan’s results (which generates higher gross margins than our “legacy” operations) in fiscal 2005 compared to ten months in fiscal 2004 also positively affected our gross margin comparisons on a year-over-year basis; however this impact was far less than the impact of EITF Issue No. 02-16.

Operating Expenses

Selling, general and administrative expenses (“SG&A”)

SG&A as a percentage of net sales decreased to 4.04% in fiscal 2006, compared to 4.22% in fiscal 2005. The decrease in SG&A as a percentage of net sales in fiscal 2006 is the result of continuing cost savings initiatives and improvements in productivity, particularly in EMEA, where we are beginning to realize the benefits associated with our restructuring efforts. Also contributing to our decrease in SG&A is a reduction in credit costs due to favorable credit experience and the positive resolution of contingencies associated with certain customer accounts. We strive to continuously improve our business model through our constant monitoring of costs, including tight budgetary controls and productivity reviews. These productivity reviews result in a variable cost model with an ability to better respond to changes in market demand compared to those companies with high fixed costs.

In absolute dollars, worldwide SG&A decreased by $3.9 million in fiscal 2006 compared to fiscal 2005. The decrease in fiscal 2006 is primarily due to the benefits realized from the restructuring program and the decrease in credit costs, partially offset by $9.6 million of external consulting costs incurred related to our EMEA restructuring program, an increase in labor costs in the Americas to support the additional sales and, to a lesser extent, a stronger U.S. dollar versus the euro in fiscal 2006 compared to fiscal 2005.

SG&A as a percentage of net sales decreased to 4.22% in fiscal 2005, compared to 4.45% in fiscal 2004. This decrease is the result of continuing costs savings initiatives and improvements in productivity, offset in part by the effects of EITF Issue No. 02-16. In absolute dollars, SG&A increased by $60.4 million in fiscal 2005 compared to fiscal 2004. This increase is attributable to the continued strengthening of the euro against the U.S. dollar and the implementation of EITF Issue No. 02-16, as discussed above. Excluding these factors, SG&A actually declined in fiscal 2005 compared to fiscal 2004 as a result of our tight budgetary controls and productivity reviews.

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Restructuring Charges

As discussed earlier in this MD&A, in May 2005, we announced a formal restructuring program to better align the EMEA operating cost structure with the current business environment. In connection with this restructuring program, we continue to record charges for workforce reductions and the optimization of facilities and systems. For the year ended January 31, 2006, we incurred $30.9 million related to the restructuring program, comprised of approximately $18.9 million related to workforce reductions and approximately $12.0 million for facility costs.

Special Charges

During fiscal 2004, we incurred special charges of $3.1 million, or .02% of net sales, related to the closure of our education business in the United States and the restructuring of this business to a more variable cost-based, outsourced model. These charges primarily include costs associated with employee severance, facility lease terminations and the write-off of fixed assets associated with the business.

Interest Expense, Discount on Sale of Accounts Receivable, Interest Income, Foreign Currency Exchange Gains/Losses

Interest expense increased 10.4% to $31.4 million in fiscal 2006 compared to $28.5 million in the prior year. The increase in interest expense during fiscal 2006 is primarily due to additional working capital requirements resulting from higher sales volume and an increase in our average short-term borrowing rate compared to the prior fiscal year. Interest income increased 32.5% to $7.4 million in fiscal 2006 from $5.6 million in the prior year. The increase in interest income during fiscal 2006 compared to fiscal 2005 is primarily attributable to higher interest rates earned on short-term cash investments compared to the prior fiscal year.

Discounts on the sale of accounts receivable totaled $5.5 million in fiscal 2006. The discount is associated with the accounts receivable purchase facility agreements executed in fiscal 2006 (see further discussion below in this MD&A and in Note 3 of Notes to Consolidated Financial Statements).

Interest expense increased 22.6% to $28.5 million in fiscal 2005 from $23.2 million in fiscal 2004. The increase in interest expense is primarily due to additional working capital requirements resulting from higher sales volume, as well as a higher interest rate environment in the U.S. in fiscal 2005 compared to fiscal 2004. Interest income decreased 15.7% to $5.6 million in fiscal 2005 from $6.7 million in fiscal 2004. This decrease is primarily due to a decrease in cash available for investment in fiscal 2005 as compared to fiscal 2004.

We realized a net foreign currency exchange loss of $1.8 million during fiscal 2006 and net foreign currency exchange gains of $3.0 million and $1.9 million during fiscal years 2005 and 2004, respectively. We recognize net foreign currency exchange gains and losses primarily due to the fluctuation in the value of the U.S. dollar versus the euro, and to a lesser extent, versus other currencies. It continues to be our goal to minimize foreign currency exchange gains and losses through an effective hedging program. Our hedging policy prohibits speculative foreign currency exchange transactions.

Provision for Income Taxes

Our effective tax rate for continuing operations was 82.6% in fiscal 2006 and 24.6% in fiscal 2005. The increase in the effective tax rate during fiscal 2006 is primarily the result of a $56.0 million increase in the deferred tax valuation allowance on deferred tax assets recorded during the second quarter of fiscal 2006 related to deferred tax assets for specific jurisdictions in EMEA, primarily Germany. While we believe the restructuring efforts will improve the operating performance within our German operations, we have determined this charge to be appropriate due to cumulative losses expected to be realized through the current fiscal year, after considering the effect of implementing prudent and feasible tax planning strategies. In the future, to the extent we generate consistent taxable income within those operations currently requiring the valuation allowance, we may reduce the valuation allowance on the related deferred tax assets, thereby reducing tax expense and increasing net income in the same period. The underlying net operating loss carryforwards remain available to offset future taxable income in the specific jurisdictions requiring the valuation allowance, subject to applicable tax laws and regulations. Excluding the effect of the deferred tax asset valuation allowance, our effective tax rate for continuing operations would have approximated 40.2% for fiscal 2006. The increase in the tax rate from 30.0% in fiscal 2005 (adjusted for the reversal of previously accrued income taxes as discussed below) to 40.2% in fiscal 2006 was primarily the result of annual losses incurred in certain tax jurisdictions where we are not able to record a tax benefit. On an absolute dollar basis, the provision for income taxes increased 109.5% to $109.0 million in fiscal 2006 as compared to $52.0 million in fiscal 2005 primarily as a result of the factors discussed above.

Our effective tax rate for continuing operations was 24.6% in fiscal 2005 compared to 30.5% in fiscal 2004. The decrease in the effective tax rate is primarily attributable to the reversal of previously accrued income taxes of $11.5 million due to the

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favorable resolution of various income tax examinations during the fourth quarter of fiscal 2005. Excluding the reversal of previously accrued income taxes, our effective tax rate for continuing operations would have approximated 30.0% during fiscal 2005. On an absolute dollar basis, the provision for income taxes increased 10.6% to $52.0 million in fiscal 2005 as compared to $47.0 million in fiscal 2004, primarily due to an increase in our taxable income and the factors discussed above.

The effective tax rate differed from the U.S. federal statutory rate of 35% during these periods for the reasons discussed above, as well as tax rate benefits of certain earnings from operations in lower-tax jurisdictions throughout the world for which no U.S. taxes have been provided because such earnings are planned to be reinvested indefinitely outside the U.S.

Our future effective tax rates could be adversely affected by earnings being lower than anticipated in countries where we have lower statutory rates, changes in the valuation of our deferred tax assets or liabilities or changes in tax laws or interpretations thereof. In addition, our income tax returns are subject to continuous examination by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. At January 31, 2006, we believe we have appropriately accrued for probable income tax exposures. To the extent we prevail in matters for which accruals have been established or are required to pay amounts in excess of such accruals, our effective tax rate in a financial reporting period could be materially affected.

Income (Loss) from Discontinued Operations, Net of Tax

Results of operations for the Training Business have been reclassified and presented as income (loss) from discontinued operations, net of tax, within the Consolidated Statement of Operations for all periods presented. We realized income from discontinued operations, net of tax, of $3.6 million and $2.8 million in fiscal 2006 and 2005, respectively, and a loss from discontinued operations, net of tax, of $3.0 million in fiscal 2004.

Impact of Inflation

We have not been adversely affected by inflation. Management believes that most price increases could be passed on to our customers, as prices charged by us are not set by long-term contracts; however, as a result of competitive pressure, there can be no assurance that the full effect of any such price increases could be passed on to our customers.

Quarterly Data—Seasonality

Our 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 we offer. Narrow operating margins may magnify the impact of these factors on our operating results. Recent historical seasonal variations have included a reduction of demand in EMEA during our second and third fiscal quarters followed by an increase in EMEA demand during our fiscal fourth quarter. Given that a significant portion of our revenues are derived from EMEA, the worldwide results closely follow the seasonality trends in EMEA. Additionally, the life cycles of major products, as well as the impact of future acquisitions and dispositions, may also materially impact our business, financial condition, or results of operations. See Note 15 of Notes to Consolidated Financial Statements for further information regarding our quarterly results.

Liquidity and Capital Resources

Our discussion of liquidity and capital resources includes an analysis of our cash flows and capital structure, which includes both continuing and discontinued operations for all periods presented. The absence of cash flows from discontinued operations is not expected to affect the Company’s future liquidity.

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The following table summarizes Tech Data’s Consolidated Statement of Cash Flows for the years ended January 31, 2006, 2005 and 2004 (in thousands):

	Years ended January 31,
	2006			2005			2004
Net cash provided by (used in):
Operating activities	$	257,439		$	106,945		$	303,234
Investing activities		(51,583	)		(38,645	)		(251,518	)
Financing activities		(235,438	)		12,200			(110,708	)
Effect of exchange rate changes on cash and cash equivalents		(8,809	)		5,755			10,602
Net increase (decrease) in cash and cash equivalents	$	(38,391	)	$	86,255		$	(48,390	)

Net cash provided by operating activities increased in fiscal 2006 as compared to fiscal 2005 due primarily to the timing of payments to vendors. We have several key metrics we use to manage our working capital, including our cash conversion cycle (also referred to as “net cash days”) and owned inventory levels. Our net cash days are defined as days sales outstanding in accounts receivable (“DSO”) plus days of supply on hand in inventory (“DOS”), less days of purchases outstanding in accounts payable (“DPO”). Owned inventory is calculated as the difference between our inventory and accounts payable balances divided into the inventory balance. Our net cash days improved by approximately 6% to 29 days at the end of fiscal 2006 compared to 31 days at the end of fiscal 2005, resulting from improved management of our worldwide cash conversion cycle. Our owned inventory level (the percentage of inventory not financed by vendors) was a negative 25% at the end of fiscal 2006, meaning our accounts payable balances exceeded our inventory balances by 25%. This compares to negative owned inventory of 18% at the end of fiscal 2005.

Net cash provided by operating activities decreased in fiscal 2005 as compared to fiscal 2004 due primarily to the timing of payments to vendors, offset in part by increased earnings over the prior year (especially within our EMEA segment). Our net cash days improved by approximately 6% to 31 days at the end of fiscal 2005 compared to 33 days at the end of fiscal 2004, resulting from improved management of our worldwide cash conversion cycle. Our owned inventory level was a negative 18% at the end of fiscal 2005 compared to negative owned inventory of 24% at the end of fiscal 2004.

The following table presents the components of Tech Data’s cash conversion cycle, in days, as of January 31, 2006, 2005 and 2004:

	As of January 31,
	2006		2005		2004
Days of sales outstanding	36		36		39
Days of supply in inventory	26		25		26
Days of purchases outstanding	(33	)	(30	)	(32	)
Cash conversion cycle (days)	29		31		33

Net cash used in investing activities of $51.6 million during fiscal 2006 was primarily attributable to the continuing investment related to the expansion and upgrading of our IT systems, office facilities and equipment for our logistics centers. We expect to make total capital expenditures of approximately $60.0 million during fiscal 2007 for equipment and machinery in our logistics centers, office facilities and IT systems. While we believe we will realize increased operating efficiencies as a result of these investments, unforeseen circumstances or complexities could have an adverse impact on our business.

Net cash used in investing activities of $38.6 million during fiscal 2005 was attributable to the continuing investment related to the expansion and upgrading of our IT systems, office facilities and equipment for our logistics centers, offset by the proceeds from the sale of one of the facilities at our headquarters campus in Clearwater, Florida.

Net cash used in financing activities of $235.4 million during fiscal 2006 reflects the $290.0 million repayment of our convertible subordinated debentures, $1.6 million of payments on other long-term debt and $127.0 million for the repurchase of 3,443,131 shares of our common stock, partially offset by net borrowings on our revolving credit lines of $166.5 million and $16.7 million in proceeds received for the issuance of common stock related to our stock option exercises and purchases made through our Employee Stock Purchase Plan (“ESPP”).

Net cash provided by financing activities of $12.2 million during fiscal 2005 reflects $32.7 million in proceeds from stock option exercises and purchases made through our ESPP, partially offset by net repayments on our revolving credit lines and long-term debt of $20.5 million.

As of January 31, 2006, we maintained a $400.0 million Receivables Securitization Program with a syndicate of banks, which expires in August 2006. We pay interest (average rate of 4.72% at January 31, 2006) on the Receivables Securitization Program at designated commercial paper rates plus an agreed-upon margin. Additionally, we maintained a $250.0 million Multi-currency

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Revolving Credit Facility with a syndicate of banks that expires in March 2010. We pay interest (average rate of 5.50% at January 31, 2006) under this facility at the applicable euro rate plus a margin based on our credit ratings. In addition to these credit facilities, we maintained lines of credit and overdraft facilities totaling approximately $674.7 million at January 31, 2006 (average interest rate was 3.49% at January 31, 2006).

The total capacity of the aforementioned credit facilities was approximately $1.3 billion, of which $235.1 million was outstanding at January 31, 2006. Our credit agreements contain limitations on the amounts of annual dividends and repurchases of common stock. Additionally, the credit agreements require compliance with certain warranties and covenants on a continuing basis. The financial ratio covenants contained within the credit agreements include a debt to capitalization ratio, an interest to EBITDA (earnings before interest, taxes, deprecation and amortization) ratio, and a tangible net worth requirement. At January 31, 2006, we were in compliance with all such covenants. The ability to draw funds under these credit facilities is dependent upon sufficient collateral (in the case of the Receivables Securitization Program) and meeting the aforementioned financial covenants, which may limit our ability to draw the full amount of these facilities. As of January 31, 2006, the maximum amount that could be borrowed under these facilities, in consideration of the availability of collateral and the financial covenants, was approximately $1.1 billion.

At January 31, 2006, we had issued standby letters of credit of $22.4 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 these letters of credit reduces our available capacity under the above mentioned facilities by the same amount.

In December 2001, we issued $290.0 million of convertible subordinated debentures due 2021. The debentures bore interest at 2% per year and were convertible into our common stock, if the market price of the common stock exceeded a specified percentage of the conversion price per share of common stock. Holders had the option to require us to repurchase the debentures on specified anniversary dates from the issue date at 100% of the principal amount plus accrued interest to the repurchase date. We had the option to satisfy such repurchases in either cash and/or our common stock, provided that shares of common stock reached a certain fair market value. The debentures were redeemable in whole or in part for cash at our option at any time on or after December 20, 2005. Additionally, the debentures were subordinated in right of payment to all of our senior indebtedness were effectively subordinated to all indebtedness and other liabilities of our subsidiaries.

In December 2004, we completed an Exchange Offer whereby approximately 99.3% of our then outstanding $290.0 million convertible subordinated debentures (the “Old Notes”) were exchanged for new debentures (the “New Notes”). The New Notes had substantially identical terms to the previously outstanding Old Notes. As the holders of both the New Notes and the Old Notes had the option to require us to repurchase the debentures on certain dates, beginning with December 15, 2005, we classified the debentures as a current liability at January 31, 2005.

In accordance with the debenture agreement, on December 15, 2005, the debenture holders of the New Notes exercised their option to require the Company to repurchase the debentures. We repurchased the New Notes using cash and existing credit lines. In addition, prior to January 31, 2006, we also repurchased the Old Notes using cash and existing credit lines.

In August 2000, we filed a universal shelf registration statement with the Securities and Exchange Commission for $500.0 million of debt and equity securities. The net proceeds from any issuance are expected to be used for general corporate purposes, including capital expenditures, the repayment or refinancing of debt and to meet working capital needs. As of January 31, 2006, we have not issued any debt or equity securities under this registration statement, nor can any assurances be given that we will issue any debt or equity securities under this registration statement in the future.

Our debt to capital ratio was 12% at January 31, 2006. We believe that our existing sources of liquidity, including cash resources and cash provided by operating activities, supplemented as necessary with funds available under our credit arrangements, will provide sufficient resources to meet our present and future working capital and cash requirements for at least the next 12 months. Changes in our credit rating or other market factors may increase our interest expense or other costs of capital, or capital may not be available to us on acceptable terms to fund our working capital needs. The Company will continue to need additional financing, including debt financing. The inability to obtain such sources of capital could have an adverse effect on the Company’s business. The Company’s credit facilities contain various financial and other covenants that may limit the Company’s ability to borrow or limit the Company’s flexibility in responding to business conditions.

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Contractual Obligations

Principal maturities of long-term debt, comprised exclusively of capital leases, at January 31, 2006 and amounts due under future minimum lease payments, including minimum commitments under IT outsourcing agreements, are as follow (in thousands):

	Operating leases		Capital leases			Total
Fiscal year:
2007	$	62,493	$	2,520		$	65,013
2008		54,841		2,520			57,361
2009		44,846		1,751			46,597
2010		37,383		1,597			38,980
2011		29,450		1,597			31,047
Thereafter		68,728		9,768			78,496
Total payments		297,741		19,753			317,494
Less amounts representing interest		—		(3,770	)		(3,770	)
Total principal payments	$	297,741	$	15,983		$	313,724

Fair value renewal and purchase options and escalation clauses exist for a substantial portion of the operating leases included above. Purchase orders for the purchase of inventory and other goods and services are not included in the table above. We are not able to determine the aggregate amount of such purchase orders that represent contractual obligations, as purchase orders typically represent authorizations to purchase rather than binding agreements. For the purposes of this table, contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding on Tech Data and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Our purchase orders are based on our current demand expectations and are fulfilled by our vendors within short time horizons. We do not have significant non-cancelable agreements for the purchase of inventory or other goods specifying minimum quantities or set prices that exceed our expected requirements for the next three months. We also enter into contracts for outsourced services; however, the obligations under these contracts were not significant and the contracts generally contain clauses allowing for cancellation without significant penalty.

Off-Balance Sheet Arrangements

Synthetic Lease Facility

On July 31, 2003, we completed a restructuring of our synthetic lease facility with a group of financial institutions (the “Restructured Lease”) under which we lease certain logistics centers and office facilities from a third-party lessor. The Restructured Lease expires in fiscal 2008, at which time we have the following options: renew the lease for an additional five years, purchase the properties at an amount equal to their cost, or remarket the properties. If we elect to remarket the properties, we have guaranteed the lessor a percentage of the cost of each of the properties, in an aggregate amount of approximately $121.0 million (the “residual value”). At any time during the lease term, we may, at our option, purchase up to four of the seven properties, at an amount equal to each property’s cost. We pay interest on the Restructured Lease at LIBOR plus an agreed-upon margin. The Restructured Lease contains covenants that must be complied with on a continuous basis, similar to the covenants described in certain of the credit facilities discussed above and in Note 7 of Notes to Consolidated Financial Statements. The amount funded under the Restructured Lease (approximately $136.7 million at January 31, 2006) is treated as debt under the definition of the covenants required under both the Restructured Lease and the credit facilities. As of January 31, 2006, we were in compliance with all such covenants.

The sum of future minimum lease payments under the Restructured Lease at January 31, 2006 was approximately $20.9 million. Properties leased under the Restructured Lease facility total 2.5 million square feet of space, with land totaling 204 acres located in Clearwater and Miami, Florida; Fort Worth, Texas; Fontana, California; Suwanee, Georgia; Swedesboro, New Jersey; and South Bend, Indiana.

The Restructured Lease has been accounted for as an operating lease. FASB Interpretation (“FIN”) No. 46 requires us to evaluate whether an entity with which we are involved meets the criteria of a variable interest entity (“VIE”) and, if so, whether we are required to consolidate that entity. We have determined that the third-party lessor of this synthetic lease facility does not meet the criteria of a VIE and, therefore, is not subject to the consolidation provisions of FIN No. 46.

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Trade Receivables Purchase Facility Agreements

During fiscal 2006, we entered into revolving trade receivables purchase facility agreements (the “Receivables Facilities”) with third-party financial institutions to sell accounts receivable on a non-recourse basis. We use the Receivables Facilities as a source of working capital funding. The Receivables Facilities limit the amount of purchased accounts receivable the financial institutions may hold to $346.0 million at January 31, 2006, based on the foreign currency exchange rate at that date. Under the Receivables Facilities, we may sell certain accounts receivable (the “Receivables”) in exchange for cash less a discount based on LIBOR plus a margin. Such transactions have been accounted for as a true sale, in accordance with SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”. The Receivables Facilities, of which $200.0 million expires in May 2006 and $146.0 million does not have an expiration date, require that we continue to service, administer and collect the sold accounts receivable. During the year ended January 31, 2006, we received gross proceeds of $796.1 million from the sale of the Receivables and recognized related discounts totaling $5.5 million. The proceeds, net of the discount incurred, are reflected in the Consolidated Statement of Cash Flows in operating activities within cash received from customers and the change in accounts receivable.

Guarantees

As is customary in the IT industry, to encourage certain customers to purchase product from us, we have arrangements with certain finance companies that provide inventory-financing facilities for our customers. In conjunction with certain of these arrangements, we have agreements with the finance companies that would require us to repurchase certain inventory, which might be repossessed from the customers by the finance companies. Due to various reasons, including among other items, the lack of information regarding the amount of saleable inventory purchased from us still on hand with the customer at any point in time, our repurchase obligations relating to inventory cannot be reasonably estimated. Repurchases of inventory by us under these arrangements have been insignificant to date. We also provide additional financial guarantees to finance companies on behalf of certain customers. The majority of these guarantees are for an indefinite period of time, where we would be required to perform if the customer is in default with the finance company. The Company reviews the underlying credit for these guarantees on at least an annual basis. As of January 31, 2006 and 2005, the aggregate amount of guarantees under these arrangements totaled approximately $7.0 million and $9.7 million, respectively, of which approximately $2.9 million and $5.3 million, respectively, was outstanding. We believe that, based on historical experience, the likelihood of a material loss pursuant to both of the above guarantees is remote. We also provide residual value guarantees related to our Restructured Lease which have been recorded at the estimated fair value of the residual value guarantees.

Asset Management

We manage our inventories by maintaining sufficient quantities to achieve high order fill rates while attempting to stock only those products in high demand with a rapid turnover rate. Inventory balances fluctuate as we add new product lines and when appropriate, we make large purchases, including cash purchases from manufacturers and publishers when the terms of such purchases are considered advantageous. Our contracts with most of our vendors provide price protection and stock rotation privileges to reduce the risk of loss due to manufacturer price reductions and slow moving or obsolete inventory. In the event of a vendor price reduction, we generally receive a credit for the impact on products in inventory and we have the right to rotate a certain percentage of purchases, subject to certain limitations. Historically, price protection and stock rotation privileges as well as our inventory management procedures have helped to reduce the risk of loss of inventory value.

We attempt to control losses on credit sales by closely monitoring customers’ creditworthiness through our IT systems, which contain detailed information on each customer’s payment history and other relevant information. We have obtained credit insurance that insures a percentage of the credit extended by us to certain customers against possible loss. Customers who qualify for credit terms are typically granted net 30-day payment terms in the Americas. While credit terms in EMEA vary by country, the vast majority of customers are granted credit terms ranging from 30-60 days. We also sell products on a prepay, credit card and cash on delivery basis. In addition, certain of the Company’s vendors subsidize floorplan financing arrangements for the benefit of our customers.

ITEM 7A. Qualitative and Quantitative Disclosures About Market Risk

As a large global organization, we face exposure to adverse movements in foreign currency exchange rates. These exposures may change over time as business practices evolve and could have a material impact on our financial results in the future. In the normal course of business, we employ established policies and procedures to manage our exposure to fluctuations in the value of foreign currencies using a variety of financial instruments. It is our policy to utilize financial instruments to reduce risks where internal netting cannot be effectively employed. Additionally, we do not enter into foreign currency derivative instruments for speculative or trading purposes. Our primary exposure relates to transactions in EMEA, where the currency collected from customers can be different from the currency used to purchase the product. Our foreign currency risk management objective is to protect our earnings and cash flows from the adverse impact of exchange rate changes.

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Foreign exchange risk is managed by using foreign currency forward, option and swap contracts to hedge both intercompany and third party a) loans, b) accounts receivable and c) accounts payable.

We have elected not to designate our foreign currency contracts as hedging instruments, and they are therefore marked-to-market with changes in their value recorded in the income statement each period. The underlying exposures are denominated primarily in the following currencies: U.S. dollar, British pound, Canadian dollar, Czech koruna, Danish krone, euros, Norwegian krone, Polish zloty, Swedish krona and Swiss franc.

The following table provides information about our foreign currency derivative financial instruments outstanding as of January 31, 2006 and 2005. The information is provided in U.S. dollar equivalents. For the foreign currency contracts, the table presents the notional amount (at contractual exchange rates) and the weighted average contractual foreign currency exchange rates. These contracts are generally for durations of 90 days or less.

Foreign Currency Contracts

Notional Amounts by Expected Maturity

Average Forward Foreign Currency Exchange Rate

(Dollar amounts in millions, except weighted average contract rates)

	January 31, 2006						January 31, 2005
	Notional amount		Weighted average contract rate	Estimated fair market value			Notional amount		Weighted average contract rate	Estimated fair market value
United States Dollar Functional Currency
Forward Contracts— Purchase United States Dollar
Euro	$	33.63	1.215	$	(0.09	)	$	103.67	1.319	$	1.42
Swiss Franc		3.17	1.276		(0.01	)		2.93	1.181		0.01
Norweigan Krone		2.20	6.629		—			5.04	6.585		(0.16	)
Danish Krone		5.71	6.161		(0.03	)		4.42	5.658		0.04
British Pound		42.08	1.768		(0.36	)		33.59	1.874		0.26
Swedish Krona		2.63	7.636		(0.02	)		—	—		—
Miscellaneous other currencies		0.65	—		—			1.07	—		—
Forward Contracts— Sell United States Dollar
Euro	$	21.60	1.199	$	0.46		$	22.00	1.314	$	(0.19	)
Danish Krone		—	—		—			1.80	5.693		—
Miscellaneous other currencies		1.26	—		0.01			—	—		—
Euro Functional Currency
Forward Contracts— Purchase Euro
United States Dollar	$	118.70	1.217	$	0.13		$	39.13	1.314	$	(0.30	)
Czech Koruna		16.09	28.775		(0.20	)		10.07	30.394		(0.10	)
Swedish Krona		148.98	9.234		0.05			131.27	9.059		0.69
Swiss Franc		47.12	1.554		(0.08	)		34.65	1.545		0.02
Danish Krone		21.60	7.463		—			21.07	7.444		(0.01	)
Canadian Dollar		35.68	1.394		(0.17	)		30.25	1.618		(0.01	)
Polish Zloty		26.39	3.832		(0.06	)		9.04	4.079		(0.03	)
Norwegian Krone		7.60	8.131		(0.04	)		—	—		—
Forward Contracts— Sell Euro
United States Dollar	$	185.39	1.215	$	(0.48	)	$	110.30	1.309	$	0.48
British Pound		—	—		—			45.08	1.451		(0.25	)
Czech Koruna		—	—		—			3.04	30.200		0.01
Danish Krone		—	—		—			—	—		—
Swedish Krona		5.14	9.300		0.03			—	—		—
Miscellaneous other currencies		—	—		—			0.84	—		—
Forward Contracts— Purchase Swedish Krona
Norwegian Krone	$	1.72	1.149	$	0.01		$	—	—	$	—
Forward Contracts— Sell Swedish Krona
United States Dollar	$	3.94	7.668	$	(0.04	)	$	—	—	$	—
Forward Contracts— Purchase British Pound
United States Dollar	$	—	—	$	—		$	1.01	1.872	$	0.01

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	January 31, 2006						January 31, 2005
	Notional amount		Weighted average contract rate	Estimated fair market value			Notional amount		Weighted average contract rate	Estimated fair market value
Other Miscellaneous Functional Currencies
Forward Contracts—Purchase United States Dollar
Canadian Dollar	$	9.45	1.149	$	(0.08	)	$	12.50	1.228	$	0.11
Swiss Franc		1.10	1.268		0.01			1.40	1.176		0.01
Chilean Peso		5.80	527.991		(0.05	)		4.72	575.930		0.05
Polish Zloty		9.28	3.183		(0.13	)		12.50	3.095		0.08
Czech Koruna		1.69	23.381		(0.01	)		—	—		—
Swedish Krona		3.90	7.677		(0.05	)		—	—		—
Miscellaneous other currencies		—	—		—			0.20	—		—
Forward Contracts—Purchase Euro
British Pound	$	—	—	$	—		$	4.57	1.436	$	(0.02	)
Swiss Franc		7.43	1.547		0.02			8.74	1.531		0.10
Polish Zloty		13.56	3.840		(0.06	)		8.57	4.089		(0.06	)
Miscellaneous other currencies		0.65	—		—			—	—		—
Forward Contracts—Sell Euro
Swiss Franc	$	—	—	$	—		$	2.48	1.539	$	(0.02	)
Polish Zloty		17.31	3.839		0.07			—	—		—
Swedish Krona		5.11	9.300		0.03			—	—		—
Forward Contracts—Sell United States Dollar
Swiss Franc	$	0.56	1.273	$	—		$	1.00	1.187	$	—
Swiss Franc		8.70	3.146		0.02			—	—		—
Forward Contracts—Sell Norwegian Krone
Swedish Krona	$	2.21	1.150	$	0.01		$	—	—	$	—

We are exposed to changes in interest rates primarily as a result of our short- and long-term debt used to maintain liquidity and to finance working capital, capital expenditures and business expansion. Interest rate risk is also present in the forward foreign currency contracts hedging intercompany and third-party loans. Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to minimize overall borrowing costs. To achieve our objective, we use a combination of fixed and variable rate debt. The nature and amount of our long-term and short-term debt can be expected to vary as a result of future business requirements, market conditions and other factors. As of January 31, 2006 and 2005, approximately 6% and 82%, respectively, of the outstanding debt had fixed interest rates. We utilize various financing instruments, such as receivables securitization, leases, revolving credit facilities and trade receivable purchase facilities, to finance working capital needs.

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The following table provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and related weighted-average interest rates by expected maturity dates. Fair value for these instruments was determined based on third-party valuations. All amounts are stated in U.S. dollar equivalents.

Debt and Interest Rate Contracts as of January 31, 2006

Principal Notional Amount by Expected Maturity

(Dollar amounts in millions)

	January 31,																	Fair market value January 31, 2006
	2007			2008			2009			2010			Thereafter			Total
United States Dollar Functional Currency
Liabilities
U.S. dollar denominated debt—revolving credit
Variable rate debt	$	126.6			—			—			—			—		$	126.6	$	126.6
Average interest rate		4.76	%		—			—			—			—
Euro Functional Currency
Liabilities
Euro denominated debt—revolving credit
Variable rate debt	$	82.0			—			—			—			—		$	82.0	$	82.0
Average interest rate		3.13	%		—			—			—			—
Euro denominated long-term debt (including current portion)
Fixed rate debt	$	1.6		$	1.7		$	1.0		$	1.0		$	10.7		$	16.0	$	16.0
Average interest rate		5.94	%		5.94	%		5.94	%		5.94	%		5.94	%
Other Miscellaneous Functional Currencies
Liabilities
Other foreign currencies denominated debt—revolving credit
Variable rate debt	$	26.5			—			—			—			—		$	26.5	$	26.5
Average interest rate		5.72	%		—			—			—			—

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Debt and Interest Rate Contracts as of January 31, 2005

Principal Notional Amount by Expected Maturity

(Dollar amounts in millions)

	January 31,																	Fair market value January 31, 2005
	2006			2007			2008			2009			Thereafter			Total
United States Dollar Functional Currency
Liabilities
U.S. dollar denominated debt—revolving credit
Variable rate debt	$	1.4			—			—			—			—		$	1.4	$	1.4
Average interest rate		3.09	%		—			—			—			—
U.S. dollar denominated long-term debt (including current portion)
Fixed rate debt	$	290.0			—			—			—			—		$	290.0	$	290.4
Average interest rate		2.00	%		—			—			—			—
Euro Functional Currency
Liabilities
Euro denominated debt—revolving credit
Variable rate debt	$	56.5			—			—			—			—		$	56.5	$	56.5
Average interest rate		2.55	%		—			—			—			—
Euro denominated long-term debt (including current portion)
Fixed rate debt	$	1.6		$	1.7		$	1.8		$	1.1		$	12.5		$	18.8	$	18.8
Average interest rate		5.94	%		5.94	%		5.94	%		5.94	%		5.94	%
Other Miscellaneous Functional Currencies
Liabilities
Other foreign currencies denominated debt—revolving credit
Variable rate debt	$	10.4			—			—			—			—		$	10.4	$	10.4
Average interest rate		4.66	%		—			—			—			—

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ITEM 8. Financial Statements and Supplementary Data

Index to Financial Statements

	Page
Financial Statements
Report of Independent Registered Certified Public Accounting Firm	34
Consolidated Balance Sheet as of January 31, 2006 and 2005	35
Consolidated Statement of Operations for the three years ended January 31, 2006	36
Consolidated Statement of Changes in Shareholders’ Equity for the three years ended January 31, 2006	37
Consolidated Statement of Cash Flows for the three years ended January 31, 2006	38
Notes to Consolidated Financial Statements	39
Financial Statement Schedule
Schedule II—Valuation and Qualifying Accounts	68

All schedules and exhibits not included are not applicable, not required or would contain information which is shown in the financial statements or notes thereto.

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REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Tech Data Corporation:

We have audited the accompanying consolidated balance sheets of Tech Data Corporation and subsidiaries as of January 31, 2006 and 2005, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended January 31, 2006. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Tech Data Corporation and subsidiaries at January 31, 2006 and 2005, and the consolidated results of their operations and their cash flows for each of the three years in the period ended January 31, 2006, in conformity with U. S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Tech Data Corporation’s internal control over financial reporting as of January 31, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 29, 2006 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Tampa, Florida

March 29, 2006

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TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(In thousands, except share amounts)

	January 31,
	2006			2005
ASSETS
Current assets:
Cash and cash equivalents	$	156,665		$	195,056
Accounts receivable, net		2,160,138			2,217,474
Inventories		1,527,729			1,492,479
Prepaid expenses and other assets		138,927			151,480
Total current assets		3,983,459			4,056,489
Property and equipment, net		141,275			146,144
Goodwill		134,327			149,719
Other assets, net		145,573			205,384
Total assets	$	4,404,634		$	4,557,736
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Revolving credit loans	$	235,088		$	68,343
Accounts payable		1,917,213			1,757,838
Current portion of long-term debt		1,605			291,625
Accrued expenses and other liabilities		437,445			450,066
Total current liabilities		2,591,351			2,567,872
Long-term debt		14,378			17,215
Other long-term liabilities		38,598			45,178
Total liabilities		2,644,327			2,630,265
Commitments and contingencies (Note 12)
Shareholders’ equity:
Common stock, par value $.0015; 200,000,000 shares authorized; 59,239,085 shares issued at January 31, 2006 and 58,984,055 shares issued at January 31, 2005		89			88
Additional paid-in capital		729,455			724,562
Treasury stock, at cost (3,048,060 shares at January 31, 2006)		(112,601	)		—
Retained earnings		938,383			911,797
Accumulated other comprehensive income		204,981			291,024
Total shareholders’ equity		1,760,307			1,927,471
Total liabilities and shareholders’ equity	$	4,404,634		$	4,557,736

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

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TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

	Year ended January 31,
	2006			2005			2004
Net sales	$	20,482,851		$	19,730,917		$	17,358,525
Cost of products sold		19,460,332			18,667,184			16,414,773
Gross profit		1,022,519			1,063,733			943,752
Selling, general and administrative expenses		828,278			832,178			771,786
Restructuring charges (Note 6)		30,946			—			—
Special charges		—			—			3,065
Operating income		163,295			231,555			168,901
Interest expense		31,422			28,473			23,217
Discount on sale of accounts receivable		5,503			—			—
Interest income		(7,426	)		(5,606	)		(6,651	)
Net foreign currency exchange loss (gain)		1,816			(2,959	)		(1,893	)
Income from continuing operations before income taxes		131,980			211,647			154,228
Provision for income taxes		109,013			52,025			47,040
Income from continuing operations		22,967			159,622			107,188
Income (loss) from discontinued operations, net of tax		3,619			2,838			(3,041	)
Net income	$	26,586		$	162,460		$	104,147
Income (loss) per common share – basic:
Continuing operations	$	0.40		$	2.74		$	1.88
Discontinued operations		0.06			0.05			(0.05	)
Net income	$	0.46		$	2.79		$	1.83
Income (loss) per common share – diluted:
Continuing operations	$	0.39		$	2.69		$	1.86
Discontinued operations		0.06			0.05			(0.05	)
Net income	$	0.45		$	2.74		$	1.81
Weighted average common shares outstanding:
Basic		57,749			58,176			56,838
Diluted		58,414			59,193			57,501

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

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TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands)

	Common Stock			Additional paid-in capital			Treasury stock			Retained earnings		Accumulated other comprehensive income (loss)(a)			Total shareholders’ equity
	Shares	Amount
Balance—January 31, 2003	56,484	$	85	$	652,928		$	—		$	645,190	$	40,327		$	1,338,530
Issuance of common stock for benefit plans and stock options exercised, including related tax benefit of $4,343	1,233		2		33,164			—			—		—			33,166
Comprehensive income	—		—		—			—			104,147		182,646			286,793
Balance—January 31, 2004	57,717		87		686,092			—			749,337		222,973			1,658,489
Issuance of common stock for benefit plans and stock options exercised, including related tax benefit of $5,738	1,267		1		38,470			—			—		—			38,471
Comprehensive income	—		—		—			—			162,460		68,051			230,511
Balance—January 31, 2005	58,984		88		724,562			—			911,797		291,024			1,927,471
Issuance of common stock for benefit plans and stock options exercised, including related tax benefit of $1,461	255		1		8,001			—			—		—			8,002
Purchase of treasury stock, at cost	—		—		—			(127,027	)		—		—			(127,027	)
Issuance of treasury stock for benefit plans and stock options exercised, including related tax benefit of $1,174	—		—		(3,108	)		14,426			—		—			11,318
Comprehensive income (loss)	—		—		—			—			26,586		(86,043	)		(59,457	)
Balance—January 31, 2006	59,239	$	89	$	729,455		$	(112,601	)	$	938,383	$	204,981		$	1,760,307

(a) The Company’s accumulated other comprehensive income (loss) is comprised exclusively of changes in the Company’s cumulative foreign currency translation adjustment account.

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

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TECH DATA CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

	Year ended January 31,
	2006			2005			2004
Cash flows from operating activities:
Cash received from customers	$	20,504,871		$	19,745,283		$	17,390,674
Cash paid to suppliers and employees		(20,160,865	)		(19,571,824	)		(17,027,162	)
Interest paid, net		(21,082	)		(18,837	)		(17,045	)
Income taxes paid		(65,485	)		(47,677	)		(43,233	)
Net cash provided by operating activities		257,439			106,945			303,234
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired		—			—			(203,010	)
Proceeds from sale of property and equipment		9,169			5,130			4,484
Expenditures for property and equipment		(41,973	)		(25,876	)		(31,278	)
Software and software development costs		(18,779	)		(17,899	)		(21,714	)
Net cash used in investing activities		(51,583	)		(38,645	)		(251,518	)
Cash flows from financing activities:
Proceeds from the issuance of common stock and reissuance of treasury stock		16,686			32,733			28,823
Cash paid for purchase of treasury stock		(127,027	)		—			—
Net borrowings (repayments) on revolving credit loans		166,530			(11,319	)		(138,039	)
Principal payments on long-term debt		(291,627	)		(9,214	)		(1,492	)
Net cash provided by (used in) financing activities		(235,438	)		12,200			(110,708	)
Effect of exchange rate changes on cash and cash equivalents		(8,809	)		5,755			10,602
Net increase (decrease) in cash and cash equivalents		(38,391	)		86,255			(48,390	)
Cash and cash equivalents at beginning of year		195,056			108,801			157,191
Cash and cash equivalents at end of year	$	156,665		$	195,056		$	108,801
Reconciliation of net income to net cash provided by operating activities:
Net income	$	26,586		$	162,460		$	104,147
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	$	53,744		$	55,472		$	55,084
Provision for losses on accounts receivable		6,172			13,268			29,214
Deferred income taxes		26,466			(3,616	)		7,369
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable		(32,585	)		(44,305	)		(15,699	)
Inventories		(83,311	)		(119,999	)		(140,203	)
Prepaid expenses and other assets		3,078			(32,193	)		14,713
Accounts payable		214,804			55,849			300,350
Accrued expenses and other liabilities		42,485			20,009			(51,741	)
Total adjustments		230,853			(55,515	)		199,087
Net cash provided by operating activities	$	257,439		$	106,945		$	303,234

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

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TECH DATA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Tech Data Corporation (“Tech Data” or the “Company”) is a leading provider of information technology (“IT”) products, logistics management and other value-added services. The Company distributes microcomputer hardware and software products to value-added resellers, direct marketers, retailers and corporate resellers. The Company is managed in two geographic segments: the Americas (which includes the United States, Canada, Latin America and export sales to the Caribbean) and EMEA (which includes Europe, the Middle East and export sales to Africa).

Principles of Consolidation

The consolidated financial statements include the accounts of Tech Data and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company operates on a fiscal year that ends on January 31.

Basis of Presentation

In accordance with Statement of Financial Accounting Standards (“SFAS” or “Statement”) No 144, “Accounting for the Impairment or Disposal of Long-lived Assets”, the Company has accounted for the EMEA Training Business (the “Training Business”) as a discontinued operation. SFAS No. 144 applies to long-lived assets to be held and used or to be disposed of, including assets under capital leases of lessees, assets subject to operating leases of lessors and prepaid assets. The results of operations of the Training Business have been reclassified and presented as “income (loss) from discontinued operations, net of tax”, for all periods presented. The balance sheet data has not been reclassified as the net assets of the Training Business are less than 0.5% of the total net assets of the Company. The cash flows of the Training Business have not been reported separately within the Company’s Consolidated Statement of Cash Flows as the net cash flows of the Training Business are not material and the absence of cash flows from discontinued operations is not expected to affect the Company’s future liquidity. The transaction is further discussed in Note 2—Discontinued Operations.

Method of Accounting

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States. 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.

Revenue Recognition

Revenue is recognized once four criteria are met: (1) the Company must have persuasive evidence that an arrangement exists; (2) delivery must occur, which generally happens at the point of shipment (this includes the transfer of both title and risk of loss, provided that no significant obligations remain); (3) the price must be fixed or determinable; and (4) collectibility must be reasonably assured. Shipping revenue is included in net sales while the related costs, including shipping and handling costs, are included in the cost of products sold. The Company allows its customers to return product for exchange or credit subject to certain limitations. A provision for such returns is recorded at the time of sale based upon historical experience.

The Company generated net sales of approximately 27%, 28% and 32%, in fiscal 2006, 2005 and 2004, respectively, from products purchased from Hewlett Packard.

Service revenue associated with configuration, training and other services is recognized when the work is complete and the four criteria discussed above have been met. Service revenues have represented less than 10% of total net sales for fiscal years 2006, 2005 and 2004.

Accounts Receivable

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. In estimating the required allowance, the Company takes into consideration the overall quality and aging of the receivable portfolio, the existence of credit insurance, specifically identified customer risks and historical writeoff experience. If actual customer performance were to deteriorate to an extent not expected by the Company, additional allowances may be required which could have an adverse effect on the Company’s financial results.

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Inventories

Inventories, consisting entirely of finished goods, are stated at the lower of cost or market, cost being determined on the first-in, first-out (“FIFO”) method. Inventory is written down for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks (such as technological obsolescence and the nature of vendor terms surrounding price protection and product returns), foreign currency fluctuations for foreign-sourced product and assumptions about future demand.

Property and Equipment

Property and equipment are stated at cost and property and equipment under capital leases are stated at the present value of the future minimum lease payments. Depreciation expense includes depreciation of purchased property and equipment and assets recorded under capital leases. Depreciation expense is computed over the shorter of the estimated economic lives or lease periods using the straight-line method as follows:

	Years
Buildings and improvements	15-39
Leasehold improvements	3-10
Furniture, fixtures and equipment	3-10

Expenditures for renewals and improvements that significantly add to productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are charged to operations when incurred. When assets are sold or retired, the cost of the asset and the related accumulated depreciation are eliminated and any gain or loss is recognized at such time.

Long-Lived Assets

Long-lived assets are reviewed for potential impairment at such time when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss would be recognized when the sum of the expected, undiscounted future net cash flows is less than the carrying amount of the asset.

Goodwill

The Company accounts for goodwill and other intangible assets in accordance SFAS No. 142, “Goodwill and Other Intangible Assets”. SFAS No. 142 requires an annual review for impairment, or more frequently if impairment indicators arise. This testing includes the determination of each reporting unit’s fair value using market multiples and discounted cash flow modeling. The Company performs its annual review for goodwill impairment in the fourth quarter of each fiscal year.

Intangible Assets

Included within other assets at both January 31, 2006 and 2005 are certain intangible assets including capitalized software costs, as well as value assigned to the acquired customer lists and trademarks related to the acquisitions of Computer 2000 AG (“Computer 2000”) and Azlan Group PLC (“Azlan”). Such capitalized costs and intangibles are being amortized over a period of three to ten years.

The Company capitalizes computer software costs that meet both the definition of internal-use software and defined criteria for capitalization in accordance with SFAS Position No. 98-1, “Accounting for the Cost of Computer Software Developed or Obtained for Internal Use”.

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The Company’s accounting policy is to amortize capitalized software costs on a straight-line basis over periods ranging from three to ten years, depending upon the nature of the software, the stability of the hardware platform on which the software is installed, its fit in our overall strategy, and our experience with similar software. It is the Company’s policy to amortize personal computer-related software, such as spreadsheet and word processing applications, over three years, which reflects the rapid changes in personal computer software. Mainframe software licenses are amortized over five years, which is in line with the longer economic life of mainframe systems compared to personal computer systems. Finally, strategic applications such as customer relationship management and enterprise-wide systems are amortized over seven to ten years based on their strategic fit and the Company’s historical experience with such applications.

Product Warranty

The Company’s vendors generally warrant the products distributed by the Company and allow the Company to return defective products, including those that have been returned to the Company by its customers. The Company does not independently warrant the products it distributes. However, in several countries where the Company operates, the Company is responsible for defective product as a matter of law. The time period required by law in certain countries exceeds the warranty period provided by the manufacturer. To date, the Company has not incurred any significant costs for defective products under these legal requirements. The Company does warrant services with regard to products integrated for its customers. A provision for estimated warranty costs is recorded at the time of sale and periodically adjusted to reflect actual experience. To date, the Company has not incurred any significant service warranty costs. Fees charged for products configured by the Company represented less than 10% of net sales for fiscal years 2006, 2005 and 2004.

Income Taxes

Income taxes are accounted for under the liability method. Deferred taxes reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts. Deferred taxes have not been provided on the cumulative undistributed earnings of foreign subsidiaries or the cumulative translation adjustment related to those investments, since such amounts are expected to be reinvested indefinitely.

The Company’s future effective tax rates could be adversely affected by earnings being lower than anticipated in countries where it has lower statutory rates, changes in the valuation of its deferred tax assets or liabilities or changes in tax laws or interpretations thereof. In addition, the Company is subject to the continuous examination of its income tax returns by the Internal Revenue Service and other tax authorities. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. To the extent the Company were to prevail in matters for which accruals have been established or be required to pay amounts in excess of such accruals, the Company’s effective tax rate in a given financial statement period could be materially affected.

Concentration of Credit Risk

The Company sells its products to a large base of value-added resellers, direct marketers, retailers and corporate resellers throughout the United States, Europe, Canada, Latin America, the Caribbean, the Middle East and Africa. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company has obtained credit insurance, which insures a percentage of credit extended by the Company to certain of its customers against possible loss. The Company makes provisions for estimated credit losses at the time of sale. No single customer accounted for more than five percent of the Company’s net sales during fiscal years 2006, 2005 and 2004.

Foreign Currency Translation

Income and expense accounts of foreign operations are translated at weighted average exchange rates during the year. Assets, including goodwill, and liabilities of foreign operations that operate in a local currency environment are translated to U.S. dollars at the exchange rates in effect at the balance sheet date, with the related translation gains or losses reported as components of accumulated other comprehensive income in shareholders’ equity.

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Derivative Financial Instruments

The Company faces exposure to changes in foreign currency exchange rates and interest rates. The Company reduces its exposure by creating offsetting positions through the prudent use of derivative financial instruments. The majority of these instruments have terms of 90 days or less. It is the Company’s policy to utilize financial instruments to reduce risk where appropriate and prohibit entering into derivative financial instruments for speculative or trading purposes.

Derivative financial instruments are marked-to-market each period with gains and losses on these contracts recorded in income in the period in which their value changes, with the offsetting entry for unsettled positions being booked to either other assets or other liabilities. Gains and losses resulting from effective accounting hedges of existing assets, liabilities or firm commitments are deferred and recognized when the offsetting gains and losses are recognized on the related hedged items.

The notional amount of forward exchange contracts and options is the amount of foreign currency to be bought or sold at maturity. The notional amount of interest rate swaps is the underlying principal used in determining the interest payments exchanged over the life of the swap. Notional amounts are indicative of the extent of the Company’s involvement in the various types and uses of derivative financial instruments and are not a measure of the Company’s exposure to credit or market risks through its use of derivatives. The estimated fair value of derivative financial instruments represents the amount required to enter into similar offsetting contracts with similar remaining maturities based on quoted market prices.

The Company’s derivative financial instruments outstanding at January 31, 2006 and 2005 are as follows:

	January 31, 2006					January 31, 2005
	Notional   amounts		Estimated fair value			Notional   amounts		Estimated fair value
	(In thousands)					(In thousands)
Foreign exchange forward contracts	$	818,030	$	(1,109	)	$	666,950	$	214

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short maturity of these items. The carrying amount of debt outstanding pursuant to bank credit agreements approximates fair value as interest rates on these instruments approximate current market rates. The estimated fair value of the convertible subordinated notes was approximately $290.4 million at January 31, 2005 based upon available market information. These convertible subordinated notes were repaid prior to January 31, 2006.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, and is comprised of “net income (loss)” and “other comprehensive income (loss).” The Company’s other comprehensive income (loss) is comprised exclusively of changes in the Company’s currency translation adjustment account (“CTA account”), including income taxes attributable to those changes.

Comprehensive income (loss), net of taxes, for the years ended January 31, 2006, 2005 and 2004 is as follows (in thousands):

	Year ended January 31,
	2006			2005		2004
Comprehensive income (loss):
Net income	$	26,586		$	162,460	$	104,147
Change in CTA(1)		(86,043	)		68,051		182,646
Total	$	(59,457	)	$	230,511	$	286,793

(1) Net of income taxes of $5.6 million for the fiscal year ended January 31, 2004. There was no income tax effect in fiscal years 2006 or 2005.

Accumulated comprehensive income includes $28.6 million of income taxes at January 31, 2006, 2005 and 2004.

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Stock-Based Compensation

At January 31, 2006, the Company had awards outstanding under four stock-based employee compensation plans, which are described more fully in Note 10—Employee Benefit Plans. The Company has adopted the disclosure provisions of SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure,” which amends SFAS No. 123, “Accounting for Stock-Based Compensation.” SFAS No. 148 allows for continued use of recognition and measurement principles of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees” and related interpretations in accounting for those plans. The Company applies the recognition and measurement principles of APB Opinion No. 25, and related interpretations in accounting for the Company’s stock-based compensation plans. Options granted under these plans had an exercise price equal to or greater than the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions to stock-based employee compensation. Such disclosure is not necessarily indicative of the fair value of stock options that could be granted by the Company in future fiscal years or of the value of all equity instruments currently outstanding.

	Year ended January 31,
	2006			2005			2004
	(In thousands, except per share amounts)
Net income, as reported	$	26,586		$	162,460		$	104,147
Deduct: Total stock-based employee compensation expense determined under fair value-based method for all awards, net of related tax effects (1)		(22,804	)		(17,592	)		(21,231	)
Pro forma net income	$	3,782		$	144,868		$	82,916
Earnings per share:
Basic-as reported	$	0.46		$	2.79		$	1.83
Basic-pro forma	$	0.07		$	2.49		$	1.46
Diluted-as reported	$	0.45		$	2.74		$	1.81
Diluted-pro forma	$	0.06		$	2.45		$	1.44

(1) Pro-forma stock compensation expense for the year ended January 31, 2006 includes incremental expense, net of the related tax effects, of approximately $15.4 million related to the accelerated vesting of stock options issued in March 2004.

On February 25, 2005, the Company’s Board of Directors approved the acceleration of vesting for all stock options awarded in March 2004 to employees and officers under the Company’s stock option award program. While the Company typically issues options that vest equally over four years, as a result of this vesting acceleration, stock options to purchase approximately 1.5 million shares of the Company’s common stock became immediately exercisable. The grant prices of the affected stock options range from $41.08 to $41.64 and the closing price of the Company’s common stock on February 24, 2005, was $41.20. The vesting acceleration resulted in an expense to the Company of less than $0.1 million. The primary purpose of the accelerated vesting was to eliminate future compensation expense the Company would otherwise recognize in its income statement with respect to these accelerated options upon the adoption of SFAS No. 123R, “Share Based Payments”.

Treasury Stock

Treasury stock is accounted for at cost. The reissuance of shares from treasury stock for exercises of stock-based awards or other corporate purposes is based on the weighted average purchase price of the shares.

Earnings Per Share (“EPS”)

Basic EPS is computed by dividing net income by the weighted average number of shares outstanding during the reported period. For the years ended January 31, 2006, 2005 and 2004, diluted EPS reflects the potential dilution that could occur assuming the exercise of the stock options and similar equity incentives (as further discussed below) using the if-converted and treasury stock methods, respectively. The composition of basic and diluted EPS is as follows:

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	Year ended January 31, 2006					Year ended January 31, 2005					Year ended January 31, 2004
	(In thousands, except per share data)
	Net income		Weighted average shares	Per share amount		Net income		Weighted average shares	Per share amount		Net income		Weighted average shares	Per share amount
Net income per common share-basic	$	26,586	57,749	$	0.46	$	162,460	58,176	$	2.79	$	104,147	56,838	$	1.83
Effect of dilutive securities:
Stock options		—	665				—	1,017				—	663
Net income per common share-diluted	$	26,586	58,414	$	0.45	$	162,460	59,193	$	2.74	$	104,147	57,501	$	1.81

At January 31, 2006, 2005 and 2004, there were 3,215,066, 1,435,852 and 2,445,046 shares, respectively, excluded from the computation of diluted earnings per share because their effect would have been antidilutive.

The Company issued approximately 255,000 shares of common stock during the year ended January 31, 2006 and 1,267,000 shares of common stock during the year ended January 31, 2005 in connection with the exercise of stock options. In addition, during the year ended January 31, 2006, the Company repurchased 3,443,131 shares of common stock and reissued 395,071 shares of the treasury stock.

In December 2004 the Company completed an Exchange Offer whereby approximately 99.3% of the Company’s $290.0 million convertible subordinated debentures (the “Old Notes”) were exchanged for new debentures (the “New Notes”). The dilutive impact of the Old Notes and New Notes outstanding at January 31, 2005 and 2004 has been excluded from the diluted earnings per share calculations due to the conditions for the contingent conversion features not being met. As further discussed in Note 8—Long Term Debt, the entire balance of the Old Notes and the New Notes was repaid prior to January 31, 2006.

Cash Management System

Under the Company’s cash management system, to the extent that cash is unavailable locally, disbursements cleared by the bank are reimbursed on a daily basis from available credit facilities. As a result, checks issued but not yet presented to the bank by the payee are not considered reductions of cash or accounts payable. Included in accounts payable are $87.3 million and $67.1 million at January 31, 2006 and 2005, respectively, for which checks are outstanding.

Statement of Cash Flows

Short-term investments which have an original maturity of ninety days or less are considered cash equivalents.

Contingencies

The Company accrues for contingent obligations, including estimated legal costs, when the obligation is probable and the amount is reasonably estimable. As facts concerning contingencies become known, the Company reassesses its position and makes appropriate adjustments to the financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal and other regulatory matters such as imports and exports, the imposition of international governmental controls, changes in the interpretation and enforcement of international laws (particularly related to items such as duty and taxation), and the impact of local economic conditions and practices, which are all subject to change as events evolve and as additional information becomes available during the administrative and litigation process.

Non-Cash Transactions

The Company completed an Exchange Offer in December 2004 whereby approximately 99.3% of the Company’s $290.0 million convertible subordinated debentures were exchanged for new notes. See further discussion at Note 8—Long-Term Debt.

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Recent Accounting Pronouncements & Legislation

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Staff Position No. 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004” (“FSP No. 109-2”), which provides guidance for implementing the repatriation of earnings provisions of the American Jobs Creation Act of 2004 (the “Jobs Act”) and disclosing the provision’s impact on the Company’s income tax and deferred tax liabilities. Even though the Jobs Act was enacted in October 2004, FSP No. 109-2 permits additional time beyond the period of enactment to allow the Company to evaluate the effects of the Jobs Act on the Company’s plan for reinvestment or repatriation of foreign earnings. After completing this evaluation during the third quarter of fiscal 2006, the Company made the decision not to repatriate any foreign earnings under the provisions of the Jobs Act.

In February 2005, the FASB issued Emerging Issues Task Force (“EITF”) Issue No. 03-13, “Applying the Conditions of Paragraph 42 of FASB Statement No. 144 in Determining Whether to Report Discontinued Operations” (“EITF 03-13”). EITF 03-13 gives guidance on how to evaluate whether the operations and cash flows of a disposed component have been or will be eliminated from ongoing operations and the types of continuing involvement that constitute significant continuing involvement in the operations of the disposed component. The provisions of EITF 03-13 have been applied in the determination of the discontinued operations as of January 31, 2006.

In April 2005, the SEC modified the effective date of SFAS No. 123R – “Share-Based Payments” (“SFAS No. 123R”). SFAS 123R, as amended, requires all share-based payments to employees, including grants of employee equity incentives, to be recognized in the consolidated statement of operations based on their fair values. SFAS No. 123R is applicable to the Company beginning February 1, 2006, and the Company will adopt the standard using the “modified prospective” method. The modified prospective method requires compensation costs to be recognized, beginning with the effective date of adoption, for all share-based payments granted after the effective date and awards granted to employees prior to the effective date of the statement that remain unvested on the effective date.

As permitted by SFAS No. 123, the Company currently accounts for share-based payments to employees using the intrinsic value method prescribed in APB Opinion No. 25, and as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of SFAS No. 123R will impact the Company’s results of operations, although it will have no impact on our overall liquidity. The future impact of the adoption of SFAS No. 123R cannot be determined because it will depend on the levels of share-based payments granted in the future. However, had the Company adopted SFAS No. 123R in prior periods, the impact of the statement would have approximated the impact of SFAS No. 123 as described in the disclosure of pro-forma net income and earnings per share included in the stock-based compensation table earlier in this note.

SFAS No. 123R also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow, as currently required. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. While the Company cannot estimate what those amounts will be in the future as it depends, among other things, when employees exercise stock options, the amount of operating cash flows recognized in prior periods for such excess tax deductions were $2.6 million, $5.7 million and $4.3 million for the years ended January 31, 2006, 2005 and 2004, respectively.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Corrections”, which replaces APB Opinion No. 20, “Accounting Changes” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”, and changes the requirements for the accounting for and reporting of a change in accounting principle. SFAS No. 154 also provides guidance on the accounting for and reporting of error corrections. This statement is applicable for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.

In June 2005, the FASB issued Staff Position 143-1, “Accounting for Electronic Equipment Waste Obligations” (“FSP 143-1”). FSP 143-1 provides guidance on the accounting for certain obligations associated with the Waste Electrical and Electronic Equipment Directive (the “Directive”) adopted by the European Union (“EU”). Under the Directive, the waste management obligation for historical equipment (products put on the market on or prior to August 13, 2005) remains with the commercial user until the customer replaces the equipment. The Company will apply the provisions of FSP 143-1, which requires recognition of the estimated liability and obligation associated with the historical waste, upon the Directive’s adoption into law by the applicable EU member countries in which it operates. The Company is in the process of assessing what impact, if any, the Directive and FSP 143-1 may have on its consolidated financial position or results of operations.

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Reclassifications

Reclassifications, in addition to those related to discontinued operations discussed in Note 2, have been made to the January 31, 2005 and 2004 financial statements to conform to the January 31, 2006 financial statement presentation. These reclassifications did not change previously reported total assets, liabilities, shareholders’ equity or net income.

NOTE 2 — DISCONTINUED OPERATIONS

In the fourth quarter of fiscal 2006, in order to dedicate strategic efforts and resources to core growth opportunities, the Company made the decision to sell the EMEA Training Business (the “Training Business”). In March 2006, we closed the sale of the Training Business to a third-party (the “Purchaser”) for total cash consideration of $16.5 million and $0.5 million of additional consideration which is contingent upon the satisfaction of certain post-closing conditions. The sale of the Training Business includes net assets with a book value of approximately $7.3 million at January 31, 2006, comprised primarily of accounts receivable, property and equipment, accrued expenses and other liabilities. We will provide IT services for a transitional period anticipated to be approximately six months, but will have no other significant continuing involvement in the operations of the Training Business subsequent to the closing of the sale. In addition, the Company will realize no continuing cash flows from the Training Business subsequent to the closing of the sale. The Company is in the process of finalizing the closing balance sheet as of the sale date with the Purchaser, including the allocation of any EMEA goodwill and does not anticipate the gain on the sale of the Training Business to be material to the Company’s consolidated operating results or financial condition.

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the sale of the Training Business qualifies as a discontinued operation. Accordingly, the results of the Training Business have been reclassified and presented as “income (loss) from discontinued operations, net of tax”, within Consolidated Statement of Operations for each of the three years in the period ended January 31, 2006. The assets and liabilities of the Training Business have not been reclassified within the Consolidated Balance Sheet as the net assets of the Training Business are less than 0.5% of the total consolidated net assets of the Company.

The following table reflects the results of the Training Business reported as discontinued operations for all periods presented:

	Year ended January 31,
	2006		2005		2004
	(In thousands)
Net sales	$	59,290	$	59,416	$	47,815
Cost of products sold		11,519		11,117		9,921
Gross profit		47,771		48,299		37,894
Selling, general and administrative expenses		42,545		44,340		41,179
Operating income (loss) from discontinued operations		5,226		3,959		(3,285	)
Provision (benefit) for income taxes		1,607		1,121		(244	)
Income (loss) from discontinued operations, net of tax	$	3,619	$	2,838	$	(3,041	)

No amounts related to interest expense or interest income have been allocated to discontinued operations.

- 46 -

The net assets of the Training Business as of January 31, 2006, included in the Company’s Consolidated Balance Sheet, are as follows (in thousands):

ASSETS
Current assets:
Accounts receivable, net	$	9,266
Inventories		537
Prepaid expenses and other assets		2,227
Total current assets		12,030
Property and equipment, net		6,236
Total assets	$	18,266
LIABILITIES
Current liabilities:
Accounts payable	$	1,597
Accrued expenses and other liabilities		9,349
Total current liabilities		10,946
Total liabilities	$	10,946
Net assets	$	7,320

NOTE 3 — ACCOUNTS RECEIVABLE, NET

Accounts receivable, net is comprised of the following:

	January 31,
	2006			2005
	(In thousands)
Accounts receivable	$	2,220,513		$	2,294,783
Allowance for doubtful accounts		(60,375	)		(77,309	)
Total	$	2,160,138		$	2,217,474

Trade Receivables Purchase Facility Agreements

During fiscal 2006, the Company entered into revolving trade receivables purchase facility agreements (the “Receivables Facilities”) with third-party financial institutions to sell accounts receivable on a non-recourse basis. The Company uses the Receivables Facilities as a source of working capital funding. The Receivables Facilities limit the amount of purchased accounts receivable the financial institutions may hold to $346.0 million at January 31, 2006, based on currency exchange rates at that date. Under the Receivables Facilities, the Company may sell certain accounts receivable (the “Receivables”) in exchange for cash less a discount based on LIBOR plus a margin. Such transactions have been accounted for as a true sale, in accordance with SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”. The Receivables Facilities, of which $200.0 million expires in May 2006 and $146.0 million does not have an expiration date, require that the Company continue to service, administer and collect the sold accounts receivable. During the year ended January 31, 2006, the Company received gross proceeds of $796.1 million from the sale of the Receivables and recognized related discounts totaling $5.5 million. The proceeds, net of the discount incurred, are reflected in the Consolidated Statement of Cash Flows in operating activities within cash received from customers and the change in accounts receivable.

- 47 -

NOTE 4 — PROPERTY AND EQUIPMENT, NET

	January 31,
	2006			2005
	(In thousands)
Land	$	6,276		$	8,075
Buildings and leasehold improvements		88,996			100,669
Furniture, fixtures and equipment		322,344			321,670
		417,616			430,414
Less accumulated depreciation		(276,341	)		(284,270	)
	$	141,275		$	146,144

Depreciation expense, including amortization expense of assets recorded under capital leases, included in income from continuing operations for the years ended January 31, 2006, 2005 and 2004 totaled $30.6 million, $33.1 million, and $35.2 million, respectively. Property and equipment leased under capital leases was approximately $14.5 million and $17.2 million, net of accumulated depreciation of $8.2 million and $7.1 million, at January 31, 2006 and 2005, respectively (see Note 8—Long-Term Debt). Property and equipment recorded as capital leases is comprised of a logistics center and related equipment in EMEA.

NOTE 5— GOODWILL AND OTHER INTANGIBLE ASSETS

The Company accounts for goodwill and other intangible assets in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 requires an annual review for impairment, or more frequently if impairment indicators arise. This review includes the determination of each reporting unit’s fair value using market multiples and discounted cash flow modeling. Separable intangible assets that have finite lives continue to be amortized over their estimated useful lives. During the fourth quarters of fiscal 2006, 2005 and 2004, the Company performed its annual review for impairment of goodwill and determined there were no impairments.

The changes in the carrying amount of goodwill for the years ended January 31, 2006 and 2005, respectively, are as follows:

	Americas		EMEA			Total
			(In thousands)
Balance as of January 31, 2004	$	2,966	$	138,272		$	141,238
Goodwill acquired during the year		—		3,046			3,046
Adjustments to allocation of previously recorded purchase price		—		(3,728	)		(3,728	)
Other(1)		—		9,163			9,163
Balance as of January 31, 2005		2,966		146,753			149,719
Adjustments to allocation of previously recorded purchase price		—		(3,346	)		(3,346	)
Other(1)		—		(12,046	)		(12,046	)
Balance as of January 31, 2006	$	2,966	$	131,361		$	134,327

⁽¹⁾ “Other” primarily relates to the effect of fluctuations in foreign currencies.

- 48 -

Included within “other assets, net” are intangible assets as follows:

	January 31, 2006						January 31, 2005
	Gross carrying amount		Accumulated amortization		Net book value		Gross carrying amount		Accumulated amortization		Net book value
	(In thousands)						(In thousands)
Amortized intangible assets:
Capitalized software and development costs	$	191,169	$	107,248	$	83,921	$	181,638	$	95,792	$	85,846
Customer lists		29,340		15,777		13,563		31,443		12,930		18,513
Trademarks		7,303		4,139		3,164		7,827		2,869		4,958
Other intangible assets		817		745		72		708		592		116
Total	$	228,629	$	127,909	$	100,720	$	221,616	$	112,183	$	109,433

In addition, the Company capitalized intangible assets of $18.8 million, $17.9 million and $21.7 million for the years ended January 31, 2006, 2005 and 2004, respectively. These capitalized intangible assets included capitalized interest of $0.3 million, $0.6 million and $0.8 million for the respective periods. These capitalized assets related solely to software and software development expenditures to be used in the Company’s operations.

The weighted average amortization period for all intangible assets capitalized during fiscal 2006, 2005 and 2004 approximated nine, eight and seven years, respectively. The weighted average amortization period of all intangible assets was approximately nine, nine and eight years for fiscal years 2006, 2005 and 2004, respectively.

Amortization expense included in income from continuing operations for the years ended January 31, 2006, 2005 and 2004 totaled $21.2 million, $20.0 million and $17.7 million, respectively. Estimated amortization expense of currently capitalized costs for assets placed in service is as follows (in thousands):

Fiscal year:
2007	$	18,500
2008		16,900
2009		13,200
2010		10,900
2011		8,700

NOTE 6 — RESTRUCTURING PROGRAM

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

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

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

- 49 -

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

	Employee termination benefits			Facility costs			Total
	(In thousands)
Balance as of January 31, 2005	$	—		$	—		$	—
Charges to operations		18,888			12,058			30,946
Cash payments		(16,980	)		(2,198	)		(19,178	)
Other		151			564			715
Balance as of January 31, 2006	$	2,059		$	10,424		$	12,483

NOTE 7 — REVOLVING CREDIT LOANS

	January 31,
	2006		2005
	(In thousands)
Receivables Securitization Program, average interest rate of 4.72% at January 31, 2006, expiring August 2006	$	120,000	$	—
Multi-currency Revolving Credit Facility, average interest rate of 5.50% at January 31, 2006, expiring March 2010		6,000		—
Other revolving credit facilities, average interest rate of 3.49% at January 31, 2006, expiring on various dates throughout fiscal 2007		109,088		68,343
	$	235,088	$	68,343

The Company has an agreement (the “Receivables Securitization Program”) with a syndicate of banks that allows the Company to transfer an undivided interest in a designated pool of U.S. accounts receivable, on an ongoing basis, to provide security or collateral for borrowings up to a maximum of $400.0 million. Under this program, which expires in August 2006, the Company legally isolated certain U.S. trade receivables into a wholly-owned bankruptcy remote special purpose entity. Such receivables, which are recorded in the Consolidated Balance Sheet, totaled $515.3 million and $505.0 million at January 31, 2006 and 2005, respectively. As collections reduce accounts receivable balances included in the pool, the Company may transfer interests in new receivables to bring the amount available to be borrowed up to the maximum. The Company pays interest on advances under the Receivables Securitization Program at designated commercial paper rates plus an agreed-upon margin. The Company plans to renew this program in August 2006.

Under the terms of the Company’s Multi-currency Revolving Credit Facility with a syndicate of banks, the Company is able to borrow funds in major foreign currencies up to a maximum of $250.0 million. Under this facility, which expires in March 2010, the Company has provided either a pledge of stock or a guarantee of certain of its significant subsidiaries. The Company pays interest on advances under this facility at the applicable LIBOR rate plus a margin based on the Company’s credit ratings. The Company can fix the interest rate for periods of 7 to 180 days under various interest rate options.

In addition to the facilities described above, the Company has additional lines of credit and overdraft facilities totaling approximately $674.7 million at January 31, 2006 to support its worldwide operations. Most of these facilities are provided on an unsecured, short-term basis and are reviewed periodically for renewal.

The total capacity of the aforementioned credit facilities was approximately $1.3 billion, of which $235.1 million was outstanding at January 31, 2006. The Company’s credit agreements contain limitations on the amounts of annual dividends and repurchases of common stock. Additionally, the credit agreements require compliance with certain warranties and covenants on a continuing basis. The financial ratio covenants contained within the credit agreements include a debt to capitalization ratio, an interest to EBITDA (earnings before interest, taxes, deprecation and amortization) ratio and a tangible net worth requirement. At January 31, 2006, the Company was in compliance with all such covenants. The ability to draw funds under these credit facilities is dependent upon sufficient collateral (in the case of the Receivables Securitization Program) and meeting the aforementioned financial covenants, which may limit the Company’s ability to draw the full amount of these facilities. As of January 31, 2006, the maximum amount that could be borrowed under these facilities, in consideration of the availability of collateral and the financial covenants, was approximately $1.1 billion.

- 50 -

At January 31, 2006, the Company had issued standby letters of credit of $22.4 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 these letters of credit reduces the Company’s available capacity under the above mentioned facilities by the same amount.

NOTE 8 — LONG-TERM DEBT

	January 31,
	2006			2005
	(In thousands)
Convertible subordinated debentures, interest at 2.00% payable semi-annually, due December 2021 (includes $2.0 million of convertible debentures not redeemed for New Notes at January 31, 2005 in connection with the Exchange Offer discussed below)	$	—		$	290,000
Capital leases		15,983			18,840
		15,983			308,840
Less—current maturities		(1,605	)		(291,625	)
	$	14,378		$	17,215

In December 2001, the Company issued $290.0 million of convertible subordinated debentures due 2021. The debentures bore interest at 2% per year and were convertible into the Company’s common stock, if the market price of the common stock exceeded a specified percentage of the conversion price per share of common stock, beginning at 120% and declining 1/2% each year until it reaches 110% at maturity, or in other specified instances. Holders could convert debentures into 16.7997 shares per $1,000 principal amount of debentures, equivalent to a conversion price of approximately $59.53 per share. The debentures were convertible into 4,871,913 shares of the Company’s common stock. Holders had the option to require the Company to repurchase the debentures on any of the fourth, eighth, twelfth or sixteenth anniversary dates from the issue date at 100% of the principal amount plus accrued interest to the repurchase date. The Company had the option to satisfy such repurchases in either cash and/or the Company’s common stock, provided that shares of common stock at the first purchase date will be valued at 95% of fair market value (as defined in the indenture) and at 97.5% of fair market value for all subsequent purchase dates. The debentures were redeemable in whole or in part for cash at the Company’s option at any time on or after December 20, 2005. Additionally, the debentures were subordinated in right of payment to all senior indebtedness of the Company and were effectively subordinated to all indebtedness and other liabilities of the Company’s subsidiaries.

In December 2004, the Company completed an Exchange Offer whereby approximately 99.3% of the Company’s then outstanding $290.0 million convertible subordinated debentures (the “Old Notes”) were exchanged for new debentures (the “New Notes”). The New Notes had substantially identical terms to the previously outstanding Old Notes except for the following modifications: a) a net share settlement feature that provides that holders will receive, upon redemption, cash for the principal amount of the New Notes and stock for any remaining amount due; b) an adjustment to the conversion rate upon payment of cash dividends or distributions as well as a modification to the options available to the New Note holders in the event of a change in control; and c) a modification to the calculation of contingent interest payable, if any. As the holders of both the New Notes and the Old Notes had the option to require the Company to repurchase the debentures on certain dates, beginning with December 15, 2005, the Company classified the debentures as a current liability at January 31, 2005.

In accordance with the debenture agreement, on December 15, 2005, the debenture holders of the New Notes exercised their option to require the Company to repurchase the debentures. The Company repurchased the New Notes using cash and existing credit lines. In addition, prior to January 31, 2006, the Company also repurchased the Old Notes using cash and existing credit lines.

In accordance with Emerging Issues Task Force Issue No. 04-8, “The Effect of Contingently Convertible Instruments on Diluted Earnings Per Share”, the dilutive impact of the New Notes is excluded from the diluted EPS calculations due to the conditions for the contingent conversion feature not being met. Since only $2.0 million of the original $290.0 million of Old Notes were not exchanged for New Notes in connection with the Exchange Offer, there is no impact on previously reported diluted EPS or on diluted EPS for the years ended January 31, 2005 and 2004, respectively.

The aforementioned debentures were subordinated in right of payment to all senior indebtedness of the Company and were effectively subordinated to all indebtedness and other liabilities of the Company’s subsidiaries.

- 51 -

Principal maturities of long-term debt, comprised exclusively of capital leases, at January 31, 2006 and for succeeding fiscal years is as follows (in thousands):

Fiscal year:
2007	$	2,520
2008		2,520
2009		1,751
2010		1,597
2011		1,597
Thereafter		9,768
Total payments		19,753
Less amounts representing interest		(3,770	)
Total principal payments	$	15,983

In August 2000, the Company filed a universal shelf registration statement with the Securities and Exchange Commission for $500.0 million of debt and equity securities. The net proceeds from any issuance are expected to be used for general corporate purposes, including capital expenditures, the repayment or refinancing of debt and to meet working capital needs. As of January 31, 2006, the Company had not issued any debt or equity securities under this registration statement, nor can any assurances be given that the Company will issue any debt or equity securities under this registration statement in the future.

NOTE 9 — INCOME TAXES

The Company accounts for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes”. In accordance with SFAS No. 109, the Company evaluates the ability to realize its deferred tax assets on a quarterly basis. This evaluation takes into consideration all positive and negative evidence and a variety of factors, including the scheduled reversal of temporary differences, historical and projected future taxable income, and prudent and feasible tax planning strategies.

As a result of the Company’s quarterly deferred tax asset evaluation, during the second quarter of fiscal 2006, a non-cash charge of $56.0 million was recorded to increase the valuation allowance against deferred tax assets related to specific jurisdictions in EMEA, primarily Germany. While the Company believes its restructuring efforts will improve the operating performance within its German operations, the Company determined this charge to be appropriate due to the cumulative losses expected to be realized through the current fiscal year, with such cumulative losses not being utilized in future periods through the implementation of prudent and feasible tax planning strategies. To the extent that the Company generates consistent taxable income within those operations requiring a valuation allowance, the Company may reduce the valuation allowance on the related deferred tax assets, thereby reducing the income tax expense and increasing net income in the same period. The underlying net operating loss carryforwards remain available to offset future taxable income in the specific jurisdictions requiring a valuation allowance, subject to applicable tax laws and regulations.

Significant components of the provision for income taxes for continuing operations are as follows:

	Year ended January 31,
	2006			2005			2004
	(In thousands)
Current:
Federal	$	62,032		$	31,701		$	21,245
State		3,931			1,763			1,025
Foreign		16,584			22,177			17,401
Total current		82,547			55,641			39,671
Deferred:
Federal		(22,747	)		4,990			13,011
State		(2,371	)		967			2,007
Foreign		51,584			(9,573	)		(7,649	)
Total deferred		26,466			(3,616	)		7,369
	$	109,013		$	52,025		$	47,040

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The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax expense for continuing operations is as follows:

	Year ended January 31,
	2006		2005		2004
U.S. statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	0.8		0.8		1.3
Net operating losses	60.7		2.5		7.6
Tax on foreign earnings under U.S. rate	(14.0	)	(9.8	)	(13.2	)
Reversal of previously accrued income taxes	—		(5.4	)	—
Other—net	0.1		1.5		(0.2	)
	82.6	%	24.6	%	30.5	%

Included in net operating losses in fiscal 2006 is a non-cash charge of $56.0 million to increase in the valuation allowance on deferred tax assets related to specific jurisdictions in EMEA, primarily Germany. The reversal of previously accrued income taxes represents the reversal of $11.5 million in accrued taxes due to the favorable resolution of various income tax examinations during the fourth quarter of fiscal 2005.

The components of pretax income from continuing operations are as follows:

	Year ended January 31,
	2006		2005		2004
	(In thousands)
United States	$	122,125	$	114,338	$	101,059
Foreign		9,855		97,309		53,169
	$	131,980	$	211,647	$	154,228

Significant components of the Company’s deferred tax liabilities and assets are as follows:

	January 31,
	2006			2005
	(In thousands)
Deferred tax liabilities:
Depreciation and amortization	$	23,595		$	27,541
Capitalized marketing program costs		2,497			1,791
Convertible debenture interest		—			26,706
Accruals currently deductible		8,793			8,788
Other, net		6,488			6,317
Total deferred tax liabilities		41,373			71,143
Deferred tax assets:
Accrued liabilities and reserves		50,363			56,042
Loss carryforwards		101,756			85,936
Amortizable goodwill		32,456			39,231
Depreciation and amortization		8,256			5,210
Other, net		2,114			233
		194,945			186,652
Less: valuation allowance		(136,506	)		(66,909	)
Total deferred tax assets		58,439			119,743
Net deferred tax asset	$	17,066		$	48,600

The net change in the deferred income tax valuation allowance was an increase of $69.6 at January 31, 2006, an increase of $8.8 million at January 31, 2005, and an increase of $33.3 million at January 31, 2004. The valuation allowance at January 31, 2006 and 2005 primarily relates to foreign net operating loss carryforwards of $375.7 million and $321.6 million, respectively. The majority of the net operating losses have an indefinite carryforward period with the remaining portion expiring in fiscal years 2007 through 2021. The Company evaluates a variety of factors in determining the realizability of deferred tax assets, including the scheduled reversal of temporary differences, projected future taxable income, and prudent and feasible tax planning strategies.

- 53 -

During fiscal 2005, $39.2 million of the loss carryforward deferred tax asset was reclassified due to a corporate reorganization in Germany. As part of the reorganization, a tax election was made, which converted a portion of the German net operating losses into tax deductible goodwill.

The cumulative amount of undistributed earnings of foreign subsidiaries for which U.S. income taxes have not been provided was approximately $83.1 million at January 31, 2006. It is not currently practical to estimate the amount of unrecognized deferred U.S. income taxes that might be payable on the repatriation of these earnings.

NOTE 10 — EMPLOYEE BENEFIT PLANS

Stock Compensation Plans

At January 31, 2006, the Company had awards outstanding under four stock-based compensation plans, two of which are currently active and which authorize the issuance of 10.5 million shares, of which approximately 2.2 million shares are available for future grant. Under the plans, the Company is authorized to award officers, employees, and non-employee members of the Board of Directors restricted stock, options to purchase common stock, maximum-value stock-settled stock appreciation rights (“MV Stock-settled SARS”), maximum-value stock options (“MVOs”) and performance awards that are dependent upon achievement of specified performance goals. Equity-based compensation grants have a maximum term of 10 years, unless a shorter period is specified by the Compensation Committee of the Board of Directors. Grants and awards under the plans are priced as determined by the Compensation Committee and under the terms of the Company’s active stock-based compensation plans and are required to be priced at, or above, the fair market value on the date of grant. Awards generally vest between one and five years from the date of grant. The Company applies APB Opinion No. 25 and related interpretations in accounting for its plans.

During the fiscal year ended January 31, 2006, the Company’s Board of Directors approved the issuance of 1.6 million long-term incentive awards in the form of MV Stock-settled SARs and MVOs pursuant to the 2000 Equity Incentive Plan of Tech Data Corporation, as amended. MV Stock-settled SARs and MVOs are similar to traditional stock options, except these instruments contain a predetermined cap on the exercise price. In addition, upon exercise, a MV Stock-settled SAR requires the Company to settle the spread (the difference between the exercise price and the grant price) in shares of the Company’s common stock. The grant price of the MV Stock-settled SARs and MVOs was determined using the last sale price as quoted on the NASDAQ on the date of grant (or higher as required based on the laws and regulations of specific foreign jurisdictions). The terms of the awards (i.e. vesting schedule, contractual term, etc.) were not materially different from the terms of traditional stock options previously granted by the Company. MV Stock-settled SARs are required to be accounted for as variable awards, until the earlier of the exercise of these awards or the implementation of SFAS No. 123R. In accordance with APB Opinion No. 25, variable awards are to be remeasured on a quarterly basis with changes in value recorded in the Company’s Consolidated Statement of Operations as compensation expense. Compensation expense of approximately $0.1 million was recorded for these instruments during the year ended January 31, 2006.

A summary of the status of the Company’s stock option plans is as follows:

	January 31, 2006				January 31, 2005				January 31, 2004
	Shares		Weighted- average exercise price		Shares		Weighted- average exercise price		Shares		Weighted- average exercise price
Outstanding at beginning of year	6,843,585		$	34.15	6,952,461		$	31.20	7,064,331		$	32.14
Granted	1,600,027			37.07	1,656,310			40.86	2,101,055			24.44
Exercised	(596,786	)		24.01	(1,284,001	)		26.25	(1,236,862	)		23.49
Canceled	(654,623	)		37.19	(481,185	)		35.95	(976,063	)		33.18
Outstanding at year end	7,192,203			35.36	6,843,585			34.15	6,952,461			31.20
Options exercisable at year end	5,043,986				3,576,410				3,436,503
Available for grant at year end	2,166,082	(1)			3,225,442				4,452,027

(1) Total includes 758,014 shares available for grant under an employee equity compensation plan not approved by shareholders. On March 29, 2006, the Board of Directors passed a resolution that prohibits the Company from issuing any future grants under this plan.

- 54 -

	Options outstanding				Options exercisable
Range of exercise prices	Number outstanding at 1/31/06	Weighted- average remaining contractual life (years)	Weighted- average exercise price		Number exercisable at 1/31/06	Weighted- average exercise price
$14.37 – $21.56	257,814	3.09	$	16.65	257,814	$	16.65
22.75 –   25.64	1,161,702	6.53		24.25	512,118		24.23
28.31 –   36.86	1,144,314	4.96		30.33	1,068,361		29.99
37.06 –   37.06	1,342,419	9.16		37.06	0		0
37.25 –   41.00	623,418	3.55		39.72	554,344		39.83
41.08 –   41.08	1,295,550	8.16		41.08	1,289,050		41.08
41.13 –   51.38	1,366,986	5.93		43.47	1,362,299		43.46
	7,192,203	6.57		35.36	5,043,986		36.28

Employee Stock Purchase Plan

Under the 1995 Employee Stock Purchase Plan (the “ESPP”) approved in June 1995, the Company is authorized to issue up to 1,000,000 shares of common stock to eligible employees in the Company’s U.S. and Canadian subsidiaries. Under the terms of the ESPP, employees can choose to have a fixed dollar amount or percentage deducted from their bi-weekly compensation to purchase the Company’s common stock and/or elect to purchase shares once per calendar quarter. The purchase price of the stock is 85% of the market value on the exercise date and employees are limited to a maximum purchase of $25,000 in fair market value each calendar year. From the inception of the ESPP through January 31, 2006, the Company has sold 387,005 shares of common stock to the ESPP. All shares purchased under the ESPP must be held for a period of one year.

Pro Forma Effect of Stock Compensation Plans

As disclosed in Note 1—Business and Summary of Significant Accounting Policies, the Company has included the pro forma net income and pro forma earnings per share reflecting the compensation cost that the Company would have recorded on its equity incentive plans plan had it used the fair value at grant date for awards under the plans consistent with the method prescribed by SFAS No. 123. The weighted-average estimated fair value of the MV Stock-settled SARs and MVOs granted during the year ended January 31, 2006 was $7.70 based on a two-step valuation utilizing both the Hull-White Lattice (binomial) and Black-Scholes option-pricing models using the following weighted-average assumptions:

Year ended January 31, 2006	Expected option term (years)	Expected volatility	Risk-free interest rate	Expected  dividend yield	Suboptimal exercise factor
Hull-White Lattice	10	41%	4.65%	0%	1.24
Black-Scholes	4	41%	4.65%	0%	—
The weighted-average estimated fair value of options granted during fiscal 2005 and 2004 was $19.87 and $13.10, respectively, based on the Black-Scholes option-pricing model using the following weighted-average assumptions:
Year ended January 31,	Expected option term (years)	Expected volatility	Risk-free interest rate	Expected dividend yield
2005	5	57%	2.50%	0%
2004	4	66%	2.54%	0%

Results may vary depending on the assumptions applied within the model.

Retirement Savings Plan

The Company sponsors the Tech Data Corporation 401(k) Savings Plan (“the 401(k) Savings Plan”) for its employees. At the Company’s discretion, participant deferrals are matched monthly, in the form of company stock, in an amount equal to 50% of the first 6% of participant deferrals and participants are fully vested following four years of qualified service.

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At January 31, 2006 and 2005, the number of shares of Tech Data common stock held by the Company’s 401(k) Savings Plan totaled 329,000 and 334,000 shares, respectively.

Aggregate contributions made by the Company to the 401(k) Savings Plan were $2.3 million and $1.8 million for fiscal 2006 and fiscal 2005, respectively. Tech Data did not make any contributions to the 401(k) Savings Plan in fiscal 2004.

NOTE 11 — SHAREHOLDERS’ EQUITY

On March 31, 2005, the Company’s Board of Directors authorized a share repurchase program of up to $100.0 million of the Company’s common stock (increased to $200.0 million in November 2005). The Company’s share repurchases are made on the open market through block trades or otherwise. The number of shares purchased and the timing of the purchases is based on working capital requirements, general business conditions and other factors, including alternative investment opportunities. Shares repurchased by the Company are held in treasury for general corporate purposes, including issuances under employee equity incentive plans. During fiscal 2006, the Company repurchased 3,443,131 shares comprised of 3,260,576 shares purchased in conjunction with the Company’s share repurchase program and 182,555 shares purchased outside of the stock repurchase program, at an average of $36.89 per share, for a total cost, including expenses, of approximately $127.0 million.

NOTE 12 — COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases logistics centers, office facilities and certain equipment under noncancelable operating leases that expire at various dates through 2015. Fair value renewal and purchase options and escalation clauses exist for a substantial portion of the operating leases included above. Rental expense related to continuing operations for all operating leases, including minimum commitments under IT outsourcing agreements, totaled $59.0 million, $58.6 million and $55.9 million in fiscal years 2006, 2005 and 2004, respectively. Future minimum lease payments at January 31, 2006 under all such leases, including minimum commitments under IT outsourcing agreements, for succeeding fiscal years are as follows (in thousands):

Fiscal year:
2007	$	62,493
2008		54,841
2009		44,846
2010		37,383
2011		29,450
Thereafter		68,728
Total payments	$	297,741

Synthetic Lease Facility

On July 31, 2003, the Company completed a restructuring of its synthetic lease facility with a group of financial institutions (the “Restructured Lease”) under which the Company leases certain logistics centers and office facilities from a third-party lessor. The Restructured Lease expires in fiscal year 2008, at which time the Company has the following options: renew the lease for an additional five years, purchase the properties at an amount equal to their cost, or remarket the properties. If the Company elects to remarket the properties, it has guaranteed the lessor a percentage of the cost of each of the properties, in an aggregate amount of approximately $121.0 million (the “residual value”). At any time during the lease term, the Company may, at its option, purchase up to four of the seven properties, at an amount equal to each property’s cost. The Company pays interest on the Restructured Lease at LIBOR plus an agreed-upon margin. The Restructured Lease contains covenants that must be complied with on a continuous basis, similar to the covenants described in certain of the credit facilities discussed in Note 7—Revolving Credit Loans. The amount funded under the Restructured Lease (approximately $136.7 million at January 31, 2006) is treated as debt under the definition of the covenants required under both the Restructured Lease and the credit facilities. As of January 31, 2006, the Company was in compliance with all such covenants.

The sum of future minimum lease payments under the Restructured Lease at January 31, 2006 was approximately $20.9 million. Properties leased under the Restructured Lease are located in Clearwater and Miami, Florida; Fort Worth, Texas; Fontana, California; Suwanee, Georgia; Swedesboro, New Jersey; and South Bend, Indiana.

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The Restructured Lease has been accounted for as an operating lease. FASB Interpretation (“FIN”) No. 46 requires the Company to evaluate whether an entity with which it is involved meets the criteria of a variable interest entity (“VIE”) and, if so, whether the Company is required to consolidate that entity. The Company has determined that the third-party lessor of its synthetic lease facility does not meet the criteria of a VIE and, therefore, is not subject to the consolidation provisions of FIN No. 46.

Contingencies

Prior to fiscal 2004, one of the Company’s European subsidiaries was audited in relation to various value-added tax (“VAT”) matters. As a result of those audits, the subsidiary received notices of assessment that allege the subsidiary did not properly collect and remit VAT. It is management’s opinion, based upon the opinion of outside legal counsel, that the Company has valid defenses related to a substantial portion of these assessments. Although the Company is vigorously pursuing administrative and judicial action to challenge the assessments, no assurance can be given as to the ultimate outcome. The resolution of such assessments could be material to the Company’s operating results for any particular period, depending upon the level of income for such period.

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.

Guarantees

As is customary in the IT industry, to encourage certain customers to purchase products from Tech Data, 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. For various reasons, including the lack of information regarding the amount of saleable 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 also provides additional financial guarantees to finance companies on behalf of certain customers. The majority of these guarantees are for an indefinite period of time, where the Company would be required to perform if the customer is in default with the finance company. The Company reviews the underlying credit for these guarantees on at least an annual basis. As of January 31, 2006 and 2005, the aggregate amount of guarantees under these arrangements totaled approximately $7.0 million and $9.7 million, respectively, of which approximately $2.9 million and $5.3 million, respectively, was outstanding. The Company believes that, based on historical experience, the likelihood of a material loss pursuant to both of the above guarantees is remote. The Company also provides residual value guarantees related to the Restructured Lease which have been recorded at the estimated fair value of the residual guarantees.

NOTE 13 — SEGMENT INFORMATION

Tech Data operates predominately in a single industry segment as a distributor of IT products, logistics management, and other value-added services. While the Company operates primarily in one industry, because of its global presence, the Company is managed by its geographic segments. The Company’s geographic segments include the Americas (United States, Canada, Latin America, and export sales to the Caribbean) and EMEA (Europe, Middle East, and export sales to Africa). The Company assesses performance of and makes decisions on how to allocate resources to its operating segments based on multiple factors including current and projected operating income and market opportunities. The accounting policies of the segments are the same as those described in Note 1—Business and Summary of Significant Accounting Policies.

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Financial information by geographic segment is as follows.

	Year ended January 31,
	2006		2005		2004
			(In thousands)
Net sales to unaffiliated customers(a)
Americas	$	9,464,667	$	8,482,512	$	7,839,425
EMEA		11,018,184		11,248,405		9,519,100
Total	$	20,482,851	$	19,730,917	$	17,358,525
Operating income (b)
Americas	$	154,839	$	140,690	$	120,413
EMEA		8,456		90,865		48,488
Total	$	163,295	$	231,555	$	168,901
Depreciation and amortization
Americas	$	16,290	$	16,885	$	19,957
EMEA		35,506		36,199		32,950
Total	$	51,796	$	53,084	$	52,907
Capital expenditures
Americas	$	24,454	$	8,511	$	13,380
EMEA		36,298		35,264		39,612
Total	$	60,752	$	43,775	$	52,992
Identifiable assets(a)
Americas	$	1,436,508	$	1,459,639	$	1,358,729
EMEA		2,968,126		3,098,097		2,809,157
Total	$	4,404,634	$	4,557,736	$	4,167,886
Goodwill
Americas	$	2,966	$	2,966	$	2,966
EMEA		131,361		146,753		138,272
Total	$	134,327	$	149,719	$	141,238

(a) For the year ended January 31, 2006, net sales to unaffiliated customers in the US represented 87% of the total Americas net sales to unaffiliated customers, and represented 88% and 89%, respectively, of the total Americas net sales for the years ended January 31, 2005 and 2004. Identifiable assets in the US represented 79% of the Americas identifiable assets at January 31, 2006 and represented 86% of the Americas’ identifiable assets at both January 31, 2005 and 2004.

(b) For the year ended January 31, 2006, the amounts shown above include $30.9 million of restructuring charges related to the EMEA restructuring program and $9.6 million in external consulting costs associated with the restructuring program (see also Note 6—Restructuring Program). For the year ended January 31, 2004, the amounts shown above include $3.1 million of pre-tax special charges related to the Americas’ operations (see also Note 14—Special Charges).

NOTE 14 — SPECIAL CHARGES

In fiscal year 2004, the Company recorded pre-tax special charges of $3.1 million related to the closure of the Company’s education business in the United States and changing this business to an outsourced model. This total is presented separately as a component of income from operations in the Consolidated Statement of Operations.

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NOTE 15 — INTERIM FINANCIAL INFORMATION (UNAUDITED)

Interim financial information for fiscal years 2006 and 2005 is as follows. All periods presented have been restated to reflect the reclassification of the Training Business as discontinued operations.

	Quarter ended
	April 30,		July 31,			October 31,		January 31,
	(In thousands, except per share amounts)
Fiscal year 2006
Net sales	$	5,063,691	$	4,813,850		$	5,073,955	$	5,531,355
Gross profit	$	264,126	$	239,950		$	250,986	$	267,457
Income (loss) from continuing operations	$	32,666	$	(60,118	)	$	21,921	$	28,498
Income from discontinued operations, net of tax		857		704			1,043		1,015
Net income (loss)	$	33,523	$	(59,414	)	$	22,964	$	29,513
Income (loss) per share - basic:
Continuing operations	$	0.56	$	(1.03	)	$	0.38	$	0.50
Discontinued operations		0.01		.01			0.02		0.02
Net income (loss) per share	$	0.57	$	(1.02	)	$	0.40	$	0.52
Income (loss) per share - diluted:
Continuing operations	$	0.55	$	(1.03	)	$	0.38	$	0.50
Discontinued operations		0.01		.01			0.02		0.02
Net income (loss) per share	$	0.56	$	(1.02	)	$	0.40	$	0.52
Fiscal year 2005
Net sales	$	4,806,833	$	4,564,942		$	4,757,111	$	5,602,031
Gross profit	$	262,696	$	256,266		$	252,101	$	292,670
Income from continuing operations	$	34,526	$	30,294		$	36,664	$	58,138
Income from discontinued operations, net of tax		138		380			1,146		1,174
Net income	$	34,664	$	30,674		$	37,810	$	59,312
Income per share - basic:
Continuing operations	$	0.60	$	0.52		$	0.63	$	0.99
Discontinued operations		0.00		0.01			0.02		0.02
Net income per share	$	0.60	$	0.53		$	0.65	$	1.01
Income per share - diluted:
Continuing operations	$	0.59	$	0.51		$	0.62	$	0.97
Discontinued operations		0.00		0.01			0.02		0.02
Net income per share	$	0.59	$	0.52		$	0.64	$	0.99

Net loss in the quarter ended July 31, 2005 includes a $56.0 million increase in the valuation allowance recorded against deferred tax assets related to specific jurisdictions in EMEA, primarily Germany, which increased diluted loss per share from continuing operations by $0.96 per share for the quarter ended July 31, 2005.

Net income in the quarter ended January 31, 2005 includes an $11.5 million reversal of previously accrued income taxes resulting from the favorable resolution of several tax audits concluded during the quarter, which increased diluted earnings per share from continuing operations by $0.19 per share for the quarter ended January 31, 2005.

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ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

ITEM 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the specified time periods. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

As of the end of the period covered by this report, the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) evaluated, with the participation of Tech Data’s management, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Exchange Act). Based on the evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we assessed the effectiveness of the Company’s internal control over financial reporting as of January 31, 2006. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework. Based on our assessment, we believe that, as of January 31, 2006, the Company’s internal control over financial reporting was effective based on those criteria.

Management’s assessment of the effectiveness of internal control over financial reporting as of January 31, 2006, has been audited by Ernst & Young, LLP, the independent registered certified public accounting firm who also audited the Company’s consolidated financial statements. Ernst & Young’s attestation report on management’s assessment of the Company’s internal control over financial reporting is included below.

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Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with management’s evaluation during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Board of Directors and Shareholders of Tech Data Corporation:

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control over Financial Reporting, that Tech Data Corporation and subsidiaries maintained effective internal control over financial reporting as of January 31, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Tech Data Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Tech Data Corporation maintained effective internal control over financial reporting as of January 31, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, Tech Data Corporation maintained, in all material respects, effective internal control over financial reporting as of January 31, 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Tech Data Corporation as of January 31, 2006 and 2005, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended January 31, 2006 of Tech Data Corporation and our report dated March 29, 2006 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Tampa, Florida

March 29, 2006

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ITEM 9B. Other Information

Not applicable.

63

PART III

ITEMS 10, 11, 12 and 13.

The information required by Item 10 relating to executive officers of the registrant is included under the caption “Executive Officers” of Item 1 of this Form 10-K. The information required by Item 10 relating to Directors of the registrant and the information required by Items 11, 12 and 13 is incorporated herein by reference to the registrant’s definitive proxy statement for the 2006 Annual Meeting of Shareholders. However, the information included in such definitive proxy statement in the table entitled “Ten-Year Option/SAR Repricings”, the information included under the caption entitled “Compensation Committee Report on Executive Compensation”, and the information included in the “Stock Price Performance Graph” shall not be deemed incorporated by reference in this Form 10-K and shall not otherwise be deemed filed under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended. The definitive proxy statement for the 2006 Annual Meeting of Shareholders will be filed with the SEC prior to May 31, 2006.

Audit Committee

Tech Data has a separately designated, standing Audit Committee established in accordance with Section 3(a) (58) (A) of the Exchange Act. The members of the Audit Committee are Charles E. Adair, Maximilian Ardelt, David M. Upton, and John Y. Williams.

Audit Committee Financial Expert

The Board of Directors of Tech Data has determined that Charles E. Adair, Chairman of the Audit Committee, is an audit committee financial expert as defined by Item 401(h) of Regulation S-K under the Exchange Act, and is independent within the meaning of Item 7(d)(3) (iv) of Schedule 14A under the Exchange Act.

Code of Ethics

Tech Data has adopted a code of business conduct and ethics for directors, officers (including Tech Data’s principal executive officer, principal financial officer, and principal accounting officer) and employees, known as the Code of Ethics. The Code of Ethics is available, and may be obtained free of charge, on Tech Data’s website at http://www.techdata.com/content/td_ethics/main.aspx. Tech Data intends to provide information required by Item 5.05 of Form 8-K by disclosing any amendment to, or waiver from, a provision of the Code of Ethics that applies to Tech Data’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions on the Company’s website at the web address noted in this section.

ITEM 14. Principal Accounting Fees and Services

Information regarding principal accounting fees and services is set forth under the caption “Principal Accounting Firm Fees” in our Proxy Statement, which is incorporated herein by reference to the registrant’s definitive proxy statement for the 2006 Annual Meeting of Shareholders. The definitive proxy statement for the 2006 Annual Meeting of Shareholders will be filed with the SEC prior to May 31, 2006.

The Audit Committee has a policy to pre-approve all services to be provided by the Company’s independent auditor, and will not approve prohibited non-audit services.

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PART IV

ITEM 15. Exhibits, Financial Statement Schedules.

(a) See index to financial statements and schedules included in Item 8.

(c) The exhibit numbers on the following list correspond to the numbers in the exhibit table required pursuant to Item 601 of Regulation S-K.

Exhibit Number		Description
3-M(2)	—	Amended and Restated Bylaws of Tech Data Corporation as adopted on March 31, 2004.
3-N(9)	—	Amended and Restated Articles of Incorporation of the Company filed on June 17, 2004 with the Secretary of State of the State of Florida.
4-A(15)	—	Indenture between the Company and JP Morgan Trust Company, National Association as Successor trustee to Bank One Trust Company, N.A., dated as of December 10, 2001.
10-G(7)	—	Employee Stock Ownership Plan as amended December 16, 1994.
10-Z(4)	—	1990 Incentive and Non-Statutory Stock Option Plan as amended.
10-AA(5)	—	Non-Statutory Stock Option Grant Form.
10-BB(5)	—	Incentive Stock Option Grant Form.
10-NN(8)	—	Non-Employee Directors’ 1995 Non-Statutory Stock Option Plan.
10-OO(8)	—	1995 Employee Stock Purchase Plan.
10-AAa(10)	—	Transfer and Administration Agreement dated May 19, 2000.
10-AAb(10)	—	Credit Agreement dated as of May 8, 2000.
10-AAc(10)	—	Amended and Restated Participation Agreement dated as of May 8, 2000.

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Exhibit Number		Description
10-AAd(10)	—	Amended and Restated Lease Agreement dated as of May 8, 2000.
10-AAe(10)	—	Amended and Restated Agency Agreement dated as of May 8, 2000.
10-AAg(12)	—	Tech Data Corporation 401(K) Savings Plan dated January 1, 2000.
10-AAi(13)	—	2000 Non-Qualified Stock Option Plan of Tech Data Corporation.
10-AAj(13)	—	2000 Equity Incentive Plan of Tech Data Corporation.
10-AAl(17)	—	Amendment Agreement Number 1 to Credit Agreement dated November 21, 2002.
10-AAo(18)	—	The Amended and Restated Credit Agreement dated May 2, 2003.
10-AAq(19)	—	Second Amended and Restated Participation Agreement dated as of July 31, 2003.
10-AAr(19)	—	Second Amended and Restated Lease Agreement dated as of July 31, 2003.
10-AAs(19)	—	Second Amended and Restated Credit Agreement dated as of July 31, 2003.
10-AAt(19)	—	Trust Agreement Between Tech Data Corporation and Fidelity Management Trust Company, Tech Data Corporation 401(k) Savings Plan Trust, effective August 1, 2003.
10-AAv(2)	—	Amendment Agreement Number 2 to Amended and Restated Credit Agreement dated as of January 30, 2004.
10-AAw(16)	—	Amendment to the 2000 Equity Incentive Plan of Tech Data Corporation.
10-AAx(2)	—	Amended and Restated Tech Data Corporation 401(K) Savings Plan and Amendments 1-3.
10-AAz(11)	—	Amendment Number 2 to Receivables Purchase and Servicing Agreement dated May 19, 2000.
10-AAaa(6)	—	2005 Deferred Compensation Plan
10-AAbb(9)	—	Indenture for New 2% Subordinated Debentures between Tech Data and JP Morgan Trust Company, National Association and Table of contents of Indenture including Cross-Reference Table to the Trust Indenture Act of 1939 and including form of new 2% Subordinated Debenture as an exhibit.
10-AAbb(3)	—	Amendment Number 8 to Transfer and Administration Agreement dated as of May 19, 2000.
10-Acc(20)	—	Executive Severance Plan, effective March 31, 2005.
10-Add(20)	—	First Amendment to the Tech Data Corporation 2005 Deferred Compensation Plan, effective January 1, 2005.
10-AAee(20)	—	Executive Incentive Plan – April 2005.
10-AAff(20)	—	Fourth Amendment to the Tech Data Corporation 401(k) Savings Plan, effective March 28, 2005.
10-Agg(20)	—	Trade Receivables Purchase Facility Agreement between Tech Data Corporation and SunTrust Bank, dated May 26, 2005.
10-Ahh(21)	—	First Amendment to Trade Receivables Purchase Facility Agreement.
10-AAii(21)	—	Amendment No. 10 to Transfer and Administration Agreement.
10-AAjj(1)	—	Uncommitted Account Receivable Purchase Agreement dated as of January 23, 2006.
10-AAkk(1) (22)	—	Master Agreement for the sale and purchase of the Azlan Training Business, dated as of March 7, 2006.
21-A(1)	—	Subsidiaries of Registrant.
23-A(1)	—	Consent of Ernst & Young LLP.
31-A(1)	—	Certification of Chief Executive Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31-B(1)	—	Certification of Chief Financial Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32-A(1)	—	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32-B(1)	—	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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⁽¹⁾ Filed herewith.

⁽²⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-K dated January 31, 2004, File No. 0-14624.

⁽³⁾ Incorporated by reference to the Exhibits included in the Company’s Form 8-K dated December 31, 2004, File No. 0-14625.

⁽⁴⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended October 31, 1992, File No. 0-14625.

⁽⁵⁾ Incorporated by reference to the Exhibits included in the Company’s Registration Statement on Form S-8, File No. 33-41074.

⁽⁶⁾ Incorporated by reference to the Exhibits included in the Company’s Form 8-K dated December 8, 2004, File No. 0-14625.

⁽⁷⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-K for the year ended January 31, 1995, File No. 0-14625.

⁽⁸⁾ Incorporated by reference to the Exhibits included in the Company’s Definitive Proxy Statement for the 1995 Annual Meeting of Shareholders, File No. 0-14625.

⁽⁹⁾ Incorporated by reference to the Exhibits included in the Company’s Form S-4, File No. 0-14625.

⁽¹⁰⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended July 31, 2000, File No. 0-14625.

⁽¹¹⁾ Incorporated by reference to the Exhibits included in the Company’s Form 8-K dated August 27, 2004, File No. 0-14625.

⁽¹²⁾ Incorporated by reference to the Exhibits included in the Company’s Registration Statement on Form S-8, File No. 333-93801.

⁽¹³⁾ Incorporated by reference to the Exhibits included in the Company’s Registration Statement on Form S-8, File No. 333-59198.

⁽¹⁴⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended July 31, 2001, File No. 0-14625.

⁽¹⁵⁾ Incorporated by reference to the Exhibits included in the Company’s Registration Statement on Form S-3, File No. 333-76858.

⁽¹⁶⁾ Incorporated by reference to the Exhibits included in the Company’s Definitive Proxy Statement for the 2003 Annual Meeting of Shareholders, File No. 0-14625.

⁽¹⁷⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-K for the year ended January 31, 2003, File No. 0-14625.

⁽¹⁸⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended April 30, 2003, File No. 0-14625.

⁽¹⁹⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended July 31, 2003, File No. 0-14625.

⁽²⁰⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended April 30, 2005, File No. 0-14625.

⁽²¹⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended October 31, 2005, File No. 0-14625.

⁽²²⁾ Certain information contained in this exhibit has been omitted and filed separately with the Commission pursuant to a confidential treatment request under 17 C.F.R. Sections 200.80(b)(4), 200.83 and 230.406.

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SCHEDULE II

TECH DATA CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

(In thousands)

	Balance at beginning of period		Activity							Balance at end of period
Allowance for doubtful accounts receivable and sales returns			Charged to cost and expenses		Deductions			Other(1)
January 31,
2006	$	77,309	$	6,172	$	(26,495	)	$	3,389	$	60,375
2005		74,556		13,268		(25,047	)		14,532		77,309
2004		60,307		29,214		(37,445	)		22,480		74,556

(1) “Other” primarily includes recoveries, acquisitions, dispositions and the effect of fluctuations in foreign currency. For fiscal 2004, approximately $11.0 million of this amount was attributed to the addition of the Azlan allowance for doubtful accounts receivable and sales returns as a result of the acquisition in the first quarter of fiscal 2004.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 29, 2006.

TECH DATA CORPORATION
By	/s/ STEVEN A. RAYMUND
	Steven A. Raymund Chairman of the Board of Directors and Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature to this Annual Report on Form 10-K appears below hereby appoints Jeffery P. Howells and David R. Vetter, or either of them, as his or her attorney-in-fact to sign on his or her behalf individually and in the capacity stated below and to file all amendments and post-effective amendments to this Annual Report on Form 10-K, and any and all instruments or documents filed as a part of or in connection with this Annual Report on Form 10-K or the amendments thereto, and the attorney-in-fact, or either of them, may make such changes and additions to this Annual Report on Form 10-K as the attorney-in-fact, or either of them, may deem necessary or appropriate.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ STEVEN A. RAYMUND Steven A. Raymund	Chairman of the Board of Directors; Chief Executive Officer	March 29, 2006
/s/ JEFFERY P. HOWELLS Jeffery P. Howells	Executive Vice President and Chief Financial Officer; Director (principal financial officer)	March 29, 2006
/s/ JOSEPH B. TREPANI Joseph B. Trepani	Senior Vice President and Corporate Controller (principal accounting officer)	March 29, 2006
/s/ CHARLES E. ADAIR Charles E. Adair	Director	March 29, 2006
/s/ MAXIMILIAN ARDELT Maximilian Ardelt	Director	March 29, 2006
/s/ JAMES M. CRACCHIOLO James M. Cracchiolo	Director	March 29, 2006
/s/ KATHY MISUNAS Kathy Misunas	Director	March 29, 2006
/s/ DAVID M. UPTON David M. Upton	Director	March 29, 2006
/s/ JOHN Y. WILLIAMS John Y. Williams	Director	March 29, 2006

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EXHIBIT INDEX

Exhibit Number		Description
3-M(2)	—	Amended and Restated Bylaws of Tech Data Corporation as adopted on March 31, 2004.
3-N(9)	—	Amended and Restated Articles of Incorporation of the Company filed on June 17, 2004 with the Secretary of State of the State of Florida.
4-A(15)	—	Indenture between the Company and JP Morgan Trust Company, National Association, as successor trustees Bank One Trust Company, N.A., dated as of December 10, 2001.
10-G(7)	—	Employee Stock Ownership Plan as amended December 16, 1994.
10-Z(4)	—	1990 Incentive and Non-Statutory Stock Option Plan as amended.
10-AA(5)	—	Non-Statutory Stock Option Grant Form.
10-BB(5)	—	Incentive Stock Option Grant Form.
10-NN(8)	—	Non-Employee Directors’ 1995 Non-Statutory Stock Option Plan.
10-OO(8)	—	1995 Employee Stock Purchase Plan.
10-AAa(10)	—	Transfer and Administration Agreement dated May 19, 2000.
10-AAb(10)	—	Credit Agreement dated as of May 8, 2000.
10-AAc(10)	—	Amended and Restated Participation Agreement dated as of May 8, 2000.
10-AAd(10)	—	Amended and Restated Lease Agreement dated as of May 8, 2000.
10-AAe(10)	—	Amended and Restated Agency Agreement dated as of May 8, 2000.
10-AAg(12)	—	Tech Data Corporation 401(K) Savings Plan dated January 1, 2000.
10-AAi(13)	—	2000 Non-Qualified Stock Option Plan of Tech Data Corporation.
10-AAj(13)	—	2000 Equity Incentive Plan of Tech Data Corporation.
10-AAl(17)	—	Amendment Agreement Number 1 to Credit Agreement dated November 21, 2002.
10-AAo(18)	—	The Amended and Restated Credit Agreement dated May 2, 2003.
10-AAq(19)	—	Second Amended and Restated Participation Agreement dated as of July 31, 2003.
10-AAr(19)	—	Second Amended and Restated Lease Agreement dated as of July 31, 2003.
10-AAs(19)	—	Second Amended and Restated Credit Agreement dated as of July 31, 2003.
10-AAt(19)	—	Trust Agreement Between Tech Data Corporation and Fidelity Management Trust Company, Tech Data Corporation 401(k) Savings Plan Trust, effective August 1, 2003.
10-AAv(2)	—	Amendment Agreement Number 2 to Amended and Restated Credit Agreement dated as of January 30, 2004.
10-AAw(16)	—	Amendment to the 2000 Equity Incentive Plan of Tech Data Corporation.
10-AAx(2)	—	Amended and Restated Tech Data Corporation 401(K) Savings Plan and Amendments 1-3.
10-AAz(11)	—	Amendment Number 2 to Receivables Purchase and Servicing Agreement dated May 19, 2000.
10-AAaa(6)	—	2005 Deferred Compensation Plan.

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Exhibit Number		Description
10-AAbb(9)	—	Indenture for New 2% Subordinated Debentures between Tech Data and J.P. Morgan Trust Company, National Association and Table of Contents of Indenture, including Cross-Reference Table to the Trust Indenture Act of 1939 and including form of new 2% Subordinated Debenture as an exhibit
10-AAbb(3)	—	Amendment Number 8 to Transfer and Administration Agreement dated as of May 19, 2000.
10-AAcc(20)	—	Executive Severance Plan, effective March 31, 2005.
10-AAdd(20)	—	First Amendment to the Tech Data Corporation 2005 Deferred Compensation Plan, effective January 1, 2005.
10-AAee(20)	—	Executive Incentive Plan – April 2005.
10-AAff(20)	—	Fourth Amendment to the Tech Data Corporation 401(k) Savings Plan, effective March 28, 2005.
10-AAgg(20)	—	Trade Receivables Purchase Facility Agreement between Tech Data Corporation and SunTrust Bank, dated May 26, 2005.
10-AAhh(21)	—	First Amendment to Trade Receivables Purchase Facility Agreement.
10-AAii(21)	—	Amendment No. 10 to Transfer and Administration Agreement.
10-AAjj(1)	—	Uncommitted Account Receivable Purchase Agreement dated as of January 23, 2006.
10-AAkk(1) (22)	—	Master Agreement for the sale and purchase of the Azlan Training Business, dated as of March 7, 2006.
21-A(1)	—	Subsidiaries of Registrant.
23-A(1)	—	Consent of Ernst & Young LLP.
31-A(1)	—	Certification of Chief Executive Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31-B(1)	—	Certification of Chief Financial Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32-A(1)	—	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32-B(1)	—	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

⁽¹⁾ Filed herewith.

⁽²⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-K dated January 31, 2004, File No. 0-14625.

⁽³⁾ Incorporated by reference to the Exhibits included in the Company’s Form 8-K dated December 31, 2004, File No. 0-14625.

⁽⁴⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended October 31, 1992, File No. 0-14625.

⁽⁵⁾ Incorporated by reference to the Exhibits included in the Company’s Registration Statement on Form S-8, File No. 33-41074.

⁽⁶⁾ Incorporated by reference to the Exhibits included in the Company’s Form 8-K dated December 8, 2004, File No. 0-14625.

⁽⁷⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-K for the year ended January 31, 1995, File No. 0-14625.

⁽⁸⁾ Incorporated by reference to the Exhibits included in the Company’s Definitive Proxy Statement for the 1995 Annual Meeting of Shareholders, File No. 0-14625.

⁽⁹⁾ Incorporated by reference to the Exhibits included in the Company’s Form S-4, File No. 0-14625.

⁽¹⁰⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended July 31, 2000, File No. 0-14625.

⁽¹¹⁾ Incorporated by reference to the Exhibits included in the Company’s Form 8-K dated August 27, 2004, File No. 0-14625.

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⁽¹²⁾ Incorporated by reference to the Exhibits included in the Company’s Registration Statement on Form S-8, File No. 333-93801.

⁽¹³⁾ Incorporated by reference to the Exhibits included in the Company’s Registration Statement on Form S-8, File No. 333-59198.

⁽¹⁴⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended July 31, 2001, File No. 0-14625.

⁽¹⁵⁾ Incorporated by reference to the Exhibits included in the Company’s Registration Statement on Form S-3, File No. 333-76858.

⁽¹⁶⁾ Incorporated by reference to the Exhibits included in the Company’s Definitive Proxy Statement for the 2003 Annual Meeting of Shareholders, File No. 0-14625.

⁽¹⁷⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-K for the year ended January 31, 2003, File No. 0-14625.

⁽¹⁸⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended April 30, 2003, File No. 0-14625.

⁽¹⁹⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended July 31, 2003, File No. 0-14625.

⁽²⁰⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended April 30, 2005, File No. 0-14625.

⁽²¹⁾ Incorporated by reference to the Exhibits included in the Company’s Form 10-Q for the quarter ended October 31, 2005, File No. 0-14625.

⁽²²⁾ Certain information contained in this exhibit has been omitted and filed separately with the Commission pursuant to a confidential treatment request under 17 C.F.R. Sections 200.80(b)(4), 200.83 and 230.406.

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EX-10.(AAJJ)

Exhibit 10-AAjj

Uncommitted Account Receivable Purchase Agreement

Dated 23 January 2006

Tech Data GmbH & Co. OHG

(Supplier)

Citibank International, plc

(Purchaser)

Contents

1	Definitions and Interpretation	1
2	Object of the Agreement	4
3	Purchase of Account Receivable	4
4	Representations and Warranties	5
5	Undertakings	6
6	Price Adjustments and Interest	7
7	Additional Costs	8
8	Servicing and Management of Purchased Receivables.	8
9	General	9
10	Notices	10
11	Assignments	10
12	Governing Law	10
Schedule 1 – Supplier Pricing Schedule and Customer Data sheet		12
Schedule 2 - Purchase Request		13
Schedule 3 - Notice of assignment		15

Contents (1)

Uncommitted Account Receivable Purchase Agreement made on 23 January 2006

Between

(1) Tech Data GmbH & Co. OHG (the Supplier) of Kistlerhofstrasse 75, D-81379 Munich, Germany; and

(2) Citibank International Plc (the Purchaser) acting through its office at 25, Canada Square, Canary Wharf, London E14 5LB, United Kingdom.

Whereas

A From time to time the Supplier enters into commercial trade transactions with a Customer (as hereinafter defined) for the sale of goods and/or services, resulting in Account Receivables (as hereinafter defined) owed by the Customer to the Supplier.

B From time to time, the Supplier may wish to sell, and the Purchaser may wish to purchase, such Account Receivables with their accompanying rights and proceeds subject to the terms and conditions set forth in this Agreement.

Now, therefore, the Supplier and the Purchaser agree as follows:

It is agreed:

1 Definitions and Interpretation

Account Receivable(s) means any indebtedness of the Customer to the Supplier:

1.1 evidenced by an invoice, which indebtedness shall include the right to receive payment of interest or finance charges or other liabilities of the Customer under the relevant contract to which such invoice relates; and

1.2 that may be subject to additional agreements including, but not limited to, Delkredere Agreements or Insurance Contracts.

Adjustment(s) means, with respect to each Account Receivable the percentage set forth in the Schedule 1 relevant to the Customer as amended from time to time based on the Purchaser’s evaluation of discounts and allowances as are in force between the Supplier and the Customer.

Business Day means a day on which banks are open for business in London, Germany and the principal financial centre of each relevant currency.

Collection Account means, individually and collectively, any bank account maintained with Citigroup Global Markets Deutschland AG & Co. KGaA (unless otherwise agreed by the parties in writing) which is established for the purpose of receiving payments and other monies and proceeds collected with respect to Account Receivables, which shall be subject to a Control Agreement in favour of the Purchaser, in form and substance satisfactory to the Purchaser.

Commercial Dispute means inter alia (i) any returns, replacements, credits and any other Adjustments relating to any Purchased Receivable, or (ii) any disputes or claims including, but not limited to, any dispute alleged as to price, rebates, volume discounts, invoice terms, payment of mandatory fees for (e.g. copyright royalties, WEEE (Waste of Electrical and Electronic Equipment)), offset of counterclaims, quantity or quality, breach of contract, warranty, representation, or covenant by the Customer in respect of any Purchased Receivable, late or wrongful delivery and related claims, or general breakdown in commercial relations between the Supplier and the Customers, arising out of, or in connection with, all or any portion of a Purchased Receivable or any other transaction related thereto. For the avoidance of doubt, the Purchaser and Supplier expressly agree that the Customer’s non-payment caused solely by an Insolvency Event shall not qualify as a Commercial Dispute.

Page 1

Control Agreement means a deposit account control agreement or a blocked account agreement in form and substance satisfactory to the Purchaser with respect to a Collection Account by and among the Purchaser, the Supplier, and the financial institution with which each Collection Account is maintained.

Credit and Collection Policies and Procedures shall mean those credit and collection policies and procedures delivered and certified to the Purchaser by the Supplier as of the date of this Agreement.

Customer shall mean an entity or entities, agreed upon by Supplier and Purchaser from time to time, that enters into commercial trade transactions with Supplier for the sale of goods and/ or services resulting in Accounts Receivable, and in respect of which the Purchaser and Supplier have concluded a Schedule 1 covering specific requirements for the relevant Account Receivables and conditions of purchase.

Customer Limit means, without obligation to the Purchaser, the maximum Receivables Balance that the Purchaser may be prepared to purchase at any time as set forth in the relevant Schedule 1 for a Customer.

Delkredere means the liability of a Delkredere Obligor for the payment of any Account Receivable in the event of the respective Customer’s inability to pay, as accepted by the relevant Delkredere Agreement.

Delkredere Agreement means any agreement between the Delkredere Obligor and the Supplier, stating the Delkredere.

Delkredere Claim means any indebtedness of the Delkredere Obligor the Supplier under a Delkredere Agreement.

Delkredere Obligor means an entity or entities providing a Delkredere in respect of a Customer as set out in the relevant Schedule 1.

EURIBOR means, in relation to any amount in Euro and any period: the applicable Screen Rate; or

(i) (If no Screen Rate is available for Euro or other relevant period) the rate (rounded upwards to four decimal places) at which the Purchaser is able to obtain deposits in Euro from leading banks in the European Interbank market;

(ii) as at 11.00 am (London time) on the Quotation Day for the offering of deposits in Euro and amount and for the relevant period in respect of which EURIBOR is to be determined;

EURO or € means the single currency introduced in the third stage of economic and monetary union pursuant to the EC Treaty.

Insolvency Event means, in relation to the Customer, that any of the following has occurred:

(i) the Customer shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or any corporate action, legal proceedings or other procedure or step is taken in relation to (i) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Customer other than a solvent liquidation or reorganisation of the Customer; (ii) a composition, assignment or arrangement with any creditor of the Customer; (iii) the appointment of a liquidator (other than in respect of a solvent liquidation of the Customer), receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of the Customer or any of its assets; provided, that any such event arising by reason of currency restrictions or foreign political restrictions or regulations beyond the control of the Supplier or the Customer shall not be deemed an “Insolvency Event” hereunder; or

(ii) any procedure or step analogous to any of the foregoing is taken in any jurisdiction.

Page 2

Insurance Coverage Provider means any credit insurance coverage provider with whom the Supplier has entered into an insurance policy with in respect of any Account Receivable.

Insurance Contract means any comprehensive insurance contract in form and substance satisfactory to the Purchaser made between the Supplier and any Insurance Coverage Provider in respect of a Purchased Receivable.

Insurance Proceeds means all insurance proceeds payable pursuant to any Insurance Contract.

Insurance Cap means the maximum liability of an Insurance Coverage Provider in respect of a Customer.

Invoice Amount means, as off each Settlement Date, the aggregate nominal Euro amount of all Account Receivables offered for sale to the Purchaser.

Next Settlement Date means the subsequent Settlement Date indicated in a Purchase Request, which, unless otherwise agreed, shall not fall more than 45 days from the previous Settlement Date.

Maturity Date means, in respect of an Account Receivable, the date on which such Account Receivable becomes due and payable by the Customer as specified in the Purchase Request.

Program Fee shall mean the fee paid by the Supplier directly to the Purchaser in Euros for the program, which shall be in the amount computed in accordance with the formula contained in Schedule 1.

Purchase Date means each date on which the Purchaser purchases an Account Receivable, which, unless otherwise agreed, shall be the date specified in the Purchase Request, whereby the Supplier will aim to propose such date to be on spot basis, but not later than 3 Business Days after the Purchaser receives the duly signed Purchase Request.

Purchase Request means, in relation to each Account Receivable, a database containing the information set out in Schedule 2, which information will identify the specific Account Receivables that are being offered for sale to Purchaser by Supplier.

Purchase Price shall mean the purchase price paid by the Purchaser directly to the Supplier for the account of the Supplier in Euros for the Purchased Receivables which shall be in the amount computed according to the formula contained in the relevant Schedule 1.

Purchased Receivables means the Account Receivables that have been assigned to and purchased by the Purchaser from the Supplier in relation to a Customer pursuant to the provisions of this Agreement.

Quotation Day means, in relation to any period for which a rate per annum is to be determined, two Business Days before the first day of that period unless market practice differs in the relevant interbank market, in which case the Quotation Day will be determined by the Purchaser in accordance with market practice in the relevant interbank market (and if quotations would normally be given by leading banks in the relevant market on more than one day, the Quotation Day will be the last of those days).

Receivables Balance means the total outstanding balance of all Purchased Receivables from the Supplier in respect of a Customer as of any applicable Purchase or Settlement Date.

Screen Rate means the percentage rate per annum determined by the Banking Federation of the European Union for the relevant periods displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or services cease to be available, the Purchaser may specify another page or service displaying the appropriate rate with the advance consent of Supplier.

Servicer shall mean the Supplier, or any successor thereto, which provides the services described in Section 8.

Page 3

Settlement Date means each date on which the parties effect the settlement procedures set forth in Section 3.2.

2 Object of the Agreement

2.1 Subject to the terms and conditions of this Agreement, the Supplier may from time to time offer to sell Account Receivables to the Purchaser by submitting a Purchase Request to the Purchaser and the Purchaser at its sole discretion may agree to acquire such Account Receivables.

2.2 The Supplier shall not be entitled to serve a Purchase Request on the Purchaser unless (i) each of the representations set out in Clause 4 is true on the date of the Purchase Request and the proposed Purchase Date for the relevant Account Receivables; (ii) the relevant Purchase Request has been duly executed by a duly authorised person on behalf of the Supplier; (iii) each of the Account Receivables meets the requirements of the relevant Schedule 1; and (iv) after the purchase of the Accounts Receivable by the Purchaser, the Customer Limit and, if applicable, the Insurance Cap for the relevant Customer would not be exceeded.

2.3 For the purpose of this Agreement, the Supplier assigns to the Purchaser all of its right, title, benefit and interest to and to all monies due to the Supplier from time to time in relation to each Account Receivable the Purchaser purchases in accordance with clause 3.1 hereof, together with any other claims relating to such Account Receivables, including, in each case, all rights to demand, receive or dispose of any such monies or claims, all rights to sue for or in relation thereto and all rights of action against any person in connection therewith or otherwise to enforce the same. For the purpose of this Agreement, the aforementioned assignment of any Account Receivable from Supplier shall be deemed accepted by the Purchaser by payment of the Purchase Price in respect of such Account Receivable .

2.4 If the Purchaser in its sole discretion and for any reason whatsoever is not willing to purchase any Account Receivable offered to it in any Purchase Request, the Purchaser shall notify the Supplier of its decision within 3 Business Days of receipt of the Purchase Request.

3 Purchase of Account Receivable

3.1 Unless the Purchaser has notified the Supplier that it is not willing to purchase any Account Receivable specified in a Purchase Request received by the Purchaser, the Purchaser shall (subject to (i) the terms of the Schedule 1 in relation to the relevant Customer from time to time in force and (ii) the settlement procedures set forth in Clause 3.2 below) purchase such Account Receivable and shall pay the Purchase Price in respect of such Account Receivable to the Supplier into an account or accounts with any such bank or banks as the Supplier may notify the Purchaser in writing from time to time, on the Purchase Date specified in the Purchase Request as the proposed purchase date for such Account Receivable.

3.2 The parties shall adhere to the following settlement procedures, unless otherwise agreed by the Purchaser, for so long as this Agreement remains in effect or any Receivables Balance remains outstanding:

i. The Servicer shall provide to the Purchaser on a monthly basis (or at such times as otherwise requested by the Purchaser) an accounts aging trial balance report in such form and with such detail as approved by the Purchaser, for all Purchased Receivables, and the Servicer shall provide to the Purchaser any other reporting reasonably requested by the Purchaser. In respect of Purchased Receivables which remain unpaid after the Maturity Date, the Servicer shall inform the Purchaser within 90 days thereof whether such non-payment was caused by a Commercial Dispute or some other cause.

ii. The Servicer shall pay to the Purchaser to the account notified to Servicer on or before each Settlement Date all amounts the Servicer has collected (including any Insurance Proceeds, Delkredere Claims or other monies received in respect of any Purchased Receivables) since the preceding Settlement Date on account of Purchased Receivables or

Page 4

otherwise for the benefit of the Purchaser, the Program Fee, if any, and all amounts otherwise owed by the Supplier to the Purchaser as of such Settlement Date (including, without limitation, amounts owed in accordance with Clause 6 hereof).

iii. The Servicer shall identify and hold in trust for the Purchaser all amounts remitted or paid to the Servicer, if any, on account of Purchased Receivables as the property of the Purchaser (including, if applicable, any Insurance Proceeds or Delkredere Claims received in respect of any Purchased Receivables), and shall immediately deposit all such funds to such account that the Purchaser will notify the Servicer from time to time, subject to reconciliation on each subsequent Settlement Date.

iv. If the relevant Schedule 1 for the Customer requires an Insurance Contract be in place, and the total value of Account Receivables owed by that Customer exceeds the Insurance Cap at the time of a claim, the Supplier will ensure that the Purchaser receives the same amount of Insurance Proceeds as if the total value of Account Receivables were equal to or less than the Insurance Cap.

v. The obligations owed by the parties to one another as of each Settlement Date shall be netted against one another. All payments to be made by the Purchaser to the Supplier or by the Supplier to the Purchaser hereunder shall be made in Euros in same day funds in time to be credited in accordance with normal banking procedures on the day when such payment is due and payable in accordance with the most current written wire instructions previously provided by one party to the other party.

4 Representations and Warranties

The Supplier hereby makes the following representations and warranties as of the date hereof, as of each day a Purchase Request is delivered hereunder and as of each proposed date for the purchase of an Account Receivable by the Purchaser as if made on each such date with reference to the facts and circumstances then existing:

(a) the contract relating to each Account Receivable assigned to the Purchaser is in full force and effect and legally valid and binding on the Customer and the Supplier is not aware of any material breach thereof or in default thereunder;

(b) this Agreement and each Purchase Request constitute or will, when delivered, constitute its legal, valid and binding obligations enforceable in accordance with its terms and this Agreement when duly executed is effective to assign the Account Receivables and any accompanying rights (if any, including, without limitation, any Delkredere Claims) to the Purchaser;

(c) if applicable, the Delkredere Agreement is in full force and effect and legally valid and binding on the Delkredere Obligor;

(d) if applicable, it has a valid Insurance Contract in respect of each Purchased Receivable and each Insurance Contract constitutes legally valid and binding obligations each enforceable in accordance with its terms and each Insurance Contract is legally valid and binding and effective to name the Purchaser as loss payee or co-insured in relation to each Purchased Receivable;

(e) each Account Receivable assigned to the Purchaser is freely assignable and constitutes amounts due and payable by the Customer on the relevant Maturity Date and each Account Receivable assigned to the Purchaser pursuant to a Purchase Request constitutes an unconditional, legal, valid and binding obligation of the Customer enforceable by the Purchaser against the Customer and the assets of the Customer and has not, to any extent, been prepaid;

(f) immediately prior to the delivery of each Purchase Request by the Supplier, the Supplier was the legal and beneficial owner of each Account Receivable identified in such Purchase Request and it has not assigned, transferred or otherwise disposed, or created any encumbrance or security interest over any such Account Receivable, other than to the Purchaser and with the exception that the Supplier may in the ordinary course of business agree with its suppliers and vendors extended and/or expanded forms of reservation of title and title retention rights; and

Page 5

(g) the Supplier shall pay those of the vendors with whom it has entered into a distribution agreement in the ordinary course of business.

5 Undertakings

5.1 The Supplier hereby agrees and undertakes as related solely to the Purchased Receivables:

(a) not to create or permit to subsist any encumbrance over any of the Supplier’s rights, title and interest in and to any contract relating to any Account Receivable and not to assign, transfer or otherwise deal with any of its rights in respect of any such contract or any Account Receivable, with the exception of expanded forms of reservation of title and title retention rights in the ordinary course of business;

(b) to take commercially reasonable steps to assist the Purchaser to recover each Purchased Receivable and any accompanying claims (if any, including, without limitation, any Delkredere Claims) and/ or to assist the Purchaser to perfect the assignment to the Purchaser of any Purchased Receivable and of any such accompanying claim;

(c) (i) to maintain and implement administrative and operating procedures and to keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Purchased Receivables or in order to comply with applicable laws and regulations; (ii) to retain all such records and information relating thereto so long as any Purchased Receivable remains outstanding; and (iii) to hand such records and documentation to the Purchaser promptly on request;

(d) not to amend, cancel or terminate any Delkredere Agreement, Insurance Contracts or any other contract to which any Account Receivable assigned to the Purchaser relates and not to, or purport to, terminate, revoke or vary any term or condition of or extend the Maturity Date of any Purchased Receivable and to refrain from any action which might in any way prejudice or limit the Purchaser’s rights under or in respect of any Purchased Receivable or any respective accompanying claims;

(e) to procure that the Purchaser is named as loss payee or co-insured on all required Insurance Contracts;

(f) if an Insurance Contract is required by the relevant Schedule 1, to ensure that:

(i) each Insurance Contract is at all times in full force and effect;

(ii) it makes timely claims under each Insurance Contract as required by the Purchaser;

(iii) it procures that all payments received from an Insurance Coverage Provider in respect of a claim are paid into the Collection Account or to such other account as the Purchaser may specify; and

(iv) not to compromise or settle any claim under any Insurance Contract without the prior written consent of the Purchaser; and

(v) to take any other action reasonably required by the Purchaser or the Insurance Coverage Provider with a view to recovering monies due and minimising loss;

(g) to provide the Purchaser at its request from time to time with any and all information that the Supplier creates, sends, has or receives in respect of each Insurance Contract and any associated Insurance Proceeds;

(h) to notify the Purchaser immediately upon the withdrawal of, or amendment to, any of the limits or other endorsement or alteration to the terms of any Insurance Contract;

Page 6

(i) acknowledges and agrees that the Purchaser may, from time to time, appoint any employee, manager, agent or correspondent to review such information provided to the Purchaser and provide the Purchaser with the results of such due analysis;

(j) to immediately inform the Purchaser upon becoming aware of any Delkredere Obligor’s intention to terminate a Delkredere Agreement; and

(k) promptly after execution of (i) this present agreement; and (ii) any further Schedule 1 with respect to an additional Customer, to serve a notice of assignment on the relevant Customer and (if applicable) the Delkredere Obligor substantially in the form as set forth in Schedule 3 hereto.

5.2 The Supplier hereby irrevocably authorizes the Purchaser, in its sole discretion, to file any document or financing statements, and any amendments thereto, in relation to all or any Purchased Receivable or Insurance Contract, without the signature of Supplier, to the extent permitted by applicable law. If not so permitted by applicable law, or in such other circumstances as the Purchaser may reasonably request, the Supplier will execute and file any such document, financing statements, or amendments thereto, and such other instruments or notices, as may be necessary or appropriate to perfect and maintain the perfection of the Purchaser’s ownership interest in any Purchased Receivable or Insurance Proceeds.

5.3. Notwithstanding the foregoing, if the relevant Schedule 1 requires an Insurance Contract, the Supplier shall notify the Purchaser immediately or as soon as reasonably practicable if any Purchased Receivables are no longer the subject of such Insurance Contract. If such event occurs the Purchaser can terminate this Agreement immediately for good cause in respect of the relevant Customer.

6 Price Adjustments and Interest

6.1 Price Adjustments

6.1.1 If any Purchased Receivable shall be an amount less than that specified in the Purchase Request (after giving effect to any Adjustments known on the Purchase Date) by reason of one or more credit notes or equivalent documents issued by the Supplier, or a reduction taken by the Customer in respect of a discount or other claim, then the Purchase Price is to be adjusted accordingly and Supplier shall pay such difference to the Purchaser on the next Settlement Date.

6.1.2 If a Commercial Dispute regarding a Purchased Receivable occurs, the Purchase Price shall be adjusted accordingly and the Supplier shall pay to the Purchaser in respect of such Purchased Receivable an amount equal to, and in the same currency as, the reduction to the Purchase Price caused by such Commercial Dispute on the next Settlement Date.

6.1.3 Any payment received by the Purchaser in respect of a Purchased Receivable which has been adjusted in accordance with this Clause 6.1 shall be passed through to the Supplier to the extent such payment exceeds the adjusted Purchase Price of such Purchased Receivable.

6.2 Default Interest

6.2.1 In the event that any amount payable by the Supplier pursuant to Clauses 6.1.1 , 6.1.2 or this Clause 6.2 remains unpaid on the date on which it becomes due and payable the Purchaser shall charge and the Supplier shall pay interest (Additional Interest) from time to time on any such unpaid amount due from the Supplier to the Purchaser during the period from (and including) the due date thereof to ( but excluding) the date payment is received by the Purchaser in full, at a rate equal to the aggregate of (i) the Applicable Margin plus EURIBOR applicable pursuant to the relevant Schedule 1 (calculated by reference to such calculation periods ending on or before the date payment is made in full as the Purchaser may select and notify to the Supplier from time to time ) and (ii) 2% per annum.

6.2.2 Such Additional Interest shall be payable at the end of each calculation period selected and notified by the Purchaser (as referred to above) by reference to which interest is calculated and may be deducted by the Purchaser from amounts which would otherwise be due to the Supplier from time to time under this Agreement.

Page 7

7 Additional Costs

7.1 The Supplier shall pay to the Purchaser on demand:

(a) all costs, charges and expenses including legal costs, in relation to the enforcement of this Agreement and any Purchase Request;

(b) all stamp, documentary, registration or other like duties or taxes, including withholding taxes and any penalties, additions, fines, surcharges or interest relating thereto, or any notarial fees which are imposed or chargeable on or in connection with any this Agreement or any Purchase Request or the purchase by the Purchaser of any Account Receivable.

8 Servicing and Management of Purchased Receivables.

8.1 The Purchaser appoints the Supplier (when acting in such capacity, herein referred to as “Servicer”) to act as “Servicer” hereunder and to service the Purchased Receivables hereunder. The servicing of Purchased Receivables shall include, but not be limited to: (1) managing the collection of the Purchased Receivables and undertaking commercially reasonable action or all legal or other proceedings to enforce payment; (2) taking commercially reasonable actions necessary to request or demand that the Customer pays Purchased Receivables if such Purchased Receivables are due and payable; and (3) administer, service and manage the collection and servicing of the Purchased Receivables in the ordinary course of business with at least the same standard of care and procedures as the Supplier uses in the servicing and management of Receivables owned by the Supplier.

(a) The Servicer shall implement and comply in all material respects with the Credit and Collection Policies and Procedures and shall perform all obligations described herein, including without limitation, those obligations described in Section 3.2 hereof.

(b) The Servicer shall administer, service and manage the collection and servicing of the Purchased Receivables in the ordinary course of its business in compliance with all applicable laws, rules and regulations.

(c) The Servicer shall arrange to have all payments from the Customers or otherwise related to the Purchased Receivables made separately and directly to the Collection Account and shall not permit any payments from other customers to be made to the Collections Account.

(d) The Servicer shall be responsible for all of the fees, costs and expenses incurred in connection with the management and collection of the Purchased Receivables, unless the Customer’s non-payment was caused by an Insolvency Event. The Servicer shall obtain or cause to be obtained all licenses, permits and regulatory approvals necessary to collect the Purchased Receivables and otherwise comply with all applicable laws, rules and regulations.

(e) The Servicer agrees that, except as historically applied in the normal, customary and ordinary course of its business with respect to the collection of its own Account Receivables (and which standard of practice shall at least constitute the average level of collection practices of its industry), it will not adjust, settle, or compromise the amount due under any Purchased Receivables without the prior written consent of the Purchaser.

8.2 In partial consideration for its performance of its duties as Servicer, including section 8.1(d) hereof, the Purchaser shall assign to the Supplier, and the Supplier shall be entitled to receive and retain, all amounts from time to time paid by the depository bank where the Collection Account is maintained as interest or other investment return on the funds from time to time held in the Collection Account. The Supplier agrees that it will report all such amounts as its income and be responsible for paying all income and other taxes in respect thereof. Amounts shall be payable monthly to the Supplier upon receipt and review by the Purchaser and the Supplier of the applicable periodic statements for the Collection Account following the actual crediting of such amounts to the Collection Account.

Page 8

8.3 At its sole discretion, the Purchaser may replace the Supplier (or any successor Servicer) as the Servicer.

8.4 If the Servicer intends to make any material changes to the Credit and Collection Policies and Procedures that are outside the ordinary course of business and would effect the Account Receivables, the Servicer shall notify the Purchaser in writing giving details and an explanation of such proposed change, and unless the Purchaser objects within ten (10) days of receipt of such written notice, such change shall be deemed approved by the Purchaser.

8.5 The Purchaser (including its auditors, legal counsel or accountants retained by Purchaser) may inspect and request copies of such books and records relating to Purchased Receivables at any time at each Servicer’s offices during normal business hours and upon notice given at least three (3) Business Days in advance to the Service. Servicer shall (i) bear responsibility for ensuring that Purchaser has the right to inspect, obtain copies, and gain access to any such books and records held or maintained by any third party, and (ii) bear any loss occasioned by Purchaser’s inability to obtain access to information with respect to such Purchased Receivables from the books and records.

9 General

9.1 Each party may terminate this agreement upon 30 (thirty) days’ prior written notice. The Termination of this Agreement shall not effect the obligations of the Servicer to continue servicing those receivables that have been purchased by the Purchaser prior to the termination, nor have any effect on arrangements set forth herein with regard to receivables sold prior to the date of termination.

9.2 Any amounts which but for this Clause 9.2 would fall due for payment by the Purchaser or the Supplier on a day other than a Business Day shall be payable on the succeeding Business Day and the Purchase Price (or as the case may be, the amount payable by the Supplier) shall, where necessary, be adjusted accordingly.

9.3 The Supplier agrees and acknowledges that it has taken independent legal and accounting advice in relation to the accounting treatment to be applied to the transactions contemplated herein and the Purchase Request. It is agreed that the Supplier has not relied on any representation of the Purchaser in this regard.

9.4 The Purchaser shall be entitled to rely on any communication sent by the Supplier, irrespective of any error or fraud contained in the communication or the identity of the individual who sent the communication, and shall not be liable for any action taken or omitted in reliance on any notice, direction, consent, certificate, affidavit, statement, designation or other paper or document reasonably believed by it to be genuine and to have been duly and properly signed or presented to it by the Supplier.

9.5 This Agreement may be executed in any number of counterparts (including by facsimile transmission) and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

9.6 The Supplier agrees and acknowledges that it is a sophisticated party in relation to the Supplier relevant documents and that it has taken independent legal and accounting advice in relation to the accounting treatment to be applied to the transactions contemplated in the Supplier relevant documents. It is agreed that the Supplier has not relied on any representation of the Purchaser in this regard.

9.7 The Supplier shall remain liable to perform all obligations assumed by it under any contract with the Customer and the Purchaser shall be under no obligation of any kind whatsoever under such contract or be under any liability whatsoever in the event of any failure by the Supplier to perform its obligations under any such contract.

Page 9

10 Notices

10.1 All notices, requests and demands given or made under this Agreement shall be given or made in writing and unless otherwise stated shall be made by telefax or letter using the address as specified below or such other address as the party may designate to the other party:

To the Supplier:

Attention: Mark-Björn König and Norbert Sourek

Address: 75 Kistlerhofstraße, D-81379 Munich, Germany

Facsimile: +49 89 4700 2777

To the Purchaser:

Attention: Trade Finance Operations

Address: 4^th Floor, 68, Molesworth Street, Lewisham, London SE13 7EU

Facsimile: +44 20 7500 8063

10.2 All notices or other communication shall be deemed to have been received:

(i) if sent by fax with a confirmed receipt of transmission from the receiving machine, on the day on which transmitted;

(ii) in the case of a notice given by hand, on the day of actual delivery;

(iii) if sent by post, 5 Business Days after being deposited in the post with first class prepaid postage, provided that a notice given in accordance with the above but received on a day which is not a Business Day or after normal business hours in the place of receipt shall be deemed to have been received on the next Business Day.

11 Assignments

11.1 The Purchaser may at any time assign, transfer or sub-participate (including by way of novation) any of its rights and obligations hereunder or under any Purchase Request to another bank or financial institution. The Supplier may not assign or otherwise transfer its rights, benefits or obligations or any of them hereunder.

12 Governing Law

12.1 This Agreement shall be governed by and construed in accordance with German law.

12.2 The Supplier irrevocably agrees for the exclusive benefit of the Purchaser that the courts of Germany shall have jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute which may arise out of or in connection with this Agreement and for such purposes irrevocably submits to the jurisdiction of such courts. The Supplier irrevocably waives any objection which it may have now or in the future to the courts of Germany being nominated for the purpose of this Clause on the ground of venue or otherwise and agrees not to claim that any such court is not a convenient or appropriate forum.

Page 10

As witness the hands of the authorised signatories of the parties hereto the day and year first above written.

The Supplier

Executed for and on behalf of 12.1 Tech Data GmbH & Co. OHG by                          and ) ) )

The Purchaser

Executed for and on behalf of Citibank International Plc by                          and ) ) )

Page 11

Schedule 1 – Supplier Pricing Schedule and Customer Data sheet

In relation to the Uncommitted Account Receivable Purchase Agreement dated 23 January 2006, the Purchaser and the Supplier hereby agree to include the following Customer(s) on the below stated terms:

Customer: [•]

Customer Limit: [•]

Adjustments: [•]

[Delkredere Obligors: [•]]

[Delkredere Agreement: [•]]

[Insurance Contract: [•]]

Applicable Margin: [•]

Account for the payment of sums owing to the Citibank International plc in respect of the Purchased Receivables: [•] unless notified otherwise in writing by the Purchaser.

Account for the payment of sums owing to Tech Data GmbH & Co. OHG by the Servicer in respect of the Purchased Receivables: [•] unless notified otherwise in a Purchase Request by the Supplier.

The Program Fee shall be calculated as follows:

The Purchase Price shall be calculated as follows:

The effective date of this Schedule 1 shall be: [•]

Agreed by:

CITIBANK INTERNATIONAL PLC	TECH DATA GmbH & Co. OHG
BY:	BY:
NAME:	NAME:
TITLE:	TITLE:

Page 12

Schedule 2 - Purchase Request

Receivables Purchase Request

Finanzierungsbescheinigung über einen Kredit für den Ankauf von Forderungen

aus Lieferungen und Leistungen

Tech Data GmbH & Co. OHG

Shaded cells require input, all others are calculated/ Schattierte Zellen sind eingabepflichtig, alle übrigen werden berechnet
Settlement Date/ Abrechnungsdatum:	[	•]
Tech Data’s account number/ Tech Datas Konto Nummer:	[	•]
Next Settlement Date/ Datum der nächsten Abrechnung	[	•]
12.2 RECEIVABLES BALANCE & COLLECTIONS FORDERUNGSBESTAND & INKASSI
Please complete this section only for settlements. For purchase requests, please leave this section empty. Diesen Abschnitt bitte für Abrechnungen ausfüllen. Für den Ankauf von Forderungen bitte diesen Abschnitt leer lassen.
Receivables Balance as of last Settlement Date Forderungsbestand zum Zeitpunkt der letzten Abrechnung	€ [•]
Deductions from Receivables Balance Abzüge vom Forderungsbestand	€ [•]
Face value of paid invoices during the current period Nennwert der bezahlten Warenrechnungen während des laufenden Zeitraums.	€ [•]
Collections during the current period Inkassi während des laufenden Zeitraums	€ [•]
Receivables Balance for the current Settlement Date Forderungsbestand am aktuellen Abrechnungsdatum			€ [•]
NEW RECEIVABLES NEUE FORDERUNGEN
12.3 Please complete this section in the case of new purchases only. Diesen Abschnitt bitte nur im Fall eines Neuerwerbs ausfüllen.
Invoice Amount offered for sale Zu verkaufender Forderungsbetrag	€ [•]
Proposed Purchase Date Vorgeschlagenes Kaufsdatum	[Date]
Total/ Summe			€ [•]
Current Receivables Balance plus New Account Receivables purchased Aktueller Forderungsbestand zuzüglich angekaufter neuer Forderungen			€ [•]

Page 13

DEDUCTIONS FROM RECEIVABLES BALANCE – WORKSHEET ABZÜGE VOM FORDERUNGSBESTAND - ROHBILANZ
Price Adjustments Adjustierter Preis	€ [•]
Deductions from Invoice Amount Abzüge vom Rechnungsbetrag	€ [•]
Credit Notes Gutschriftanzeigen	€ [•]
Deductions from Receivables Balance Abzüge vom Forderungsbestand	€ [•]
Note: support file is the “Sold Invoices File” Anm.: Dateianhang ist das ‘Sold Invoices File’.

The capitalized terms used herein shall have the same meeting as set forth in the Agreement (as defined below) except as otherwise provided herein. This certificate and supporting data (collectively the “Certificate”) is delivered in connection with that certain Uncommitted Account Receivable Purchase Agreement dated 23 January 2006 as amended from time to time (the “Agreement”) between Citibank International plc (“Citibank”) and Tech Data GmbH & Co. OHG (“Tech Data”). Tech Data certifies to Citibank that the information contained herein is true, correct and based upon the information contained in Tech Data’s financial reporting records.

The Supplier confirms that all representations and warranties set out in the Agreement are correct as at the date hereof and as of the proposed Purchase Date in respect of each Account Receivable referred to above and the circumstances existing on the date hereof now and as of the proposed Purchase Date.

Acknowledged by:
CITIBANK INTERNATIONAL PLC	TECH DATA GmbH & Co. OHG
BY:	BY:
NAME:	NAME:
TITLE:	TITLE:

Page 14

Schedule 3 - Notice of assignment

NOTICE OF ASSIGNMENT

To: [Customer or Delkredere Obligor (if applicable)]

Dear Sirs,

We refer to the agreements concluded by and between your affiliates and Tech Data GmbH & Co. OHG for the supply of certain goods to you (the “Supply Contracts”) [and the agreement between yourselves and Tech Data GmbH & Co. OHG [dated [•],(the “Delkredere Agreement”, and together with the Supply Contracts,] the “Underlying Agreement[s]”).

We hereby inform you that we have assigned and will be assigning on an ongoing basis some or all of our rights, title and interest in and to the amounts payable under the Underlying Agreement[s] by you [or your affiliates] to Tech Data GmbH & Co. OHG to Citibank International plc acting through its office at 25, Canada Square, Canary Wharf, London E14 5LB, United Kingdom, on the basis of an account receivables purchase agreement dated 23 January 2006.

We hereby request you to fulfil your [and your affiliates’] payment obligations towards us under the Underlying Agreement[s], contrary to any other provision of the Supply Contract [or the Delkredere Agreement], exclusively to the following account of Tech Data GmbH & Co. OHG:

Citigroup Global Markets Deutschland AG & Co.KGaA

Account number: 214150077

SWIFT: CITIDEFF

Currency of account: EUR

IBAN: DE10502109000214150077

or to such other account or accounts as Citibank International Plc. may notify you in writing from time to time. Any of your [or your affiliates’] payment obligation under the Underlying Agreement[s] can only be fulfilled and discharged by payment to the above mentioned account or to such other account or accounts as Citibank International Plc. may notify you in writing from time to time.

This assignment may only be withdrawn with the prior written consent of Citibank International, plc.

We also inform you that, notwithstanding the foregoing, Citibank International plc has appointed us to act as servicer for the assigned receivables. In this role, we will continue to administer, service and manage the collection and servicing of the assigned receivables. This appointment is effective until such time as Citibank International plc shall inform you in writing of its revocation.

Yours Faithfully:	Acknowledged by:
___________	___________
Date	Date
Tech Data GmbH & Co. OHG	[Customer or Delkredere Obligor]

17

EX-10.(AAKK)

Exhibit 10-AAkk

DATED 7 March 2006

(1) TECH DATA EUROPE GMBH

(2) GLOBAL KNOWLEDGE NETWORK NETHERLANDS B.V.

(3) GLOBAL KNOWLEDGE TRAINING, LLC

MASTER AGREEMENT

for the sale and purchase

of the Azlan Training Business

Eversheds LLP

Senator House

85 Queen Victoria Street

London EC4V 4JL

Tel: +44 (0) 20 7919 4500

Fax: +44 (0) 20 7919 4919

CONFIDENTIAL TREATMENT REQUESTED

CONTENTS

		Page
Clause
1	INTERPRETATION	1
2	SALE AND PURCHASE	10
3	DEPOSIT	12
4	CONSIDERATION	12
5	COMPLETION	13
6	WARRANTIES	15
7	INDEMNITIES	16
8	RESTRICTIVE COVENANTS	17
9	USE OF THE AZLAN NAME	18
10	BUYER’S ASSURANCES	20
11	RECORDS AND ACCESS	20
12	FUTURE ENQUIRIES AND ASSISTANCE	21
13	ANNOUNCEMENTS	21
14	COSTS	21
15	NOTICES	21
16	ASSIGNMENT	22
17	ENTIRE AGREEMENT	22
18	GENERAL	23
19	GUARANTOR OBLIGATIONS	24
20	GOVERNING LAW AND ARBITRATION	25
21	COUNTERPARTS	26
Schedules
1	Relevant Sellers and Relevant Buyers	27
2	Purchase Price Allocation	28
3	The Excluded Assets	29
4	Warranties	30
5	Limitations on the Seller’s Liability	39
6	Azlan Name	44
7	Part I - Completion Accounts	45
	Part II - Pro Forma Balance Sheet as at the Transfer Date	49
8	Material Contracts	50
9	IT Systems	51
10	Transitional Arrangements	52

CONFIDENTIAL TREATMENT REQUESTED

THIS AGREEMENT is made on 7 March 2006

BETWEEN:

(1) TECH DATA EUROPE GMBH incorporated and registered in Germany with company number HRB 123866 whose registered office is at Kistlerhofstrasse 75, D-81379 Munich, Germany (the “Seller”); and

(2) GLOBAL KNOWLEDGE NETWORK NETHERLANDS B.V. incorporated and registered in the Netherlands with company number 30134193 whose registered office is at Ratelaar 38, 3434 EW Nieuwegein, The Netherlands (the “Buyer”);

(3) GLOBAL KNOWLEDGE TRAINING LLC incorporated and registered in the state of Delaware and whose registered office is at 90000 Regency Parkway, Suite 500, Cary, North Carolina 27511, United States of America (the “Guarantor”).

WHEREAS

(A) Each of the Relevant Sellers (as defined below) is a direct or indirect subsidiary of or an Associated Company of the Seller and the Relevant Sellers together carry on the Business.

(B) Each of the Relevant Buyers (as defined below) is a direct or indirect subsidiary of the Buyer.

(C) The Seller has agreed to sell and transfer, or procure the sale and transfer by the Relevant Sellers of, and the Buyer has agreed to purchase, or procure the purchase by the Relevant Buyers of, the Business as a going concern for the consideration and on the terms and subject to the conditions set out in this Agreement and the relevant Local Agreements (as defined below).

OPERATIVE CLAUSES

1. INTERPRETATION

In this Agreement:

1.1 the following expressions have the following meanings unless inconsistent with the context:

“Accounting Date”	31 January 2005
“Accounts”	the audited statutory accounts of each Relevant Seller for the financial year which ended on the Accounting Date

CONFIDENTIAL TREATMENT REQUESTED 1

“Additional Consideration”	the amount of USD $500,000 set out in clause 4.1.2
“Associated Company”	any company which at the relevant time is: (a)      a holding company of the Seller (or the Buyer (as the case may be)); or (b)      a subsidiary or subsidiary undertaking of the Seller (or the Buyer (as the case may be)); or (c)      a subsidiary or subsidiary undertaking of any such holding company (other than the Seller (or the Buyer (as the case may be)) itself); the expressions “holding company”, “subsidiary” and “subsidiary undertaking” having the meanings given to them by CA 1985
“Assumed Liabilities”	(i)       the liabilities of the Relevant Sellers in respect of the Business which fall due on or after the Transfer Date set out in the Completion Accounts, and (ii)      all other obligations of the Relevant Sellers under or in respect of the Business Contracts and the Property due to be performed after the Transfer Date (but excluding any liability for breach of any such obligation which ought to have been performed prior to the Transfer Date)
“Azlan Integration”	the process of integrating the operational business activities of Azlan entities into the Tech Data group of companies which started in December 2004 and which is ongoing

CONFIDENTIAL TREATMENT REQUESTED 2

“Azlan Name”	the Azlan Training name and/or the Azlan logo as used in the Business at the Transfer Date, including the visual representations which are set out in Schedule 6
“Business”	the training business carried on by the Relevant Sellers under the Azlan Name at the Transfer Date
“Business Assets”	all the property, rights and assets of the Business to be sold to the Relevant Buyers pursuant to this Agreement or any Local Agreement as described in clause 2
“Business Contracts”	all Contracts entered into by or on behalf of the Relevant Sellers in connection with the Business which are unperformed (wholly or partly) as at the Transfer Date and including customer and supplier contracts, computer contracts, leasing and hire agreements, pre-payments in respect of business contracts and licences of Intellectual Property Rights and Know How but excluding employment contracts with Employees, contracts relating to the ownership or occupation of the Property, and contracts relating to the Excluded Assets
“Business Day”	any day (other than a Saturday or Sunday) on which banks are open in London for normal banking business
“Business Information”	all confidential information (but excluding Business Know How) that is used in any part of the Business and Business Assets including (i) any products sold or services rendered by the Business and (ii) the operations, management, administration or financial affairs of the Business

CONFIDENTIAL TREATMENT REQUESTED 3

“Business Intellectual Property”	Intellectual Property Rights (excluding the Business Name) owned by the Relevant Sellers or used in connection with the Business as at the Transfer Date
“Business Know How”	that Know How owned by the Relevant Sellers and used primarily and substantially in connection with the Business at this Transfer Date excluding for the avoidance of doubt any Business Name
“Business Name”	the Tech Data name and/or the Azlan Name
“Buyer’s Solicitors”	Kilpatrick Stockton LLP of One Canada Square Canary Wharf, London E14 5NZ, United Kingdom
“CA 1985”	the Companies Act 1985
“Collateral Intellectual Property Rights”	all intellectual property rights, other than Intellectual Property Rights (as defined below) used in connection with the Business as at the Transfer Date
“Completion”	completion of the sale and purchase in accordance with clause 5
“Completion Accounts”	the proforma balance sheets of each of the Relevant Sellers relating to its part of the Business as at the Transfer Date prepared in accordance with Schedule 7 and on a consistent basis with the Management Accounts
“Consideration”	the aggregate consideration for the sale of the Business Assets as stated in clause 4
“Contract”	any legally binding agreement or commitment
“Customer Cash”	all cash sums belonging or referable to customers, or potential customers, of the Business which are held by or deposited with the Seller and/or each Relevant Seller as deposits for, or advance or instalment payment in relation to, any Business Contract, or so held or deposited in relation to any contract or order which any such customer may place with the Business in the future

CONFIDENTIAL TREATMENT REQUESTED 4

“Deposit”	the sum of USD $1,650,000 to be paid to the Seller on the execution of this Agreement in accordance with clause 3
“Disclosed”	disclosed in the Disclosure Letter or any of its annexures
“Disclosure Letter”	the letter having the same date as this Agreement from the Seller to the Buyer qualifying the Warranties
“Employees”	the persons identified in schedules to the Local Agreements and employed in the Business immediately before the Transfer Date whose contracts of employment after the Transfer Date will be or are deemed effected with the Relevant Buyer
“Encumbrance”	any mortgage, charge, pledge, lien, assignment by way of security, option, restriction, claim, right of pre-emption, right of first refusal, third party right or interest, other encumbrance or security interest of any kind, or other preferential arrangement having similar effect
“Excluded Assets”	the assets described in Schedule 3 and which are excluded from the sale and purchase pursuant to this Agreement
“Goodwill”	the goodwill of the Business at the Transfer Date and the exclusive right of the Relevant Buyer to carry on the Business and to represent themselves as carrying on the Business in succession to the Relevant Sellers
“Initial Consideration”	the sum of USD $16.5 million (sixteen million five hundred thousand United States’ dollars)

CONFIDENTIAL TREATMENT REQUESTED 5

“Intellectual Property Rights”	the Business Name, the Flexcom name, the Horizon name, the domain names listed in the Disclosure Letter, software licences and ownership and other rights to use the training and marketing materials employed in the Business at the Transfer Date
“Inventory”	all stock in trade of the Business at the Transfer Date (including, without limitation any transferable testing vouchers)
“IT Systems”	all computer hardware (including network and telecommunications equipment) and software (including associated preparatory materials, user manuals and other related documentation) owned, used, leased or licensed by or in relation to the Business, excluding the Retained Accounting Systems. A non-exhaustive list of the IT Systems (providing central IT services) is set out in Schedule 9
“Jurisdictions”	Belgium, Denmark, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden and the United Kingdom
“Know How”	all technical information and know-how (whether or not confidential) including that comprised in or derived from formulae, designs, specifications, drawings, manuals, instructions and catalogues that in any way relate to inventions, discoveries, improvements, designs, processes, techniques, computer hardware and Software
“Liabilities”	all costs, expenses, losses, damages, claims, proceedings, awards, fines, orders and other liabilities (including reasonable legal and other professional fees and expenses) whenever arising or brought

CONFIDENTIAL TREATMENT REQUESTED 6

“Local Agreements”	the asset transfer agreements to be entered into by the Relevant Sellers and the Relevant Buyers on Completion in substantially the agreed form or in such other form as the parties may agree required in order to effect the sale and purchase of the Business in the Jurisdictions and Local Agreement means any one of them
“Management Accounts”	a proforma balance sheet and a profit and loss account relating to the Business extracted from the management accounts of each Relevant Seller for the nine month period from the Accounting Date to the Management Accounts Date
“Management Accounts Date”	31 October 2005
“Material Business Contracts”	means those Business Contracts listed in Schedule 8
[REDACTED]	[REDACTED]
“Parties”	the parties to this Agreement and “Party” shall be construed accordingly
“Plant and Equipment”	the fixed and loose plant, machinery and equipment, fittings and other chattels (including office equipment but excluding the IT Systems) owned by the Relevant Sellers and used in connection with the Business or this Transfer Date whether or not situated at the Property
“Property”	the leasehold or licensed properties used in connection with the Business listed in the Local Agreements and in relation to a particular Relevant Seller, the leasehold or licensed property owned or occupied for the purpose of the Business by that Relevant Seller and each and every part of such property (including, for the avoidance of doubt the benefit of rental payments, deposits and rates made under the relevant Leases prior to Completion and where the context admits the leases and tenancies pursuant to which the Properties are held by the Seller or Relevant Seller)

CONFIDENTIAL TREATMENT REQUESTED 7

“Records”	all the books and records (or extracts thereof where appropriate) relating primarily and substantially to the Business, the Business Assets and the Employees (including personnel files) other than those relating to the Excluded Assets and any records that the Seller or the Relevant Sellers are required by law to retain
“Relevant Buyers”	the relevant buyers whose names are set out in column (2) of Schedule 1
“Relevant Claim”	any claim for breach of any of the Warranties or any other provision of this Agreement (other than a breach of clause 2.2 or a claim under clause 7.1)
“Relevant Sellers”	the relevant sellers whose names are set out in column (1) of Schedule 1
“Retained Accounting Systems”	the “SAP” and “Strategix” accounting software systems used by certain of the Relevant Sellers
“Retained Liabilities”	all liabilities or obligations of the Business which have accrued at the Transfer Date other than the Assumed Liabilities
“Retained Property”	the leasehold or licensed properties used in connection with the Business in [REDACTED]
“Seller’s Solicitors”	Eversheds LLP of Senator House, 85 Queen Victoria Street, London EC4V 4JL
“Software”	any form of computer program, including applications software, database platform and operating systems, whether in source or object code form used in the Business

CONFIDENTIAL TREATMENT REQUESTED 8

“Taxation” or “Tax”	any governmental, federal, state, regional, local, municipal or foreign income, gross receipts license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, alternative or add-on minimum, estimated, or other tax or any kind whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, including any interest, penalty, or addition thereto, whether disputed or not and including any obligation to indemnify or otherwise assume or succeed to the Tax liability of any other person
“Trade Accounts Receivable”	all amounts owing to a Relevant Seller by trade debtors in connection with the Business at the Transfer Date in respect of goods or services supplied by such Relevant Seller before the Transfer Date (whether or not invoiced and whether or not then due and payable)
“Transfer Date”	10 March 2006, or such other date as the Parties may agree
“VAT”	Value Added Tax
“Warranties”	the warranties set out or referred to in clause 6 and Schedule 4

1.2 references to any statute or statutory provision include, unless the context otherwise requires, a reference to the statute or statutory provision as modified or re-enacted and in force from time to time prior to Completion and any subordinate legislation made under the relevant statute or statutory provision in force prior to Completion;

1.3 references to persons will include bodies corporate, unincorporated associations and partnerships;

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1.4 references to a document being “in the agreed terms” are to that document in the form agreed and for the purposes of identification initialled by or on behalf of the Seller and the Buyer;

1.5 references to the singular include the plural and vice versa;

1.6 references to clauses and Schedules are to clauses of and Schedules to this Agreement, and references to paragraphs are to paragraphs in the Schedule in which such references appear;

1.7 references to the Transfer Date shall mean 5.30 p.m. (GMT) on the Transfer Date;

1.8 if any reference to an amount in US dollars under this Agreement or any Local Agreement needs to be converted into a currency other than US dollars it will be converted at the spot rate prevailing and published in the Financial Times in London on the Transfer Date;

1.9 the Schedules form part of this Agreement and will have the same force and effect as if expressly set out in the body of this Agreement;

1.10 the headings in this Agreement will not affect its interpretation; and

1.11 any phrase introduced by the term “include”, “including”, “in particular” or any similar expression will be construed as illustrative and will not limit the sense of the words preceding that term.

2. SALE AND PURCHASE

2.1 The Seller will procure the sale and transfer by each Relevant Seller, in each case pursuant to this Agreement and, to the extent applicable, the relevant Local Agreement with full title guarantee (unless otherwise specified in this Agreement), and the Buyer will procure the purchase by each Relevant Buyer of the Business as a going concern as at the Transfer Date comprising the following assets (the “Business Assets”):

2.1.1 the benefit (subject to the burden) of the Business Contracts;

2.1.2 the Business Know How;

2.1.3 the Business Information;

2.1.4 the Business Intellectual Property;

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2.1.5 the Collateral Intellectual Property Rights

2.1.6 the Inventory;

2.1.7 the IT Systems;

2.1.8 the Goodwill;

2.1.9 the Plant and Equipment;

2.1.10 the Property (other than the Retained Property);

2.1.11 the Trade Accounts Receivable; and

2.1.12 the Records.

2.2 Each of the Business Assets will be sold and bought free from any Encumbrance and with all rights attached to it unless otherwise specified in this Agreement.

2.3 The Buyer will procure that each Relevant Buyer will assume the burden of the Assumed Liabilities pursuant to the relevant Local Agreement.

2.4 Except as otherwise provided in this Agreement or any relevant Local Agreement:

2.4.1 beneficial ownership and risk in each of the Business Assets in respect of which beneficial ownership is to pass to the Relevant Buyer will pass to the Relevant Buyer on Completion; and

2.4.2 title to all Business Assets in respect of which beneficial ownership is to pass to the Relevant Buyer which can be transferred by delivery will pass on delivery and such delivery will be deemed to take place at Completion.

2.5 Notwithstanding any other provision of this Agreement, the Excluded Assets and the Retained Liabilities (which the Parties do not consider to be necessary for the operation of the business as a going concern) are excluded from the sale and purchase under or pursuant to this Agreement.

2.6 For the avoidance of doubt, provisions dealing with the transfer of the Business Assets and detailed schedules of the Property and the Employees are contained in the Local Agreements.

2.7 Subject to Completion:

2.7.1 [REDACTED];

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2.7.2 [REDACTED];

2.7.3

2.7.3.1 [REDACTED]

2.7.3.2 [REDACTED]

2.7.3.3 [REDACTED]

2.7.3.4 [REDACTED]

2.7.3.5 [REDACTED]

3. DEPOSIT

3.1 There shall be paid by the Buyer in cash to the Seller’s Solicitors client account on the execution of this Agreement the amount of the Deposit, which shall be held by the Seller’s Solicitors as stakeholders and shall be dealt with in accordance with Clause 3.2 of this Agreement.

3.2 The Seller’s Solicitors shall hold the Deposit as stakeholders and the Seller and the Buyer agree irrevocably to authorise the Seller’s Solicitors to:

3.2.1 pay the Deposit and accrued interest to the Seller either: (a) (as part satisfaction of the Initial Consideration) in the event that Completion takes place in accordance with Clause 5; or (b) if Completion does not take place in accordance with Clause 5 due to anything done or omitted to be done by the Buyer save where the Buyer exercises it right to rescind this Agreement pursuant to Clause 17.4; or

3.2.2 pay the Deposit and accrued interest to the Buyer in the event that Completion does not take place in accordance with Clause 5 due to anything done or omitted to be done solely by the Seller.

4. CONSIDERATION

4.1 The Consideration for the sale of the Business and the Business Assets is:

4.1.1 the Initial Consideration (the amount of which less the Deposit shall be paid in accordance with clause 5.5, such Deposit to be dealt with in accordance with clause 3 above);

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4.1.2 [REDACTED], a further amount of USD $500,000, payable within 10 Business Days of unconditional confirmation of renewal to the Buyer or any Relevant Buyer [REDACTED].

4.2 [REDACTED].

4.3 The Consideration will be allocated as set out at Schedule 2.

4.4 The Consideration shall be paid by the Buyer (as agent for the Relevant Buyers) to the Seller or such other Tech Data entity as the Seller shall direct (as agent for the Relevant Sellers), in accordance with clauses 5.5 and 5.6 as reflected in and subject to any legal requirements under any Local Agreement for any direct payments thereunder or as otherwise agreed by the Buyer and the Seller.

4.5 All amounts expressed in this Agreement as being payable by the Buyer are expressed exclusive of any VAT or similar tax or duty which may be chargeable. The parties will use their respective best endeavours to mitigate the imposition of any such tax. If subsequent to Completion it is determined that the relevant sales are (contrary to the view of the Parties) not to be regarded as transfers as going concerns such that VAT or a similar tax should have been charged, the Buyer will be invoiced and shall pay such tax to the Seller.

5. COMPLETION

5.1 Completion will take place at the offices of Seller’s Solicitors on the Transfer Date.

5.2 At Completion, the Seller shall procure that each Relevant Seller shall, and the Buyer shall procure that each Relevant Buyer shall enter into the relevant Local Agreement. To the extent that any provisions of this Agreement are inconsistent with or additional to the provisions of a Local Agreement, the provisions of this Agreement shall prevail and the Seller and the Buyer shall procure that the provisions of the relevant Local Agreement are adjusted to the extent necessary to give effect to the provisions of this Agreement subject to being compliant with any relevant law in the relevant Jurisdiction and/or that the Relevant Seller and the Relevant Buyer comply to the extent lawful with the provisions of this Agreement as though they were bound by such provisions in place of the provisions of the relevant Local Agreement. For the avoidance of doubt, the relevant Local Agreement will be entered into solely in order to implement the sale and purchase of the part of the Business agreed to be sold in the relevant Jurisdiction and to enable the Relevant Buyer to enter into a direct contractual relationship with the Relevant Seller in the terms of the Local Agreement.

CONFIDENTIAL TREATMENT REQUESTED 13

5.3 The Seller shall not and shall procure that a Relevant Seller shall not bring any claim against the Buyer or the Relevant Buyers in respect of or based upon the Local Agreements save to the extent necessary to implement any transfer of any Business Assets sold hereunder in a manner consistent with the terms provided for by this Agreement. To the extent that the Seller or a Relevant Seller does bring such a claim (save as referred to above), the Seller shall indemnify each of the Buyer and the Relevant Buyers against all losses which it may suffer through or arising from the bringing of such a claim against it. The Buyer shall not and shall procure that a Relevant Buyer shall not bring any claim against the Seller or the Relevant Sellers in respect of or based upon the Local Agreements save to the extent necessary to implement any transfer of any Business Assets sold hereunder in a manner consistent with the terms provided for by this Agreement. To the extent that the Buyer or a Relevant Buyer does bring such a claim (save as referred to above), the Buyer shall indemnify each of the Seller and the Relevant Sellers against all losses which it may suffer through or arising from the bringing of such a claim against it.

5.4 At and from Completion, the Seller will procure that the Relevant Sellers and the Buyer will procure that the Relevant Buyers will comply with the provisions of and perform the relevant Local Agreements.

5.5 At Completion, the Buyer will pay the Initial Consideration by electronic funds transfer to the Seller’s Solicitors’ client account (details of which have been provided by the Seller’s Solicitors to the Buyer’s Solicitors) or by such other method as may be agreed between the parties.

5.6 The Additional Consideration shall be paid by electronic funds transfer to the Seller’s Solicitors’ client account or by such other method as may be agreed between the parties within the applicable time frame prescribed in clause 4.1.2.

5.7 The Seller’s Solicitors are authorised to receive the Consideration on behalf of the Seller and payment to them will be a good and sufficient discharge to the Buyer and the Buyer will not be further concerned as to the application of the moneys so paid.

5.8 The Buyer is not obliged to complete this Agreement unless the Relevant Sellers comply with all of their respective obligations under the relevant Local Agreements.

5.9 The Buyer and the Seller will implement the provisions of Schedule 7 to produce and effect a final determination of the Completion Accounts.

CONFIDENTIAL TREATMENT REQUESTED 14

5.10 Between the execution of this Agreement and Completion, the Seller shall procure that the Relevant Sellers shall operate the Business in the normal course and that all insurance related to the Business is maintained.

6. WARRANTIES

6.1 The Seller warrants to the Buyer in the terms of the Warranties. The Warranties shall have effect subject to and shall be qualified by all facts and matters fairly Disclosed and the limitations and qualifications set out in this Agreement.

6.2 The Seller waives and may not enforce any right which the Seller may have against any of the Employees on whom it may have relied in agreeing to any term of this Agreement or any statement in the Disclosure Letter save to the extent of any fraud or any dishonest, reckless or wilful misconduct or omission by such Employee towards the Seller in this regard.

6.3 Each Warranty is to be construed independently and is not limited or restricted by any other Warranty.

6.4 Where any Warranty refers to the knowledge, information, belief or awareness of the Seller (or similar expression) the reference shall include the actual knowledge of the Seller and Relevant Seller and the Seller will be deemed to be aware of all information it received after making due enquiry of [REDACTED] and any other persons who are directors of the Relevant Sellers but the Seller will not be deemed to have made enquiry of any other person or further or otherwise and will not be liable for breach of Warranty should a fact or circumstance which would otherwise constitute a breach of Warranty be known to any person other than the persons of whom due enquiry should be made.

6.5 Notwithstanding any other provision of this Agreement, the liability of the Seller in respect of any Relevant Claim will be limited in accordance with the provisions of Schedule 5 (Limitations on the Seller’s liability).

6.6 Where an amount is payable by one party to the other after Completion, the amount of any Relevant Claim or any indemnity claim as finally determined will if determined in a currency other than US dollars be converted to US dollars at the spot rate prevailing and published in the Financial Times in London last before payment.

6.7 In respect of any Relevant Claim (or part thereof) the Seller will pay the sum due to the Buyer within 10 Business Days of the Seller or Relevant Seller confirming it does not dispute the relevant amount of the Relevant Claim or part thereof.

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6.8 In the event that any of the Business Assets used in the remote labs are removed or rendered unusable by the Seller or any Associated Company, or any agent thereof, after Completion the Seller shall replace such Business Assets with the same equipment or equipment with the same specifications and functionality within 24 hours of notification by Buyer to Seller regarding an event triggering this clause 6.8. For the avoidance of doubt, the financial limitations on the Seller’s liability contained in paragraphs 2.2 and 2.3 of Schedule 5 shall not apply to this clause 6.8. For the further avoidance of doubt, the other provisions of Schedule 5 shall apply to this clause 6.8.

7. INDEMNITIES

7.1 As at and from the Transfer Date, the Seller undertakes to indemnify, and to keep indemnified, the Buyer and each Relevant Buyer against the Retained Liabilities (whether actual, contingent or prospective) to the extent not performed or discharged by the Relevant Sellers under the Local Agreements including any reasonable costs of defending third party claims relating to the Retained Liabilities and all reasonable legal fees incurred by the Buyer in connection with enforcing this indemnity.

7.2 As at and from the Transfer Date, the Buyer undertakes to indemnify, and keep indemnified, the Seller and each Relevant Seller against the Assumed Liabilities (whether actual, contingent or prospective) to the extent not performed or discharged by the Relevant Buyers under the Local Agreements including any reasonable costs of defending third party claims relating to the Assumed Liabilities and all reasonable legal fees incurred by the Seller in connection with enforcing this indemnity.

7.3 The Buyer undertakes to:

7.3.1 procure that the Relevant Buyers shall pay any registration fee or transfer tax payable by the Relevant Buyers on the transfer of the Business Assets in any Jurisdiction; and

7.3.2 indemnify, and keep indemnified, the Seller and each Relevant Seller against any failure by the Relevant Buyers to pay any such registration fee or transfer tax.

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8. RESTRICTIVE COVENANTS

8.1 In this clause:

“Confidential Information” means all Business Know How and all Business Information, in each case, which amounts to a trade secret and which is not publicly known

8.2 Each party undertakes to the other that it shall not and shall procure that each of the Associated Companies shall not (whether alone or in conjunction with, or on behalf of, another person and whether directly or indirectly), without the prior written consent of the other:

8.2.1 for a period of two years from Completion, solicit or entice away, or endeavour to solicit or entice away, from the other party or any Associated Company of it, or employ, any person employed by, or who is or was a consultant to, the other party at Completion provided that nothing in this clause will prohibit or restrict a party from interviewing and/or employing any such person who (i) initiates discussions regarding employment without any direct or indirect solicitation by a party; (ii) contacts a party or any Associated Company of it in response to a general recruitment advertisement placed by or on behalf of such party or any Associate Company of it in the national, local or trade press or otherwise in relation to seeking employment with such party; or (iii) has been terminated by the relevant party or any Associated Company of it prior to commencement of any employment discussions or employment; or

8.2.2 at any time after Completion make use of, disclose or cause unauthorised disclosure to any person (except those authorised by the Buyer in writing to know or as required by law or any governmental or regulatory organisation, or to enforce the terms of this Agreement) any Confidential Information relating to the other party or any Associated Company of it.

8.3 The Seller undertakes to the Buyer that it shall not, and will procure that the Relevant Sellers shall not, (whether alone or in conjunction with, or on behalf of, another person and whether directly or indirectly), without the prior written consent of the Buyer:

8.3.1 for a period of two years from Completion, in any geographic areas in which the Business was carried on at the Completion Date, carry on or be employed, engaged or interested in any business which would be in competition with any part of the Business as the Business was carried on at Completion;

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8.3.2 for a period of two years from Completion use the Azlan Name.

8.4 Each of the undertakings set out in this clause is separate and severable and enforceable accordingly, and if any one or more of such undertakings or part of an undertaking is held to be against the public interest or unlawful, the remaining undertakings or remaining part of the undertakings will continue in full force and effect and will bind the person to whom it relates.

9. USE OF THE AZLAN NAME

9.1 Subject to the conditions set out in this clause 9, the Seller hereby grants to the Buyer and the Relevant Buyers for a period of 12 months after Completion the non-exclusive, non-assignable right to use the Azlan Name in any geographic areas in which the Business was carried on in the period of 12 months ended on the Completion Date solely in connection with the Buyer’s succession of the Business.

9.2 It is understood between the parties that during the 12 month period referred to in clause 9.1 above the Buyer will and will procure that the Relevant Buyers will phase out its use of the Azlan Name in favour of using its own name and logo.

9.3 The Buyer will and will procure that the Relevant Buyers will only use the Azlan Name in connection with the Business as set out in this clause. The Buyer and/or the Relevant Buyers may during, but not following the expiry of, the above 12 month period:

9.3.1 where the Azlan Name has prior to Completion been applied and/or displayed in connection with the Business, continue to display and use the Azlan Name in precisely the same manner;

9.3.2 use existing stocks of printed training materials; and

9.3.3 use the Azlan Name on advertising and marketing materials.

9.4 The Buyer will not and will procure that the Relevant Buyers will not apply and/or use the Azlan Name in relation to its business other than the Business.

9.5 The Buyer will not and will procure that the Relevant Buyers will not use or refer to the Azlan Name in any way which would tend to allow it to become generic, lose its distinctiveness, or become liable to mislead the public, nor use or refer to the Azlan Name in any way which is detrimental to or inconsistent with the good name, goodwill, reputation and image of the Seller and the Relevant Sellers.

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9.6 The Buyer will not and will procure that the Relevant Buyers will not at any time adopt or use or attempt to register any name, logo, trade mark, symbol or device which incorporates or is confusingly similar to, or is a simulation or colourable imitation of the Azlan Name or takes advantage of or is detrimental to the distinctive character or repute of the Azlan Name.

9.7 The Buyer acknowledges that the Azlan Name is and will remain the property of the Seller or the Relevant Sellers, and the Buyer shall not acquire any right, title or interest in the Azlan Name except the rights of use as are specifically set out in this Agreement and agree that the goodwill attaching to the Azlan Name as a result of the Buyer’s or the Relevant Buyers’ use of them, and all use of the Azlan Name shall enure for the Seller’s benefit.

9.8 The Buyer hereby indemnifies the Seller against all Liabilities suffered or incurred by the Seller or the Relevant Sellers as a result of the Buyer’s or any Relevant Buyer’s use of the Azlan Name otherwise than in accordance with this Agreement.

9.9 The Seller hereby indemnifies the Buyer in respect of any claims against the Buyer or any Relevant Buyer by any third party claimants to be entitled to exercise rights in respect of the Azlan Name for any unauthorised use by the Buyer or any Relevant Buyer of the Azlan Name.

9.10 The Buyer will and will procure that the Relevant Buyers will promptly notify the Seller if it becomes aware of any unauthorised use of the Azlan Name and the Buyer will and will procure that the Relevant Buyers will assist the Seller as the Seller may reasonably require to protect the Azlan Name.

9.11 If the Buyer is in breach of any of its obligations under this clause 9 and such breach is not remediable or, to the extent that it is remediable, it is not remedied to the reasonable satisfaction of the Seller within 15 days of notice to remedy the Seller may terminate absolutely and with immediate effect by notice in writing to the Buyer all of the Buyer’s rights under this clause. Otherwise, the Buyer’s rights under this clause shall terminate on the expiry of the twelve month period referred to in clause 9.1.

9.12 Upon any termination under clause 9.11, the Buyer shall and shall procure that the Relevant Buyers shall immediately cease to use the Azlan Name and shall immediately remove or obliterate in a permanent manner all visible manifestations of the Azlan Name and, upon request from the Seller, shall certify thereto in the form of a declaration by a director of the Buyer.

CONFIDENTIAL TREATMENT REQUESTED 19

10. BUYER’S ASSURANCES

10.1 The Buyer warrants to the Seller that it and each Relevant Buyer has full power to enter into and perform this Agreement and the relevant Local Agreement (as the case may be) and that this Agreement and the relevant Local Agreement (as the case may be) constitutes a binding obligation on the Buyer and each Relevant Buyer in accordance with its terms and, without prejudice to the generality of the foregoing, the Buyer further warrants and represents that all authorisations, approvals, consents and licences required by the Buyer and/or the Relevant Buyers to permit the Buyer to enter into this Agreement or any Relevant Buyer to enter into the Local Agreement and the arrangements contemplated in those agreements have been unconditionally and irrevocably obtained and are in full force and effect.

10.2 The Buyer warrants to the Seller that there are no circumstances within the actual knowledge of the Buyer, any Relevant Buyer or its officers or employees at the date of this Agreement which will or might entitle the Buyer to make a claim against the Seller under this Agreement.

11. RECORDS AND ACCESS

11.1 Without prejudice to any other provision of this Agreement, the Buyer and its agents will be entitled for a period of 2 years from Completion on giving reasonable notice to the Seller to have access during normal business hours to take copies of any books, documents or other records (including computer records) in the Seller’s possession relating primarily and substantially to the Business or the Business Assets and which have not been delivered to the Buyer.

11.2 The Seller and its agents will, where necessary for the completion of its accounts or tax returns or for dealing with any claims or disputes relating to the use of the Business Assets or the carrying on of the Business up to the Transfer Date, be entitled for a period of six years from Completion on giving reasonable notice to the Buyer to have access during normal business hours and to take copies of any of the Records which were delivered to the Buyer pursuant to this Agreement and the Buyer shall retain the Records for such period of 6 years.

11.3 For a period of 2 years from Completion and in the event of the Buyer needing to produce financial information to support a public offering on any internationally recognised stock exchange, the Seller shall give due consideration to any reasonable

CONFIDENTIAL TREATMENT REQUESTED 20

request made by the Buyer for the Seller to offer assistance and provide documentation to the Buyer and its agents, where it is still in the Seller’s possession and relates primarily and substantially to the Business or the Business Assets and which have not been delivered to the Buyer, and the Buyer shall reimburse the Seller for reasonable third party expenses incurred in this regard. For the avoidance of doubt such information will be provided without responsibility on the part of the Seller, any Relevant Seller or any of their respective employees, consultants, advisers or agents and specifically without any representations or warranties as to its accuracy or completeness.

12. FUTURE ENQUIRIES AND ASSISTANCE

The Seller will after Completion refer enquiries received by it relating primarily and substantially to the Business to the Buyer including enquiries for orders for anything manufactured or sold in connection with the Business.

13. ANNOUNCEMENTS

13.1 No announcement or circular concerning the terms of the transactions contemplated by this Agreement and no disclosure of the terms of this Agreement will be made by the Seller except with the prior written approval of the Buyer or by the Buyer except with the prior written approval of the Seller.

13.2 Clause 13.1 does not apply to any announcement, circular or disclosure required by law, or to the extent relevant, the regulations of any stock exchange or listing authority or any other governmental or regulatory organisation or any action taken to enforce this Agreement, provided, if practicable, in each case, that the party required to make it has first consulted and taken into account the reasonable requirements of the other party.

14. COSTS

Except where expressly stated otherwise, each party to this Agreement will bear such party’s own costs and expenses relating to the negotiation, preparation and implementation of this Agreement.

15. NOTICES

15.1 Any notice or other communication given in connection with this Agreement will be in writing and will be delivered personally or sent by pre-paid first class post (or air mail if overseas) or by fax to the recipient’s address set out in this Agreement or to any other address which the recipient has notified in writing to the sender received not less than seven Business Days before the notice was despatched.

CONFIDENTIAL TREATMENT REQUESTED 21

15.2 A notice or other communication is deemed given:

15.2.1 if delivered personally, upon delivery at the address provided for in this clause; or

15.2.2 if sent by prepaid first class post, on the second Business Day after posting it; or

15.2.3 if sent by air mail, on the sixth Business Day after posting it; or

15.2.4 if sent by fax, on completion of its transmission

provided that, if it is delivered personally or sent by fax on a day which is not a Business Day or after 4 p.m. on a Business Day, it will instead be deemed to have been given or made on the next Business Day.

15.3 The provisions of this clause will not apply, in the case of service of court documents, to the extent that such provisions are inconsistent with the Civil Procedure Rules.

16. ASSIGNMENT

16.1 None of the parties may assign, transfer, charge or deal in any other manner with this Agreement or any of its rights under this Agreement nor sub-contract any or all of its obligations under this Agreement, nor purport to do any of the same without the prior written consent (such not to be unreasonably withheld) of the other parties.

16.2 This Agreement will be binding and enure for the benefit of successors in title and permitted assigns of each of the parties and references to the parties will be construed accordingly.

17. ENTIRE AGREEMENT

17.1 This Agreement and the documents referred to in it constitutes the entire agreement between the parties and supersedes and replaces any previous agreement, understanding, undertaking, representation, warranty or arrangement of any nature whatsoever between the parties relating to the subject matter of this Agreement.

17.2 The Buyer acknowledges and agrees for itself and each Relevant Buyer that in entering into this Agreement, and the documents referred to in it, it has not relied on,

CONFIDENTIAL TREATMENT REQUESTED 22

and will have no remedy in equity, contract, tort, under the Misrepresentation Act 1967 or otherwise in respect of, any representation other than as set out in this Agreement and each document referred to in it.

17.3 Subject to clause 17.4, the only remedy available to the Buyer in respect of this Agreement and the documents referred to in it is damages for breach of contract and, for the avoidance of doubt, it will not have the right to rescind or terminate this Agreement for breach of contract, negligent or innocent misrepresentation or otherwise.

17.4 The Buyer shall have the right to rescind this Agreement in the event of any fraudulent misrepresentation by the Buyer to the Seller where such fraudulent misrepresentation has a material impact on the Business.

17.5 Nothing in this clause will have the effect of limiting or restricting any liability of the parties arising as a result of any fraud.

18. GENERAL

18.1 Unless otherwise provided, any outstanding obligation contained in this Agreement will remain in force notwithstanding Completion.

18.2 Each Party will (at the other party’s cost) do, or procure the doing of, all acts and things and execute, or procure the execution of, all documents as the other Party reasonably considers necessary to give full effect to the terms of this Agreement and the Local Agreements.

18.3 Failure or delay by any Party in exercising any right or remedy under this Agreement will not in any circumstances operate as a waiver of it, nor will any single or partial exercise of any right or remedy in any circumstances preclude any other or further exercise of it or the exercise of any other right or remedy.

18.4 Any waiver of any breach of, or any default under, any of the terms of this Agreement will not be deemed a waiver of any subsequent breach or default and will in no way affect the other terms of this Agreement.

18.5 The Parties to this Agreement do not intend that any of its terms will be enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999 by any person not a party to it.

18.6 No variation of this Agreement will be valid unless it is in writing and signed by or on behalf of each Party to this Agreement.

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18.7 Save as expressly provided in this Agreement all rights or remedies provided by law are excluded.

18.8 The Parties will perform the obligations set out in Schedule 10.

18.9 If any sum payable under this Agreement is not paid when due then, without prejudice to either party’s rights under this Agreement, that sum will bear interest at 2 per cent per annum over the base rate for the time being of HSBC Bank plc, such interest accruing on a daily basis until payment is made in full, whether before or after any judgement.

19. GUARANTOR OBLIGATIONS

19.1 In consideration of the Seller entering into this Agreement the Guarantor irrevocably and unconditionally:

19.1.1 guarantees to the Seller the due and punctual payment, observance and performance by the Buyer of all of the Buyer’s liabilities and obligations, whether present or future, express or implied, actual or contingent, under;

(i) clause 4.1.2 (Additional Consideration); and

(ii) clause 7.2 (Buyer’s indemnities) to the extent only that the same relates to Assumed Liabilities in respect of the Property (the “Lease Obligations”); and

19.1.2 undertakes that, if the Buyer fails to pay in full and on time any amount due under or in connection with clause 4.1.2 and/or the Lease Obligations, the Guarantor will immediately on demand pay that amount as if it were the principal obligor; and

19.1.3 agrees to indemnify the Seller on demand against each loss, liability and cost which the Seller incurs as a result of:

19.1.3.1	the Buyer’s failure to perform in full and on time its obligations under or arising out of clause 4.1.2 and/or the Lease Obligations; or
19.1.3.2	any of the obligations (or purported obligations) of the Buyer under clause 4.1.2 and/or the Lease Obligations being or becoming void, voidable or unenforceable.

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19.2 Neither the liability of the Guarantor under this clause nor the rights, powers and remedies conferred on the Seller under this clause or by law will in any way be released, prejudiced, diminished or affected by any of the following:

19.2.1 time or other indulgence being granted to the Buyer in respect of its obligations under clause 4.1.2 and/or the Lease Obligations;

19.2.2 any amendment to, or any variation, waiver or release of, any obligation of the Buyer under clause 4.1.2 and/or the Lease Obligations;

19.2.3 any invalidity, illegality, unenforceability, irregularity or frustration in any respect of any of the liabilities or obligations referred to in clause 19.1.1; and

19.2.4 any other act, omission event or circumstances which, but for this provision, might operate to prejudice, affect or otherwise affect the liability of the Guarantor under this clause or any of the rights, powers or remedies conferred upon the Seller under this clause or by law.

Each obligation of the Guarantor under clause 19.1 is independent of each other obligation under that clause.

20. GOVERNING LAW AND ARBITRATION

20.1 The formation, existence, construction, performance, validity and all aspects whatsoever of this Agreement or of any term of this Agreement and any dispute, controversy or claim arising out of or in connection with its subject matter will be governed by and construed in accordance with the law of England and Wales.

20.2 Any dispute, controversy or claim arising out of or in relation to this Agreement, or in breach, termination or invalidity thereof, will be referred to and finally settled by arbitration under the London Court of International Arbitration Rules.

20.3 The number of arbitrators will be three.

20.4 The place of arbitration will be London and the language to be used in the arbitral proceedings will be English.

20.5 If any arbitration proceedings are considered under this Agreement or any Local Agreement where such proceedings would raise issues which are substantially the same as, or connected with, issues raised in an arbitration proceeding under this Agreement or any Local Agreement which has already been commenced or arise out

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of substantially the same facts as are the subject of an arbitration proceeding under this Agreement or any Local Agreement which has already been commenced, the Parties shall use their best endeavours to ensure that the matters at issue shall be heard together by the same arbitral tribunal and that, if appropriate, the Buyer, Relevant Buyer, Seller and/or Relevant Seller or Relevant Buyer (as the case may be) be joined to any such proceeding.

20.6 The Parties hereby waive irrevocably:

20.6.1 any right of appeal under the Arbitration Act 1996 in relation to any award made by the arbitration tribunal appointed in accordance with this clause; and

20.6.2 any right to apply to the High Court under the Arbitration Act 1996 for the determination of any question of law arising in the course of any reference to arbitration under this clause.

21. COUNTERPARTS

This Agreement may be executed in any number of counterparts each of which when executed and delivered will be an original, but all the counterparts will together constitute one and the same agreement.

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SCHEDULE 1

Relevant Sellers and Relevant Buyers

(1) Relevant Seller	(2) Relevant Buyer	(3) Jurisdiction
Tech Data BVBA	Global Knowledge Belgium B.V.B.A	Belgium
Tech Data Denmark ApS	Global Knowledge Denmark ApS	Denmark
Azlan SAS	Global Knowledge Network France S.A.	France
Tech Data GmbH & Co. OHG	Global Knowledge Germany Training GmbH	Germany
Tech Data Italia S.r.l.	Global Knowledge Network Italia S.r.l.	Italy
Tech Data Nederland B.V.	Global Knowledge Network Netherlands B.V.	Netherlands
Azlan Norge A/S	Global Knowledge Norway AS	Norway
Tech Data Espana SLU	Global Knowledge Network Spain S.L.	Spain
Azlan Scandinavia AB	Global Knowledge Network Sweden AB	Sweden
Azlan Logistics Ltd and Computer 2000 Distribution Ltd*	Global Knowledge Network Training Ltd.	UK

* Note: Azlan Logistics Limited and Computer 2000 Distribution Limited are to be regarded jointly as a Relevant Seller for all purposes except Schedule 7 (Completion Accounts) when they shall be treated as separate Relevant Sellers with separate Completion Accounts attributable to each of them.

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SCHEDULE 2

Purchase Price Allocation

[REDACTED]

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SCHEDULE 3

The Excluded Assets

The following assets are excluded from the sale and purchase:

1. cash-in-hand held as at the Transfer Date and cash at bank (whether on current or deposit account) relating to the Business including uncleared cheques received at the Transfer Date, together with all Customer Cash;

2. any sums due as at the Transfer Date to the Seller and/or Relevant Sellers in respect of Taxation including, without limitation VAT;

3. the Business Name;

4. the Retained Accounting Systems; and

5 the Retained Property.

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SCHEDULE 4

Warranties

22. Schedules

The information contained in Schedules 2 and 3 to each Local Agreement is true and accurate in all material respects.

SELLER

23. Capacity etc

The Seller and each Relevant Seller have full power to enter into and perform this Agreement and each relevant Local Agreement (as the case may be) and this Agreement and the relevant Local Agreement (as the case may be) constitutes a binding obligation on the Seller and each Relevant Seller in accordance with its terms and, without prejudice to the generality of the foregoing, all authorisations, approvals, consents and licences required by the Seller and/or the Relevant Sellers to permit the Seller to enter into this Agreement or any Relevant Seller to enter into the Local Agreement and the arrangements contemplated in those agreements have been unconditionally and irrevocably obtained and are in full force and effect.

ACCOUNTS

24. The Accounts

24.1 The Accounts:

24.1.1 show a true and fair view of the assets, liabilities and state of affairs of each Relevant Seller as at the Accounting Date and of the profits (or losses) of each Relevant Seller financial year ended on that date;

24.1.2 have been prepared and audited in accordance with the historical cost convention, with all applicable accounting standards in the relevant Jurisdiction then in force and (to the extent that no accounting standard is applicable) with generally accepted accounting principles and practices of the United States then in force; and

24.1.3 have been prepared on bases and principles which are consistent with those used in the preparation of the audited statutory accounts of the Relevant Seller for the financial year immediately preceding that which ended on the Accounting Date.

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24.2 Without prejudice to the generality of paragraph 3.1, the Accounts:

24.2.1 provide for all material liabilities whatsoever of each Relevant Seller in relation to the Business (other than contingent or potential liabilities which are not expected to crystallise) and disclose all material contingent or potential liabilities of each Relevant Seller in relation to the Business which are not expected to crystallise and all material capital commitments of each Relevant Seller in relation to the Business as at the Accounting Date; and

24.2.2 set forth all the assets of each Relevant Seller that are attributable to the Business as at the Accounting Date and the profits (or losses) of each Relevant Seller for the financial year which ended on the Accounting Date.

25. Management Accounts

The Management Accounts, copies of which are attached to the Disclosure Letter, have been prepared in good faith in accordance with generally accepted accounting principles and practices in the relevant Jurisdiction then in force and on bases consistent with those used in the preparation of the Accounts and in all material respects fairly reflect the performance and the position of the Business for the nine month period ended on and as at the Management Accounts Date.

CHANGES

26. Since the Accounting Date, save in relation to the Azlan Integration:

26.1 the Business has been carried on in the ordinary and usual course and in the same manner (taking into account factors of seasonality) as in the 12 months preceding the Accounting Date;

26.2 Since the Management Accounts Date, save in relation to Azlan Integration,:

26.2.1 the Relevant Sellers have not acquired, or agreed to acquire, in relation to the Business any single asset having a value in excess of $100,000 other than in the ordinary course of its business;

26.2.2 the Relevant Sellers have not disposed of, or agreed to dispose of, any asset of the Business which has a value reflected in the Accounts in excess of $100,000 or which has been acquired since the Accounting Date other than in the ordinary course of its business;

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26.2.3 there has been no material adverse change in the financial position of the Business or its operations.

RECORDS

27. The Records:

27.1 are properly prepared and maintained and up to date and accurate in all material respects; and

27.2 are all exclusively owned by the Relevant Sellers and under their direct control.

ASSETS

28. Unencumbered title; possession

28.1 Each material Business Asset to be sold by a Relevant Seller is legally and beneficially owned by the Relevant Seller free from any Encumbrance.

28.2 No Relevant Seller has agreed to acquire any Business Asset (being an asset with a value exceeding $50,000) on terms that the property in it will not pass until full payment is made.

28.3 The Business Assets comprise all the assets that are necessary or desirable for the carrying on of the Business in the manner in which it is currently carried on.

29. Intellectual Property Rights and Know How

29.1 All Intellectual Property Rights and Know How used in the Business (save for Intellectual Property Rights and Know How licensed to the Seller under any Business Contract) are legally and beneficially owned by the Relevant Seller.

29.2 There are and have been in the last six years no proceedings, actions or claims brought against any Relevant Seller in respect of the Business, and none are pending or threatened impugning the title, validity or enforceability of any of the Business Intellectual Property or Business Know How (provided that this warranty is qualified to the extent of matters within the Seller’s knowledge in respect of the period prior to the Relevant Seller’s ownership of the Business).

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29.3 So far as the Seller is aware, there is, and has been, no infringement of any of the Business Intellectual Property and none is pending or threatened.

29.4 So far as the Seller is aware, there are no circumstances which would render any current application for registration of the Business Intellectual Property unacceptable to the relevant registry or other authority or which would prevent any such application from proceeding to grant and registration.

29.5 Details of all licences, sub-licences and other agreements whereby the Relevant Sellers are licensed or otherwise authorised to use the Intellectual Property Rights, or Know How of a third party in connection with the Business which are material to the operation of the Business or whereby a Relevant Seller licenses or otherwise authorises a third party to use any of the Business Intellectual Property or Business Know How which are material to the operation of the Relevant Business are attached to the Disclosure Letter.

30. IT Systems

Details of all material Software used in the Business are so far as the Seller is aware set out in or attached to the Disclosure Letter. Copies of all material licences, escrow agreements and development agreements in respect of such Software are so far as the Seller is aware attached to the Disclosure Letter.

PROPERTY

31. Details of the Property

31.1 The particulars of the Property shown in each Local Agreement and true and accurate in all material respects.

31.2 The unexpired residue of the term granted by the Lease under which each Leasehold Property is held is vested in the Seller and/or each Relevant Seller and is valid and subsisting against all persons, including any person in whom any superior estate or interest is vested.

31.3 In relation to each Lease, the landlord, and each lessee, tenant, licensee or occupier has observed and performed in all material respects all covenants, restrictions, stipulations and other encumbrances and there has not been any express or implied waiver of or acquiescence to any breach of them.

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31.4 In relation to each Lease:

31.4.1 all principal rent and additional rent and all other sums payable by each lessee, tenant, licensee or occupier under each Lease (“Lease Sums”) have been paid as and when they become due; and

31.4.2 no Lease Sums have been commuted, waived or paid in advance of the due date of payment.

31.5 No collateral assurances, undertakings or concessions have been made by any party to any Lease.

31.6 No premium or principal rent has been taken or accepted from or agreed with any tenant, lessee, occupier or licensee under any Lease beyond what is legally permitted.

31.7 In this paragraph 10, “Lease” and “Leasehold Property” shall mean any Lease or Leasehold Property forming part of or relating to the Property.

EMPLOYEES

32. Remuneration and employees

32.1 The Employees comprise all the persons employed or engaged by the Relevant Sellers in relation to the Business at the date of this Agreement.

32.2 A schedule of all of the Employees is attached to the Disclosure Letter and the details therein are accurate and substantially complete and such schedule gives details of the identity, job title, date of commencement of employment (or appointment to office), date of birth, years of continuous service, holiday entitlement, all contractual remuneration and benefits payable to each Employee.

32.3 Save as set out in the Completion Accounts, there are no amounts owing to any present or former officers, workers or employees of any Relevant Seller in relation to the Business and none of them is entitled to accrued but unpaid holiday or accrued but untaken holiday leave in respect of the current or previous holiday year of the Business.

32.4 There are no Employees who have been absent from work due to sickness or maternity leave for more than three continuous months in the 12 month period ending on the date of this Agreement.

32.5 No Relevant Seller has formally recognised a trade union or works council in relation to the Business or any part of it and the Relevant Seller is not a party to any agreement or understanding with any trade union in relation to the Business or any part of it.

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32.6 No Relevant Seller is involved in any industrial action in connection with the Business.

32.7 There are no home working, part time, job share, flexitime or flexible working arrangements or early retirement schemes applicable to any of the Employees.

32.8 No Relevant Seller operates any short time working scheme or arrangement or any redundancy or redeployment scheme or arrangement in relation to the Business, whether formal or informal, contractual or non-contractual, which provides for payments greater than those required by statute or for notice periods greater than those set out in contracts of employment or engagement.

32.9 No Relevant Seller uses the services of outworkers, agency or other self-employed persons, contracted labour or agents in the Business.

32.10 So far as the Seller is aware there is no person previously employed or engaged by any Relevant Seller who now has or may have statutory or contractual right to return to work or to be reinstated or to be re-engaged by it in the Business.

32.11 No Relevant Seller has given or received notice to terminate the employment or engagement of any person employed or engaged in the Business and no person has ceased to be employed or engaged in the Business in either case since the Management Accounts Date or where such notice has not yet expired.

33. Pensions

33.1 Details of all pension schemes applicable to the Employees are set out in or are attached to the Disclosure Letter.

33.2 The Relevant Sellers have paid all pension contributions which they are obliged to pay to or on behalf of the Employees under the rules of the pension schemes.

CONTRACTS

34. Insurance

34.1 Particulars of the Seller’s insurances that relate to the Business or any part of it or to any of the Business Assets and of all claims made against those insurances in the last two years are set out in or attached to the Disclosure Letter.

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34.2 All premiums due in relation to the insurance that relate to the Business or any part of it or to any of the Business Assets have been paid.

34.3 So far as the Seller is aware there are no circumstances which are likely to result in any insurance claim.

35. Material contracts

35.1 None of the Material Business Contracts:

35.1.1 involves agency, distributorship, franchising, partnership, marketing rights, joint venture, shareholders’ or consortium arrangements;

35.1.2 involves hire purchase, conditional sale, credit sale, leasing, or hiring arrangements in excess of $100,000;

35.1.3 involves any capital expenditure in relation to the Business in excess of $100,000;

35.1.4 is incapable of complete performance in accordance with its terms within six months after the date on which it was entered into;

35.1.5 is a guarantee, indemnity, surety or form of comfort in respect of the obligations of a third party, under which any liability or contingent liability is outstanding; or

35.1.6 is outside the ordinary course of Business.

35.2 No party to a Material Business Contract has given written notice to terminate or to repudiate a Material Business Contract.

35.3 No party to a Material Business Contract has given written notice that a Relevant Seller is in breach of the agreement. To the Seller’s knowledge no matter exists which might give rise to such a breach.

35.4 The copies of the Material Business Contracts which are attached to the Disclosure Letter accurately represent the terms and conditions of those agreements under which the Business currently operates, notwithstanding that certain of such documents (i) have not been executed or (ii) may be one of a number of multiple agreements entered into by the Relevant Buyers in connection with the Business which have materially the same terms. (And, for the avoidance of doubt, the Buyer shall not be prejudiced in asserting any claim under the Warranties against the Seller as a result of its knowledge that certain of the Material Business Contracts attached to the Disclosure Letter are not (i) executed agreements or (ii) may be one of multiple agreements having materially the same terms.

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36. Other business matters

36.1 The Seller and the Relevant Seller does not carry on the Business under any names other than the Business Names.

COMPLIANCE, DISPUTES

37. General legal compliance

37.1 So far as the Seller is aware, all material licences, consents, permits and authorities (public and private) which are necessary to enable the Business to be carried on effectively in the places and in the manner in which the Business is now carried on have been obtained.

37.2 So far as the Seller is aware, the Business has been carried on in all material respects in accordance with all applicable legal and administrative requirements.

37.3 So far as the Seller is aware, none of the Employees (during the course of his duties in relation to the Business) has committed or omitted to do any act or thing in contravention of any law, order, regulation or the like in the applicable Jurisdiction or elsewhere.

37.4 So far as the Seller is aware, there is not pending, or in existence, any investigation or enquiry by, or on behalf of, any governmental or other regulatory body in respect of the affairs of the Business.

37.5 So far as the Seller is aware, no agreement, transaction or arrangement carried on or proposed to be carried on in connection with the Business by any Relevant Seller is (or ought to have been) registered under, infringes or falls within the scope of any competition, anti restrictive trade practice or consumer protection law or legislation in the applicable Jurisdiction or elsewhere or is or has been subject to any investigation, request for information, notice or other communication by any court, governmental or regulatory authority.

38. Litigation

38.1 Neither a Relevant Seller nor, so far as the Seller is aware, any person for whose acts a Relevant Seller may in respect of the Business be contractually or vicariously liable is party to (whether as claimant, defendant or otherwise) any civil, criminal, tribunal,

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arbitration, administrative or other proceedings in respect of the Business or any of the Business Assets and, so far as the Seller is aware, no such proceedings are pending or threatened.

38.2 There is no outstanding or unsatisfied judgment, decree, order, award or decision of a court, tribunal, arbitrator or governmental agency against a Relevant Seller in relation to the Business and a Relevant Seller is party to any current undertaking or assurance given to a court, tribunal or any other person in connection with the determination or settlement of any claim or proceedings in relation to the Business which remains outstanding.

39. Insolvency

39.1 No order has been made, petition presented or resolution passed for the winding up of the Seller or any Relevant Seller. No administrative receiver, receiver or receiver and manager has been appointed of the whole or any part of the property, assets or undertaking of the Seller or any Relevant Seller.

39.2 No distress, execution or similar process has been levied and remains undischarged in respect of any of the Business Assets.

39.3 The Seller has not stopped or suspended the payment of its debts or received a written demand pursuant to section 123(1)(a) Insolvency Act 1986 or equivalent applicable legislation and the Seller is not insolvent or unable to pay its debts within the meaning of section 123 Insolvency Act 1986 or equivalent applicable legislation.

39.4 No administrator (or similar offices under the laws of any other relevant jurisdiction) has been appointed in respect of the Seller or any Relevant Seller and no steps or actions have been taken in connection with the appointment of an administrator in respect of the Seller or any Relevant Seller.

39.5 No voluntary arrangement has been proposed or approved under Part 1 Insolvency Act 1986 or equivalent applicable legislation and no compromise or arrangement has been proposed, agreed to or sanctioned under section 425 CA 1985 or similar process in any other Jurisdiction has been proposed, agreed to or sanctioned in respect of any Seller or any Relevant Seller.

40. Regulatory

40.1 In the last three years, neither the Seller nor any Relevant Seller has received any notice or information alleging any liability in relation to any environmental or health and safety matters. To the Seller’s knowledge there are no circumstances which would be likely to give rise to such liability.

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SCHEDULE 5

Limitations on the Seller’s Liability

1. The provisions of this Schedule will apply notwithstanding any provisions to the contrary in this Agreement.

2. Financial limitations

2.1 The aggregate liability of the Seller in respect of all claims under this Agreement will not exceed the USD $16.5 million (sixteen million five hundred thousand United States’ dollars).

2.2 The Seller will not be liable for any Relevant Claim unless the amount of the liability in respect of that Relevant Claim exceeds $30,000 (when aggregated with any and all other Relevant Claims arising out of the same circumstances or set of circumstances).

2.3 The Seller will not be liable for any Relevant Claim unless and until the amount of the liability in respect of that Relevant Claim, when aggregated with the amount of the liability in respect of all other Relevant Claims (excluding any amounts in respect of a Relevant Claim for which the Seller has no liability because of paragraph 2.2), exceeds $200,000 in which event the Seller would be liable for the whole amount of any such claims.

3. Time limitation

3.1 The Seller will not be liable for any Relevant Claim unless:

3.1.1 within a period of fifteen months after the date of this Agreement the Seller receives written notice of such Relevant Claim from the Buyer specifying in reasonable detail (to the extent such information is available at the time of the claim) the matter which gives rise to the claim, the nature of the claim and the amount claimed in respect of such claim; and

3.1.2 provided the Relevant Claim has not otherwise been satisfied, settled or withdrawn, proceedings in respect of the Relevant Claim are issued and served on the Seller within a period of six months from the later of the date of; (i) notification of the Relevant Claim or; (ii) where it takes action against any other person under clause 7.1 the date when it has taken all appropriate steps.

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4. Specific limitations

The Seller will have no liability in respect of any Relevant Claim:

4.1 to the extent that it arises or is increased as a result of the passing of, or a change in, any law, rule, regulation, interpretation of the law or administrative practice of a government, government department, agency or regulatory body;

4.2 if it would not have arisen but for any act, omission, transaction or arrangement carried out at the request of or with the consent of the Buyer before Completion;

4.3 if it would not have arisen but for any voluntary act, omission, transaction or arrangement carried out after Completion by the Buyer or any of the Buyer’s respective directors, employees or agents or successors in title;

4.4 to the extent that it relates to any loss for which the Buyer has a right of recovery whether by contribution or indemnity by insurance or would have been entitled to recover if valid and adequate insurance:

4.4.1 had been maintained at the relevant time; and

4.4.2 was of a type as in force in relation to the Business at the date of this Agreement or normally effected by prudent companies carrying on a business similar to that of the Business; or

4.5 to the extent that the subject matter of the Relevant Claim is a matter provided for, or included as a liability or disclosed, in the Management Accounts.

4.6 to the extent that it is an Assumed Liability (in the amount set out in the Completion Accounts).

5. Recovery from third parties

5.1 If the Buyer is entitled to recover from some other person any sum in respect of any matter or event which could give rise to a Relevant Claim, the Buyer will take all appropriate steps to recover that sum before making such Relevant Claim, and any sum recovered will reduce the amount of such Relevant Claim after deduction of all reasonable costs and expenses of recovery.

5.2 If the Seller pays the Buyer a sum to settle or discharge a Relevant Claim and the Buyer subsequently recovers whether by payment, discount, credit, relief or otherwise from any third party (including any tax authority) a sum which is referable to the Relevant Claim then:

5.2.1 either the Buyer will repay the Seller immediately the amount recovered from the third party less any reasonable costs and expenses incurred in recovering the same; or

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5.2.2 if the figure resulting under paragraph 5.2.1 above is greater than the amount paid by the Seller to settle or discharge the relevant Claim, then the Buyer is only obliged to repay to the Seller such amount as is equivalent to the sum paid by the Seller in settlement or discharge of that Relevant Claim.

6. No double recovery

The Buyer is not entitled to recover damages or otherwise obtain payment, reimbursement or restitution more than once in respect of the same loss or liability.

7. Contingent Liabilities

Without prejudice to paragraph 3, if any potential Relevant Claim arises as a result of a contingent or unquantifiable liability of the Business, the Seller will not be obliged to pay any sum in respect of the potential Relevant Claim until the liability either ceases to be contingent or becomes quantifiable.

8. Conduct of Relevant Claims

8.1 If the Buyer becomes aware of a third party claim which will or is likely to give rise to a Relevant Claim, the Buyer will (or will procure that the relevant Group Member will):

8.1.1 immediately notify the Seller in writing of the potential Relevant Claim and of the matters which will or are likely to give rise to such Relevant Claim;

8.1.2 not make any admission of liability, agreement or compromise with any person, body or authority in relation to the potential Relevant Claim without prior written consent of the Seller;

8.1.3 at all times disclose in writing to the Seller all information and documents relating to the potential Relevant Claim or the matters which will or are likely to give rise to the potential Relevant Claim;

8.1.4 if requested by the Seller give the Seller and its professional advisers reasonable access to:

8.1.4.1 the personnel of the Buyer in order to interview the personnel; and

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8.1.4.2 any relevant premises, chattels, accounts, documents and records within the power, possession or control of the Buyer in order to, at the Seller’s own expense, examine and photograph the premises and chattels and to examine, photograph and take copies of the accounts, documents and records;

8.1.5 take such action as the Seller may reasonably request to avoid, resist, contest, defend, compromise or remedy the potential Relevant Claim or the matters which will or are likely to give rise to such Relevant Claim and in each case on the basis that the Seller will indemnify the Buyer for all reasonable costs incurred as a result of a request by the Seller; and

8.1.6 in connection with any actions or proceedings relating to the matter or Relevant Claim, and subject to the Buyer being indemnified for all reasonable costs incurred, use advisers nominated by the Seller and, if the Seller requests, allow the Seller the exclusive conduct of such actions or proceedings.

8.2 In any event, the Seller will be entitled at any stage and at its sole discretion to settle any third party assessment or claim provided that the Seller notifies the Buyer and that any settlement is for monetary damages only.

9. Mitigation

Nothing in this Schedule 5 will in any way restrict or limit the Buyer’s common law duty to mitigate its loss.

10. Buyer’s knowledge of Relevant Claims

The Seller will have no liability in respect of any Relevant Claim to the extent that the circumstances are, at the date of this Agreement, within the actual knowledge of the employees or officers of the Buyer who conducted due diligence in relation to the purchase of the Business and could reasonably be expected to result in a Relevant Claim.

11. No Limitations for Fraud

Nothing in this Schedule 5 will have the effect of limiting or restricting any liability of the Seller in respect of a Relevant Claim arising as a result of any fraud or wilful misconduct or omission by or on behalf of the Seller.

CONFIDENTIAL TREATMENT REQUESTED 42

12. Payment of Relevant Claim to be reduction in consideration

Any payment made by the Seller in respect of any Relevant Claim will be deemed to be a reduction in the Consideration payable in accordance with clause 4 of this Agreement.

CONFIDENTIAL TREATMENT REQUESTED 43

SCHEDULE 6

Azlan Name

CONFIDENTIAL TREATMENT REQUESTED 44

SCHEDULE 7

Part I - Completion Accounts

1. Completion Accounts

1.1 The Seller and the Buyer will procure that after Completion, proforma accounts for each Relevant Seller so far only as relate to the Business will be prepared in accordance with the provisions of this Schedule and in the format set out in Part II of this Schedule.

1.2 The Completion Accounts will consist of a balance sheet of each Relevant Seller as at the close of business on the Transfer Date.

1.3 The Completion Accounts will adopt the accounting bases, principles, policies, treatments and categorisations applied for the purposes of the Management Accounts.

2. Procedure

2.1 Within 20 Business Days after the date of Completion the Seller will procure that there are prepared and delivered to the Buyer a final draft of the Completion Accounts for each Relevant Seller.

2.2 The Buyer will review the draft Completion Accounts as delivered by the Seller under this Schedule, such review to be completed within 15 Business Days of such delivery. The Buyer will notify the Seller by one written notice within such period whether or not it accepts them as complying with paragraph 1 of this Schedule. The Seller will ensure that the Buyer is given access as soon as reasonably practicable to all additional information it may reasonably require to enable the Buyer to makes its decision. If the Buyer does not so notify the Seller within 15 Business Days of delivery of the draft Completion Accounts then the Buyer will be deemed to have accepted the draft Completion Accounts as complying with paragraph 1.

2.3 If the Buyer notifies the Seller of any objection pursuant to paragraph 2.2 then:

2.3.1 the Buyer will set out in reasonable detail its reasons for such non-acceptance and specify the adjustments (including for the avoidance of doubt, the quantum of the same) that in its opinion should be made to the draft Completion Accounts in order to specify with paragraph 1 and provide supporting evidence for each such adjustment;

CONFIDENTIAL TREATMENT REQUESTED 45

2.3.2 the Buyer will provide the Seller with access to all such documents and working papers relating to their preparation of the reasons for non-acceptance and proposed adjustments to the Completion Accounts referred to in paragraph 2.3.1; and

2.3.3 the Buyer and the Seller will use all reasonable endeavours to reach agreement upon the adjustment needed to make the objections of the Buyer.

2.4 Once the Buyer has notified the Seller of any objection(s) in accordance with paragraph 2.3.1 the Buyer shall not be entitled to raise any new or additional objections and to the extent that the Buyer has not objected, the Buyer shall be deemed to have accepted the remainder of the Completion Accounts.

2.5 If the Buyer and the Seller do not reach agreement within 20 Business Days after service of the Buyer’s notice of non-acceptance under paragraph 2.2 then any party may refer the matter(s) in dispute to an independent firm of chartered accountants of international standing agreed by the parties. If the parties are unable to agree on the appointment of an independent firm of chartered accountants after a further 20 Business Days, an independent firm of chartered accountants will be appointed on application of either party by the President or other senior officer for the time being of the Institute of Chartered Accountants in England and Wales (the “Expert”).

2.6 The Expert will act on the following basis:

2.6.1 the Expert will act as an expert and not as an arbitrator;

2.6.2 the Expert’s terms of reference will be to determine the remaining matters in dispute between the parties;

2.6.3 the parties will each provide the Expert with all information relating to the matter which the Expert reasonably requires and the Expert will be entitled (to the extent he considers appropriate) to base his determination on such information and on the accounting and other records of the Company;

2.6.4 the decision of the Expert is, in the absence of fraud or manifest error, final and binding on the parties;

2.6.5 the parties will each pay one half of the Expert’s costs or as the Expert may determine;

CONFIDENTIAL TREATMENT REQUESTED 46

2.6.6 except to the extent that the parties agree otherwise or otherwise as set out in this paragraph 2.6, the Expert will determine its own procedure and will determine only:

2.6.6.1 whether any of the arguments for the adjustments to be made to the draft Completion Accounts put forward in the Buyer’s non-acceptance notice are correct in whole or in part; and

2.6.6.2 if so, what alterations should be made to the Completion Accounts in order to correct the relevant inaccuracy in them;

2.6.7 the Expert will apply the accounting principles as set out in paragraph 1.3;

2.6.8 the procedure of the Expert will:

2.6.8.1 give the parties a reasonable opportunity to make written representations to it; and

2.6.8.2 require that each party supply the other with a copy of any written representations at the same times they are made to the Expert;

2.6.9 determination of the Expert will be in writing and made available for collection by each of the parties at the offices of the Expert at such time as it will determine.

2.7 If the Buyer and the Seller reach agreement on (or pursuant to paragraph 2.3 the Buyer is deemed to have accepted) the Completion Accounts, or if the Completion Accounts are finally determined at any stage in the procedure set out in this paragraph 2, the Completion Accounts as so agreed or determined will be the Completion Accounts for the purposes of this Agreement and shall be final and binding on the Seller and the Buyer and the liabilities stated or provided for in the Completion Accounts shall be Assumed Liabilities referred to in paragraph (i) of the definition of Assumed Liabilities in clause 1.

2.8 The Buyer and the Seller will pay their own costs and expenses in connection with the preparation and agreement of the Completion Accounts including, where applicable, any costs associated with presentation of their case to the Independent Accountant.

CONFIDENTIAL TREATMENT REQUESTED 47

2.9 For the avoidance of doubt where the Buyer is required pursuant to this paragraph to provide notice in writing to the Seller, such notice must be signed by or on behalf of each of the Buyers in order to constitute valid notice upon the Seller.

CONFIDENTIAL TREATMENT REQUESTED 48

Part II - Pro forma Balance Sheet as at the Transfer Date

[REDACTED] [REDACTED] [REDACTED]

CONFIDENTIAL TREATMENT REQUESTED 49

SCHEDULE 8

Material Contracts

[REDACTED]

CONFIDENTIAL TREATMENT REQUESTED 50

SCHEDULE 9

IT Systems

[REDACTED]

CONFIDENTIAL TREATMENT REQUESTED 51

SCHEDULE 10

Transitional Arrangements

1. Master Services Agreement

1.1 The Buyer and the Seller have agreed to enter into the master service agreement in respect of IT services (“MSA”), the agreed form of which is attached as Appendix A to this Schedule 10.

1.2 Subject to paragraph 2 and paragraph 3 below, the MSA sets out all of the rights and obligations of each party in connection with the transitional services that are to be provided by the Seller to the Buyer pursuant to this Agreement.

2. Remittance Services

2.1 The Seller shall procure that each Relevant Seller shall charge the Relevant Buyer for payments made by the Relevant Seller that are properly due from, and payable by, the Relevant Buyer and the Buyer shall procure that each Relevant Buyer shall pay such charges in accordance with, and in the manner, specified in the Relevant Seller’s normal terms of business. The Relevant Seller shall only be permitted to make such payments for the benefit of, or on behalf of, the Relevant Buyer to satisfy obligations, which have been mutually agreed upon in advance by the parties.

2.2 The Seller will procure that any purchase invoices relating to the period after the Transfer Date which have been received in error, and not settled in accordance with paragraph 2.1 above by the Relevant Seller, will be passed through to the Relevant Buyer by the Relevant Seller on a timely basis.

3. Credit Management and Cash Collection Services

3.1 The Seller shall procure that the Relevant Sellers shall provide such credit management and cash collection services (“CMCC Services”) to the Relevant Buyers, in connection with Trade Accounts Receivable that have been transferred to the Relevant Buyers, in such countries as are agreed between the parties from time to time.

3.2 These CMCC Services shall be provided for an agreed fee to be calculated on the basis of actual costs incurred by the Relevant Seller, on the Relevant Seller’s usual terms of business and for such duration as the parties agree.

CONFIDENTIAL TREATMENT REQUESTED 52

3.3 The Seller will procure that any amounts collected by the Relevant Seller subsequent to the Transfer Date on: a) Trade Accounts Receivable purchased by the Relevant Buyer; or b) Trade Accounts Receivable created in respect of goods or services supplied by the Relevant Buyer subsequent to the Transfer Date (account payments received in error) will be transferred to the Relevant Buyer by the Relevant Seller on a weekly basis.

4. Access to Data Centre

4.1 During the provision of the transitional services provided pursuant to this Agreement the Buyer shall ensure that the Seller has full access to the data centre at [REDACTED]. Where access poses a risk to the Buyer’s security, such access shall either be supervised or monitored using CCTV.

5. Miscellaneous

5.1 In the event of any inconsistency between the provision of this Schedule 10 and this Agreement then the provisions of this Schedule 10 shall prevail.

CONFIDENTIAL TREATMENT REQUESTED 53

APPENDIX A

Master Service Agreement between Tech Data Europe GmbH and Global Knowledge

Network Netherlands B.V.

1.1 Approvals

The table below shows the representatives from Tech Data, the Business and Global Knowledge that review and approve this agreement.

Ownership Type	Organizational Group	Representative
[REDACTED]	[REDACTED]	[REDACTED]

2.0 Background

On [10] March 2006 (the “Transfer Date”), Global Knowledge Network Netherlands B.V. completed the purchase of the acquired business division from Tech Data Europe GmbH..

The acquired business referred to in this agreement is the entire Azlan training business carried on by the Tech Data group under the Azlan name at the Transfer Date (the “Business”).

The Business software, hardware infrastructure, telephony & data communication is hosted by Tech Data. It is acknowledged that Tech Data is not effectively able to separate certain operations and infrastructure related to the Business from its other operating assets and Global Knowledge is not able to integrate the Business into its infrastructure by the Transfer Date without ceasing the operations of the Business.

In the absence of an existing service level agreement between the Business and Tech Data, this agreement is intended to define the support that Global Knowledge requires to keep the Business at its current level of functionality until the Business has been fully migrated to Global Knowledge.

2.1 Period of Agreement

Commence on the Transfer Date 24:00 and will remain in effect for a period of six months.

The option to extend requires to written consent of both parties 2 months in advance of the expiry date.

2.2 Termination of the agreement

Termination will occur either at the end of the six month period or when the approving parties agree that the Business has been separated and integrated into Global Knowledge, whichever is the earlier.

CONFIDENTIAL TREATMENT REQUESTED 54

No single party has the right to terminate this agreement independent of the other before the 6 month period expires.

2.3 Statement of Intent

The intention of this agreement is to outline the process for all application and technical support related issues. This document will specify the roles and responsibilities of all users in resolving issues and the estimated time frames in which actions should be completed.

2.4 Principal Contacts

The following will be the principal contacts to operate this Agreement:

Global Knowledge	[REDACTED]
Tech Data	[REDACTED]
The Business	[REDACTED]

3.0 Tech Data agrees to maintain current levels of support for the following services:-

3.1 User Account Management

[REDACTED]

3.2 Network Connectivity

[REDACTED]

3.3 Telephony

[REDACTED]

3.4 Network & Fileserver Security

[REDACTED]

3.5 Building and room access.

Continue to provide to existing Business employees any existing building, room & access rights. Where access poses a risk to Tech Data security e.g. Computer Rooms, access will either be provided under supervision or monitored using CCTV.

3.6 Applications

TD will ensure availability of the following applications to the Business users:-

[REDACTED]

All other application support activities will be managed by the Business.

CONFIDENTIAL TREATMENT REQUESTED 55

3.7 Software Maintenance & Licence Fees.

For shared infrastructure;

• Software maintenance fees are kept up to date.

• Software licence fees are paid where necessary.

For equipment transferred to GKN software licenses & maintenance activities will be managed by Global Knowledge.

3.8 Transition Activity Support

• Assist in trouble shooting for 30 days after transition of servers/applications.

• Provide users data files (including email-files) in the condition they were left on Tech Data servers.

• Assist in moving desktops to new domain when required

• Assist in moving servers to new domain when required.

• Assist in completing all work necessary to separate the infrastructure from Tech Data to Global Knowledge.

• Meet on regular basis with Global Knowledge employees to assist in planning & realisation of the transition.

• Provide to Global Knowledge employees access to buildings, rooms & equipment necessary to transition equipment and locations to Global Knowledge.

• Tech Data will accompany any Global Knowledge or the Business employees when working on TD site/equipment.

4.0 Authorities

Tech data will manage the above subject to the following authorisations:-

[REDACTED]                                 [REDACTED]

5.0 Registering Support Requests

Tech Data will register the Business/Global Knowledge transition requests on its in-house helpdesk software.

5.1 Reporting

Tech Data will provide a report on the level of service provided upon request. This will show logged, closed & unclosed service requests to the date of request.

6.0 Locations Support

The Business employees at the following locations will contact their existing local Tech Data IT Support staff when an issue arises.

Location	Address
[REDACTED]	[REDACTED]

CONFIDENTIAL TREATMENT REQUESTED 56

7.0 Priority Definitions

[REDACTED]

7.1 Response Times

[REDACTED]

7.2 Service Availability

Tech Data IS function will provide telephone and on-site support for central services provided out of the Wokingham office as follows:-

[REDACTED]

8.0 Escalation

If agreed response times are exceeded, problems will be escalated to the next level of management within Tech Data IS function. If a problem has been escalated two levels then Craig Partington will be notified.

8.1 Dispute Resolution

Problems that have escalated to point of dispute, the principle contacts will address the issue and seek resolution. If the principle contacts are not able to resolve the problem then the dispute will escalate to the CIO’s Global Knowledge & Tech Data VP EMEA IT.

To the extent that any dispute is not resolved pursuant to the above paragraph, clause 20 of the master agreement entered into by the parties on the Transfer Date relating to the sale of the Business shall apply.

9.0 Obligations of the two parties to perform the separation

This section describes what tasks and timelines both parties agree to perform the separation.

9.1 GKN

[REDACTED]

9.2 TD

[REDACTED]

CONFIDENTIAL TREATMENT REQUESTED 57

10.0 Confidential Disclosure

1. In connection with the business relationship between the parties under this agreement, either party (the “Recipient”) may acquire confidential information (“Confidential Information”) concerning the other party and its group companies. Confidential Information may include information concerning past, present or future research, development, technology, products (including software), services, customers, procurement requirements, marketing initiatives, specifications, test data, business forecasts and financial data.

2. Except as set out below, the Recipient shall receive Confidential Information in confidence and keep it confidential. In particular:

(a) The Recipient shall not disclose Confidential Information to any third party and shall use its best efforts to prevent any such disclosure; and

(b) The Recipient shall not circulate Confidential Information within its own organisation except to those employees who need to know such information in connection with the business relationship between the parties under this agreement.

3. The Recipient shall have no obligations in respect of any Confidential Information which is already in the public domain, or which is already in the Recipient’s possession free of any obligation of confidence, at the time of receipt by the Recipient.

4. The Recipient’s obligations in respect of any Confidential Information shall cease if:

(a) it enters the public domain through no fault of the Recipient, or is communicated to the Recipient free of any obligation of confidence; or

(b) it is developed by the Recipient independently of, and without reference to, any Confidential Information; and

(c) in any event, three (3) years after receipt by the Recipient.

5. All materials including (but not limited to) documents, designs, specifications, data and lists furnished to the Recipient by the other party or any of its group companies shall remain the property of that other party or group company and shall be returned, together with all copies, promptly upon request.

6. The Recipient warrants that all communications from the Recipient to the other party or any of its group companies shall be without any obligation of confidence, unless otherwise agreed in writing.

7. The Recipient shall not publicize this agreement or any connected matter, including (but not limited to) any business relationship between the parties, without the prior written consent of the other party.

11.0 Security Considerations

[REDACTED]

12.0 Approval

[REDACTED]

CONFIDENTIAL TREATMENT REQUESTED 58

EX-21.(A)

Exhibit 21-A

Name of Subsidiary	State or Country of Incorporation
1250895 Ontario Ltd.	Canada (dormant)
Azlan European Finance Limited	UK
Azlan GmbH	Germany
Azlan Group Limited	UK
Azlan Limited	UK
Azlan Logistics Limited	UK
Azlan Norge A/S	Norway
Azlan Overseas Holdings Ltd	UK
Azlan SAS	France
Azlan Scandinavia AB	Sweden
Azlan VAD s.r.o.	Czech Republic
Computer 2000 S.L.	Spain (Dormant)
Computer 2000 Distribution Ltd.	UK
Computer 2000 Immobilien-und-Beteiligungsverwaltungs Gesellschaft m.b.H.	Austria
Computer 2000 Portuguesa Lda.	Portugal
Computer 2000 Publishing AB	Sweden (dormant)
Datatechnology Datech Ltd.	UK (dormant)
Datech 2000 Ltd.	UK (non-trading)
Datech de Servicios Tecnologicos S.L.	Spain (dormant)
ENS Datensysteme GmbH	Germany
ENS Datensysteme Vertrieb GmbH	Germany
Expander Express AB	Sweden (dormant)
Expander Informatic AB	Sweden (dormant)
Expander Technical AB	Sweden (dormant)
Frontline Distribution Ltd.	UK (non-trading)
Frontline Distribution (Ireland) Ltd.	Ireland (dormant)
Globelle Computer Brokers N.V.	Netherlands Antilles
Globelle Netherland Holding B.V.	Netherlands
Horizon Technical Services (UK) Limited	UK
Horizon Technical Services AB	Sweden
Managed Training Services Limited	UK
Maneboard Ltd	UK
Quadrangle Technical Services Ltd	UK
Soft Europe SAS	France
TD Brasil, Ltda.	Brazil
TD Facilities, Ltd. (Partnership)	Texas
TD Fulfillment Services, LLC	Florida
TD Tech Data AB	Sweden
TD United Kingdom Acquisition Limited	UK
Tech Data (Netherlands) B.V.	Netherlands
Tech Data (Schweiz) GmbH	Switzerland
Tech Data (T.D.) Israel, Ltd.	Israel
Tech Data Canada Corporation	Canada – Nova Scotia
Tech Data Canarias, S.C.	Gran Canaria
Tech Data Chile S.A.	Chile
Tech Data Corporation (“TDC”)	Florida
Tech Data Denmark ApS	Denmark
Tech Data Deutschland GmbH	Germany
Tech Data Distribution s.r.o.	Czech Republic
Tech Data Education, Inc.	Florida
Tech Data Espana S.L.U.	Spain
Tech Data Europe GmbH	Germany
Tech Data European Distribution N.V.	Belgium (dormant)
Tech Data European Management GmbH	Germany
Tech Data Finance Partner, Inc.	Florida
Tech Data Finance SPV, Inc.	Delaware

Tech Data Finland OY	Finland
Tech Data Florida Holding, LLC	Florida
Tech Data Florida Services, Inc.	Florida
Tech Data France Holding Sarl	France
Tech Data France SAS	France
Tech Data FZ LLC	United Arab Emirates, Dubai, Internet City Free Zone
Tech Data GmbH & Co OHG	Germany (non-trading)
Tech Data Information Technology GmbH	Germany
Tech Data Distribution De Productos Informaticos S.L.	Spain (dormant)
Tech Data Global Finance LP	Cayman Islands
Tech Data International Sárl	Switzerland
Tech Data Italia s.r.l.	Italy
Tech Data Latin America, Inc.	Florida
Tech Data Lateinamerika Holding GmbH	Germany (dormant)
Tech Data LLC	United Arab Emirates, Dubai (dormant)
Tech Data Ltd	UK (non-trading)
Tech Data Luxembourg Sárl	Luxembourg
Tech Data Marne SNC	France
Tech Data Midrange GmbH	Germany (non-trading)
Tech Data Mexico S. de R. L. de C. V.	Mexico
Tech Data Netherland B.V.	Netherlands
Tech Data Norway AS	Norway (dormant)
Tech Data Österreich GmbH	Austria
Tech Data Peru S.A.C.	Peru
Tech Data Polska Sp.z.o.o.	Poland
Tech Data Product Management, Inc.	Florida
Tech Data Resources, LLC	Delaware
Tech Data Strategy GmbH	Germany
Tech Data Tennessee, Inc.	Florida
Tech Data Uruguay S.A.	Uruguay

EX-23.(A)

Exhibit 23-A

CONSENT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in (i) the Registration Statements (Form S-3, No. 333-44848) of Tech Data Corporation and in the related Prospectus and in (ii) the Registration Statements (Forms S-8, Nos. 33-62181, 33-60479, 333-93801, 333-85509, and 333-59198) pertaining to the Tech Data Corporation 401(K) Savings Plan of our reports dated March 29, 2006, with respect to the consolidated financial statements and schedule of Tech Data Corporation, Tech Data Corporation management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Tech Data Corporation, included in this Annual Report (Form 10-K) for the year ended January 31, 2006.

/s/ Ernst & Young LLP

Tampa, Florida

March 29, 2006

EX-31.(A)

Exhibit 31-A

Certification of Chief Executive Officer

Pursuant to

Exchange Act Rules 13a-14(a) and 15d-14(a)

As Adopted Pursuant to

Section 302 of The Sarbanes-Oxley Act of 2002

I, Steven A. Raymund, certify that:

1. I have reviewed this annual report on Form 10-K of Tech Data Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 29, 2006

/s/ STEVEN A. RAYMUND

Steven A. Raymund

Chairman of the Board of Directors and

Chief Executive Officer

EX-31.(B)

Exhibit 31-B

Certification of Chief Financial Officer

Pursuant to

Exchange Act Rules 13a-14(a) and 15d-14(a)

As Adopted Pursuant to

Section 302 of The Sarbanes-Oxley Act of 2002

I, Jeffery P. Howells, certify that:

1. I have reviewed this annual report on Form 10-K of Tech Data Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 29, 2006

/s/ JEFFERY P. HOWELLS

Jeffery P. Howells

Executive Vice President and

Chief Financial Officer

EX-32.(A)

Exhibit 32-A

Certification of Chief Executive Officer

Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act of 2002

I, Steven A. Raymund, Chairman of the Board of Directors and Chief Executive Officer of Tech Data Corporation, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(i) The Annual Report on Form 10-K of Tech Data Corporation for the annual period ended January 31, 2006, (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 29, 2006

/s/ STEVEN A. RAYMUND

Steven A. Raymund

Chairman of the Board of Directors and

Chief Executive Officer

EX-32.(B)

Exhibit 32-B

Certification of Chief Financial Officer

Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act of 2002

I, Jeffery P. Howells, Executive Vice President and Chief Financial Officer of Tech Data Corporation, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(i) The Annual Report on Form 10-K of Tech Data Corporation for the annual period ended January 31, 2006, (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 29, 2006

/s/ JEFFERY P. HOWELLS

Jeffery P. Howells

Executive Vice President and

Chief Financial Officer