##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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(Mark One)

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

For the quarterly period ended June 30, 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 001-32432

333-88168



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SYNIVERSE HOLDINGS, INC.

SYNIVERSE
TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 30-0041666                          
|Delaware                                                       |  | 06-1262301                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

8125 Highwoods Palm Way

Tampa, Florida 33647

(Address of principal executive office)

(Zip code)

(813) 637-5000

(Registrants telephone number, including area code)



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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 past 12 months (or for such 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 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 ̈Accelerated
filer ̈Non-accelerated filer  x

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

Indicate the number of shares outstanding of each of the issuers classes of Common Stock, as of the latest practicable date.

Shares Outstanding as of August 9, 2006

Syniverse Holdings, Inc.: 67,874,592 shares of common stock, $0.001 par value

Syniverse Technologies, Inc.: 1,000 shares of
common stock, no par value,

all of which are owned by Syniverse Holdings, Inc.



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##### Table of Contents

TABLE OF CONTENTS



|              |  |                                                                                                                       |  |     
|------------- |  | --------------------------------------------------------------------------------------------------------------------- |  | ----
|              |  |                                                                                                                       |  | Page
|PART I:       |  | FINANCIAL INFORMATION                                                                                                 |  |     
|              |  |                                                                                                                      
|ITEM 1:       |  | Consolidated Financial Statements                                                                                     |  | 3   
|              |  |                                                                                                                      
|              |  | Condensed Consolidated Balance Sheets as of June 30, 2006 (Unaudited) and December 31, 2005                           |  | 3   
|              |  |                                                                                                                      
|              |  | Condensed Consolidated Statements of Operations (Unaudited) for the three and six months ended June 30, 2006 and 2005 |  | 4   
|              |  |                                                                                                                      
|              |  | Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2006 and 2005           |  | 5   
|              |  |                                                                                                                      
|              |  | Notes to Condensed Consolidated Financial Statements (Unaudited) June 30, 2006                                       |  | 6   
|              |  |                                                                                                                      
|ITEM 2:       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                 |  | 24  
|              |  |                                                                                                                      
|ITEM 3:       |  | Quantitative and Qualitative Disclosures About Market Risk                                                            |  | 37  
|              |  |                                                                                                                      
|ITEM 4:       |  | Controls and Procedures                                                                                               |  | 37  
|              |  |                                                                                                                      
|PART II:      |  | OTHER INFORMATION                                                                                                     |  |     
|              |  |                                                                                                                      
|ITEM 1:       |  | Legal Proceedings                                                                                                     |  | 37  
|              |  |                                                                                                                      
|ITEM 1A:      |  | Risk Factors                                                                                                          |  | 37  
|              |  |                                                                                                                      
|ITEM 2:       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                           |  | 38  
|              |  |                                                                                                                      
|ITEM 3:       |  | Defaults Upon Senior Securities                                                                                       |  | 38  
|              |  |                                                                                                                      
|ITEM 4:       |  | Submission of Matters to a Vote of Security Holders                                                                   |  | 38  
|              |  |                                                                                                                      
|ITEM 5:       |  | Other Information                                                                                                     |  | 38  
|              |  |                                                                                                                      
|ITEM 6:       |  | Exhibits                                                                                                              |  | 39  
|              | 
|SIGNATURES    |  | 40                                                                                                                   
|              | 
|EXHIBIT INDEX |  | 41                                                                                                                   



2



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##### Table of Contents

PART 1

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SYNIVERSE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS EXCEPT SHARE AMOUNTS)



|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | -------- | - | ------------ | - | -------- | -
|                                                                                                                                                                                                                                              |  | June 30,    |          |   | December 31, |  
|                                                                                                                                                                                                                                              |  | 2006        |          |   | 2005         |  
|                                                                                                                                                                                                                                              |  | (unaudited) |          |   |              |  
|ASSETS                                                                                                                                                                                                                                        |  |             |          |   |              |   |          |  
|Current assets:                                                                                                                                                                                                                               |  |             |          |   |              |   |          |  
|Cash                                                                                                                                                                                                                                          |  | $           | 11,069   |   |              | $ | 49,294   |  
|Accounts receivable, net of allowances of $1,427 and $1,067, respectively                                                                                                                                                                     |  |             | 71,423   |   |              |   | 61,735   |  
|Prepaid and other current assets                                                                                                                                                                                                              |  |             | 12,297   |   |              |   | 4,379    |  
|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  
|Total current assets                                                                                                                                                                                                                          |  |             | 94,789   |   |              |   | 115,408  |  
|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  
|Property and equipment, net                                                                                                                                                                                                                   |  |             | 45,370   |   |              |   | 43,426   |  
|Capitalized software, net                                                                                                                                                                                                                     |  |             | 48,734   |   |              |   | 52,674   |  
|Deferred costs, net                                                                                                                                                                                                                           |  |             | 5,590    |   |              |   | 6,218    |  
|Goodwill                                                                                                                                                                                                                                      |  |             | 397,227  |   |              |   | 362,065  |  
|Identifiable intangibles, net:                                                                                                                                                                                                                |  |             |          |   |              |   |          |  
|Customer contract, net                                                                                                                                                                                                                        |  |             | 263      |   |              |   | 301      |  
|Customer base, net                                                                                                                                                                                                                            |  |             | 184,037  |   |              |   | 190,026  |  
|Other assets                                                                                                                                                                                                                                  |  |             | 1,064    |   |              |   | 1,240    |  
|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  
|Total assets                                                                                                                                                                                                                                  |  | $           | 777,074  |   |              | $ | 771,358  |  
|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                                          |  |             |          |   |              |   |          |  
|Current liabilities:                                                                                                                                                                                                                          |  |             |          |   |              |   |          |  
|Accounts payable                                                                                                                                                                                                                              |  | $           | 5,246    |   |              | $ | 4,862    |  
|Accrued payroll and related benefits                                                                                                                                                                                                          |  |             | 4,338    |   |              |   | 11,738   |  
|Accrued interest                                                                                                                                                                                                                              |  |             | 5,160    |   |              |   | 5,618    |  
|Other accrued liabilities                                                                                                                                                                                                                     |  |             | 33,450   |   |              |   | 21,067   |  
|Current portion of 123/4% senior subordinated notes due 2009, net of discount                                                                                                                                                                 |  |             |         |   |              |   | 14,469   |  
|Current portion of Term Note B                                                                                                                                                                                                                |  |             | 1,801    |   |              |   | 1,801    |  
|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  
|Total current liabilities                                                                                                                                                                                                                     |  |             | 49,995   |   |              |   | 59,555   |  
|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  
|Long-term liabilities:                                                                                                                                                                                                                        |  |             |          |   |              |   |          |  
|Deferred tax liabilities                                                                                                                                                                                                                      |  |             | 39,608   |   |              |   | 36,186   |  
|73/4%
senior subordinated notes due 2013                                                                                                                                                                                                      |  |             | 175,000  |   |              |   | 175,000  |  
|Term Note B, less current maturities                                                                                                                                                                                                          |  |             | 175,623  |   |              |   | 176,524  |  
|Other long-term liabilities                                                                                                                                                                                                                   |  |             | 709      |   |              |   | 1,454    |  
|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  
|Total long-term liabilities                                                                                                                                                                                                                   |  |             | 390,940  |   |              |   | 389,164  |  
|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  
|Commitments and contingencies                                                                                                                                                                                                                 |  |             |          |   |              |   |          |  
|                                                                                                                                                                                                                                              |  |            
|Stockholders equity:                                                                                                                                                                                                                         |  |             |          |   |              |   |          |  
|Preferred stock, $0.001 par value; 300,000 shares authorized; no shares issued                                                                                                                                                                |  |             |         |   |              |   |         |  
|Common stock, $0.001 par value; 100,300,000 shares authorized; 68,242,832 shares issued and 67,868,653 shares outstanding and 67,667,819
shares issued and 67,370,851 shares outstanding at June 30, 2006 and December 31, 2005, respectively |  |             | 68       |   |              |   | 68       |  
|Additional paid-in capital                                                                                                                                                                                                                    |  |             | 457,557  |   |              |   | 457,165  |  
|Accumulated deficit                                                                                                                                                                                                                           |  |             | (121,464 | ) |              |   | (134,501 | )
|Accumulated other comprehensive income (loss)                                                                                                                                                                                                 |  |             | 6        |   |              |   | (70      | )
|Common stock held in treasury, at cost; 374,179 and 296,968 at June 30, 2006 and December 31, 2005, respectively                                                                                                                              |  |             | (28      | ) |              |   | (23      | )
|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  
|Total stockholders equity                                                                                                                                                                                                                    |  |             | 336,139  |   |              |   | 322,639  |  
|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  
|Total liabilities and stockholders equity                                                                                                                                                                                                    |  | $           | 777,074  |   |              | $ | 771,358  |  
|                                                                                                                                                                                                                                              |  |             |          |   |              |   |          |  

See Notes to Condensed Consolidated Financial Statements



3



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##### Table of Contents

SYNIVERSE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)



|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|----------------------------------------------------------------------------------- |  | ------------------ | ------ | - | ---------------- | - | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                                    |  | Three Months Ended |        |   | Six Months Ended |  
|                                                                                    |  | June 30,           |        |   | June 30,         |  
|                                                                                    |  | 2006               |        |   | 2005             |   |        | 2006 |  |   | 2005    |  
|Revenues                                                                            |  | $                  | 82,194 |   |                  | $ | 86,875 |      |  | $ | 157,611 |   |  | $ | 166,294 |  
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Costs and expenses:                                                                 |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Cost of operations (excluding depreciation and amortization shown separately below) |  |                    | 33,545 |   |                  |   | 34,446 |      |  |   | 64,751  |   |  |   | 66,872  |  
|Sales and marketing                                                                 |  |                    | 6,871  |   |                  |   | 5,812  |      |  |   | 12,364  |   |  |   | 11,474  |  
|General and administrative                                                          |  |                    | 13,300 |   |                  |   | 12,137 |      |  |   | 30,596  |   |  |   | 21,846  |  
|Provision for uncollectible accounts                                                |  |                    | 373    |   |                  |   | 243    |      |  |   | 388     |   |  |   | 688     |  
|Depreciation and amortization                                                       |  |                    | 9,868  |   |                  |   | 12,190 |      |  |   | 19,849  |   |  |   | 24,075  |  
|Restructuring                                                                       |  |                    |       |   |                  |   |       |      |  |   | 338     |   |  |   |        |  
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|                                                                                    |  |                    | 63,957 |   |                  |   | 64,828 |      |  |   | 128,286 |   |  |   | 124,955 |  
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Operating income                                                                    |  |                    | 18,237 |   |                  |   | 22,047 |      |  |   | 29,325  |   |  |   | 41,339  |  
|                                                                                    |  |                    |        |  
|Other income (expense), net:                                                        |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Interest income                                                                     |  |                    | 445    |   |                  |   | 398    |      |  |   | 1,079   |   |  |   | 737     |  
|Interest expense                                                                    |  |                    | (6,707 | ) |                  |   | (8,590 | )    |  |   | (13,449 | ) |  |   | (19,094 | )
|Loss on extinguishment of debt                                                      |  |                    |       |   |                  |   |       |      |  |   | (924    | ) |  |   | (23,788 | )
|Other, net                                                                          |  |                    | 211    |   |                  |   |       |      |  |   | 330     |   |  |   |        |  
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|                                                                                    |  |                    | (6,051 | ) |                  |   | (8,192 | )    |  |   | (12,964 | ) |  |   | (42,145 | )
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Income (loss) before provision for income taxes                                     |  |                    | 12,186 |   |                  |   | 13,855 |      |  |   | 16,361  |   |  |   | (806    | )
|Provision for income taxes                                                          |  |                    | 2,699  |   |                  |   | 2,077  |      |  |   | 3,324   |   |  |   | 4,368   |  
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Net income (loss)                                                                   |  |                    | 9,487  |   |                  |   | 11,778 |      |  |   | 13,037  |   |  |   | (5,174  | )
|Preferred stock dividends                                                           |  |                    |       |   |                  |   |       |      |  |   |        |   |  |   | (4,195  | )
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Net income (loss) attributable to common stockholders                               |  | $                  | 9,487  |   |                  | $ | 11,778 |      |  | $ | 13,037  |   |  | $ | (9,369  | )
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Net income (loss) per common share:                                                 |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Basic                                                                               |  | $                  | 0.14   |   |                  | $ | 0.18   |      |  | $ | 0.20    |   |  | $ | (0.16   | )
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Diluted                                                                             |  | $                  | 0.14   |   |                  | $ | 0.18   |      |  | $ | 0.19    |   |  | $ | (0.16   | )
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Weighted average common shares outstanding:                                         |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Basic                                                                               |  |                    | 66,909 |   |                  |   | 66,061 |      |  |   | 66,828  |   |  |   | 57,470  |  
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  
|Diluted                                                                             |  |                    | 67,873 |   |                  |   | 66,064 |      |  |   | 67,568  |   |  |   | 57,470  |  
|                                                                                    |  |                    |        |   |                  |   |        |      |  |   |         |   |  |   |         |  

See Notes to Condensed Consolidated Financial Statements



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##### Table of Contents

SYNIVERSE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(DOLLARS IN THOUSANDS)



|                                                                                                        |  |                          |         |   |      |   |          |  
|------------------------------------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | -------- | -
|                                                                                                        |  | Six Months EndedJune 30, |        
|                                                                                                        |  | 2006                     |         |   | 2005 |  
|Cash flows from operating activities                                                                    |  |                          |         |   |      |   |          |  
|Net income (loss)                                                                                       |  | $                        | 13,037  |   |      | $ | (5,174   | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities:                |  |                          |         |   |      |   |          |  
|Depreciation and amortization including amortization of deferred debt issuance costs                    |  |                          | 20,468  |   |      |   | 25,764   |  
|Provision for uncollectible accounts                                                                    |  |                          | 388     |   |      |   | 688      |  
|Deferred income tax expense                                                                             |  |                          | 3,262   |   |      |   | 4,364    |  
|Loss on extinguishment of debt                                                                          |  |                          | 924     |   |      |   | 23,788   |  
|Stock-based compensation                                                                                |  |                          | 329     |   |      |   |         |  
|Gain on sale of marketable securities                                                                   |  |                          | (119    | ) |      |   |         |  
|Loss on disposition of property                                                                         |  |                          | 158     |   |      |   | 611      |  
|Changes in operating assets and liabilities:                                                            |  |                          |         |   |      |   |          |  
|Accounts receivable                                                                                     |  |                          | (2,646  | ) |      |   | 8,182    |  
|Other current assets                                                                                    |  |                          | (1,414  | ) |      |   | (3,259   | )
|Accounts payable                                                                                        |  |                          | (10,198 | ) |      |   | (6,446   | )
|Other current liabilities                                                                               |  |                          | 2,687   |   |      |   | 3,383    |  
|Other assets and liabilities                                                                            |  |                          | (528    | ) |      |   | (862     | )
|                                                                                                        |  |                          |         |   |      |   |          |  
|Net cash provided by operating activities                                                               |  |                          | 26,348  |   |      |   | 51,039   |  
|                                                                                                        |  |                          |         |   |      |   |          |  
|Cash flows from investing activities                                                                    |  |                          |         |   |      |   |          |  
|Capital expenditures                                                                                    |  |                          | (10,821 | ) |      |   | (14,077  | )
|Proceeds from the sale of marketable securities                                                         |  |                          | 119     |   |      |   |         |  
|Acquisition of ITHL, net of acquired cash                                                               |  |                          | (37,725 | ) |      |   |         |  
|                                                                                                        |  |                          |         |   |      |   |          |  
|Net cash used in investing activities                                                                   |  |                          | (48,427 | ) |      |   | (14,077  | )
|                                                                                                        |  |                          |         |   |      |   |          |  
|Cash flows from financing activities                                                                    |  |                          |         |   |      |   |          |  
|Debt issuance fees paid                                                                                 |  |                          |        |   |      |   | (1,948   | )
|Repayment of 123/4% senior subordinated notes due 2009 including prepayment of premium and related fees |  |                          | (15,424 | ) |      |   | (98,124  | )
|Repayment of previous senior credit facility                                                            |  |                          |        |   |      |   | (220,073 | )
|Borrowings under new senior credit facility                                                             |  |                          |        |   |      |   | 240,000  |  
|Principal payments on new senior credit facility                                                        |  |                          | (902    | ) |      |   | (1,200   | )
|Stock options exercised                                                                                 |  |                          | 63      |   |      |   |         |  
|Proceeds from issuance of common stock, net of issuance costs of $20,961                                |  |                          |        |   |      |   | 260,959  |  
|Redemption of class A preferred stock at liquidation value                                              |  |                          |        |   |      |   | (176,456 | )
|Purchase of treasury stock                                                                              |  |                          | (5      | ) |      |   | (23      | )
|                                                                                                        |  |                          |         |   |      |   |          |  
|Net cash (used in) provided by financing activities                                                     |  |                          | (16,268 | ) |      |   | 3,135    |  
|                                                                                                        |  |                          |         |   |      |   |          |  
|Effect of exchange rate changes on cash                                                                 |  |                          | 122     |   |      |   | (9       | )
|                                                                                                        |  |                          |         |   |      |   |          |  
|Net increase in cash                                                                                    |  |                          | (38,225 | ) |      |   | 40,088   |  
|Cash at beginning of period                                                                             |  |                          | 49,294  |   |      |   | 17,919   |  
|                                                                                                        |  |                          |         |   |      |   |          |  
|Cash at end of period                                                                                   |  | $                        | 11,069  |   |      | $ | 58,007   |  
|                                                                                                        |  |                          |         |   |      |   |          |  
|Supplemental cash flow information                                                                      |  |                          |         |   |      |   |          |  
|Interest paid                                                                                           |  | $                        | 13,303  |   |      | $ | 22,233   |  
|Income taxes paid                                                                                       |  |                          | 21      |   |      |   | 11       |  
|                                                                                                        |  |                         
|Supplemental non-cash transactions                                                                      |  |                          |         |   |      |   |          |  
|Conversion of class A cumulative redeemable preferred stock to common stock                             |  | $                        |        |   |      | $ | 163,353  |  

See Notes to Condensed Consolidated Financial Statements



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##### Table of Contents

SYNIVERSE HOLDINGS, INC.

NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

1. Business

We are a leading provider of mission-critical technology services to wireless telecommunications companies
worldwide. Our solutions simplify technology complexities by integrating disparate carriers systems and networks in order to provide seamless global voice and data communications to wireless subscribers. Many carriers depend on our integrated
suite of services to solve their most complex technology challenges and to facilitate the rapid deployment of next generation wireless services. We provide our services to approximately 350 telecommunication carriers in over 50 countries, including
the ten largest U.S. carriers and six of the ten largest international wireless carriers. The majority of our revenues are transaction-based and derived from long-term contracts, typically averaging three years in duration.

On January 17, 2005, Syniverse Holdings, LLC (Syniverse LLC), our former parent, contributed its ownership of all the non-voting common stock of
Syniverse Networks, Inc. (Syniverse Networks) to us, resulting in our ownership of 100% of Syniverse Networks. From February 14, 2002 until January 17, 2005, Syniverse LLC owned all of the non-voting common stock and we owned all of the
voting preferred stock of Syniverse Networks. Prior to February 14, 2002, the Verizon business, which we acquired, owned all of the operations referred to as Syniverse Networks. Since this was a business combination of entities under common
control, we have accounted for this 2005 transaction in a manner similar to a pooling of interests. As a result, all of our financial statements since February 14, 2002 include all of the historical results of Syniverse Networks.

On February 9, 2005, Syniverse LLC entered into an Amendment No. 1 to Limited Liability Company Agreement and Dissolution Agreement, dated as
of February 9, 2005, with us and certain members of Syniverse LLC (the Dissolution Agreement). The Dissolution Agreement provided, among other things, for (i) the distribution of our capital stock to the members of Syniverse LLC,
(ii) the termination of certain equity agreements among Syniverse LLC and its members and (iii) the subsequent dissolution of Syniverse LLC.

On February 9, 2005, we merged our subsidiaries, Syniverse Networks and Syniverse Finance, Inc. (Syniverse Finance), with and into Syniverse Technologies, Inc. (Syniverse), another wholly owned subsidiary.

On February 9, 2005, our Board of Directors approved (i) the reclassification of the outstanding shares of our non-voting class
B common stock into shares of our voting common stock, (ii) the 1-for-2.485 reverse stock split of our common stock with respect to the number of shares but not the par value per share, (iii) the increase in the number of shares reserved
for issuance under the Non-Employee Directors Plan for a total of 160,630 shares of our common stock reserved for issuance and (iv) the number of shares to be granted to new non-employee directors who do not otherwise have an equity interest in
our company under the Non-Employee Directors Plan to 20,000 shares of our common stock. All shares of common stock and per common share amounts have been retroactively restated to reflect this reverse stock split. In addition, the amended and
restated plan provided an additional one-time option grant to each of our existing non-employee and non-equity investor directors as of the date immediately prior to our initial public offering, entitling the holder to purchase 10,000 shares of our
common stock at the offering price. These options will vest in equal annual amounts over a period of five years.

On February 10,
2005, we completed an initial public offering of 17,620,000 shares of common stock at a price of $16.00 per common share. The net proceeds of the offering of $260,966 after deducting underwriting discounts, commissions and expenses, along with
$240,000 received from our new credit facility, were used primarily to redeem 124,876 shares of our class A cumulative redeemable preferred stock described in Note 5, tender for $85,750 of our 123/4% senior subordinated notes and repay and terminate our previous senior credit facility.

2. Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements of Syniverse Holdings, Inc. (Syniverse Inc.) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information.
Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (including normal recurring accruals)
considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2006 are not necessarily indicative of the results that may be expected for the year ended December 31, 2006.

The condensed consolidated financial statements include the accounts of Syniverse Inc., Syniverse, Syniverse Technologies, BV (Syniverse
BV), Syniverse Brience, LLC (Syniverse Brience), Syniverse Holdings Limited (Syniverse Limited) and Perfect Profits International Limited (PPIL). Syniverse Inc. was wholly owned by Syniverse LLC until our February 10, 2005 initial public
offering as described in Note 5. Concurrent with the initial public offering, Syniverse LLC was dissolved. References to the Company, us, or we include all of the consolidated companies. All significant
intercompany balances and transactions have been eliminated.



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3. Summary of Significant Accounting Policies

Revenue Recognition

The majority of
our revenues are transaction-based and derived from long-term contracts, typically averaging three years in duration. Our revenues are primarily the result of the sale of our technology interoperability services, network services, number portability
services, call processing services and enterprise solutions to wireless carriers throughout the world. In order to encourage higher customer transaction volumes, we generally negotiate tiered pricing schedules with our customers based on certain
established transaction volume levels. Generally, there is also a seasonal increase in wireless roaming telephone usage and corresponding revenues in the high-travel months of the second and third fiscal quarters.



| |  | Technology Interoperability Services primarily generate revenues by charging per-transaction processing fees. For our wireless roaming clearinghouse and SMS and MMS routing
services, revenues vary based on the number of data/messaging records provided to us by wireless carriers for aggregation, translation and distribution among carriers. We recognize revenues at the time the transactions are processed.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Network Services primarily generate revenues by charging per-transaction processing fees. In addition, our customers pay monthly connection fees based on the number of
network connections as well as the number of switches with which a customer communicates. The per-transaction fees are based on the number of intelligent network messages and intelligent network database queries made through our network and are
recognized as revenues at the time the transactions are processed. In addition, a small amount of our revenues are generated through software license fees, maintenance agreements and professional services. Software license fees are generally
recognized over the contract period. Maintenance agreements call for us to provide technical support and software enhancements to customers. Revenues on technical support and software enhancement rights are recognized ratably over the term of the
support agreement. Professional services include consulting, training and installation services to our customers. Revenues from such services are generally recognized on a straight-line basis over the same period as the software license fees.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Number Portability Services primarily generate revenues by charging per-transaction processing fees, monthly fixed fees, and fees for customer implementations. We recognize
processing revenues at the time the transactions are processed. We recognize monthly fixed fees as revenues on a monthly basis as the services are performed. We defer revenues and incremental customer-specific costs related to customer
implementations and recognize these fees and costs on a straight-line basis over the life of the initial customer agreements.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Call Processing Services primarily generate revenues by charging per-transaction processing fees. The per-transaction fee is based on the number of validation, authorization
and other call processing messages generated by wireless subscribers. We recognize processing fee revenues at the time the transactions are processed.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Enterprise Solutions Services primarily generate revenues by charging per-subscriber fees. We recognize these revenues at the time the service is performed.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Off-Network Database Query Feesprimarily generate revenues by providing access to database providers. We pass these charges onto our customers, with little or no margin,
based upon the charges we receive from the third party intelligent network database providers. We recognize revenues at the time the transaction is processed.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Due to our billing cycles, which for some products lag as much as 40 days after the month in which the services are rendered, we estimate the amounts of
unbilled revenue each reporting period. Our estimates are based on recent volume and pricing trends adjusted for material changes in contracted services. Historically, our estimates have not been materially different from our actual billed revenue.
Unanticipated changes in volume and pricing trends or material changes in contracted services could adversely affect our estimates of unbilled revenue.

Stock-Based Compensation

Syniverse has three stock-based compensation plans, the Founders Stock Option Plan for
non-employee directors, executives and other key employees of Syniverse Inc., the Directors Stock Option Plan, which provides for grants to independent directors, and the Long-Term Equity Incentive Plan, which provides incentive compensation
through grants of incentive or non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights (SARs), performance awards, or any combination of the foregoing, all of which are described below. Prior to
fiscal 2006, we accounted for those plans under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), and related Interpretations, as permitted by
Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation (SFAS 123). Compensation costs related to stock options granted at fair value under those
plans were not recognized in the consolidated statements of operations. In December 2004, the FASB issued SFAS 123 (revised 2004), Share-Based Payment (SFAS 123(R)). Under the new standard, companies are no longer able to account for
stock-based compensation transactions using the intrinsic value method in accordance with APB 25.



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Effective January 1, 2006, we adopted SFAS 123(R), which requires companies to account for such
stock-based compensation using a fair-value method and recognize the expense in the consolidated statement of income. Using the modified-prospective-transition method, stock-based compensation cost recognized beginning January 1, 2006 includes:
(a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, and (b) compensation
cost for all share-based payments granted on or subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). Results for prior periods have not been restated. Accordingly, during
the three months ended June 30, 2006, we recorded stock-based compensation expense for awards granted prior to but not yet vested as of January 1, 2006. For the six months ended June 30, 2006, stock-based compensation expense for
awards granted was $294. The impact to our income from operations of recording stock-based compensation for the three and six months ended June 30, 2006 was as follows:



|                               |  |                |     |                |   |    
|------------------------------ |  | -------------- | --- | -------------- | - | ---
|                               |  | Three Months   |     | Six Months    
|                               |  | Ended June 30, |     | Ended June 30,
|                               |  | 2006           |     | 2006          
|Cost of operations             |  | $              | 49  |                | $ | 52 
|Sales and marketing            |  |                | 50  |                |   | 52 
|General and administrative     |  |                | 195 |                |   | 225
|                               |  |                |     |                |   |    
|Total share-based compensation |  | $              | 294 |                | $ | 329
|                               |  |                |     |                |   |    

Option Plans

On May 16, 2002, Syniverse Inc.s Board of Directors adopted a Founders Stock Option Plan for non-employee directors, executives and other key employees of Syniverse Inc. In addition, the Board of
Directors adopted a Directors Stock Option Plan on August 2, 2002, which provides for grants to independent directors to purchase 20,000 shares upon election to the board. The plans have a term of five years and provided for the granting
of options to purchase shares of Syniverse Inc.s non-voting Class B common stock. As part of our initial public offering, we reclassified the Class B common stock into our common stock and hence all of our options now provide for purchase of
our common stock.

Under the plans, the options have or will have an initial exercise price based on the fair value of each share, as
determined by the Board. The per share exercise price of each stock option will not be less than the fair market value of the stock on the date of the grant or, in the case of an equity holder owning more than 10% of the outstanding stock of
Syniverse Inc., the price for incentive stock options is not less than 110% of such fair market value. The Board of Syniverse Inc. reserved 402,400 shares of non-voting Class B common stock, par value $.001 per share for issuance under the
Founders plan and 160,360 shares under the Directors plan. The Company does not currently expect to repurchase shares from any source to satisfy such obligation under the Plan.

As of June 30, 2006, there were options to purchase 278,076 shares outstanding under the Founders Stock Option Plan and options to purchase
130,360 shares outstanding under the Directors Stock Option Plan. Following stockholder approval of our 2006 Long-Term Equity Incentive Plan, the Board of Syniverse, Inc. will no longer grant options from the Founders Stock Option Plan
or the Directors Stock Option Plan.

All options issued under the plans are presumed to be nonqualified stock options unless
otherwise indicated in the option agreement. Each option has an exercisable life of no more than 10 years from the date of grant for both nonqualified and incentive stock options in the case of grants under the Founders Stock Option Plan and
under the Directors Stock Option Plan. Generally, the options under these plans vest 20% after the first year and 5% per quarter thereafter.

2006 Long-Term Equity Incentive Plan

On May 9, 2006, our Board of Directors adopted the 2006 Long-Term Equity
Incentive Plan (the Incentive Plan). The Incentive Plan provides incentive compensation through grants of incentive or non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights (SARs),
performance awards, or any combination of the foregoing. The Incentive Plan is designed to allow for the grant of long term incentive awards that conform to the requirements for tax deductible performance based compensation under
Section 162(m) of the Internal Revenue Code of 1986. During the quarter ended June 30, 2006, 220,000 options were granted to certain executive officers which vest 331/3% per year. During the quarter ended June 30, 2006, 570,000 restricted shares were granted to certain executive officers and other employees, which vest 20% per
year.



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Under the Incentive Plan, 6,000,000 shares of common stock were authorized for issuance, of which
1,000,000 shares may be issued as restricted stock, restricted stock units or performance shares. The number of shares and price per share is determined by the Compensation Committee (the Committee) for those awards granted. However, the
exercise price of any option may not be less than 100% of the fair market value of a share of common stock on the date of grant, and the exercise price of an incentive option awarded to a person who owns stock constituting more than 10% of
Syniverses voting power may not be less than 110% of the fair market value on the date of grant. Those eligible to participate in the Incentive Plan are limited to directors (including non-employee directors), officers (including non-employee
officers) and employees of Syniverse, Inc. and its Subsidiaries selected by the Committee, including participants located outside the United States. Determinations made by the Committee under the Incentive Plan need not be uniform and may be made
selectively among eligible individuals under the Incentive Plan.

Employee Stock Purchase Plan

On May 9, 2006, our Board of Directors adopted the 2006 Employee Stock Purchase Plan (the Purchase Plan). All employees, including
Directors who are employees and all employees of any subsidiary, are eligible to participate in any one or more of the offerings to purchase Common Stock under the Purchase Plan. Eligible employees may purchase a limited number of shares of
Syniverse, Inc.s common stock at 85% of the market value during a series of offering periods. Each offering period is divided into semi-annual purchase intervals and has a maximum term of six months. During the quarter ended June 30,
2006, there were no enrollments into the Purchase Plan.

Accounting for Stock-Based Compensation

Stock Options

The fair values of stock grants are
amortized as compensation expense on a straight-line basis over the vesting period of the grants. Compensation expense recognized is shown in the operating activities section of the consolidated statements of cash flows. The fair value for these
options was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions:



|                                          |  |                             |   |  |                           |   |  |      |   |  |      |  
|----------------------------------------- |  | --------------------------- | - |  | ------------------------- | - |  | ---- | - |  | ---- | -
|                                          |  | Three Months Ended June 30, |   |  | Six Months Ended June 30, |  
|                                          |  | 2006                        |   |  | 2005                      |   |  | 2006 |   |  | 2005 |  
|Risk-free interest rate                   |  | 4.49                        | % |  | 4.20                      | % |  | 4.49 | % |  | 4.23 | %
|Volatility factor                         |  | 34.0                        |   |  | 29.8                      |   |  | 34.0 |   |  | 33.8 |  
|Dividend yield                            |  |                            |   |  |                          |   |  |     |   |  |     |  
|Weighted average expected life of options |  | 5                           |   |  | 5                         |   |  | 5    |   |  | 5    |  

The Black-Scholes option valuation model was developed for use in estimating the fair value of
traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Prior to February 10, 2005,
Syniverse Inc.s common stock was not traded on public markets. Therefore a volatility of 0% was used in the Black-Scholes option valuation model for options issued prior to our initial public offering. Due to the limited time in which our
stock was publicly traded, we used the average volatility factor of eight comparable companies in determining our pro forma compensation for stock options granted at the time of our initial public offering and through June 30, 2006. Based on
the results produced from the Black-Scholes option-pricing model, our pro forma compensation amounts are not materially different from the intrinsic value compensation expense amounts and hence are not disclosed. For the three and six months ended
June 30, 2005, pro forma fair value amounts of compensation expense as applied in accordance with the fair value recognition provisions of SFAS 123 were not materially different from the intrinsic value method because the fair value of the
options were not material and hence are not disclosed.

SFAS 123(R) requires companies to estimate potential forfeitures of stock grants
and adjust compensation cost recorded accordingly. Due to the minimal number of forfeitures we have experienced during the limited life of our option plans, our forfeiture rate is not material to our fair value calculation; therefore, we
currently use actual forfeitures in our calculations.



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##### Table of Contents

A summary of our stock-based compensation activity for the six months ended June 30, 2006 is as
follows:



|                                 |  |         |   |  |           |       |             |      |           |   |    
|-------------------------------- |  | ------- | - |  | --------- | ----- | ----------- | ---- | --------- | - | ---
|                                 |  |         |   |  |           |       | Weighted-   |      |          
|                                 |  |         |   |  | Weighted- |       | Average     |      | Aggregate
|                                 |  |         |   |  | Average   |       | Remaining   |      | Intrinsic
|                                 |  |         |   |  | Exercise  |       | Contractual |      | Value    
|Stock Options                    |  | Shares  |   |  | Price     |       | Term        |      | (000s)   
|Outstanding at December 31, 2005 |  | 423,477 |   |  | $         | 13.33 |             |      |           |   |    
|Granted                          |  | 220,000 |   |  | $         | 16.60 |             |      |           |   |    
|Exercised                        |  | (5,013  | ) |  | $         | 12.43 |             |      |           |   |    
|Cancelled or expired             |  | (10,028 | ) |  | $         | 14.67 |             |      |           |   |    
|                                 |  |         |   |  |           |       |             |      |           |   |    
|Outstanding at June 30, 2006     |  | 628,436 |   |  | $         | 14.46 |             | 8.34 |           | $ | 152
|                                 |  |         |   | 
|Vested at June 30, 2006          |  | 184,748 |   |  | $         | 12.75 |             | 6.90 |           | $ | 361
|                                 |  |         |   | 
|Exercisable at June 30, 2006     |  | 184,748 |   |  | $         | 12.75 |             | 6.90 |           | $ | 361

Outstanding options as of June 30, 2006 and 2005 had a weighted average remaining contractual
life of 8.3 and 8.4 years, respectively. During the six months ended June 30, 2006 and 2005:



| |  | the weighted average fair value per share of stock-based compensation granted to employees was $6.27 and $5.58, respectively;
| | - | -----------------------------------------------------------------------------------------------------------------------------



| |  | the total intrinsic value of stock options exercised was $34 and $0, respectively; and
| | - | --------------------------------------------------------------------------------------



| |  | the total fair value of stock options that vested during both periods was $122 and $0, respectively.
| | - | ----------------------------------------------------------------------------------------------------

During the six months ended June 30, 2006, $63 was received for the exercise of stock options. Since the options exercised had a fair value of $0,
no tax benefits were realized from the exercise of those options. Cash was not used to settle any equity instruments previously granted. There was no stock-based compensation cost capitalized into assets as of June 30, 2006.

A summary of our unvested shares activity for the six months ended June 30, 2006 is as follows:



|                              |  |         |   |  |            |     
|----------------------------- |  | ------- | - |  | ---------- | ----
|                              |  |         |   |  | Weighted- 
|                              |  |         |   |  | Average   
|                              |  |         |   |  | Grant-Date
|                              |  |         |   |  | Fair      
|Stock Options                 |  | Shares  |   |  | Value     
|Unvested at December 31, 2005 |  | 283,960 |   |  | $          | 2.61
|Granted                       |  | 220,000 |   |  | $          | 6.27
|Vested                        |  | (50,556 | ) |  | $          | 2.42
|Forfeited                     |  | (9,716  | ) |  | $          | 4.29
|                              |  |         |   |  |            |     
|Unvested at June 30, 2006     |  | 443,688 |   |  | $          | 4.41
|                              |  |         |   |  |            |     

As of June 30, 2006, there was $1,834 of total unrecognized compensation cost related to
stock-based compensation arrangements granted. The recognition period for the remaining unrecognized stock-based compensation cost is approximately six years.

Restricted Stock

Restricted stock awards are issued and measured at market value on the date of grant. Generally 20% become
exercisable per year from date of grant. Vesting of restricted stock is based solely on time vesting.



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##### Table of Contents

Changes in our restricted stock for the six months ended June 30, 2006 were as follows:



|                              |  |         |  |            |      
|----------------------------- |  | ------- |  | ---------- | -----
|                              |  |         |  | Weighted- 
|                              |  |         |  | Average   
|                              |  |         |  | Grant-Date
|                              |  |         |  | Fair      
|Restricted Stock              |  | Shares  |  | Value     
|Unvested at December 31, 2005 |  |        |  | $          |     
|Granted                       |  | 570,000 |  | $          | 15.76
|Vested                        |  |        |  | $          |     
|Forfeited                     |  |        |  | $          |     
|                              |  |         |  |            |      
|Unvested at June 30, 2006     |  | 570,000 |  | $          | 15.76
|                              |  |         |  |            |      

As of June 30, 2006, unrecognized compensation expense related to the unvested portion of our
restricted stock awards was $8,805, which is expected to be recognized over a period of approximately five years.

Net Income (Loss) Per Common Share

We compute net income (loss) per common share in accordance with Statement of Financial Accounting Standards No. 128, Earnings
Per Share(SFAS 128). Basic net income (loss) per common share includes no dilution and is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of fully vested common shares outstanding
for the period. Our basic weighted average shares outstanding for the three and six month period ended June 30, 2006 excludes 913,744 and 674,155 shares, respectively, which represents unvested common stock held by our management and employees.
Diluted net income (loss) per common share includes the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. As of June 30, 2006 and 2005, options to purchase
628,436 and 390,198 shares of common stock, respectively, were outstanding. Due to the anti-dilutive nature of the options and the class A cumulative redeemable convertible preferred stock, these were not considered and thus there is no effect on
the calculation of weighted average shares for diluted net loss per common share for the six months ended June 30, 2005. As a result, the basic and diluted net losses per common share amounts are identical for that period. However, for the
three months ended June 30, 2005 and the three and six months ended June 30, 2006, unvested common stock held by our management and the outstanding options to purchase common stock were used in the calculation of dilutive net income per
common share.



|                                                      |  |                    |            |                  |   |            |  |      |            |  |   |            |  
|----------------------------------------------------- |  | ------------------ | ---------- | ---------------- | - | ---------- |  | ---- | ---------- |  | - | ---------- | -
|                                                      |  | Three Months Ended |            | Six Months Ended |  
|                                                      |  | June 30,           |            | June 30,         |  
|                                                      |  | 2006               |            | 2005             |   | 2006       |  | 2005 |           
|Basic and diluted net income (loss) per common share: |  |                    |            |                  |   |            |  |      |            |  |   |            |  
|Net income (loss) attributable to common stockholders |  | $                  | 9,487      |                  | $ | 11,778     |  | $    | 13,037     |  | $ | (9,369     | )
|                                                      |  |                    |            |                 
|Determination of basic and diluted shares:            |  |                    |            |                  |   |            |  |      |            |  |   |            |  
|Basic weighted-average common shares outstanding      |  |                    | 66,908,836 |                  |   | 66,060,764 |  |      | 66,828,285 |  |   | 57,469,708 |  
|Unvested common stock                                 |  |                    | 913,744    |                  |   |           |  |      | 674,155    |  |   |           |  
|Potentially dilutive stock options                    |  |                    | 50,065     |                  |   | 2,814      |  |      | 65,295     |  |   |           |  
|                                                      |  |                    |            |                  |   |            |  |      |            |  |   |            |  
|Diluted weighted-average common shares outstanding    |  |                    | 67,872,645 |                  |   | 66,063,578 |  |      | 67,567,735 |  |   | 57,469,708 |  
|                                                      |  |                    |            |                  |   |            |  |      |            |  |   |            |  
|Basic net income (loss) per common share              |  | $                  | 0.14       |                  | $ | 0.18       |  | $    | 0.20       |  | $ | (0.16      | )
|                                                      |  |                    |            |                  |   |            |  |      |            |  |   |            |  
|Diluted net income (loss) per common share            |  | $                  | 0.14       |                  | $ | 0.18       |  | $    | 0.19       |  | $ | (0.16      | )
|                                                      |  |                    |            |                  |   |            |  |      |            |  |   |            |  



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##### Table of Contents

Comprehensive Income (Loss)

Comprehensive income (loss) includes foreign currency translation adjustments and unrealized gains and losses on marketable securities classified as available-for-sale. Comprehensive income (loss) for the three and
six months ended June 30, 2006 and 2005 is as follows:



|                                          |  |                    |       |      |                  |        |      |  |   |        |   |  |   |        |  
|----------------------------------------- |  | ------------------ | ----- | ---- | ---------------- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                          |  | Three Months Ended |       |      | Six Months Ended |       
|                                          |  | June 30,           |       |      | June 30,         |       
|                                          |  | 2006               |       | 2005 |                  |        | 2006 |  |   | 2005   |  
|Net income (loss)                         |  | $                  | 9,487 |      | $                | 11,778 |      |  | $ | 13,037 |   |  | $ | (5,174 | )
|Net unrealized gain (loss) on investments |  |                    |      |      |                  | 189    |      |  |   | (118   | ) |  |   | 110    |  
|Foreign currency translation gain (loss)  |  |                    | 181   |      |                  | (87    | )    |  |   | 194    |   |  |   | (119   | )
|                                          |  |                    |       |      |                  |        |      |  |   |        |   |  |   |        |  
|Total                                     |  | $                  | 9,668 |      | $                | 11,880 |      |  | $ | 13,113 |   |  | $ | (5,183 | )
|                                          |  |                    |       |      |                  |        |      |  |   |        |   |  |   |        |  

The balance in accumulated other comprehensive income as of June 30, 2006 is comprised of a
foreign currency translation loss of $6.

Available-for-Sale Securities

Our investments in equity securities as of December 31, 2005 were composed primarily of a less than 5% ownership in a small publicly held company,
and are categorized as available-for-sale as defined by Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities (SFAS 115). These equity securities were included in other
current assets in the accompanying condensed consolidated balance sheet as of December 31, 2005 and were recorded at fair value based on quoted market prices. The cost of each equity security is determined primarily on a specific identification
method. Unrealized holding gains and losses are reflected, net of income tax, as a separate component of accumulated other comprehensive income (loss). During the first six months of 2006, we sold our entire investment in these securities. As of
June 30, 2006 and December 31, 2005, available-for-sale securities had a fair value of $0 and $118, respectively.

Interest in Joint Venture

We hold a 5% interest in the joint venture mTLD Top Level Domain, Ltd., a joint venture formed to provide mobile data and content
domain name registry services and development guidelines. We account for this investment using the cost method of accounting. As of June 30, 2006, our investment was $888 and is included in other assets.

Foreign Currency Translation

In accordance with
Statement of Financial Accounting Standard No. 52, Foreign Currency Translation(SFAS 52), income and expense accounts of foreign operations are translated at the 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 a
separate component of stockholders equity.

Segment Reporting

For all periods reported, we operated as a single segment since our chief operating-decision maker decides resource allocations on the basis of our consolidated financial results. For the three months ended
June 30, 2006 and 2005, we derived 83.1% and 87.1%, respectively, of our revenues from customers in the United States. For the six months ended June 30, 2006 and 2005, we derived 82.9% and 86.8%, respectively, of our revenues from
customers in the United States.

Derivatives

Financial Accounting Standards Board Statement No. 133, Accounting for Derivative Instruments and Hedging Activities(SFAS 133), requires companies to recognize all of their derivative instruments as either assets or liabilities
in the statement of financial position at fair value. As of June 30, 2006 and December 31, 2005, we do not have any derivative instruments or have engaged in any hedging activities.

Recent Accounting Pronouncements

In June 2006, the
FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (FIN48), an interpretation of FAS 109, Accounting for Income Taxes. This interpretation prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognition, interest and penalties, accounting in interim
periods, disclosure and transition. The provisions of FIN48 are effective starting January 1, 2007. We have not yet evaluated the impact, if any, that FIN48 will have on our financial position or results of operations.



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##### Table of Contents

4. Acquisition of Interactive Technology Holdings Limited Business

On June 16, 2006, we acquired the capital stock of Perfect Profits International (PPIL), which comprises the Interactive Technologies Holdings
Limited business (ITHL), from Interactive Technologies Holdings Limited for $37,746 in cash including preliminary working capital adjustments. In connection with the acquisition, we incurred $1,110 in acquisition related costs. In addition, the
purchase agreement contains certain earn-out provisions, pursuant to which the sellers may receive up to $7,000 in additional cash consideration based upon achieving certain levels of revenues and EBITDA. Headquartered in Hong Kong, ITHL is a
leading provider of value-added services to carriers in the Asia Pacific region. We believe the acquisition expands our footprint in the Asia Pacific region and adds a complementary customer base, new products, advanced development capabilities and
in-region customer support.

The following table summarizes the preliminary allocation of the purchase price based on the estimated fair
value of the net assets acquired and liabilities assumed at the acquisition date. We are in the process of reviewing the information and refining the purchase price information as well as obtaining a third-party valuation of certain tangible and
intangible assets. As a result, the allocation is not yet finalized and preliminary estimates and assumptions are subject to change.



|                          |  |   |       
|------------------------- |  | - | ------
|Purchase Price            |  | $ | 38,856
|                          |  |   |       
|Cash                      |  |   | 1,131 
|Accounts receivable       |  |   | 7,430 
|Other current assets      |  |   | 6,621 
|Property and equipment    |  |   | 1,062 
|                          |  |   |       
|Total assets              |  | $ | 16,244
|Accounts payable          |  |   | 3,182 
|Other accrued liabilities |  |   | 9,398 
|                          |  |   |       
|Total liabilities         |  | $ | 12,580
|                          |  |   |       
|Net assets acquired       |  | $ | 3,664 
|                          |  |   |       
|Excess purchase price     |  | $ | 35,192
|                          |  |   |       

At June 30, 2006, the excess purchase price related to the acquisition of ITHL has been
temporarily classified as a component of goodwill.

The acquisition was accounted for using the purchase method of accounting. The purchase
price was allocated to the assets and liabilities based upon their fair value as of the date of the acquisition. Since the acquisition was completed as of the close of business on June 16, 2006, the preliminary fair values have been included in
our condensed consolidated balance sheet. However, none of ITHLs operating results, which are not material, have been included in the condensed consolidated statement of operations.

5. Initial Public Offering and Redeemable Preferred Stock

On February 10, 2005, we completed an
initial public offering (IPO) of 17,620,000 shares of common stock at a price of $16.00 per common share. The net proceeds of the offering of $260,966 after deducting underwriting discounts, commissions and expenses, along with the $240,000 received
from our new credit facility, were used to redeem 124,876 shares of our class A cumulative redeemable preferred stock as described below, tender for $85,750 of our 123/4% senior subordinated notes due 2009 and repay our previous senior credit facility.

On February 15, 2005, we redeemed 124,876 shares of our class A cumulative redeemable convertible preferred stock including accrued and unpaid dividends with $176,456 of proceeds received from our initial public
offering completed on February 10, 2005.

On March 28, 2005, we converted the remaining 115,604 shares of our class A cumulative
redeemable convertible preferred stock including accrued and unpaid dividends at a liquidation value of $163,353 into 10,209,598 shares of our class A common stock, using the IPO price of $16.00 per share.

6. Restructurings

In connection with the IOS North
America acquisition on September 30, 2004, we began to formulate restructuring plans, which consisted primarily of the relocation of key IOS North America employees and the elimination of redundant



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positions. As a result of these plans, we recognized $1,888 of employee relocation costs and termination benefits as
liabilities in the purchase accounting in accordance with EITF 95-3, Recognition of Liabilities in Connection with a Purchase Business Combination. During the six months ended June 30, 2006, we reduced the liability for the termination
benefits costs and relocation costs by $73 based on our revised estimate of the remaining liability. Additionally, we made payments of $377 and we expect to pay the remainder of this liability in the third quarter of 2006.

In February 2006, we completed a restructuring plan in our marketing group resulting in the termination of eight employees. As a result, we incurred $338
in severance related costs and made payments of $290 in the six months ended June 30, 2006. We expect to pay the remainder of these costs through December 2006.

In the six months ended June 30, 2006, we had the following activity in our restructuring accruals:



|                             |  |                   |     |           |   |          |  |   |            |   |  |               |     |   |  |   |   
|---------------------------- |  | ----------------- | --- | --------- | - | -------- |  | - | ---------- | - |  | ------------- | --- | - |  | - | --
|                             |  | December 31, 2005 |     |           |   |          |  |   |            |   |  | June 30, 2006
|                             |  | Balance           |     | Additions |   | Payments |  |   | Reductions |   |  | Balance      
|September 2004 Restructuring |  |                   |     |           |   |          |  |   |            |   |  |               |     |   |  |   |   
|Termination costs            |  | $                 | 394 |           | $ |         |  | $ | (330       | ) |  | $             | (64 | ) |  | $ |  
|Relocation costs             |  |                   | 98  |           |   |         |  |   | (47        | ) |  |               | (9  | ) |  |   | 42
|February 2006 Restructuring  |  |                   |     |           |   |          |  |   |            |   |  |               |     |   |  |   |   
|Termination costs            |  |                   |    |           |   | 338      |  |   | (290       | ) |  |               |    |   |  |   | 48
|                             |  |                   |     |           |   |          |  |   |            |   |  |               |     |   |  |   |   
|Total                        |  | $                 | 492 |           | $ | 338      |  | $ | (667       | ) |  | $             | (73 | ) |  | $ | 90
|                             |  |                   |     |           |   |          |  |   |            |   |  |               |     |   |  |   |   

7. Commitments and Contingencies

We are currently a party to various claims and legal actions that arise in the ordinary course of business. We believe such claims and legal actions,
individually and in the aggregate, will not have a material adverse effect on our business, financial condition or results of operations. As of December 31, 2005, we have considered all of the claims and disputes of which we are aware and have
provided for probable losses as part of the allowance for doubtful accounts, allowance for credit memos or accrued liabilities.

The most
significant of these claims, in terms of dollars sought, are described below:

SBC Communications, Inc., d/b/a SBC Ameritech, SBC
Southwestern Bell and SBC Pacific Bell (collectively, SBC), have asserted claims against us in the total principal sum of $7,281, based on alleged overcharging for services we provided. We deny the claims, believe they are unfounded and on
April 15, 2003 filed a complaint in Hillsborough County, Florida against SBC Southwestern Bell and SBC Pacific Bell seeking a Declaratory Judgment denying their claims and seeking $1,358, which they have refused to pay.

On June 28, 2004, SBC Ameritech filed a Demand for Arbitration in Chicago seeking $2,100 of the $7,281 it claims it was over-billed by Syniverse. On
July 19, 2004 we filed a motion to dismiss/abate the Demand based on SBC Ameritechs failure to engage in mediation prior to arbitration, as required by the contract under which it alleges it was over-billed. The motion was denied on
December 14, 2004. On May 4, 2006, an Arbitrator issued a written decision denying SBC Ameritechs $2,100 claim and ordering it to pay us $76. We are presently engaged in litigation related to the claims raised by SBC Southwestern
Bell and SBC Pacific Bell.

On April 21, 2005, we filed a complaint against BellSouth Telecommunications, Inc. in the Federal District
Court in Tampa, Florida seeking judgment for unpaid charges of approximately $3,290 related to calling name database services provided during March 2004 to July 2004 for which BellSouth has refused payment.

On August 9, 2005, we filed a complaint seeking injunctive relief and damages in Hillsborough County, Florida against Electronic Data Systems
Corporation (EDS) and EDS Information Services LLC alleging a breach of contract, tortious interference with prospective business relations and unfair competition. This complaint was based on our discovery in the second quarter of 2005
that EDS was offering to provide clearing services to one of our customers when the customers contract with Syniverse expires in 2006. We believe this offer to provide clearing services to that customer constitutes a breach of certain
non-compete obligations of EDS contained in the 2004 Asset Purchase Agreement between EDS and us. On August 11, 2005, the Circuit Court of the 13thJudicial Circuit for the State of Florida granted our motion for a temporary injunction and enjoined the defendants from selling the assets of their European subsidiaries unless the prospective
purchaser assumed the non-compete obligations of EDS. The injunction is conditioned upon Syniverse providing a $1 million surety bond, which we have now paid. We intend to continue to pursue this matter vigorously.



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On April 13, 2006, we were served with a Petition for Declaratory Judgment filed by Billing
Concepts, Inc. d/b/a BSG Clearing Solutions (BCI) in Texas State Court asking the Court to find, in pertinent part, that BCIs offering of services competitive to Syniverse in the United States and North America is not subject to
the restrictions imposed on BSG-Germany. Syniverse intends to contest the Petition and will file an appropriate response in accordance with local court rules.

8. Contract Termination Costs

On February 28, 2005 we entered into an agreement to lease 199,000 square feet for our
new corporate headquarters facility located in Tampa, Florida. The lease term is eleven years commencing on November 1, 2005 with lease payments beginning one year following the commencement date. The lease agreement for our former corporate
headquarters expires October 31, 2006, however, we negotiated an early termination in accordance with the agreement. Under Statement of Financial Accounting Standards No. 146, Accounting for Costs Associated with Exit or Disposal
Activities(SFAS 146), a liability for costs to terminate a contract before the end of its term should be recognized and measured at its fair value. For the six months ended June 30, 2006, we recorded a lease termination loss of $1,717
which is included in general and administrative expenses, and a liability for lease termination costs for the same amount. We expect to pay these costs through October 31, 2006. As of June 30, 2006 the balance in the liability account was
$1,098.

9. Debt

On February 1,
2006, we completed an early redemption for all remaining notes of $14,500 in aggregate principal amount of our outstanding 123/4% senior subordinated notes due 2009 at a premium of $924.

10. Income Taxes

In the six months ended June 30, 2006, we reversed a portion of our net deferred tax asset valuation allowance. The valuation allowance, originally
established in 2003, and adjusted annually thereafter, was recorded because the realization of those deferred tax assets did not meet the more-likely-than-not criteria under Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes (SFAS 109). In the second quarter of 2006, based upon an evaluation of our most recent twelve quarters of results and our expectations of pre-tax income, a tax benefit for the deferred tax assets expected to be realized as a result
of income in the current year was recognized as we determined that we have met the more-likely-than-not criteria related to those deferred tax assets. The benefit reduced our estimated annual effective tax rate to approximately 21%, excluding the
effects of other items. As of June 30, 2006, based upon our judgment, we will continue to maintain a valuation allowance for certain other deferred tax assets primarily associated with accumulated tax loss carry-forwards from our acquisitions.

11. Supplemental Consolidating Financial Information

Syniverses payment obligations under the senior notes are guaranteed by Syniverse Inc. and all domestic subsidiaries of Syniverse including Syniverse Brience (collectively, the Guarantors). The results of
Syniverse BV and Syniverse Limited are included as non-guarantors. Such guarantees are full, unconditional and joint and several. The following supplemental financial information sets forth, on an unconsolidated basis, balance sheets, statements of
operations, and statements of cash flows information for Syniverse Inc., Syniverse and for the guarantor subsidiaries. The supplemental financial information reflects the investment Syniverse, Inc. using the equity method of accounting.



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CONSOLIDATING BALANCE SHEET (UNAUDITED)

AS OF JUNE 30, 2006



|                                           |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|------------------------------------------ |  | --------- | -------- | - | --------- | - | -------- | ---------- |  | - | -------------- | - |  | ------------ | ------ | - | ------------ | - | -------- | - |  | - | -------- | -
|                                           |  | Syniverse |          |   |           |   |          | Subsidiary |  |   | Subsidiary     |   |  |              |        |   |              |  
|                                           |  | Inc.      |          |   | Syniverse |   |          | Guarantors |  |   | Non-Guarantors |   |  | Eliminations |        |   | Consolidated |  
|ASSETS                                     |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Current assets:                            |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Cash                                       |  | $         | 40       |   |           | $ | 8,619    |            |  | $ |               |   |  | $            | 2,410  |   |              | $ |         |   |  | $ | 11,069   |  
|Accounts receivable, net of allowances     |  |           |         |   |           |   | 61,373   |            |  |   |               |   |  |              | 10,050 |   |              |   |         |   |  |   | 71,423   |  
|Accounts receivable - affiliates           |  |           | 13       |   |           |   | 4,690    |            |  |   | 423            |   |  |              |       |   |              |   | (5,126   | ) |  |   |         |  
|Prepaid and other current assets           |  |           |         |   |           |   | 5,567    |            |  |   |               |   |  |              | 6,730  |   |              |   |         |   |  |   | 12,297   |  
|                                           |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total current assets                       |  |           | 53       |   |           |   | 80,249   |            |  |   | 423            |   |  |              | 19,190 |   |              |   | (5,126   | ) |  |   | 94,789   |  
|                                           |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Property and equipment, net                |  |           |         |   |           |   | 44,230   |            |  |   |               |   |  |              | 1,140  |   |              |   |         |   |  |   | 45,370   |  
|Capitalized software, net                  |  |           |         |   |           |   | 48,604   |            |  |   |               |   |  |              | 130    |   |              |   |         |   |  |   | 48,734   |  
|Deferred costs, net                        |  |           |         |   |           |   | 5,590    |            |  |   |               |   |  |              |       |   |              |   |         |   |  |   | 5,590    |  
|Goodwill                                   |  |           |         |   |           |   | 361,239  |            |  |   |               |   |  |              | 35,988 |   |              |   |         |   |  |   | 397,227  |  
|Identifiable intangibles, net:             |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |         |  
|Customer contract, net                     |  |           |         |   |           |   |         |            |  |   |               |   |  |              | 263    |   |              |   |         |   |  |   | 263      |  
|Customer base, net                         |  |           |         |   |           |   | 184,037  |            |  |   |               |   |  |              |       |   |              |   |         |   |  |   | 184,037  |  
|Other assets                               |  |           |         |   |           |   | 1,064    |            |  |   |               |   |  |              |       |   |              |   |         |   |  |   | 1,064    |  
|Investment in subsidiaries                 |  |           | 336,099  |   |           |   | 37,913   |            |  |   |               |   |  |              |       |   |              |   | (374,012 | ) |  |   |         |  
|                                           |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total assets                               |  | $         | 336,152  |   |           | $ | 762,926  |            |  | $ | 423            |   |  | $            | 56,711 |   |              | $ | (379,138 | ) |  | $ | 777,074  |  
|                                           |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY       |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Current liabilities:                       |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Accounts payable                           |  | $         |         |   |           | $ | 3,185    |            |  | $ |               |   |  | $            | 2,061  |   |              | $ |         |   |  | $ | 5,246    |  
|Accounts payable - affiliates              |  |           |         |   |           |   |         |            |  |   |               |   |  |              | 5,126  |   |              |   | (5,126   | ) |  |   |         |  
|Accrued payroll and related benefits       |  |           | 13       |   |           |   | 2,938    |            |  |   |               |   |  |              | 1,387  |   |              |   |         |   |  |   | 4,338    |  
|Accrued interest                           |  |           |         |   |           |   | 5,160    |            |  |   |               |   |  |              |       |   |              |   |         |   |  |   | 5,160    |  
|Other accrued liabilities                  |  |           |         |   |           |   | 22,807   |            |  |   | 38             |   |  |              | 10,605 |   |              |   |         |   |  |   | 33,450   |  
|Current portion of Term Note B             |  |           |         |   |           |   | 1,801    |            |  |   |               |   |  |              |       |   |              |   |         |   |  |   | 1,801    |  
|                                           |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total current liabilities                  |  |           | 13       |   |           |   | 35,891   |            |  |   | 38             |   |  |              | 19,179 |   |              |   | (5,126   | ) |  |   | 49,995   |  
|                                           |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Long-term liabilities:                     |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Deferred tax liabilities                   |  |           |         |   |           |   | 39,608   |            |  |   |               |   |  |              |       |   |              |   |         |   |  |   | 39,608   |  
|73/4%
senior subordinated notes due 2013   |  |           |         |   |           |   | 175,000  |            |  |   |               |   |  |              |       |   |              |   |         |   |  |   | 175,000  |  
|Term Note B, less current maturities       |  |           |         |   |           |   | 175,623  |            |  |   |               |   |  |              |       |   |              |   |         |   |  |   | 175,623  |  
|Other long-term liabilities                |  |           |         |   |           |   | 705      |            |  |   |               |   |  |              | 4      |   |              |   |         |   |  |   | 709      |  
|                                           |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total long-term liabilities                |  |           |         |   |           |   | 390,936  |            |  |   |               |   |  |              | 4      |   |              |   |         |   |  |   | 390,940  |  
|                                           |  |           |          |   |           |  
|Stockholders equity:                      |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Common stock                               |  |           | 68       |   |           |   |         |            |  |   | 116,630        |   |  |              | 31     |   |              |   | (116,661 | ) |  |   | 68       |  
|Additional paid-in capital                 |  |           | 457,557  |   |           |   | 457,557  |            |  |   |               |   |  |              | 40,997 |   |              |   | (498,554 | ) |  |   | 457,557  |  
|Accumulated deficit                        |  |           | (121,464 | ) |           |   | (121,464 | )          |  |   | (116,245       | ) |  |              | (3,506 | ) |              |   | 241,215  |   |  |   | (121,464 | )
|Accumulated other comprehensive income     |  |           | 6        |   |           |   | 6        |            |  |   |               |   |  |              | 6      |   |              |   | (12      | ) |  |   | 6        |  
|Less treasury stock, at cost               |  |           | (28      | ) |           |   |         |            |  |   |               |   |  |              |       |   |              |   |         |   |  |   | (28      | )
|                                           |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total stockholders equity                 |  |           | 336,139  |   |           |   | 336,099  |            |  |   | 385            |   |  |              | 37,528 |   |              |   | (374,012 | ) |  |   | 336,139  |  
|                                           |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total liabilities and stockholders equity |  | $         | 336,152  |   |           | $ | 762,926  |            |  | $ | 423            |   |  | $            | 56,711 |   |              | $ | (379,138 | ) |  | $ | 777,074  |  
|                                           |  |           |          |   |           |   |          |            |  |   |                |   |  |              |        |   |              |   |          |   |  |   |          |  



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CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

THREE MONTHS ENDED JUNE 30, 2006



|                                                                                    |  |           |        |   |           |   |        |            |  |                |    |  |              |       |   |              |   |         |   |  |   |        |  
|----------------------------------------------------------------------------------- |  | --------- | ------ | - | --------- | - | ------ | ---------- |  | -------------- | -- |  | ------------ | ----- | - | ------------ | - | ------- | - |  | - | ------ | -
|                                                                                    |  | Syniverse |        |   |           |   |        | Subsidiary |  | Subsidiary     |    |  |              |       |   |              |  
|                                                                                    |  | Inc.      |        |   | Syniverse |   |        | Guarantors |  | Non-Guarantors |    |  | Eliminations |       |   | Consolidated |  
|Revenues                                                                            |  | $         |       |   |           | $ | 80,032 |            |  | $              | 57 |  | $            | 2,105 |   |              | $ |        |   |  | $ | 82,194 |  
|                                                                                    |  |           |        |   |           |   |        |            |  |                |    |  |              |       |   |              |   |         |   |  |   |        |  
|Costs and expenses:                                                                 |  |           |        |   |           |   |        |            |  |                |    |  |              |       |   |              |   |         |   |  |   |        |  
|Cost of operations (excluding depreciation and amortization shown separately below) |  |           | 49     |   |           |   | 32,631 |            |  |                |   |  |              | 865   |   |              |   |        |   |  |   | 33,545 |  
|Sales and marketing                                                                 |  |           | 50     |   |           |   | 5,813  |            |  |                |   |  |              | 1,008 |   |              |   |        |   |  |   | 6,871  |  
|General and administrative                                                          |  |           | 194    |   |           |   | 12,865 |            |  |                | 3  |  |              | 238   |   |              |   |        |   |  |   | 13,300 |  
|Provision for uncollectible accounts                                                |  |           |       |   |           |   | 361    |            |  |                |   |  |              | 12    |   |              |   |        |   |  |   | 373    |  
|Depreciation and amortization                                                       |  |           |       |   |           |   | 9,765  |            |  |                |   |  |              | 103   |   |              |   |        |   |  |   | 9,868  |  
|                                                                                    |  |           |        |   |           |   |        |            |  |                |    |  |              |       |   |              |   |         |   |  |   |        |  
|                                                                                    |  |           | 293    |   |           |   | 61,435 |            |  |                | 3  |  |              | 2,226 |   |              |   |        |   |  |   | 63,957 |  
|                                                                                    |  |           |        |   |           |   |        |            |  |                |    |  |              |       |   |              |   |         |   |  |   |        |  
|Operating income (loss)                                                             |  |           | (293   | ) |           |   | 18,597 |            |  |                | 54 |  |              | (121  | ) |              |   |        |   |  |   | 18,237 |  
|                                                                                    |  |           |        |   |           |  
|Other income (expense), net:                                                        |  |           |        |   |           |   |        |            |  |                |    |  |              |       |   |              |   |         |   |  |   |        |  
|Income from equity investment                                                       |  |           | 12,479 |   |           |   | 77     |            |  |                |   |  |              |      |   |              |   | (12,556 | ) |  |   |       |  
|Interest income                                                                     |  |           |       |   |           |   | 442    |            |  |                |   |  |              | 3     |   |              |   |        |   |  |   | 445    |  
|Interest expense                                                                    |  |           |       |   |           |   | (6,668 | )          |  |                |   |  |              | (39   | ) |              |   |        |   |  |   | (6,707 | )
|Other, net                                                                          |  |           |       |   |           |   | 31     |            |  |                |   |  |              | 180   |   |              |   |        |   |  |   | 211    |  
|                                                                                    |  |           |        |   |           |   |        |            |  |                |    |  |              |       |   |              |   |         |   |  |   |        |  
|                                                                                    |  |           | 12,479 |   |           |   | (6,118 | )          |  |                |   |  |              | 144   |   |              |   | (12,556 | ) |  |   | (6,051 | )
|                                                                                    |  |           |        |   |           |   |        |            |  |                |    |  |              |       |   |              |   |         |   |  |   |        |  
|Income before provision for income taxes                                            |  |           | 12,186 |   |           |   | 12,479 |            |  |                | 54 |  |              | 23    |   |              |   | (12,556 | ) |  |   | 12,186 |  
|                                                                                    |  |           |        |   |           |  
|Provision for income taxes                                                          |  |           | 2,699  |   |           |   | 2,699  |            |  |                |   |  |              |      |   |              |   | (2,699  | ) |  |   | 2,699  |  
|                                                                                    |  |           |        |   |           |   |        |            |  |                |    |  |              |       |   |              |   |         |   |  |   |        |  
|Net income                                                                          |  | $         | 9,487  |   |           | $ | 9,780  |            |  | $              | 54 |  | $            | 23    |   |              | $ | (9,857  | ) |  | $ | 9,487  |  
|                                                                                    |  |           |        |   |           |   |        |            |  |                |    |  |              |       |   |              |   |         |   |  |   |        |  



17



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##### Table of Contents

CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2006



|                                                                                    |  |           |        |   |           |   |         |            |  |                |     |  |              |       |   |              |   |         |   |  |   |         |  
|----------------------------------------------------------------------------------- |  | --------- | ------ | - | --------- | - | ------- | ---------- |  | -------------- | --- |  | ------------ | ----- | - | ------------ | - | ------- | - |  | - | ------- | -
|                                                                                    |  | Syniverse |        |   |           |   |         | Subsidiary |  | Subsidiary     |     |  |              |       |   |              |  
|                                                                                    |  | Inc.      |        |   | Syniverse |   |         | Guarantors |  | Non-Guarantors |     |  | Eliminations |       |   | Consolidated |  
|Revenues                                                                            |  | $         |       |   |           | $ | 153,652 |            |  | $              | 113 |  | $            | 3,846 |   |              | $ |        |   |  | $ | 157,611 |  
|                                                                                    |  |           |        |   |           |   |         |            |  |                |     |  |              |       |   |              |   |         |   |  |   |         |  
|Costs and expenses:                                                                 |  |           |        |   |           |   |         |            |  |                |     |  |              |       |   |              |   |         |   |  |   |         |  
|Cost of operations (excluding depreciation and amortization shown separately below) |  |           | 52     |   |           |   | 63,162  |            |  |                |    |  |              | 1,537 |   |              |   |        |   |  |   | 64,751  |  
|Sales and marketing                                                                 |  |           | 53     |   |           |   | 10,715  |            |  |                |    |  |              | 1,596 |   |              |   |        |   |  |   | 12,364  |  
|General and administrative                                                          |  |           | 224    |   |           |   | 30,040  |            |  |                | 3   |  |              | 329   |   |              |   |        |   |  |   | 30,596  |  
|Provision for uncollectible accounts                                                |  |           |       |   |           |   | 376     |            |  |                |    |  |              | 12    |   |              |   |        |   |  |   | 388     |  
|Depreciation and amortization                                                       |  |           |       |   |           |   | 19,644  |            |  |                |    |  |              | 205   |   |              |   |        |   |  |   | 19,849  |  
|Restructuring                                                                       |  |           |       |   |           |   | 338     |            |  |                |    |  |              |      |   |              |   |         |   |  |   | 338     |  
|                                                                                    |  |           |        |   |           |   |         |            |  |                |     |  |              |       |   |              |   |         |   |  |   |         |  
|                                                                                    |  |           | 329    |   |           |   | 124,275 |            |  |                | 3   |  |              | 3,679 |   |              |   |        |   |  |   | 128,286 |  
|                                                                                    |  |           |        |   |           |   |         |            |  |                |     |  |              |       |   |              |   |         |   |  |   |         |  
|Operating income (loss)                                                             |  |           | (329   | ) |           |   | 29,377  |            |  |                | 110 |  |              | 167   |   |              |   |        |   |  |   | 29,325  |  
|                                                                                    |  |           |        |   |           |  
|Other income (expense), net:                                                        |  |           |        |   |           |   |         |            |  |                |     |  |              |       |   |              |   |         |   |  |   |         |  
|Income from equity investment                                                       |  |           | 16,690 |   |           |   | 80      |            |  |                |    |  |              |      |   |              |   | (16,770 | ) |  |   |        |  
|Interest income                                                                     |  |           |       |   |           |   | 1,075   |            |  |                |    |  |              | 4     |   |              |   |        |   |  |   | 1,079   |  
|Interest expense                                                                    |  |           |       |   |           |   | (13,382 | )          |  |                |    |  |              | (67   | ) |              |   |        |   |  |   | (13,449 | )
|Loss on extinguishment of debt                                                      |  |           |       |   |           |   | (924    | )          |  |                |    |  |              |      |   |              |   |        |   |  |   | (924    | )
|Other, net                                                                          |  |           |       |   |           |   | 464     |            |  |                |    |  |              | (134  | ) |              |   |        |   |  |   | 330     |  
|                                                                                    |  |           |        |   |           |   |         |            |  |                |     |  |              |       |   |              |   |         |   |  |   |         |  
|                                                                                    |  |           | 16,690 |   |           |   | (12,687 | )          |  |                |    |  |              | (197  | ) |              |   | (16,770 | ) |  |   | (12,964 | )
|                                                                                    |  |           |        |   |           |   |         |            |  |                |     |  |              |       |   |              |   |         |   |  |   |         |  
|Income (loss) before provision for income taxes                                     |  |           | 16,361 |   |           |   | 16,690  |            |  |                | 110 |  |              | (30   | ) |              |   | (16,770 | ) |  |   | 16,361  |  
|                                                                                    |  |           |        |   |           |  
|Provision for income taxes                                                          |  |           | 3,324  |   |           |   | 3,324   |            |  |                |    |  |              |      |   |              |   | (3,324  | ) |  |   | 3,324   |  
|                                                                                    |  |           |        |   |           |   |         |            |  |                |     |  |              |       |   |              |   |         |   |  |   |         |  
|Net income (loss)                                                                   |  |           | 13,037 |   |           |   | 13,366  |            |  |                | 110 |  |              | (30   | ) |              |   | (13,446 | ) |  |   | 13,037  |  
|                                                                                    |  |           |        |   |           |  
|Preferred stock dividends                                                           |  |           |       |   |           |   |        |            |  |                |    |  |              |      |   |              |   |        |   |  |   |        |  
|                                                                                    |  |           |        |   |           |   |         |            |  |                |     |  |              |       |   |              |   |         |   |  |   |         |  
|Net income (loss) attributable to common stockholders                               |  | $         | 13,037 |   |           | $ | 13,366  |            |  | $              | 110 |  | $            | (30   | ) |              | $ | (13,446 | ) |  | $ | 13,037  |  
|                                                                                    |  |           |        |   |           |   |         |            |  |                |     |  |              |       |   |              |   |         |   |  |   |         |  



18



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##### Table of Contents

CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2006



|                                                                                         |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|---------------------------------------------------------------------------------------- |  | --------- | ------- | - | --------- | - | ------- | ---------- |  | - | -------------- | - |  | ------------ | ------ | - | ------------ | - | ------- | - |  | - | ------- | -
|                                                                                         |  | Syniverse |         |   |           |   |         | Subsidiary |  |   | Subsidiary     |   |  |              |        |   |              |  
|                                                                                         |  | Inc.      |         |   | Syniverse |   |         | Guarantors |  |   | Non-Guarantors |   |  | Eliminations |        |   | Consolidated |  
|Cash flows from operating activities                                                     |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Net income (loss)                                                                        |  | $         | 13,037  |   |           | $ | 13,366  |            |  | $ | 110            |   |  | $            | (30    | ) |              | $ | (13,446 | ) |  | $ | 13,037  |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Depreciation and amortization including amortization of deferred debt issuance costs     |  |           |        |   |           |   | 20,353  |            |  |   |               |   |  |              | 115    |   |              |   |        |   |  |   | 20,468  |  
|Provision for uncollectible accounts                                                     |  |           |        |   |           |   | 376     |            |  |   |               |   |  |              | 12     |   |              |   |        |   |  |   | 388     |  
|Deferred income tax expense                                                              |  |           |        |   |           |   | 3,262   |            |  |   |               |   |  |              |       |   |              |   |        |   |  |   | 3,262   |  
|Income from equity investment                                                            |  |           | (16,690 | ) |           |   | (80     | )          |  |   |               |   |  |              |       |   |              |   | 16,770  |   |  |   |        |  
|Loss on extinguishment of debt                                                           |  |           |        |   |           |   | 924     |            |  |   |               |   |  |              |       |   |              |   |        |   |  |   | 924     |  
|Loss on disposal of property                                                             |  |           |        |   |           |   | 158     |            |  |   |               |   |  |              |       |   |              |   |        |   |  |   | 158     |  
|Stock-based compensation                                                                 |  |           | 329     |   |           |   |        |            |  |   |               |   |  |              |       |   |              |   |        |   |  |   | 329     |  
|Gain on sale of marketable securities                                                    |  |           |        |   |           |   | (119    | )          |  |   |               |   |  |              |       |   |              |   |        |   |  |   | (119    | )
|Changes in operating assets and liabilities:                                             |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Accounts receivable                                                                      |  |           |        |   |           |   | (1,943  | )          |  |   | 658            |   |  |              | (1,361 | ) |              |   |        |   |  |   | (2,646  | )
|Other current assets                                                                     |  |           |        |   |           |   | (1,420  | )          |  |   |               |   |  |              | 6      |   |              |   |        |   |  |   | (1,414  | )
|Accounts payable                                                                         |  |           |        |   |           |   | (10,479 | )          |  |   |               |   |  |              | 281    |   |              |   |        |   |  |   | (10,198 | )
|Other current liabilities                                                                |  |           | 3,298   |   |           |   | 2,742   |            |  |   | (828           | ) |  |              | 799    |   |              |   | (3,324  | ) |  |   | 2,687   |  
|Other assets and liabilities                                                             |  |           |        |   |           |   | (532    | )          |  |   |               |   |  |              | 4      |   |              |   |        |   |  |   | (528    | )
|                                                                                         |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Net cash provided by (used in) operating activities                                      |  |           | (26     | ) |           |   | 26,608  |            |  |   | (60            | ) |  |              | (174   | ) |              |   |        |   |  |   | 26,348  |  
|                                                                                         |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Cash flows from investing activities                                                     |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Capital expenditures                                                                     |  |           |        |   |           |   | (10,821 | )          |  |   |               |   |  |              |       |   |              |   |        |   |  |   | (10,821 | )
|Proceeds from sale of marketable securities                                              |  |           |        |   |           |   | 119     |            |  |   |               |   |  |              |       |   |              |   |        |   |  |   | 119     |  
|ITHL acquisition, net of acquired cash                                                   |  |           |        |   |           |   | (38,856 | )          |  |   |               |   |  |              | 1,131  |   |              |   |        |   |  |   | (37,725 | )
|                                                                                         |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Net cash provided by (used) in investing activities                                      |  |           |        |   |           |   | (49,558 | )          |  |   |               |   |  |              | 1,131  |   |              |   |        |   |  |   | (48,427 | )
|                                                                                         |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Cash flows from financing activities                                                     |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Stock options exercised                                                                  |  |           | 63      |   |           |   |        |            |  |   |               |   |  |              |       |   |              |   |        |   |  |   | 63      |  
|Repayment of senior subordinated notes including prepayment premium and related fees     |  |           |        |   |           |   | (15,424 | )          |  |   |               |   |  |              |       |   |              |   |        |   |  |   | (15,424 | )
|Principal payments on credit facility                                                    |  |           |        |   |           |   | (902    | )          |  |   |               |   |  |              |       |   |              |   |        |   |  |   | (902    | )
|Purchase of treasury stock                                                               |  |           | (5      | ) |           |   |        |            |  |   |               |   |  |              |       |   |              |   |        |   |  |   | (5      | )
|                                                                                         |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Net cash provided by (used) in financing activities                                      |  |           | 58      |   |           |   | (16,326 | )          |  |   |               |   |  |              |       |   |              |   |        |   |  |   | (16,268 | )
|                                                                                         |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Effect of exchange rate changes on cash                                                  |  |           |        |   |           |   |        |            |  |   |               |   |  |              | 122    |   |              |   |        |   |  |   | 122     |  
|                                                                                         |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Net increase (decrease) in cash                                                          |  |           | 32      |   |           |   | (39,276 | )          |  |   | (60            | ) |  |              | 1,079  |   |              |   |        |   |  |   | (38,225 | )
|Cash at beginning of period                                                              |  |           | 8       |   |           |   | 47,896  |            |  |   | 60             |   |  |              | 1,330  |   |              |   |        |   |  |   | 49,294  |  
|                                                                                         |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  
|Cash at end of period                                                                    |  | $         | 40      |   |           | $ | 8,620   |            |  | $ |               |   |  | $            | 2,409  |   |              | $ |        |   |  | $ | 11,069  |  
|                                                                                         |  |           |         |   |           |   |         |            |  |   |                |   |  |              |        |   |              |   |         |   |  |   |         |  



19



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##### Table of Contents

CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2005



|                                                                              |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|----------------------------------------------------------------------------- |  | ------------- | -------- | - | --------- | - | -------- | -------------------- |  | - | ------------------------ | - |  | ------------ | ------ | - | ------------ | - | -------- | - |  | - | -------- | -
|                                                                              |  | SyniverseInc. |          |   | Syniverse |   |          | SubsidiaryGuarantors |  |   | SubsidiaryNon-Guarantors |   |  | Eliminations |        |   | Consolidated |  
|ASSETS                                                                        |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Current assets:                                                               |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Cash and cash equivalents                                                     |  | $             | 8        |   |           | $ | 47,896   |                      |  | $ | 60                       |   |  | $            | 1,330  |   |              | $ |         |   |  | $ | 49,294   |  
|Accounts receivable, net of allowances                                        |  |               |         |   |           |   | 59,814   |                      |  |   | 650                      |   |  |              | 1,271  |   |              |   |         |   |  |   | 61,735   |  
|Accounts receivableaffiliates                                                |  |               |         |   |           |   | 4,050    |                      |  |   | 431                      |   |  |              |       |   |              |   | (4,481   | ) |  |   |         |  
|Deferred tax assets, net                                                      |  |               |         |   |           |   |         |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   |         |  
|Prepaid and other current assets                                              |  |               |         |   |           |   | 4,147    |                      |  |   | 117                      |   |  |              | 115    |   |              |   |         |   |  |   | 4,379    |  
|                                                                              |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total current assets                                                          |  |               | 8        |   |           |   | 115,907  |                      |  |   | 1,258                    |   |  |              | 2,716  |   |              |   | (4,481   | ) |  |   | 115,408  |  
|                                                                              |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Property and equipment, net                                                   |  |               |         |   |           |   | 43,318   |                      |  |   |                         |   |  |              | 108    |   |              |   |         |   |  |   | 43,426   |  
|Capitalized software, net                                                     |  |               |         |   |           |   | 52,525   |                      |  |   |                         |   |  |              | 149    |   |              |   |         |   |  |   | 52,674   |  
|Deferred costs, net                                                           |  |               |         |   |           |   | 6,218    |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   | 6,218    |  
|Goodwill                                                                      |  |               |         |   |           |   | 361,311  |                      |  |   |                         |   |  |              | 754    |   |              |   |         |   |  |   | 362,065  |  
|Identifiable intangibles, net:                                                |  |               |          |   |           |   |          |                      |  |   |                         |   |  |              |        |   |              |   |          |   |  |   |          |  
|Customer contract, net                                                        |  |               |         |   |           |   | 1        |                      |  |   |                         |   |  |              | 300    |   |              |   |         |   |  |   | 301      |  
|Customer base, net                                                            |  |               |         |   |           |   | 190,026  |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   | 190,026  |  
|Other assets                                                                  |  |               |         |   |           |   | 1,240    |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   | 1,240    |  
|Investment in subsidiaries                                                    |  |               | 322,632  |   |           |   | (390     | )                    |  |   |                         |   |  |              |       |   |              |   | (322,242 | ) |  |   |         |  
|                                                                              |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total assets                                                                  |  | $             | 322,640  |   |           | $ | 770,156  |                      |  | $ | 1,258                    |   |  | $            | 4,027  |   |              | $ | (326,723 | ) |  | $ | 771,358  |  
|                                                                              |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                          |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Current liabilities:                                                          |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Accounts payable                                                              |  | $             |         |   |           | $ | 4,854    |                      |  | $ |                         |   |  | $            | 8      |   |              | $ |         |   |  | $ | 4,862    |  
|Accounts payable - affiliates                                                 |  |               |         |   |           |   |         |                      |  |   |                         |   |  |              | 4,481  |   |              |   | (4,481   | ) |  |   |         |  
|Accrued payroll and related benefits                                          |  |               | 1        |   |           |   | 11,115   |                      |  |   |                         |   |  |              | 622    |   |              |   |         |   |  |   | 11,738   |  
|Accrued interest                                                              |  |               |         |   |           |   | 5,618    |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   | 5,618    |  
|Other accrued liabilities                                                     |  |               |         |   |           |   | 20,503   |                      |  |   | 156                      |   |  |              | 408    |   |              |   |         |   |  |   | 21,067   |  
|Current portion of 123/4% senior subordinated notes due 2009, net of discount |  |               |         |   |           |   | 14,469   |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   | 14,469   |  
|Current portion of Term Note B                                                |  |               |         |   |           |   | 1,801    |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   | 1,801    |  
|                                                                              |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total current liabilities                                                     |  |               | 1        |   |           |   | 58,360   |                      |  |   | 156                      |   |  |              | 5,519  |   |              |   | (4,481   | ) |  |   | 59,555   |  
|                                                                              |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Long-term liabilities:                                                        |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Deferred tax liabilities                                                      |  |               |         |   |           |   | 36,186   |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   | 36,186   |  
|73/4%
senior subordinated notes due 2013                                      |  |               |         |   |           |   | 175,000  |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   | 175,000  |  
|Term Note B, less current maturities                                          |  |               |         |   |           |   | 176,524  |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   | 176,524  |  
|Other long-term liabilities                                                   |  |               |         |   |           |   | 1,454    |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   | 1,454    |  
|                                                                              |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total long-term liabilities                                                   |  |               |         |   |           |   | 389,164  |                      |  |   |                         |   |  |              |       |   |              |   |         |   |  |   | 389,164  |  
|Stockholders equity:                                                         |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Common stock                                                                  |  |               | 68       |   |           |   |         |                      |  |   | 117,340                  |   |  |              | 21     |   |              |   | (117,361 | ) |  |   | 68       |  
|Additional paid-in capital                                                    |  |               | 457,165  |   |           |   | 457,226  |                      |  |   |                         |   |  |              | 2,151  |   |              |   | (459,377 | ) |  |   | 457,165  |  
|Accumulated deficit                                                           |  |               | (134,501 | ) |           |   | (134,501 | )                    |  |   | (116,355                 | ) |  |              | (3,476 | ) |              |   | 254,332  |   |  |   | (134,501 | )
|Accumulated other comprehensive income (loss)                                 |  |               | (70      | ) |           |   | (70      | )                    |  |   | 117                      |   |  |              | (188   | ) |              |   | 141      |   |  |   | (70      | )
|Less treasury stock, at cost                                                  |  |               | (23      | ) |           |   | (23      | )                    |  |   |                         |   |  |              |       |   |              |   | 23       |   |  |   | (23      | )
|                                                                              |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total stockholders equity (deficit)                                          |  |               | 322,639  |   |           |   | 322,632  |                      |  |   | 1,102                    |   |  |              | (1,492 | ) |              |   | (322,242 | ) |  |   | 322,639  |  
|                                                                              |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  
|Total liabilities and stockholders equity                                    |  | $             | 322,640  |   |           | $ | 770,156  |                      |  | $ | 1,258                    |   |  | $            | 4,027  |   |              | $ | (326,723 | ) |  | $ | 771,358  |  
|                                                                              |  |               |          |   |           |   |          |                      |  |   |                          |   |  |              |        |   |              |   |          |   |  |   |          |  



20



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##### Table of Contents

CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

THREE MONTHS ENDED JUNE 30, 2005





|                                                      |  |               |        |           |   |        |                      |  |                          |     |  |              |       |   |              |   |         |   |  |   |        |  
|----------------------------------------------------- |  | ------------- | ------ | --------- | - | ------ | -------------------- |  | ------------------------ | --- |  | ------------ | ----- | - | ------------ | - | ------- | - |  | - | ------ | -
|                                                      |  | SyniverseInc. |        | Syniverse |   |        | SubsidiaryGuarantors |  | SubsidiaryNon-Guarantors |     |  | Eliminations |       |   | Consolidated |  
|Revenues                                              |  | $             |       |           | $ | 85,859 |                      |  | $                        | 164 |  | $            | 852   |   |              | $ |        |   |  | $ | 86,875 |  
|                                                      |  |               |        |           |   |        |                      |  |                          |     |  |              |       |   |              |   |         |   |  |   |        |  
|Costs and expenses:                                   |  |               |        |           |   |        |                      |  |                          |     |  |              |       |   |              |   |         |   |  |   |        |  
|Cost of operations                                    |  |               |       |           |   | 34,151 |                      |  |                          |    |  |              | 295   |   |              |   |        |   |  |   | 34,446 |  
|Sales and marketing                                   |  |               |       |           |   | 5,066  |                      |  |                          |    |  |              | 746   |   |              |   |        |   |  |   | 5,812  |  
|General and administrative                            |  |               |       |           |   | 11,846 |                      |  |                          | 1   |  |              | 290   |   |              |   |        |   |  |   | 12,137 |  
|Provision for uncollectible accounts                  |  |               |       |           |   | 243    |                      |  |                          |    |  |              |      |   |              |   |        |   |  |   | 243    |  
|Depreciation and amortization                         |  |               |       |           |   | 12,124 |                      |  |                          |    |  |              | 66    |   |              |   |        |   |  |   | 12,190 |  
|                                                      |  |               |        |           |   |        |                      |  |                          |     |  |              |       |   |              |   |         |   |  |   |        |  
|                                                      |  |               |       |           |   | 63,430 |                      |  |                          | 1   |  |              | 1,397 |   |              |   |        |   |  |   | 64,828 |  
|                                                      |  |               |        |           |   |        |                      |  |                          |     |  |              |       |   |              |   |         |   |  |   |        |  
|Operating income (loss)                               |  |               |       |           |   | 22,429 |                      |  |                          | 163 |  |              | (545  | ) |              |   |        |   |  |   | 22,047 |  
|                                                      |  |               |        |           |   |       
|Other income (expense), net:                          |  |               |        |           |   |        |                      |  |                          |     |  |              |       |   |              |   |         |   |  |   |        |  
|Income (loss) from equity investment                  |  |               | 13,855 |           |   | (386   | )                    |  |                          |    |  |              |      |   |              |   | (13,469 | ) |  |   |       |  
|Interest income                                       |  |               |       |           |   | 397    |                      |  |                          |    |  |              | 1     |   |              |   |        |   |  |   | 398    |  
|Interest expense                                      |  |               |       |           |   | (8,585 | )                    |  |                          |    |  |              | (5    | ) |              |   |        |   |  |   | (8,590 | )
|                                                      |  |               |        |           |   |        |                      |  |                          |     |  |              |       |   |              |   |         |   |  |   |        |  
|                                                      |  |               | 13,855 |           |   | (8,574 | )                    |  |                          |    |  |              | (4    | ) |              |   | (13,469 | ) |  |   | (8,192 | )
|                                                      |  |               |        |           |   |        |                      |  |                          |     |  |              |       |   |              |   |         |   |  |   |        |  
|Income (loss) before provision for income taxes       |  |               | 13,855 |           |   | 13,855 |                      |  |                          | 163 |  |              | (549  | ) |              |   | (13,469 | ) |  |   | 13,855 |  
|Provision for income taxes                            |  |               | 2,077  |           |   | 2,077  |                      |  |                          |    |  |              |      |   |              |   | (2,077  | ) |  |   | 2,077  |  
|                                                      |  |               |        |           |   |        |                      |  |                          |     |  |              |       |   |              |   |         |   |  |   |        |  
|Net income (loss)                                     |  |               | 11,778 |           |   | 11,778 |                      |  |                          | 163 |  |              | (549  | ) |              |   | (11,392 | ) |  |   | 11,778 |  
|Preferred stock dividends                             |  |               |       |           |   |       |                      |  |                          |    |  |              |      |   |              |   |        |   |  |   |       |  
|                                                      |  |               |        |           |   |        |                      |  |                          |     |  |              |       |   |              |   |         |   |  |   |        |  
|Net income (loss) attributable to common stockholders |  | $             | 11,778 |           | $ | 11,778 |                      |  | $                        | 163 |  | $            | (549  | ) |              | $ | (11,392 | ) |  | $ | 11,778 |  
|                                                      |  |               |        |           |   |        |                      |  |                          |     |  |              |       |   |              |   |         |   |  |   |        |  



21



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##### Table of Contents

CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2005



|                                                      |  |               |        |   |           |   |         |                      |  |                          |     |  |              |       |   |              |   |        |   |  |   |         |  
|----------------------------------------------------- |  | ------------- | ------ | - | --------- | - | ------- | -------------------- |  | ------------------------ | --- |  | ------------ | ----- | - | ------------ | - | ------ | - |  | - | ------- | -
|                                                      |  | SyniverseInc. |        |   | Syniverse |   |         | SubsidiaryGuarantors |  | SubsidiaryNon-Guarantors |     |  | Eliminations |       |   | Consolidated |  
|Revenues                                              |  | $             |       |   |           | $ | 164,405 |                      |  | $                        | 330 |  | $            | 1,559 |   |              | $ |       |   |  | $ | 166,294 |  
|                                                      |  |               |        |   |           |   |         |                      |  |                          |     |  |              |       |   |              |   |        |   |  |   |         |  
|Costs and expenses:                                   |  |               |        |   |           |   |         |                      |  |                          |     |  |              |       |   |              |   |        |   |  |   |         |  
|Cost of operations                                    |  |               |       |   |           |   | 66,397  |                      |  |                          |    |  |              | 475   |   |              |   |       |   |  |   | 66,872  |  
|Sales and marketing                                   |  |               |       |   |           |   | 9,867   |                      |  |                          |    |  |              | 1,607 |   |              |   |       |   |  |   | 11,474  |  
|General and administrative                            |  |               |       |   |           |   | 21,696  |                      |  |                          | 6   |  |              | 144   |   |              |   |       |   |  |   | 21,846  |  
|Provision for uncollectible accounts                  |  |               |       |   |           |   | 688     |                      |  |                          |    |  |              |      |   |              |   |       |   |  |   | 688     |  
|Depreciation and amortization                         |  |               |       |   |           |   | 23,943  |                      |  |                          |    |  |              | 132   |   |              |   |       |   |  |   | 24,075  |  
|                                                      |  |               |        |   |           |   |         |                      |  |                          |     |  |              |       |   |              |   |        |   |  |   |         |  
|                                                      |  |               |       |   |           |   | 122,591 |                      |  |                          | 6   |  |              | 2,358 |   |              |   |       |   |  |   | 124,955 |  
|                                                      |  |               |        |   |           |   |         |                      |  |                          |     |  |              |       |   |              |   |        |   |  |   |         |  
|Operating income (loss)                               |  |               |       |   |           |   | 41,814  |                      |  |                          | 324 |  |              | (799  | ) |              |   |       |   |  |   | 41,339  |  
|                                                      |  |               |        |   |           |  
|Other income (expense), net:                          |  |               |        |   |           |   |         |                      |  |                          |     |  |              |       |   |              |   |        |   |  |   |         |  
|Income (loss) from equity investment                  |  |               | (806   | ) |           |   | (476    | )                    |  |                          |    |  |              |      |   |              |   | 1,282  |   |  |   |        |  
|Interest income                                       |  |               |       |   |           |   | 733     |                      |  |                          |    |  |              | 4     |   |              |   |       |   |  |   | 737     |  
|Interest expense                                      |  |               |       |   |           |   | (19,089 | )                    |  |                          |    |  |              | (5    | ) |              |   |       |   |  |   | (19,094 | )
|Loss on extinguishment of debt                        |  |               |       |   |           |   | (23,788 | )                    |  |                          |    |  |              |      |   |              |   |       |   |  |   | (23,788 | )
|                                                      |  |               |        |   |           |   |         |                      |  |                          |     |  |              |       |   |              |   |        |   |  |   |         |  
|                                                      |  |               | (806   | ) |           |   | (42,620 | )                    |  |                          |    |  |              | (1    | ) |              |   | 1,282  |   |  |   | (42,145 | )
|                                                      |  |               |        |   |           |   |         |                      |  |                          |     |  |              |       |   |              |   |        |   |  |   |         |  
|Income (loss) before provision for income taxes       |  |               | (806   | ) |           |   | (806    | )                    |  |                          | 324 |  |              | (800  | ) |              |   | 1,282  |   |  |   | (806    | )
|Provision for income taxes                            |  |               | 4,368  |   |           |   | 4,368   |                      |  |                          |    |  |              |      |   |              |   | (4,368 | ) |  |   | 4,368   |  
|                                                      |  |               |        |   |           |   |         |                      |  |                          |     |  |              |       |   |              |   |        |   |  |   |         |  
|Net income (loss)                                     |  |               | (5,174 | ) |           |   | (5,174  | )                    |  |                          | 324 |  |              | (800  | ) |              |   | 5,650  |   |  |   | (5,174  | )
|                                                      |  |               |        |   |           |  
|Preferred stock dividends                             |  |               | (4,195 | ) |           |   |        |                      |  |                          |    |  |              |      |   |              |   |       |   |  |   | (4,195  | )
|                                                      |  |               |        |   |           |   |         |                      |  |                          |     |  |              |       |   |              |   |        |   |  |   |         |  
|Net income (loss) attributable to common stockholders |  | $             | (9,369 | ) |           | $ | (5,174  | )                    |  | $                        | 324 |  | $            | (800  | ) |              | $ | 5,650  |   |  | $ | (9,369  | )
|                                                      |  |               |        |   |           |   |         |                      |  |                          |     |  |              |       |   |              |   |        |   |  |   |         |  



22



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##### Table of Contents

CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2005



|                                                                                                     |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|---------------------------------------------------------------------------------------------------- |  | - | ------------- | - |  | - | --------- | - |  | - | -------------------- | - |  | - | ------------------------ | - |  | - | ------------ | - |  | - | ------------ | -
|                                                                                                     |  |   | SyniverseInc. |   |  |   | Syniverse |   |  |   | SubsidiaryGuarantors |   |  |   | SubsidiaryNon-Guarantors |   |  |   | Eliminations |   |  |   | Consolidated |  
|                                                                                                     |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Cash flows from operating activities                                                                 |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Net income (loss)                                                                                    |  | $ | (5,174        | ) |  | $ | (5,174    | ) |  | $ | 324                  |   |  | $ | (800                     | ) |  | $ | 5,650        |   |  | $ | (5,174       | )
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:   |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Depreciation and amortization including amortization of deferred debt issuance costs                 |  |   |              |   |  |   | 25,632    |   |  |   |                     |   |  |   | 132                      |   |  |   |             |   |  |   | 25,764       |  
|Provision for uncollectible accounts                                                                 |  |   |              |   |  |   | 688       |   |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | 688          |  
|Deferred income tax expense                                                                          |  |   |              |   |  |   | 4,364     |   |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | 4,364        |  
|(Income) loss from equity investment                                                                 |  |   | 806           |   |  |   | 476       |   |  |   |                     |   |  |   |                         |   |  |   | (1,282       | ) |  |   |             |  
|Loss on extinguishment of debt                                                                       |  |   |              |   |  |   | 23,788    |   |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | 23,788       |  
|Loss on disposition of property                                                                      |  |   |              |   |  |   | 611       |   |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | 611          |  
|Changes in current assets and liabilities:                                                           |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Accounts receivable                                                                                  |  |   |              |   |  |   | 9,007     |   |  |   | (140                 | ) |  |   | (685                     | ) |  |   |             |   |  |   | 8,182        |  
|Other current assets                                                                                 |  |   |              |   |  |   | (3,272    | ) |  |   |                     |   |  |   | 13                       |   |  |   |             |   |  |   | (3,259       | )
|Accounts payable                                                                                     |  |   |              |   |  |   | (7,567    | ) |  |   |                     |   |  |   | 1,121                    |   |  |   |             |   |  |   | (6,446       | )
|Other current liabilities                                                                            |  |   | 4,368         |   |  |   | 3,221     |   |  |   | (186                 | ) |  |   | 348                      |   |  |   | (4,368       | ) |  |   | 3,383        |  
|Other assets and liabilities                                                                         |  |   |              |   |  |   | (862      | ) |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | (862         | )
|                                                                                                     |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Net cash provided by (used in) operating activities                                                  |  |   |              |   |  |   | 50,912    |   |  |   | (2                   | ) |  |   | 129                      |   |  |   |             |   |  |   | 51,039       |  
|                                                                                                     |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Cash flows from investing activities                                                                 |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Capital expenditures                                                                                 |  |   |              |   |  |   | (14,032   | ) |  |   |                     |   |  |   | (45                      | ) |  |   |             |   |  |   | (14,077      | )
|                                                                                                     |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Net cash used in investing activities                                                                |  |   |              |   |  |   | (14,032   | ) |  |   |                     |   |  |   | (45                      | ) |  |   |             |   |  |   | (14,077      | )
|                                                                                                     |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Cash flows from financing activities                                                                 |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Debt issuance fees paid                                                                              |  |   |              |   |  |   | (1,948    | ) |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | (1,948       | )
|Repayment of 123/4%
senior subordinated notes due 2009 including prepayment premium and related fees |  |   |              |   |  |   | (98,124   | ) |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | (98,124      | )
|Repayment of previous senior credit facility                                                         |  |   |              |   |  |   | (220,073  | ) |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | (220,073     | )
|Borrowings under new senior credit facility                                                          |  |   |              |   |  |   | 240,000   |   |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | 240,000      |  
|Principal payments on senior credit facility                                                         |  |   |              |   |  |   | (1,200    | ) |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | (1,200       | )
|Proceeds from issuance of common stock, net of issuance costs of $20,847                             |  |   |              |   |  |   | 260,959   |   |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | 260,959      |  
|Redemption of class A preferred stock at liquidation value                                           |  |   |              |   |  |   | (176,456  | ) |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | (176,456     | )
|Purchase of treasury stock                                                                           |  |   |              |   |  |   | (23       | ) |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | (23          | )
|                                                                                                     |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Net cash provided by financing activities                                                            |  |   |              |   |  |   | 3,135     |   |  |   |                     |   |  |   |                         |   |  |   |             |   |  |   | 3,135        |  
|                                                                                                     |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Effect of exchange rate changes on cash                                                              |  |   |              |   |  |   |          |   |  |   |                     |   |  |   | (9                       | ) |  |   |             |   |  |   | (9           | )
|                                                                                                     |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Net increase (decrease) in cash                                                                      |  |   |              |   |  |   | 40,015    |   |  |   | (2                   | ) |  |   | 75                       |   |  |   |             |   |  |   | 40,088       |  
|Cash at beginning of period                                                                          |  |   |              |   |  |   | 17,429    |   |  |   | 62                   |   |  |   | 428                      |   |  |   |             |   |  |   | 17,919       |  
|                                                                                                     |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  
|Cash at end of period                                                                                |  | $ |              |   |  | $ | 57,444    |   |  | $ | 60                   |   |  | $ | 503                      |   |  | $ |             |   |  | $ | 58,007       |  
|                                                                                                     |  |   |               |   |  |   |           |   |  |   |                      |   |  |   |                          |   |  |   |              |   |  |   |              |  



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ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a leading provider of mission-critical technology services to wireless telecommunications companies worldwide. We serve over 350
telecommunications carriers in over 50 countries. Many of these carriers depend on our integrated suite of transaction-based services to solve the complexities associated with offering seamless wireless services, connecting disparate carrier
networks and facilitating the rapid deployment of next-generation wireless services. Our services enable wireless carriers to provide their customers with enhanced wireless services including national and international wireless voice and data
roaming, caller ID, Short Message Service (SMS) messaging, Multimedia Messaging Services (MMS), wireless number portability and wireless data content.

Company History and Recent Events

Our business was founded in 1987 as GTE Telecommunication Services Inc., a unit of GTE.
In early 2000, GTE combined our business with its Intelligent Network Services business to further broaden our network services offering. In June 2000, when GTE and Bell Atlantic merged to form Verizon Communications Inc., we became an indirect,
wholly owned subsidiary of Verizon. In February 2002, we were acquired from Verizon by members of our senior management team and an investor group led by GTCR Golder Rauner, LLC (GTCR).

On February 9, 2005, Syniverse Holdings, LLC (Syniverse LLC) entered into an Amendment No. 1 to Limited Liability Company Agreement and
Dissolution Agreement, dated as of February 9, 2005, with Syniverse Holdings, Inc. (Syniverse Inc.) and certain members of Syniverse LLC (the Dissolution Agreement). The Dissolution Agreement provided, among other things, for (i) the
distribution of the capital stock of Syniverse Inc. to the members of Syniverse LLC, (ii) the termination of certain equity agreements among Syniverse LLC and its members and (iii) the subsequent dissolution of Syniverse LLC.

On February 9, 2005, we merged our subsidiaries, Syniverse Networks and Syniverse Finance, with and into Syniverse Technologies, Inc.
(Syniverse).

On February 10, 2005, we completed an initial public offering of 17,620,000 shares of common stock at a price of $16.00
per common share. The net proceeds of the offering were $261.0 million after deducting underwriting discounts, commissions and expenses, and, along with the $240.0 million received from our new credit facility, were used primarily to redeem 124,876
shares of our class A cumulative redeemable preferred stock as described below, tender for $85,750 of our 123/4%
senior subordinated notes and repay our previous senior credit facility.

On February 15, 2005, we redeemed 124,876 shares of
our class A cumulative redeemable convertible preferred stock, including accrued and unpaid dividends, with $176.5 million of proceeds received from our initial public offering completed on February 10, 2005.

On March 28, 2005, we converted the remaining 115,604 shares of our class A cumulative redeemable convertible preferred stock, including accrued and
unpaid dividends, at a liquidation value of $163.4 million into 10,209,598 shares of our common stock.

Acquisitions

On June 16, 2006, we acquired the capital stock of Perfect Profits International Limited (PPIL) which comprises the Interactive Technologies Holdings
Limited business (ITHL), from Interactive Technologies Holdings Limited for $37,746 in cash including preliminary working capital adjustments. In connection with the acquisition, we incurred $1,110 in acquisition related costs. In addition, the
purchase agreement contains certain earn-out provisions, pursuant to which the sellers may receive up to $7,000 in additional cash consideration based upon achieving certain levels of revenues and EBITDA. Headquartered in Hong Kong, ITHL is a
leading provider of value-added services to carriers in the Asia Pacific region. We believe the acquisition expands our footprint in the Asia Pacific region and adds a complementary customer base, new products, advanced development capabilities and
in-region customer support.

Introduction

We provide an integrated suite of services that simplify wireless technology complexities by integrating disparate wireless carriers systems and networks in order to provide seamless global voice and data communications to wireless
subscribers. These services include:



| |  |  | Technology Interoperability Services. We operate the largest wireless clearinghouse in the world that enables the accurate invoicing and settlement of domestic and
international wireless roaming telephone calls and wireless data events. We also provide SMS and MMS routing and translation services between carriers.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| |  |  | Network Services. Through our SS7 network, we connect disparate wireless carrier networks and enable access to intelligent network database services like caller ID, and
provide translation and routing services to support the delivery and establishment of telephone calls.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Number Portability Services. Our number portability services are used by many wireless carriers, including the five largest domestic carriers, to enable wireless subscribers
to switch service providers while keeping the same telephone number.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Call Processing Services. We provide wireless carriers global call handling and fraud management solutions that allow wireless subscribers from one carrier to make and accept
telephone calls while roaming on another carriers network.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Enterprise Solutions.Our enterprise wireless data management platform allows carriers to offer large corporate customers reporting and analysis tools to manage
telecom-related expenses.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Off-Network Database Queries. We provide our network customers with access to various third-party intelligent network databases.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

Revenues

Most of our revenues are transaction-based
and derived from long-term contracts, typically with terms averaging three years in duration. Most of the services and solutions we offer to our customers are based on applications, network connectivity and technology platforms owned and operated by
us. A small amount of our revenues are generated through software license sales. We generate our revenues through the sale of our technology interoperability services, network services, number portability services, call processing services and
enterprise solutions to telecommunications carriers throughout the world. In order to encourage higher customer transaction volumes, we generally negotiate tiered and flat rate pricing schedules with our customers based on certain established
transaction volume levels. As a result, the average per-transaction fee for many of our products has declined over time as customers have increasingly used our services and transaction volumes have grown. We expect this trend to continue. Generally,
there is also a slight increase in wireless roaming telephone usage and corresponding revenues in the high-travel months of the second and third fiscal quarters.

Future increases or decreases in revenues are dependent on many factors, such as industry subscriber growth, with few of these factors known in advance. From time to time, specific events such as customer contract
renewals at different terms, a customer contract termination, a customers decision to change technologies or to provide solutions in-house, will be known to us and then we can estimate their impact on our revenues.

Set forth below is a brief description of our primary service offerings and associated revenue recognition:



| |  |  | Technology Interoperability Services. We operate the largest wireless clearinghouse in the world that enables the accurate invoicing and settlement of domestic and
international wireless roaming telephone calls and wireless data events. We also provide SMS and MMS routing and translation services between carriers. Wireless carriers send data records to our service platforms for processing, aggregation,
translation and distribution among carriers. We primarily generate revenues by charging per-transaction processing fees based on the number of data/messaging records provided to us by wireless carriers for our wireless roaming clearinghouse and SMS
and MMS routing services. We recognize revenues at the time the transactions are processed. Over time, we expect the average per-transaction fee for certain services to continue to decline as a result of our volume-based pricing strategy as well as
potential competitive pricing pressure.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Network Services. Through our SS7 network, we connect disparate wireless carrier networks and enable access to intelligent network database services like caller ID. We also
provide translation and routing services to support the delivery and establishment of telephone calls. SS7 is the telecommunications industrys standard network signaling protocol used by substantially all carriers to enable critical
telecommunications functions such as line busy signals, toll-free calling services and caller ID. We primarily generate revenues by charging either per-transaction or fixed processing fees determined by expected customer volumes. In addition, our
customers pay monthly connection fees based on the number of network connections as well as the number of switches with which a customer communicates. The per-transaction fees are based on the number of intelligent network messages and intelligent
network database queries made through our network and are recognized as revenues at the time the transactions are processed. Over time, we expect the average per-transaction fee for certain services will continue to decline as a result of our
volume-based pricing strategy and potential competitive pricing pressures.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Number Portability Services. We provide number portability services to the wireless industry. When wireless subscribers choose to change carriers but keep their existing
telephone number, the former carrier must send the subscribers information to the new carrier. Our services perform the necessary processing between the two carriers to allow the subscribers to change service providers while keeping their
existing telephone number. We primarily generate revenues by charging per-transaction processing fees, monthly fixed fees and fees for customer implementations. We recognize processing revenues at the time the transactions and services are
processed. We recognize monthly fixed fees
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

as revenues on a monthly basis as the services are performed. We defer revenues and incremental
customer-specific costs related to customer implementations and recognize these fees and costs on a straight-line basis over the shorter of the life of the initial customer agreement or the period remaining until the amended contract end date for
those contracts terminated early. We expect pricing and revenues to remain stable over the near term. However, several of the contracts with our customers, that have a substantial revenue value, will be up for renewal at the end of the current year,
which could have an effect on the revenues that we receive.



| |  | Call Processing Services. We provide wireless carriers global call handling and fraud management solutions that allow wireless subscribers from one carrier to make and accept
calls while roaming on another carriers network. We primarily generate revenues by charging per-transaction processing fees based on the number of validation, authorization and other call processing messages generated by wireless subscribers.
We recognize processing fee revenues at the time the transactions are processed. We expect our call processing revenues will continue to decline, although at a lower than historical rate as there has been an increase in demand for our signaling
solutions services, offset by a reduction of our traditional call processing solution.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Enterprise Solutions Services. Our enterprise wireless data management platform allows carriers to offer large corporate customers reporting and analysis tools to manage
telecom-related expenses. We primarily generate revenues by charging per-subscriber fees. We recognize these revenues at the time the service is performed. We expect a gradual decline in these revenues as customers migrate off of our wireless data
management platform.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Off-Network Database Queries.Through interconnection with other carrier networks, we have access to other service providers databases that support caller ID and
toll-free routing. If one of our customers uses our network to access another service providers database, we are charged fees for access to that database. We pass these charges onto our customers, with little or no margin, based upon the
charges we receive from these database providers. We recognize revenues at the time the transaction is performed. Over time, these revenues are expected to continue to decline as customers seek direct connections with the database providers.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For more information about how we recognize revenues for each of our service categories, please see the discussion below under
Critical Accounting Policies and Estimates.

Costs and Expenses

Our costs and expenses consist of cost of operations, sales and marketing, general and administrative and depreciation and amortization.



| |  | Cost of operations includes data processing costs, network costs, royalty costs, personnel costs associated with service implementation, training and customer care and off-network
database query charges.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sales and marketing includes personnel costs, advertising costs, trade show costs and relationship marketing costs.
| | - | -------------------------------------------------------------------------------------------------------------------



| |  | General and administrative consists primarily of research and development expenses, a portion of the expenses associated with our facilities, internal management expenses, business
development expenses, and expenses for finance, legal, human resources and other administrative departments. In addition, we incur significant service development costs. These costs, which are primarily personnel, relate to technology creation,
enhancement and maintenance of new and existing services. Historically, most of these costs are expensed and recorded as general and administrative expenses. The capitalized portion, which is recorded as capitalized software costs, relates to costs
incurred during the application development stage for the new service offerings and significant service enhancements.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Depreciation and amortization relate primarily to our property and equipment including our SS7 network, infrastructure facilities related to information management and other
intangible assets recorded in purchase accounting.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Results of Operations

The following tables present an overview of our results of operations for the three and six months ended June 30, 2006 and 2005:



|                                               |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|---------------------------------------------- |  | ---------------------- | ------ | - | -------- | ----- | -- | ------------- | - | ------ | -------- |  | ----- | ------------- |  | - | ------ | - |  | ----- | --
|                                               |  | Three Months           |        |   |          |       |    | Three Months  |   |        |          |  |       |               |  |   | $      |  
|                                               |  | Ended                  |        |   | % of     |       |    | Ended         |   |        | % of     |  |       | 2006 vs. 2005 |  |   | Change |  
|                                               |  | June 30, 2006          |        |   | Revenues |       |    | June 30, 2005 |   |        | Revenues |  |       | $             |  |   | %      |  
|                                               |  | (dollars in thousands) |       
|Revenues:                                      |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|Technology Interoperability Services           |  | $                      | 30,798 |   |          | 37.4  | %  |               | $ | 27,201 |          |  | 31.3  | %             |  | $ | 3,597  |   |  | 13.2  | % 
|Network Services                               |  |                        | 31,549 |   |          | 38.4  | %  |               |   | 33,415 |          |  | 38.5  | %             |  |   | (1,866 | ) |  | (5.6  | )%
|Number Porting Services                        |  |                        | 7,220  |   |          | 8.8   | %  |               |   | 12,607 |          |  | 14.5  | %             |  |   | (5,387 | ) |  | (42.7 | )%
|Call Processing Services                       |  |                        | 7,288  |   |          | 8.9   | %  |               |   | 7,322  |          |  | 8.4   | %             |  |   | (34    | ) |  | (0.5  | )%
|Enterprise Solutions                           |  |                        | 2,084  |   |          | 2.5   | %  |               |   | 2,927  |          |  | 3.4   | %             |  |   | (843   | ) |  | (28.8 | )%
|                                               |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|Revenues excluding Off-Network Data Base       |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|Query Fees                                     |  |                        | 78,939 |   |          | 96.0  | %  |               |   | 83,472 |          |  | 96.1  | %             |  |   | (4,533 | ) |  | (5.4  | )%
|Off-Network Database Query Fees                |  |                        | 3,255  |   |          | 4.0   | %  |               |   | 3,403  |          |  | 3.9   | %             |  |   | (148   | ) |  | (4.3  | )%
|                                               |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|Total revenues                                 |  |                        | 82,194 |   |          | 100.0 | %  |               |   | 86,875 |          |  | 100.0 | %             |  |   | (4,681 | ) |  | (5.4  | )%
|                                               |  |                        |        |   |          |      
|Costs and expenses:                            |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|Cost of operations                             |  |                        | 33,545 |   |          | 40.8  | %  |               |   | 34,446 |          |  | 39.6  | %             |  |   | (901   | ) |  | (2.6  | )%
|Sales and marketing                            |  |                        | 6,871  |   |          | 8.4   | %  |               |   | 5,812  |          |  | 6.7   | %             |  |   | 1,059  |   |  | 18.2  | % 
|General and administrative                     |  |                        | 13,300 |   |          | 16.2  | %  |               |   | 12,137 |          |  | 14.0  | %             |  |   | 1,163  |   |  | 9.6   | % 
|Provision for uncollectible accounts           |  |                        | 373    |   |          | 0.5   | %  |               |   | 243    |          |  | 0.3   | %             |  |   | 130    |   |  | 53.5  | % 
|Depreciation and amortization                  |  |                        | 9,868  |   |          | 12.0  | %  |               |   | 12,190 |          |  | 14.0  | %             |  |   | (2,322 | ) |  | (19.0 | )%
|Restructuring                                  |  |                        |       |   |          | 0.0   | %  |               |   |       |          |  | 0.0   | %             |  |   |       |   |  | 0.0   | % 
|                                               |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|                                               |  |                        | 63,957 |   |          | 77.8  | %  |               |   | 64,828 |          |  | 74.6  | %             |  |   | (871   | ) |  | (1.3  | )%
|                                               |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|Operating income                               |  |                        | 18,237 |   |          | 22.2  | %  |               |   | 22,047 |          |  | 25.4  | %             |  |   | 3,810  |   |  | 17.3  | % 
|                                               |  |                        |        |   |          |      
|Other income (expense), net:                   |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|Interest income                                |  |                        | 445    |   |          | 0.5   | %  |               |   | 398    |          |  | 0.5   | %             |  |   | 47     |   |  | 11.8  | % 
|Interest expense                               |  |                        | (6,707 | ) |          | (8.2  | )% |               |   | (8,590 | )        |  | (9.9  | )%            |  |   | 1,883  |   |  | (21.9 | )%
|Loss on extinguishment of debt                 |  |                        |       |   |          | 0.0   | %  |               |   |       |          |  | 0.0   | %             |  |   |       |   |  | 0.0   | % 
|Other, net                                     |  |                        | 211    |   |          | 0.3   | %  |               |   |       |          |  | 0.0   | %             |  |   | 211    |   |  | 100.0 | % 
|                                               |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|                                               |  |                        | (6,051 | ) |          | (7.4  | )% |               |   | (8,192 | )        |  | (9.4  | )%            |  |   | 2,141  |   |  | (26.1 | )%
|                                               |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|Income before provision for income taxes       |  |                        | 12,186 |   |          | 14.8  | %  |               |   | 13,855 |          |  | 16.0  | %             |  |   | (1,669 | ) |  | (12.0 | )%
|Provision for income taxes                     |  |                        | 2,699  |   |          | 3.3   | %  |               |   | 2,077  |          |  | 2.4   | %             |  |   | 622    |   |  | 29.9  | % 
|                                               |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|Net income                                     |  |                        | 9,487  |   |          | 11.5  | %  |               |   | 11,778 |          |  | 13.6  | %             |  |   | (2,291 | ) |  | (19.5 | )%
|Preferred stock dividends                      |  |                        |       |   |          | 0.0   | %  |               |   |       |          |  | 0.0   | %             |  |   |       |   |  | 0.0   | % 
|                                               |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   
|Net income attributable to common stockholders |  | $                      | 9,487  |   |          | 11.5  | %  |               | $ | 11,778 |          |  | 13.6  | %             |  | $ | (2,291 | ) |  | (19.5 | )%
|                                               |  |                        |        |   |          |       |    |               |   |        |          |  |       |               |  |   |        |   |  |       |   



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|                                                      |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|----------------------------------------------------- |  | ---------------------- | ------- | - | -------- | ----- | -- | ---------------- | - | ------- | -------- |  | ----- | ------------- |  | - | ------- | - |  | ------- | --
|                                                      |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   | $       |  
|                                                      |  | Six Months Ended       |         |   | % of     |       |    | Six Months Ended |   |         | % of     |  |       | 2006 vs. 2005 |  |   | Change  |  
|                                                      |  | June 30, 2006          |         |   | Revenues |       |    | June 30, 2005    |   |         | Revenues |  |       | $             |  |   | %       |  
|                                                      |  | (dollars in thousands) |        
|Revenues:                                             |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|Technology Interoperability Services                  |  | $                      | 56,634  |   |          | 35.9  | %  |                  | $ | 50,400  |          |  | 30.3  | %             |  | $ | 6,234   |   |  | 12.4    | % 
|Network Services                                      |  |                        | 63,043  |   |          | 40.0  | %  |                  |   | 65,648  |          |  | 39.5  | %             |  |   | (2,605  | ) |  | (4.0    | )%
|Number Porting Services                               |  |                        | 13,950  |   |          | 8.8   | %  |                  |   | 24,276  |          |  | 14.6  | %             |  |   | (10,326 | ) |  | (42.5   | )%
|Call Processing Services                              |  |                        | 14,479  |   |          | 9.2   | %  |                  |   | 13,725  |          |  | 8.3   | %             |  |   | 754     |   |  | 5.5     | % 
|Enterprise Solutions                                  |  |                        | 4,214   |   |          | 2.7   | %  |                  |   | 6,009   |          |  | 3.6   | %             |  |   | (1,795  | ) |  | (29.9   | )%
|                                                      |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|Revenues (excluding Off-Network Data Base Query Fees) |  |                        | 152,320 |   |          | 96.6  | %  |                  |   | 160,058 |          |  | 96.3  | %             |  |   | (7,738  | ) |  | (4.8    | )%
|Off-Network Database Query Fees                       |  |                        | 5,291   |   |          | 3.4   | %  |                  |   | 6,236   |          |  | 3.7   | %             |  |   | (945    | ) |  | (15.2   | )%
|                                                      |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|Total revenues                                        |  |                        | 157,611 |   |          | 100.0 | %  |                  |   | 166,294 |          |  | 100.0 | %             |  |   | (8,683  | ) |  | (5.2    | )%
|                                                      |  |                        |         |   |          |      
|Costs and expenses:                                   |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|Cost of operations                                    |  |                        | 64,751  |   |          | 41.1  | %  |                  |   | 66,872  |          |  | 40.2  | %             |  |   | (2,121  | ) |  | (3.2    | )%
|Sales and marketing                                   |  |                        | 12,364  |   |          | 7.8   | %  |                  |   | 11,474  |          |  | 6.9   | %             |  |   | 890     |   |  | 7.8     | % 
|General and administrative                            |  |                        | 30,596  |   |          | 19.4  | %  |                  |   | 21,846  |          |  | 13.1  | %             |  |   | 8,750   |   |  | 40.1    | % 
|Provision for (recovery of) uncollectible accounts    |  |                        | 388     |   |          | 0.3   | %  |                  |   | 688     |          |  | 0.4   | %             |  |   | (300    | ) |  | 43.6    | % 
|Depreciation and amortization                         |  |                        | 19,849  |   |          | 12.6  | %  |                  |   | 24,075  |          |  | 14.5  | %             |  |   | (4,226  | ) |  | (17.6   | )%
|Restructuring                                         |  |                        | 338     |   |          | 0.2   | %  |                  |   |        |          |  | 0.0   | %             |  |   | 338     |   |  | 100.0   | % 
|                                                      |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|                                                      |  |                        | 128,286 |   |          | 81.4  | %  |                  |   | 124,955 |          |  | 75.1  | %             |  |   | 3,331   |   |  | 2.7     | % 
|                                                      |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|Operating income                                      |  |                        | 29,325  |   |          | 18.6  | %  |                  |   | 41,339  |          |  | 24.9  | %             |  |   | 12,014  |   |  | 29.1    | % 
|Other income (expense), net:                          |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|Interest income                                       |  |                        | 1,079   |   |          | 0.7   | %  |                  |   | 737     |          |  | 0.4   | %             |  |   | 342     |   |  | 46.4    | % 
|Interest expense                                      |  |                        | (13,449 | ) |          | (8.5  | )% |                  |   | (19,094 | )        |  | (11.5 | )%            |  |   | 5,645   |   |  | (29.6   | )%
|Loss on extinguishment of debt                        |  |                        | (924    | ) |          | (0.6  | )% |                  |   | (23,788 | )        |  | (14.3 | )%            |  |   | 22,864  |   |  | (96.1   | )%
|Other, net                                            |  |                        | 330     |   |          | 0.2   | %  |                  |   |        |          |  | 0.0   | %             |  |   | 330     |   |  | 100.0   | % 
|                                                      |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|                                                      |  |                        | (12,964 | ) |          | (8.2  | )% |                  |   | (42,145 | )        |  | (25.4 | )%            |  |   | 29,181  |   |  | (69.2   | )%
|                                                      |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|Income before provision for income taxes              |  |                        | 16,361  |   |          | 10.4  | %  |                  |   | (806    | )        |  | (0.5  | )%            |  |   | 17,167  |   |  | (2129.9 | )%
|Provision for income taxes                            |  |                        | 3,324   |   |          | 2.1   | %  |                  |   | 4,368   |          |  | 2.6   | %             |  |   | (1,044  | ) |  | (23.9   | )%
|                                                      |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|Net income                                            |  |                        | 13,037  |   |          | 8.3   | %  |                  |   | (5,174  | )        |  | (3.1  | )%            |  |   | 18,211  |   |  | (352.0  | )%
|Preferred stock dividends                             |  |                        |        |   |          | 0.0   | %  |                  |   | (4,195  | )        |  | (2.5  | )%            |  |   | (4,195  | ) |  | 100.0   | % 
|                                                      |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   
|Net income (loss) attributable to common stockholders |  | $                      | 13,037  |   |          | 8.3   | %  |                  | $ | (9,369  | )        |  | (5.6  | )%            |  | $ | 22,406  |   |  | 239.2   | % 
|                                                      |  |                        |         |   |          |       |    |                  |   |         |          |  |       |               |  |   |         |   |  |         |   



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Comparison of the Three and Six Months Ended June 30, 2006 and 2005

Revenues

Total revenues decreased $4.7 million
to $82.2 million for the three months ended June 30, 2006 from $86.9 million for the same period in 2005. Total revenues decreased $8.7 million to $157.6 million for the six months ended June 30, 2006 from $166.3 million for the same
period in 2005. Excluding Off-Network Database Query Fees, which decreased $0.9 million for the six months ending June 30, 2006, total revenues decreased $7.7 million for the six months ended June 30, 2006. The decrease in revenues was
primarily due to decreases in our Number Portability Services due to the Sprint migration of the number portability error resolution services and decreases in Enterprise Solutions and Off-Network Database Query Fees, offset in part, by increases in
Technology Interoperability Services and Call Processing Services.

Technology Interoperability Services revenues increased $3.6
million to $30.8 million for the three months ended June 30, 2006 from $27.2 million for the same period in 2005. Technology Interoperability Services revenues increased $6.2 million to $56.6 million for the six months ended June 30, 2006
from $50.4 million for the same period in 2005. The increase in revenues was primarily due to increases in international roaming, organic volume growth in our wireless clearinghouse services and SMS services, partially offset by a decline in
revenues due to a competitive pricing environment and a decline in per-transaction fees pursuant to our volume-based pricing strategy for certain services.

Network Services revenues decreased $1.9 million to $31.5 million for the three months ended June 30, 2006 from $33.4 million for the same period in 2005. Network Services revenues decreased $2.6
million to $63.0 million for the six months ended June 30, 2006 from $65.6 million for the same period in 2005. The decrease in revenues was primarily due to the migration off our services platform by some of our customers and price concessions
commensurate with our volume-based pricing strategy for certain of our services and a competitive pricing environment, partially offset by volume growth in data roaming. In addition, two of our SS7 customers are in the process of replacing our SS7
network solution. We expect this development to reduce 2006 network services revenues by approximately $7.0 to $8.0 million, depending on the timing of the replacement.

Number Portability Services revenues decreased $5.4 million to $7.2 million for the three months ended June 30, 2006 from $12.6 million for the same period in 2005. Number Portability Services revenues
decreased $10.3 million to $14.0 million for the six months ended June 30, 2006 from $24.3 million for the same period in 2005. The decrease in revenues was primarily due to lower port center activity related to the Sprint migration. During the
fourth quarter of 2004, we received notice from Sprint of its intention to move number portability error resolution services provided by us to its own internal platforms effective May 24, 2005. We continued to provide limited number portability
error resolution services to Sprint until December 31, 2005. In April 2005, we signed a transitional support services agreement with Sprint to assist in its migration of the number portability error resolution services to its internal
platforms. We accelerated the amortization of deferred Sprint implementation fees and the associated deferred Sprint implementation costs to fully amortize these ratably over the year ended December 31, 2005. We also amortized the transition
fee over the 2005 fiscal year. After 2005, we no longer received revenues from Sprint for these services. We expect to continue providing Sprint with number portability services other than number portability error resolution services. We expect this
Sprint migration to reduce total 2006 revenues by approximately $19.0 million, excluding the effect of any new or expanded services.

Call Processing Services revenues were $7.3 million for both the three months ended June 30, 2006 and 2005. Call Processing Services revenues increased $0.8 million to $14.5 million for the six months ended June 30, 2006
from $13.7 million for the same period in 2005. The increase in revenues was attributable to increased international roaming volumes driven by increased demand for our signaling solutions services.

Enterprise Solutions Services revenues decreased $0.8 million to $2.1 million for the three months ended June 30, 2006 from $2.9 million for
the same period in 2005. Enterprise Solutions Services revenues decreased $1.8 million to $4.2 million for the six months ended June 30, 2006 from $6.0 million for the same period in 2005. The decrease in revenues was primarily due to lower
subscribers on our enterprise wireless data management platform. We expect this decline to continue.

Off-Network Database Queries
revenues decreased $0.1 million to $3.3 million for the three months ended June 30, 2006 from $3.4 million for the same period in 2005. Off-Network Database Queries revenues decreased $0.9 million to $5.3 million for the six months ended
June 30, 2006 from $6.2 million for the same period in 2005. The decrease in revenues was primarily driven by customers moving to direct access and billing arrangements with third-party intelligent network database providers. We pass these
off-network database query fees onto our customers, with little or no margin, based upon the charges we receive from the third-party database providers. We expect this decline to continue.

Expenses

Cost of operationsdecreased
$0.9 million to $33.5 million for the three months ended June 30, 2006 from $34.4 million for the same period in 2005. Cost of operations decreased $2.1 million to $64.8 million for the six months ended



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June 30, 2006 from $66.9 million for the same period in 2005. The decrease was primarily due to decreased operational
costs related to our number porting services primarily due to the Sprint migration and decreases in our off-network database queries services, partially offset by increases in data processing costs.

Sales and marketing expenses increased $1.1 million to $6.9 million for the three months ended June 30, 2006 from $5.8 million for the same
period in 2005. Sales and marketing expenses increased $0.9 million to $12.4 million for the six months ended June 30, 2006 from $11.5 million for the same period in 2005. The increase is primarily due to higher employee-related costs for
international expansion and increased trade show expenses.

General and administrative expenses increased $1.2 million to $13.3
million for the three months ended June 30, 2006 from $12.1 million for the same period in 2005. General and administrative expenses increased $8.7 million to $30.6 million for the six months ended June 30, 2006 from $21.8 million for the
same period in 2005. This increase was primarily due to $4.9 million related to the relocation of our corporate headquarters, including $1.7 million associated with the early lease termination of our former corporate headquarters, $2.2 million
related to higher product development expenses and higher expenses associated with operating as a public company.

Provision for
uncollectible accounts increased $0.1 million for the three months ended June 30, 2006 from $0.2 million for the same period in 2005 and decreased $0.3 million to $0.4 million for the six months ended June 30, 2006 from $0.7 million
for the same period in 2005.

Depreciation and amortization expenses decreased $2.3 million to $9.9 million for the three months
ended June 30, 2006 from $12.2 million for the same period in 2005. Depreciation and amortization expenses decreased $4.2 million to $19.8 million for the six months ended June 30, 2006 from $24.1 million for the same period in 2005. The
decrease was primarily due to lower amortization of intangible assets associated with the Verizon Revenue Guarantee agreement which expired in December 2005 and lower amortization expense related to a certain intangible asset associated with the IOS
North America customer base. Included in our depreciation and amortization expenses for the six months ended June 30, 2006 and 2005 is approximately $8.4 million and $12.8 million, respectively, in amortization related to intangible assets
recorded in purchase accounting due to our February 2002 acquisition from Verizon, our December 2003 acquisition of Syniverse Holdings Limited and our September 2004 acquisition of IOS North America.

Restructuringexpense was $0.3 million for the six months ended June 30, 2006. In February 2006, we completed a restructuring plan in our
marketing group resulting in the termination of eight employees. As a result, we incurred $0.3 million in severance related costs.

Other

Interest incomeincreased $0.3 million to $1.1 million for the six months ended June 30, 2006 from $0.7 million for the
same period in 2005 primarily due to interest income earned on higher interest rates and higher average cash balances.

Interest
expense decreased $1.9 million to $6.7 million for the three months ended June 30, 2006 from $8.6 million for the same period in 2005. Interest expense decreased $5.6 million to $13.4 million for the six months ended June 30, 2006 from
$19.1 million for the same period in 2005. The decrease was primarily a result of our recapitalization occurring in the first quarter of 2005 in connection with our initial public offering, which lowered our average outstanding debt balance and
interest rate, and the refinancing of our remaining 123/4% senior subordinated notes due 2009 in the third
quarter of 2005.

Loss on extinguishment of debt was $0.9 million and $23.8 million for the six months ended June 30,
2006 and 2005, respectively. In February 2006, we redeemed all outstanding 123/4% senior subordinated notes due
2009 resulting in a prepayment premium of $0.9 million. In February 2005, we recognized $23.8 million on the early extinguishment of debt related to our previous senior credit facility and the repurchase of $85.8 million of our 123/4% senior subordinated notes due 2009. The loss included a non-cash write-off of $6.0 million of unamortized
deferred financing costs and $5.4 million of unamortized debt discount relating to the previous senior credit facility and the repurchased portion of the 123/4% senior subordinated notes due 2009, as well as a $12.4 million cash charge related to the prepayment premium on the repurchased portion of the 123/4% senior subordinated notes due 2009.

Other, net was $0.3 million for the six months ended June 30, 2006 and is comprised of non-operating revenues and gains from the sale of marketable securities.

Provision for income taxesincreased $0.6 million to $2.7 million for the three months ended June 30, 2006 from $2.1 million for the same
period in 2005. Provision for income taxes decreased $1.0 million to $3.3 million for the six months ended June 30, 2006 from $4.4 million for the same period in 2005. During the six months ended June 30, 2006, we reversed a portion of our
net deferred tax asset valuation allowance. The valuation allowance, originally established in 2003, and



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adjusted annually thereafter, was recorded because the realization of those deferred tax assets did not meet the
more-likely-than-not criteria under Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS 109). In the first six months of 2006, based upon an evaluation of our most recent twelve quarters of results and
our expectations of pre-tax income, a tax benefit for the deferred tax assets expected to be realized as a result of income in the current year was recognized as we determined that we have met the more-likely-than not criteria related to those
deferred tax assets. The benefit reduced our estimated annual effective tax rate to approximately 21%, excluding the effects of other items. As of June 30, 2006, based upon our judgment, we will continue to maintain a valuation allowance for
certain other deferred tax assets primarily associated with accumulated tax loss carry-forwards from our acquisitions

Preferred stock
dividends were $4.2 million for the six months ended June 30, 2005. The undeclared and unpaid preferred dividends relate to the 10% preferred yield on Syniverse Inc.s class A cumulative redeemable convertible preferred stock issued on
February 14, 2002. The 2004 amounts are recorded as a part of the class A redeemable preferred stock balance. On February 15, 2005, we redeemed 124,876 shares of our class A cumulative redeemable convertible preferred stock, including
accrued and unpaid dividends, at a liquidation value of $176.5 million with proceeds received from our initial public offering. On March 28, 2005, pursuant to the terms of our second amended and restated certificate of incorporation, all of our
outstanding shares of class A cumulative redeemable convertible preferred stock were converted into 10,209,598 shares of our common stock based upon the liquidation value (plus accrued and unpaid dividends) of the class A cumulative redeemable
convertible preferred stock using the initial public offering price of $16 per share. We had no shares of class A cumulative redeemable preferred stock outstanding as of June 30, 2006.

Liquidity and Capital Resources

Cash Flow Information

During the six months ended June 30, 2006, our operations generated $26.3 million of cash as compared to $51.0 million for the
same period in 2005. The decrease was primarily attributable to lower net income adjusted for non-cash items and lower cash collections. Cash and cash equivalents were $11.1 million at June 30, 2006 as compared to $49.3 million at
December 31, 2005. This decrease was primarily due to the payment of approximately $38.9 million for the acquisition of ITHL and the early redemption of our remaining 123/4% senior subordinated notes due 2009, partially offset by cash provided by operating activities. Our working capital decreased $11.1 million to $44.8 million at June 30,
2006 from $55.9 million at December 31, 2005. This decrease in working capital was primarily due the acquisition cost of ITHL and lower net cash from operations, offset in part by lower current maturities of long-term debt and lower accrued
expenses.

Capital expenditures for property and equipment, including capitalized software costs, decreased to $10.8 million for the
six months ended June 30, 2006 from $14.1 million for the six months ended June 30, 2005. For the six months ended June 30, 2006, we incurred approximately $10.8 million for capital expenditures of which $3.7 million was primarily for
capital expenditures associated with our facilities move and the balance for the upgrade of our network and capitalized software development. We expect total capital expenditures in 2006 to be approximately $21.5 million.

In February 2005, we entered into a lease agreement for approximately 199,000 square feet of new office space for our headquarters in Tampa, Florida. The
lease term is eleven years commencing on November 1, 2005 with lease payments beginning one year following the commencement date. In connection with this lease, through December 31, 2005, we incurred incremental operating expenses related
solely to this move of $2.9 million and capital costs related solely to the facility build out of approximately $10.0 million. In the six months ending June 30, 2006, we incurred $5.4 million in move related expenses, which included duplicative
lease payments and a $1.7 million charge related to the early termination of our lease on our former corporate headquarters. Additionally, during the same period, we incurred and capitalized $3.7 million of costs related to the move to our new
headquarters.

On February 1, 2006, we redeemed the remaining $14.5 million in aggregate principal amount of our outstanding 123/4% senior subordinated notes due 2009 at a premium of $0.9 million.

Our principal sources of liquidity are cash flows generated from operations and borrowings under our new senior credit facility. Our principal uses of
cash are to meet debt service requirements, finance our capital expenditures, make acquisitions and provide working capital. We expect that cash available from operations combined with the availability of $42.0 million under our revolving line of
credit will be sufficient to fund our operations, debt service and capital expenditures for the foreseeable future.

Debt and Credit Facilities

New Senior Credit Facility

On
February 15, 2005, we entered into a $282.0 million credit agreement with Lehman Brothers Inc., as lead arranger and book manager, LaSalle Bank National Association, as syndication agent, and Lehman Commercial Paper, as



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administrative agent (the Credit Agreement). The Credit Agreement provides for a term loan of $240.0 million
and a revolving credit line of $42.0 million. The obligations under the Credit Agreement are unconditionally guaranteed by Syniverse Holdings Inc. and the U.S. domestic subsidiaries of Syniverse Technologies, Inc. (the Guarantors).

Borrowings under the new senior credit facility bear interest at a floating rate, which can be either a base rate, or at our option, a
LIBOR rate, plus an applicable margin, which is presently 1.50% for the revolving loans and 1.75% for the term debt. As of June 30, 2006, the applicable interest rate was 7.25% based on the LIBOR option. The term loan facility requires
regularly scheduled quarterly payments of principal and interest, and the entire amount of the term loan facility will mature on February 15, 2012. The full amount borrowed under the revolving credit line will mature on February 15, 2011.

As of June 30, 2006, we had an aggregate face amount of $177.4 million of outstanding indebtedness under our new senior credit
facility representing the term note B facility and $42.0 million available under the revolving credit facility. No amounts were drawn under the revolving facility as of June 30, 2006.

The obligations under the Credit Agreement are unconditionally guaranteed by the guarantors, and are secured by a security interest in substantially all
of the tangible and intangible assets of Syniverse and the guarantors. The obligation under the Credit Agreement is also secured by a pledge of the capital stock of Syniverse and its direct and indirect U.S. subsidiaries.

The Credit Agreement contains covenants that will limit our ability and that of our guarantors to, among other things, incur or guarantee additional
indebtedness, create liens, pay dividends on or repurchase stock, make certain types of investments, restrict dividends or other payments from Syniverses subsidiaries, enter into transactions with affiliates, sell assets or merge with other
companies. The Credit Agreement also requires compliance with several financial covenants, including a maximum ratio of total indebtedness to EBITDA and a minimum ratio of EBITDA to interest expense.

We used the $240.0 million of borrowings under the new senior credit facility in combination with the net proceeds from our IPO to repay our previous
senior credit facility, to pay related transaction fees and expenses and to effect a tender offer for $85.8 million of our 123/4% senior subordinated notes due 2009.

123/4% Senior Subordinated Notes Due 2009

On February 25, 2005, we tendered for approximately $85.8 million in aggregate principal amount of our 123/4% senior subordinated notes due 2009 reducing the aggregate principal amount outstanding to $159.3 million at that time. In connection with the tender offer, we paid a premium of $12.3 million, related fees of $0.1 million and
accrued interest of $0.7 million. In addition to the prepayment premium of $12.3 million, the associated unamortized debt discount of $1.1 million and deferred finance costs of $1.8 million were recognized as loss on extinguishment of debt in the
first quarter of 2005.

On August 24, 2005, we tendered for approximately $144.8 million in aggregate principal amount of our
123/4% senior subordinated notes due 2009, reducing the aggregate principal amount outstanding to $14.5 million
as of September 30, 2005. In connection with the tender offer, we paid a premium of $14.3 million, related fees of $0.5 million and accrued interest of $1.2 million. In addition to the prepayment premium of $14.3 million, the associated
unamortized debt discount of $1.6 million and deferred finance costs of $2.7 million were recognized as loss on extinguishment of debt in the third quarter of 2005.

As of December 31, 2005, we had $14.5 million in aggregate principal amount of our 123/4% senior subordinated notes due 2009 outstanding.

On February 1, 2006, we repurchased the remaining $14.5 million in aggregate principal amount of outstanding 123/4% senior subordinated notes due 2009 at a premium of $0.9 million.

73/4% Senior Subordinated Notes Due 2013

On August 24, 2005, we completed a private offering of $175.0 million in aggregate principal amount of our 73/4% senior subordinated notes due 2013. Interest on the notes accrues at the rate of 73/4% per annum and is payable semi-annually in arrears on February 15 and August 15, commencing on
February 15, 2006. The net proceeds were used to repurchase $144.8 million of our outstanding 123/4% senior
subordinated notes due 2009, and to pay the related prepayment premium and costs of debt issuance. The remaining funds were held for the redemption of the $14.5 million of 123/4% senior subordinated notes due 2009, not tendered in August 2005, plus expected payment of related premium of approximately $0.9 million.

The indenture governing our 73/4% senior subordinated notes due 2013 contains certain covenants that will, among other things, limit our ability to incur additional indebtedness and issue preferred stock, pay dividends, make other restricted payments and
investments, create liens, incur restrictions on the ability of our subsidiaries to pay dividends or other payments to them, sell assets, merge or consolidate with other entities, and enter into transactions with affiliates. As of December 31,
2005, we believe we are in compliance with all of the covenants contained in the indenture governing our senior subordinated notes.



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On December 8, 2005, we completed an offer to exchange up to $175.0 million principal amount of our
Series B 73/4% senior subordinated notes due 2013 for any and all outstanding 73/4% senior subordinated notes due 2013 (the Old Notes). All of the $175.0 million in aggregate principal
amount of the Old Notes were validly tendered for exchange and have been accepted by us. The new notes have substantially identical terms of the original notes, except that the new notes have been registered under the Securities Act of 1933, as
amended.

Effect of Inflation

Inflation generally affects us by increasing our cost of labor, equipment and new materials. We do not believe that inflation has had any material effect on our results of operations during the three months ended June 30, 2006 and
2005.

Critical Accounting Policies and Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported amounts of assets and
liabilities, revenues and expenses. We consider an accounting estimate to be critical if it requires assumptions to be made that were uncertain at the time the estimate was made and changes in the estimate or different estimates that could have been
selected could have a material impact on our consolidated results of operations or financial condition. We have identified the following critical accounting policies that affect the more significant estimates and judgments.

Revenue Recognition

We derive
revenues from six categories: Technology Interoperability Services, Network Services, Number Portability Services, Call Processing Services, Enterprise Solutions and Off-Network Database Queries. The revenue recognition policy for each of these
areas is described under Revenues above.

Due to our billing cycles, which for some of our products lag as much as 40 days
after the calendar month in which the services are rendered, we estimate the amounts of unbilled revenue each reporting period. Our estimates are based on recent volume and pricing trends adjusted for material changes in contracted service, because
actual information is not immediately available. Based on a retrospective review of our actual billings compared to our estimates, our estimates have been reasonable. Historically, our estimates have approximated our actual subsequently billed
revenue. Unanticipated changes in volume and pricing trends or material changes in contracted service could affect our ability to reasonably estimate unbilled revenue. This estimate is critical to our financial statements because it impacts revenue
and amounts recorded as accounts receivable on our balance sheet. As of June 30, 2006, our estimated unbilled revenues were $11.4 million. A 10% change in our estimate would result in either an increase or decrease in revenues and accounts
receivable of approximately $1.1 million.

Allowance for Doubtful Accounts

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to pay their invoices to us in full. We
regularly review the adequacy of our accounts receivable allowance after considering the size of the accounts receivable balance, each customers expected ability to pay and our collection history with each customer. A portion of this analysis
is dependent on our ability to gather reliable information about our customers specific circumstances. As part of our analysis, we review significant invoices that are past due to determine if an allowance is necessary based on the risk
category using the factors described above. Based on the circumstances, we place each customer with such invoices, into a risk category and assign reserve percentages between 5% and 100%. Our estimates of allowances for doubtful accounts have
tracked well with our actual experience of customers who are unable to pay their invoices in full. However, uncollectible accounts that are not identified or properly assessed in our review could have a significant impact on our bad debt provision.
In addition, if our customers financial condition or the economy in general deteriorates, we may need to increase these allowances for doubtful accounts. Our allowance for doubtful accounts has historically approximated our bad debt
experience. Excluding all risk categories that are reserved at 100%, a 10% change in each one of our risk categories would cause our allowance for doubtful accounts as of June 30, 2006 and our bad debt expense for the quarter then ended to
change by $0.1 million. Because we perform our analysis and establish reserves on a customer-by-customer basis, we generally do not record a general reserve. However, if we were to apply a general reserve of 1% to our unreserved accounts receivable
balance, it would increase our allowance for doubtful accounts as of June 30, 2006 and our bad debt expense for the quarter then ended by approximately $0.5 million.



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Allowance for Credit Memos

We maintain a general reserve based on our historical credit memo activity. In addition, we establish credit memo reserves resulting from specific
customer matters. This allowance is recorded as a direct reduction of accounts receivable and revenues. Since our allowances for credit memos are derived in large part from specific customer matters, our estimates have tracked well with our actual
credit memo experience. If our billing errors or discrepancies are not resolved satisfactorily or our customers disputes over billing are not resolved satisfactorily, increases to the allowance would be required. Recently, we have resolved
some of these customer matters more favorably than originally estimated but we cannot provide any assurance this will continue. As of June 30, 2006, our allowance for credit memos totaled $7.3 million. If our allowance for credit memos,
including identified specific customer matters, changed by 10%, our allowance for credit memos and revenues would change by approximately $0.7 million.

Impairment Losses on Long-Lived Assets

We review our long-lived assets, including property
and equipment and intangibles with definite lives for impairment when events or changes in circumstances indicate the carrying value of such assets may not be recoverable. We also evaluate the useful life of our assets each reporting period, and if
deemed to be shorter than originally estimated, the resulting impairment would increase in our annual depreciation and/or amortization expense. Other than the decision to abandon our trademark in the fourth quarter of 2003, we have not had reason to
adjust our estimated lives on these assets.

The impairment review consists of a comparison of the carrying value of the assets with the
assets expected future undiscounted cash flows without interest costs. An impairment loss is recognized if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is
deemed not to be recoverable if it exceeds the sum of its undiscounted cash flows. Estimates of expected future cash flows are managements best estimate based on reasonable and supportable assumptions and projections. If actual market
conditions are less favorable than those projected by management, asset impairment charges may be required. Management continues to evaluate overall industry and company-specific circumstances and conditions to identify indicators of impairment. No
impairment was recognized in the six months ended June 30, 2006.

Impairment Losses on Goodwill

We evaluate goodwill for impairment at least annually, or more frequently if indicators of impairment arise, in accordance with the provisions of
Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (SFAS 142). Our evaluation of goodwill is measured by a two-step impairment test. The first step compares the fair value of our reporting unit,
using a discounted cash flow model, with its carrying amount, including goodwill. If the carrying amount of our reporting unit exceeds its fair value, we then compare the implied fair value of the reporting units goodwill with the carrying
amount of that goodwill. An impairment loss would be recognized to the extent that the carrying amount of the reporting units goodwill exceeds the implied fair value of that goodwill. Estimates of expected future cash flows represent
managements best estimate based on reasonable and supportable assumptions and projections. If actual market conditions are less favorable than those projected by management, an impairment loss may be required to be recognized. Management will
continue to evaluate overall industry and company-specific circumstances and conditions as necessary. No impairment was recognized in the six month period ended June 30, 2006.

Restructuring

We have made
estimates of the costs to be incurred as a part of our various restructuring plans. We have also made estimates in September 2004 related to our acquisition of IOS North America which was recorded as a part of our purchase accounting. In addition,
on September 30, 2005, we formulated a restructuring plan to eliminate redundant positions at our Syniverse Holdings Limited subsidiary. As a result, we incurred $0.1 million in severance related costs in the third quarter of 2005. The payments
related to this restructuring plan were completed in December 2005. In February 2006, we completed a restructuring plan in our marketing group at our corporate headquarters in Tampa, Florida. As a result, we incurred $0.3 million in severance
related costs in the first quarter of 2006. At June 30, 2006, our remaining restructuring accrual related to the IOS North America acquisition the restructure in our marketing development area was $0.1 million. We expect to pay the remaining
restructuring costs in the third quarter of 2006. The balance in this account at June 30, 2006 continues to represent our best estimate.



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Loss Contingencies

We are involved in asserted and unasserted claims, which arise in the ordinary course of our business. We routinely evaluate whether a loss is probable,
and if so, whether it can be estimated. Estimates are based on similar case law matters, consultation with subject matter experts and information obtained through negotiations with counter-parties. As such, accurately depicting the outcome of
pending litigation requires considerable judgment and is subject to material differences on final settlement. Accruals for probable losses are recorded in accrued expenses or as a part of our allowance for credit memos if the dispute relates to a
customer matter. If our assessment of the probability is inaccurate, we may need to record additional accruals or reduce recorded accruals later. In addition, we may need to adjust our estimates of the probable loss amounts as further information is
obtained or we consider settlements. Historically, we have had few changes in estimates for these accruals.

The most significant claims,
in terms of dollars sought, are as follows:

SBC Communications, Inc., d/b/a SBC Ameritech, SBC Southwestern Bell and SBC Pacific Bell
(collectively, SBC) have asserted claims in the amount of $7.2 million, which alleges that we overcharged SBC for services we provided to it. We deny these claims, believe that they are unfounded and intend to vigorously defend ourselves. On
May 4, 2006, an Arbitrator issued a written decision denying SBC Ameritechs $2.1 million claim and ordering it to pay us $0.1 million. We are presently engaged in litigation related to the claims raised by SBC Southwestern Bell and SBC
Pacific Bell.

On April 21, 2005, Syniverse filed a complaint against BellSouth Telecommunications, Inc. in the Federal District Court
in Tampa, Florida seeking judgment for unpaid charges of approximately $3.3 million related to calling name database services provided during March 2004 to July 2004 for which BellSouth has refused payment.

On August 9, 2005, we filed a complaint seeking injunctive relief and damages in Hillsborough County, Florida against Electronic Data Systems
Corporation (EDS) and EDS Information Services LLC alleging a breach of contract, tortious interference with prospective business relations and unfair competition. This complaint was based on our discovery in the second quarter of 2005
that EDS was offering to provide clearing services to one of our customers when the customers contract with Syniverse expires in 2006. We believe this offer to provide clearing services to that customer constituted a breach of certain
non-compete obligations of EDS contained in the 2004 Asset Purchase Agreement between EDS and us. On August 11, 2005, the Circuit Court of the 13thJudicial Circuit for the State of Florida granted our motion for a temporary injunction and enjoined the defendants from selling the assets of their European subsidiaries unless the prospective
purchaser assumed the non-compete obligations of EDS. The injunction is conditioned upon Syniverse providing a $1 million surety bond, which we have done. We intend to continue to pursue this matter vigorously.

On April 13, 2006 we were served with a Petition for Declaratory Judgment filed by Billing Concepts, Inc. d/b/a BSG Clearing Solutions
(BCI) in Texas State Court asking the Court to find, in pertinent part, that BCIs offering of services competitive to Syniverse in the United States and North America is not subject to the restrictions imposed on BSG-Germany.
Syniverse intends to contest the Petition and will file an appropriate response in accordance with local court rules.

We have accrued our
estimate of losses related to the above claims, but there could be differences, which we are unable to estimate presently. In addition, protracted litigation would also cause us to incur legal fees, which we are unable to estimate presently.

Purchase Accounting

We have made estimates of the fair values of the assets acquired as of February 14, 2002, the Softwright acquisition in December 2003, the acquisition of IOS North America in September 2004 and the acquisition ITHL in June 2006, based
primarily on appraisals from third parties and also based on certain internally generated information. If the subsequent actual and updated projections of the underlying business activity change as compared to the underlying assumptions and
projections used to develop these fair values, then we could experience impairment losses, as described above. In addition, we have estimated the economic lives of certain of these assets and these lives were used to calculate depreciation and
amortization expense. If our estimates of the economic lives change, then additional depreciation or amortization expense could be incurred on an annual basis. We have not made any changes in these areas. If the estimates of the economic lives on
the definite-lived intangible assets acquired as of February 14, 2002 were reduced by one year, our 2006 amortization expense would increase by approximately $1.2 million.

Income Taxes

We review our
deferred tax assets on a regular basis to evaluate their recoverability based on projections of the turnaround timing of our deferred tax liabilities, projections of future taxable income, and tax planning strategies that we might employ to utilize
such assets, including net operating loss carryforwards. Unless it is more likely than not that we will recover such assets through the above means, we establish a valuation allowance. The effective tax rate differs from the statutory
tax rate due primarily to changes in the valuation allowance. Syniverse Brience had incurred net operating losses since inception and hence was unable to recognize the benefit of these losses in its financial statements tax provision.



35



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As of June 30, 2006, we have determined that a reversal of a portion of our deferred tax asset
valuation allowance was justified as we have satisfied the more-likely-than-not criteria with respect to certain net deferred tax assets. As a result of this analysis, the valuation allowance as of June 30, 2006 and December 31, 2005, was
$ 76.2 million and $79.3 million, respectively. In the future, our analysis of the need for a valuation allowance will be significantly impacted by our ability, among other things, to achieve profitability and our ability to predict and achieve
future projections of pre-tax income.

We file our tax returns on a calendar year basis. As of December 31, 2005, we had Federal NOLs
and capital losses totaling approximately $98.0 million and $16.3 million, respectively, many of which we succeeded to as a result of our merger with Brience. All of our NOLs remain subject to examination and adjustment by the Internal Revenue
Service.

We do not believe that any of our NOLs are currently subject to any limitation under Section 382 of the Code. However, the
NOLs acquired from Brience are subject to the separate return limitation rules under the consolidated return regulations. As a result, these NOLs generally can be utilized only to offset income from the consolidated group of corporations or their
successors that generated such losses. In addition, under Section 382 of the Code, a corporation that undergoes an ownership change generally may utilize its pre-change NOLs only to the extent of an annual amount determined by
multiplying the applicable long-term tax-exempt rate by the equity value of such corporation. A corporation generally undergoes an ownership change if the percentage of stock of the corporation owned by one or more 5% stockholders has increased by
more than 50 percentage points over a three-year period. We do not believe the consummation of our initial public offering resulted in an ownership change under Section 382 of the Code.

It is impossible for us to ensure that an ownership change will not occur in the future as changes in our stock ownership, some of which are outside of
our control, could result in an ownership change under Section 382 of the Code. For example, the sale by one or more 5% stockholders of our common stock and changes in the beneficial ownership of such stock could result in an ownership change
under Section 382 of the Code. Similarly, the exercise of outstanding stock options by our employees would count for purposes of determining whether we had an ownership change.

If we undergo an ownership change, our ability to utilize NOLs could be limited by Section 382 of the Code. The extent to which our use of our NOLs
would be limited depends on a number of legal and factual determinations, some of which may be subject to varying interpretations, including the date on which an ownership change occurs, the long-term tax exempt rate, whether the equity value of the
entire company or only one or more of its subsidiaries would be used in the application of the Section 382 limitation and the equity value of the company or such subsidiaries, as applicable. If it is determined that an ownership change has
occurred prior to July 23, 2005, there is a significant risk that the amount of NOLs acquired from Brience that would be useable in any one year after the ownership change would be severely limited. If the limitation were significant, our
limited ability to use these NOLs to offset future taxable income could materially increase our future U.S. federal income tax liability.

Recent
Accounting Pronouncements

Effective January 1, 2006, we adopted Statement of Financial Accounting Standards 123 (revised
2004), Share-Based Payment (SFAS 123(R)), which requires companies to account for share-based compensation using a fair-value method and recognize the expense in the consolidated statement of income. Using the
modified-prospective-transition method, stock compensation cost recognized beginning January 1, 2006 includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the
grant date fair value estimated in accordance with the original provisions of Statement of Financial Accounting Standards (SFAS) 123, Accounting for Stock-Based Compensation (SFAS 123) and (b) compensation cost for all share-based
payments granted on or subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). See Note 2  Summary of Significant Accounting Policies  in these financial
statements, for additional information.

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income
Taxes, (FIN48), an interpretation of FAS 109, Accounting for Income Taxes. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognition, interest and penalties, accounting in interim periods, disclosure and transition. The provisions of FIN48 are effective starting
January 1, 2007. We have not yet evaluated the impact, if any, that FIN48 will have on our financial position or results of operations.

Off-Balance
Sheet Arrangements

We use off-balance sheet financing primarily in the form of operating leases for facility space and equipment and we
expect to continue this practice. Since the terms of these lease agreements meet the definitions of operating lease agreements, the sum of future lease payments is not reflected on our consolidated balance sheet. Furthermore, we do not use any other
type of joint venture or special purpose entities that would create off-balance sheet financing. Our remaining operating lease payment obligations for 2006 total approximately $2.6 million based on leases in effect at June 30, 2006.

Forward-Looking Statements

We have made
forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934 in this report. The words believes, anticipates, plans,
expects, intends,



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estimates and similar expressions are intended to identify forward-looking statements. These forward-looking
statements involve known and unknown risks, uncertainties and other factors including, but not limited to, the risks and uncertainties described under Risk Factors in our Annual Report on Form 10-K. Our actual results, performance
and achievements, or industry results, may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Market Risk

We are exposed to changes in interest rates on our new senior credit facility. Our new senior credit facility is variable rate debt. Interest rate changes
generally do not affect the market value of such debt but do impact the amount of our interest payments and, therefore, our future earnings and cash flows, assuming other factors are held constant. At June 30, 2006, we had $177.4 million of
variable rate debt outstanding on our senior credit facility. Holding other variables constant, including levels of indebtedness, a one percentage point increase in interest rates on our variable debt would have had an estimated impact on pre-tax
earnings and cash flows for the next year of approximately $1.8 million. Under the terms of the new senior credit facility at least 25% of our funded debt must bear interest that is effectively fixed. As a result, we may from time to time be
required to enter into interest rate protection agreements establishing a fixed maximum interest rate with respect to a portion of our total indebtedness. As of June 30, 2006, we have met all of the terms of the new senior credit facility and
consequently we were not required to, and had not, entered into any interest rate protection agreements.

As of June 30, 2006 and
December 31, 2005, we had variable rate debt of approximately $177.4 million and $178.8 million, respectively.

Foreign Currency Market Risk

We are exposed to foreign currency risk in certain circumstances. Certain of our international clients currently pay us in Euros and
pounds sterling. Foreign currency fluctuations had an immaterial impact on our June 30, 2006 position and results of operations. This could change in future periods as our newly acquired subsidiary, PPIL, has as its functional currency the Hong
Kong dollar and has contract arrangements with multiple customers that are collectible and payable in currencies other the functional currency, which could result in significant currency gains or losses. At this time, we have not entered into any
arrangements to hedge our risks from foreign currency.

ITEM 4: CONTROLS AND PROCEDURES

As of the end of the period covered by this report, an evaluation was
carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined
in rule 13a-15(e) under the Securities Exchange Act of 1934) as required by Rule 13a-15(b). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and
procedures were effective. There has been no change in our internal control over financial reporting during the quarter ended June 30, 2006 that has materially affected, or is reasonably likely to materially affect, our internal control over
financial reporting.

PART II

OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

We are currently a party to various claims and legal actions that arise in the
ordinary course of business. We believe such claims and legal actions, individually and in the aggregate, will not have a material adverse effect on our business, financial condition or results of operations. As of June 30, 2006, we have
considered all of the claims and disputes of which we are aware and accrued amounts in our analysis of doubtful accounts, allowances for credit memos or probable loss accruals. Additional discussion of legal matters is incorporated by reference from
Part I, Item 1, Note 6, Commitments and Contingencies, of this document.

ITEM 1A: RISK FACTORS

Our business, financial condition, operating results and cash flows can be impacted
by a number of factors, any one of which could cause our actual results to vary materially from recent results or from our anticipated future results. For a discussion identifying additional risk factors and important factors that could cause actual
results to differ materially from those anticipated, see the discussion in Item 1A  Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations and Notes to
Consolidated Financial Statements in our 2005 Annual Report. There has been no material changes in our risk factors from those disclosed in our 2005 annual Report.



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ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS



| | (a) | None.
| | --- | -----



| | (b) | None.
| | --- | -----



| | (c) | In February 2006, we repurchased 77,211 shares of common stock at $0.076 per share pursuant to the terms of a senior management agreement.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Our Annual Meeting of Stockholders was held on May 9,
2006. The stockholders voted on the following matters:



|              |  |                                                                                                                                                                                                          
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Proposal I.   |  | Election of 10 directors (Odie C. Donald, David A. Donnini, G. Edward Evans, Tony G. Holcombe, John C. Hofmann, Raymond L. Lawless, James B. Lipham, Robert J. Marino, Jack Pearlstein, Collin
E. Roche).
|              | 
|Proposal II.  |  | Approve the Syniverse Holdings, Inc. 2006 Long-Term Equity Incentive Plan                                                                                                                                
|              | 
|Proposal III. |  | Approve Long-Term Incentive Performance Terms for Certain Executives                                                                                                                                     
|              | 
|Proposal IV.  |  | Approve the Syniverse Holdings, Inc. 2006 Employee Stock Purchase Plan                                                                                                                                   
|              | 
|Proposal V.   |  | Ratify and approve the selection of Ernst & Young LLP as the Independent auditors for Syniverse Holdings, Inc. for 2006                                                                                  

The results of the voting were as follows:



|               |  |                   |  |                |  |                             
|-------------- |  | ----------------- |  | -------------- |  | ----------------------------
|Proposal       |  | Affirmative Votes |  | Withheld Votes |  | Abstentions/Broker Non-Votes
|I (Donald)     |  | 59,440,964        |  | 173,856        |  |                            
|I (Donnini)    |  | 53,467,946        |  | 6,164,874      |  |                            
|I (Evans)      |  | 56,850,942        |  | 2,763,878      |  |                            
|I (Holcombe)   |  | 57,179,690        |  | 2,435,130      |  |                            
|I (Hofmann)    |  | 56,851,962        |  | 2,762,858      |  |                            
|I (Lawless)    |  | 56,588,044        |  | 3,026,776      |  |                            
|I (Lipham)     |  | 59,442,689        |  | 172,131        |  |                            
|I (Marino)     |  | 59,443,664        |  | 171,156        |  |                            
|I (Pearlstein) |  | 59,440,989        |  | 173,831        |  |                            
|I (Roche)      |  | 53,468,471        |  | 6,146,349      |  |                            
|II             |  | 55,452,396        |  | 3,086,738      |  | 1,901                       
|III            |  | 58,472,382        |  | 65,999         |  | 2,654                       
|IV             |  | 58,487,642        |  | 51,662         |  | 1,731                       
|V              |  | 59,611,491        |  | 1,353          |  | 1,976                       

All proposals received the required affirmative votes and were adopted by the stockholders.

ITEM 5: OTHER INFORMATION



| | (a) | Not applicable.
| | --- | ---------------



| | (b) | Not applicable.
| | --- | ---------------



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ITEM 6: EXHIBITS [table to be updated]



|            |  |                                                                                                                                                                                                                                                                                               
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                   
|2.1         |  | Share Purchase Agreement, dated as of June 16, 2006, by and among Syniverse Holdings, Inc., Syniverse Technologies, Inc., Interactive Technology Holdings Limited and each of Raymond
Cheung, Kenneth Wong, Peter Chan, DBS Nominees Pte Ltd and Seavi Advent Venture Management Pte. Ltd. (1)
|            | 
|10.34      |  | Amendment No. 2 to Amended and Restated Senior Management Agreement, dated as of January 10, 2006, by and among Syniverse Holdings, Inc. and Syniverse Technologies, Inc. and
G. Edward Evans. (2)                                                                                            
|            | 
|10.35      |  | Senior Management Agreement, dated as of January 10, 2006, by and among Syniverse Holdings, Inc. and Syniverse Technologies, Inc. and Tony G. Holcombe. (2)                                                                                                                                   
|            | 
|10.36      |  | Senior Management Agreement, dated as of April 3, 2006, by and among Syniverse Holdings, Inc. and Syniverse Technologies, Inc. and Nancy White. (3)                                                                                                                                           
|            | 
|10.37       |  | Syniverse Holdings, Inc. 2006 Long-Term Equity Incentive Plan. (4)                                                                                                                                                                                                                            
|            | 
|10.38       |  | Syniverse Holdings, Inc. 2006 Employee Stock Purchase Plan. (4)                                                                                                                                                                                                                               
|            | 
|*31.1       |  | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.                                                                                                                                                                                      
|            | 
|*31.2       |  | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.                                                                                                                                                                                      
|            | 
|*32.1       |  | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.                                                                                                                                                                                      
|            | 
|*32.2       |  | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.                                                                                                                                                                                      

---

|(1) | Incorporated by reference to the Registrants Current Report on Form 8-K dated June 16, 2006.
|--- | ---------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to Registrants Current Report on Form 8-K dated January 9, 2006.
|--- | -------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to Registrants Current Report on Form 10-Q dated May 11, 2006.
|--- | -----------------------------------------------------------------------------------------

|(4) | Incorporated by reference to Registrants Proxy Statement on Schedule 14A for the 2006 Annual Meeting of Stockholders.
|--- | ----------------------------------------------------------------------------------------------------------------------

| | Compensatory plan or agreement.
|- | -------------------------------

|* | Filed herewith.
|- | ---------------



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##### Table of Contents

SIGNATURES

Pursuant to the requirements 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.



|                      |  |  |  |                                                      
|--------------------- |  |  |  | -----------------------------------------------------
|                      |  |  |  | SYNIVERSE HOLDINGS, INC.                             
|                      |  |  |  | (Registrant)                                         
|                      |  | 
|Date: August 10, 2006 |  |  |  | /s/ Raymond L. Lawless                               
|                      |  |  |  | Raymond L. Lawless                                   
|                      |  |  |  | Chief Financial Officer and Secretary                
|                      |  |  |  | (Authorized Officer and Principal Accounting Officer)
|                      |  | 
|                      |  |  |  | SYNIVERSE TECHNOLOGIES, INC.                         
|                      |  |  |  | (Registrant)                                         
|                      |  | 
|                      |  |  |  | /s/ Raymond L. Lawless                               
|                      |  |  |  | Raymond L. Lawless                                   
|                      |  |  |  | Chief Financial Officer and Secretary                
|                      |  |  |  | (Authorized Officer and Principal Accounting Officer)



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##### Table of Contents

INDEX OF EXHIBITS



|            |  |                                                                                                                                                                                                                                                                                               
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                   
|2.1         |  | Share Purchase Agreement, dated as of June 16, 2006, by and among Syniverse Holdings, Inc., Syniverse Technologies, Inc., Interactive Technology Holdings Limited and each of Raymond
Cheung, Kenneth Wong, Peter Chan, DBS Nominees Pte Ltd and Seavi Advent Venture Management Pte. Ltd. (1)
|            | 
|10.34      |  | Amendment No. 2 to Amended and Restated Senior Management Agreement, dated as of January 9, 2006, by and among Syniverse Holdings, Inc. and Syniverse Technologies, Inc. and
G. Edward Evans. (2)                                                                                             
|            | 
|10.35      |  | Senior Management Agreement, dated as of January 9, 2006, by and among Syniverse Holdings, Inc. and Syniverse Technologies, Inc. and Tony G. Holcombe. (2)                                                                                                                                    
|            | 
|10.36      |  | Senior Management Agreement, dated as of April 3, 2006, by and among Syniverse Holdings, Inc. and Syniverse Technologies, Inc. and Nancy White. (3)                                                                                                                                           
|            | 
|10.37       |  | Syniverse Holdings, Inc. 2006 Long-Term Equity Incentive Plan. (4)                                                                                                                                                                                                                            
|            | 
|10.38       |  | Syniverse Holdings, Inc. 2006 Employee Stock Purchase Plan. (4)                                                                                                                                                                                                                               
|            | 
|*31.1       |  | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.                                                                                                                                                                                      
|            | 
|*31.2       |  | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.                                                                                                                                                                                      
|            | 
|*32.1       |  | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.                                                                                                                                                                                      
|            | 
|*32.2       |  | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.                                                                                                                                                                                      

---

|(1) | Incorporated by reference to the Registrants Current Report on Form 8-K dated June 16, 2006.
|--- | ---------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to Registrants Current Report on Form 8-K dated January 9, 2006.
|--- | -------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to Registrants Current Report on Form 10-Q dated May 11, 2006.
|--- | -----------------------------------------------------------------------------------------

|(4) | Incorporated by reference to Registrants Proxy Statement on Schedule 14A for the 2006 Annual Meeting of Stockholders.
|--- | ----------------------------------------------------------------------------------------------------------------------

| | Compensatory plan or agreement.
|- | -------------------------------

|* | Filed herewith.
|- | ---------------



41