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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                         (AMENDMENT NO. 3 TO FORM 10-K)

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

            FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004 OR

      [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

            FOR THE TRANSITION PERIOD FROM          TO

                                     0-23494
                              (COMMISSION FILE NO.)
                                ----------------

                                BRIGHTPOINT, INC.
             (Exact name of registrant as specified in its charter)

          INDIANA                                                35-1778566
(State or other jurisdiction of                               (I.R.S. Employer
       incorporation)                                        Identification No.)

                 501 AIRTECH PARKWAY, PLAINFIELD, INDIANA 46168
           (Address of principal executive offices including zip code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (317) 707-2355

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                          COMMON STOCK, $.01 PAR VALUE
                         PREFERRED SHARE PURCHASE RIGHTS

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or 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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

      Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X] No [ ]

      The aggregate market value of the Registrant's Common Stock held by
non-affiliates as of June 30, 2004, which was the last business day of the
registrant's most recently completed second fiscal quarter was approximately
$243,025,873. As of January 28, 2005, there were 17,759,026 shares of the
registrant's Common Stock outstanding, excluding 1,755,900 treasury shares.

                      DOCUMENTS INCORPORATED BY REFERENCE:

      Portions of the registrant's proxy statement in connection with its annual
meeting of shareholders to be held in 2005, are incorporated by reference in
Items 11, 12, 13 and 14 of Part III of this Form 10-K.

================================================================================

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                                     PART I

EXPLANATORY NOTE

      This Amendment No. 2 on Form 10-K/A ("Form 10-K/A") to the Company's
Annual Report on Form 10-K for the year ended December 31, 2004, initially filed
with the Securities and Exchange Commission ("SEC") on February 3, 2005, as
amended on April 11, 2005 ("Original Filing") reflects a restatement
("Restatement") of the consolidated financial statements of Brightpoint, Inc. as
discussed in Note 19 to the consolidated financial statements. The determination
to restate these financial statements and selected financial information was
made as a result of management's identification of errors related to the
Company's operations in France and Australia. These errors were identified
through the Company's continuing self-assessment and self-testing of its
internal control over financial reporting and during the monthly financial
closing process relating to our France and Australia operations in the first
quarter of 2005. Further information on these adjustments and reclassifications
can be found in Note 19 to the accompanying consolidated financial statements.

      This Form 10-K/A only amends and restates Items 6, 7, 8 and 9A of Part II
and Item 10 of Part III of the Original Filing and we revised other language
from the Original Filing to reflect the Restatement. Although this Form 10-K/A
contains all of the items required to be included in an Annual Report on Form
10-K, no other information in the Original Filing is amended hereby. The
foregoing items have not been updated to reflect other events occurring after
the Original Filing or to modify or update those disclosures affected by
subsequent events. In addition, pursuant to the rules of the SEC, Item 15 of
Part IV of the Original Filing has been amended to contain the consent of the
Company's independent registered public accounting firm and currently dated
certifications from the Company's Chief Executive Officer and Chief Financial
Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.
Updated consents of the Company's independent registered public accounting firm
and the certifications of the Company's Chief Executive Officer and Chief
Financial Officer are attached to this Form 10-K/A as Exhibits 23, 31.1, 31.2,
32.1 and 32.2.

      Except for the foregoing amended information, this Form 10-K/A continues
to speak as of the date of the Original Filing, and the Company has not updated
the disclosure contained herein to reflect events that occurred at a later date.
Other events occurring after the filing of the Original Filing or other
disclosures necessary to reflect subsequent events have been addressed in the
Company's reports filed with the SEC subsequent to the filing of the Original
Filing, including the Quarterly Report on Form 10-Q for the period ended March
31, 2005, which is being filed concurrently with the filing of this Form 10-K/A.

      With this filing, the Company has amended the Original Filing. As such,
the consolidated financial statements as of and for the year ended December 31,
2004, the quarterly periods presented and the reports of independent registered
public accounting firm and related financial information contained in the
Original Filing should no longer be relied upon. In addition, the financial
information contained in the Company's quarterly reports on Form 10-Q for the
periods ended March 31, June 30, and September 30, 2004, previously filed by the
Company, should no longer be relied upon.

ITEM 1. BUSINESS.

GENERAL

      Brightpoint, Inc. is one of the largest dedicated distributors of wireless
devices and accessories and providers of logistics services to mobile operators,
with operations centers and/or sales offices in various countries including
Australia, Colombia, Finland, France, Germany, India, New Zealand, Norway, the
Philippines, the Slovak Republic, Sweden, United Arab Emirates and the United
States. We provide logistics services including procurement, inventory
management, customized packaging, fulfillment, activation management, prepaid
and e-business solutions within the global wireless industry. Our customers
include wireless network operators (also referred to as "mobile operators"),
resellers, retailers and wireless equipment manufacturers. We handle wireless
products manufactured by companies such as Nokia, Motorola, Kyocera, Audiovox,
LG Electronics, Sony Ericsson, Siemens, Samsung and High Tech Computer Corp.

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      We were incorporated under the laws of the State of Indiana in August 1989
under the name Wholesale Cellular USA, Inc. and reincorporated under the laws of
the State of Delaware in March 1994. In September 1995, we changed our name to
Brightpoint, Inc. In June 2004, we reincorporated under the laws of the State of
Indiana under the name of Brightpoint, Inc.

      Our website is www.brightpoint.com. We make available, free of charge, at
this website our Code of Business Conduct, annual report on Form 10-K/A,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 ("Exchange Act"), as soon as reasonably
practicable after we electronically file such material with, or furnish it to,
the United States Securities and Exchange Commission ("SEC"). The information on
the website listed above, is not and should not be considered part of this
annual report on Form 10-K/A and is not incorporated by reference in this
document.

      In addition, we will provide, at no cost, paper or electronic copies of
our reports and other filings made with the SEC. Requests for such filings
should be directed to Investor Relations, Brightpoint, Inc., 501 Airtech
Parkway, Plainfield, Indiana 46168, telephone number: (877) 447-2355.

      Unless the context otherwise requires, the terms "Brightpoint," "Company,"
"we," "our" and "us" means Brightpoint, Inc. and its consolidated subsidiaries.

FINANCIAL OVERVIEW AND RECENT DEVELOPMENTS

      Financial Overview. In 2004, wireless devices handled by the Company grew
by 34% to 27 million devices from 20 million devices in 2003, which was
principally driven by a 76% growth rate of wireless devices handled through our
fee-based logistics services. Revenue grew by 5% to $1.9 billion in 2004 from
$1.8 billion in 2003. Gross profit was up 15% and operating income from
continuing operations was $31 million, up 31% from 2003.

      Income from continuing operations was $20 million or $1.04 per diluted
share, which represented a 32% increase from 2003. Net income increased by 17%
to $13.8 million, or $0.72 per diluted share, in 2004 from $11.7 million, or
$0.62 per diluted share, in 2003. Return on invested capital from operations was
15%.

      Cash and cash equivalents (unrestricted) were $72 million at December 31,
2004, a decrease of 27% from $99 million at December 31, 2003. The decrease in
cash and cash equivalents (unrestricted) was primarily due to the repurchase of
$24 million of the Company's common stock, $16 million of net payments on credit
facilities and capital expenditures of $8.3 million, partially offset by cash
provided by operating activities of $7.7 million and a $5.0 million reduction in
pledged cash in financing activities.

      Expansion into Finland and the Slovak Republic. Effective July 31, 2004,
through certain of our subsidiaries, we acquired all of the issued and
outstanding shares of MF-Tukku Oy ("MF-Tukku") for an initial consideration of
less than $500 thousand with potential future consideration of up to 1.1 million
euros (which is the currency of the obligation) based on the future financial
performance of MF-Tukku. MF-Tukku, subsequently renamed Brightpoint Finland Oy,
based in Helsinki, Finland, is a distributor of Sony Ericsson, Siemens and
Motorola wireless devices and accessories in Finland. Simultaneously with our
acquisition of MF-Tukku, MF-Tukku acquired substantially all of the assets of
Codeal Oy ("Codeal"). Codeal, also based in Helsinki, Finland, was a distributor
of Samsung wireless devices and accessories in Finland.

      During the third quarter of 2004, we commenced operations in the Slovak
Republic, where we are currently providing logistics services to Eurotel, a
mobile operator.

      Share repurchase plans. On November 30, 2004, we announced that our Board
of Directors had approved a share repurchase program authorizing the Company to
repurchase up to $20 million of the Company's common stock by December 31, 2005.
During this period, the Company repurchased 208,100 shares of its own common
stock at an average price of $19.28 per share, totaling $4.0 million. As of
December 31, 2004, approximately $16.0 million may be used to purchase shares
under this program. Additionally, on June 4, 2004, we announced that our Board
of Directors had approved a share repurchase program authorizing the Company to
repurchase up to $20

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million of our common stock. We completed the program in June of 2004 through
open market and privately negotiated transactions.

      Compliance with Section 404 of the Sarbanes-Oxley Act of 2002. On June 5,
2003, the SEC issued new rules on internal control over financial reporting that
were mandated by Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404").
These new rules require management to report on internal control over financial
reporting. We employed the Internal Control -- Integrated Framework founded by
the Committee of Sponsoring Organizations of the Treadway Commission to evaluate
the effectiveness of the Company's internal control over financial reporting.
The Company's management has revised its assessment of the effectiveness of the
Company's internal control over financial reporting as of December 31, 2004,
originally included in Management's Report on Internal Control Over Financial
Reporting in the Company's annual report on Form 10-K filed on February 3, 2005.
In that report, management concluded that Company's internal control over
financial reporting was effective as of December 31, 2004, notwithstanding the
existence of significant deficiencies that were deemed by the Company's
management to not be material weaknesses. Subsequent to filing its annual report
on Form 10-K on February 3, 2005, the Company identified errors its financial
statements for the year ended December 31, 2004. Management has concluded that
these errors resulted from material weaknesses in internal control in the
Company's operations in France and Australia. A complete discussion of these
material weaknesses, as well as the revised attestation of our independent
registered public accounting firm, Ernst & Young LLP, is set forth in Item 9A
"Controls and Procedures" beginning on page 31 of this Form 10-K/A.

GLOBAL WIRELESS INDUSTRY

      The global wireless industry's primary purpose is to provide mobile voice
and data connectivity to subscribers. To enable this capability for the
subscriber, the global wireless industry is generally organized as follows:

      -     Mobile operators: build and operate wireless networks and provide
            voice and data access services to subscribers. Certain mobile
            operators resell voice and data access services, or airtime, from
            other mobile operators and do not directly build and operate their
            own wireless networks. These mobile operators are referred to as
            mobile virtual network operators, or "MVNOs."

      -     Infrastructure designers, manufacturers, builders, and operators:
            companies who operate in this segment provide mobile operators with
            technology, equipment, and cell sites to build and operate the
            networks.

      -     Components designers and manufacturers: design technology and
            components that are embedded within a wireless device. Components
            include semiconductor chip sets, displays, and antennae, among
            others.

      -     Wireless device manufacturers: design, manufacture, and market the
            wireless devices, such as cellular phones, wireless personal digital
            assistants, and pagers, which connect subscribers to a wireless
            network.

      -     Distribution and retail: distribution provides logistics and
            distribution services to physically move wireless devices and
            related products from manufacturers or mobile operators closer to,
            or directly into, the hands of mobile subscribers; retail provides
            subscribers and potential subscribers with an access point, either
            physical or on-line, to purchase a subscription and/or a wireless
            device.

      Wireless voice and data services are available to consumers and businesses
over regional, national and multi-national networks through mobile operators who
utilize digital and analog technological standards, such as:

<TABLE>
<CAPTION>
GENERATION                                                                    TECHNOLOGY STANDARDS
----------                                                                    --------------------
<S>                                                                           <C>
1G Analog................................................................     AMPS
2G Digital...............................................................     TDMA, CDMA, GSM, iDEN
2.5G Digital.............................................................     GPRS, EDGE, CDMA 1xRTT
3G Digital...............................................................     W-CDMA/UMTS, CDMA 1xEV-DO
</TABLE>

      Developments within the global wireless industry have allowed wireless
subscribers to talk, send text messages, send and receive email, capture and
transmit digital images and video recordings (multimedia messages), play games,
browse the Internet and watch television using their wireless devices. Wireless
devices and services are also

                                       4
<PAGE>

being used for monitoring services, point-of-sale transaction processing,
machine-to-machine communications, local area networks, location monitoring,
sales force automation and customer relationship management.

      From 2003 to 2004, the estimated number of worldwide wireless subscribers
increased by approximately 262 million, or 20%, to approximately 1.6 billion. At
the end of 2004, wireless penetration was estimated to be approximately 25% of
the world's population. The number of worldwide subscribers is expected to grow
to approximately 2.4 billion subscribers by the end of 2007. During 2004, the
global wireless industry saw shipments of wireless devices increase from
approximately 520 million wireless devices in 2003 to an estimated 665 million
wireless devices in 2004. Wireless device shipments are currently forecast to be
approximately 730 million devices in 2005. The percentage of replacement
wireless device shipments has grown and is forecast to be approximately 62% of
total shipments in 2005. Additionally, the use of wireless data products,
including interactive pagers, personal digital assistants and other mobile
computing devices, has seen recent growth and wider consumer acceptance. The
industry data contained in this paragraph and elsewhere in this subsection was
based on Company and industry analyst estimates.

      We believe the following major trends are taking place within the global
wireless industry, although there are no assurances that we will benefit from
these trends (refer to "BUSINESS RISK FACTORS"):

      Replacement Devices. As overall subscriber penetration increases in many
markets, growth in wireless device volume is more dependent on the replacement
of wireless devices by existing subscribers. During 2004, the global wireless
industry saw shipments of replacement wireless devices increase from
approximately 270 million devices in 2003 to an estimated 400 million devices.
In 2005, it is estimated that replacement device shipments will total
approximately 435 million and represent approximately 62% of total wireless
device shipments. We believe that the key drivers for the growth in volume of
replacement devices shipped will be migration to next generation systems with
streaming video and television, color displays, camera-enabled handsets
including mega-pixel embedded cameras, MP3 and other audio capabilities,
Internet access and content such as ring tones, images and games. While the new
features, enhanced functionalities and migration to next generation systems are
anticipated to increase both replacement device shipments and total wireless
device shipments, general economic conditions, consumer acceptance, component
shortages, manufacturing difficulties, supply constraints and other factors
could negatively impact anticipated wireless device shipments.

      Increasing Subscribers. We expect the number of subscribers worldwide to
continue to increase. Greater economic growth, increased wireless service
availability or lower cost of wireless service compared to conventional wireline
telephone systems and reductions in the cost of wireless devices may result in
an increase in subscribers. In particular, markets or regions such as India,
Latin America, China, Eastern Europe and Russia are expected to significantly
increase their number of subscribers. Increasing deregulation, the availability
of additional spectrum, increased competition and the emergence of new wireless
technologies and related applications may further increase the number of
subscribers in markets that have historically had high penetration rates. More
mobile operators may offer services including seamless roaming, increased
coverage, improved signal quality and greater data handling capabilities through
increased bandwidth thus, attracting more subscribers to mobile operators which
offer such services.

      Next Generation Systems. In order to provide a compelling service offering
for its current and prospective subscribers, mobile operators continue to expand
and enhance their systems by migrating to next generation systems such as 2.5G
and 3G systems. These next generation systems allow subscribers to send and
receive email, capture and transmit digital images and video recordings
(multimedia messages), play games, browse the Internet, watch television and
take advantage of services such as monitoring services, point-of-sale
transaction processing, machine-to-machine communications, location monitoring,
sales force automation and customer relationship management. In order to realize
the full advantage of these services and capabilities, many current subscribers
will need to replace their wireless devices. As a result, the continued rollout
of next generation systems is expected to be a key driver for replacement sales
of wireless devices. However, the ability and timing of mobile operators to
rollout these new services and manufacturers to provide devices which utilize
these services may have a significant impact on consumer adoption and the sale
of replacement devices.

      New or Expanding Industry Participants. With the opportunities presented
by enhanced voice and data capabilities and an expanding market for wireless
devices, many companies are entering or expanding their presence

                                       5
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in the global wireless industry. For example, in the United States, companies
such as Walt Disney Co., ESPN and Time Warner, Inc. have announced their
intentions to create mobile virtual network operators ("MVNOs") in order to
leverage their content and brands in the wireless space. This follows the
success that companies such as Virgin Mobile and TracFone have had in attracting
new, incremental mobile subscribers in the United States. In addition, companies
such as Microsoft (wireless device operating systems) and High Tech Computer
Corp. (wireless device manufacturer) are bringing feature-rich wireless devices
or operating systems to market in order to provide subscribers with capabilities
that emulate their desktop computer. These companies and their products may
heighten competition with existing manufacturers and provide consumers with more
feature-rich products, broader selection and new market channels, which may
result in increased wireless device shipments.

      Pricing Factors and Average Selling Prices. It is estimated that in 2004
the industry's average selling price for wireless devices has declined by
approximately 2%. This rate of decline is lower than what we have seen in recent
years. A number of factors impact the actual average selling prices including,
but not limited to, shortening product life cycles, decreasing manufacturing
costs due to higher volumes, manufacturing efficiencies, reductions in material
costs, consumer demand, manufacturers' promotional activities, product
availability, fluctuations in currency exchange rates, product mix and device
functionality. While manufacturers have been adding enhanced features such as
color screens and embedded cameras, we anticipate that the industry's average
selling prices for wireless devices will continue to decline, however, no
assurance can be given regarding the rate of such decline. A decline in average
selling prices could offset growth in overall wireless shipments and have an
adverse impact on both the industry's and the Company's revenues.

OUR BUSINESS

      Our primary business is moving wireless devices closer to, or directly
into, the hands of mobile subscribers. With over 27 million wireless devices
handled in 2004, we are one of the largest dedicated distributors of wireless
devices and providers of logistics services to mobile operators, MVNOs,
resellers, retailers and wireless equipment manufacturers. Our business includes
product distribution, logistics services, channel services and the sale of
prepaid airtime. The majority of our business is conducted in the product
distribution and logistics services business models. While channel services and
prepaid airtime businesses are important to us, they are less significant than
our other businesses in terms of revenue and units handled.

      Product Distribution. In our product distribution activities we purchase a
wide variety of wireless voice and data products from leading manufacturers. We
take ownership of the products and receive them in our facilities or drop-ship
them directly to our customers. We actively market and sell these products to
our worldwide customer base of approximately 20,000 customers. We generally
provide credit to our customers. Product distribution revenue includes the value
of the product sold and generates higher revenue per unit, as compared to our
logistics services revenue, which does not include the value of the product. We
frequently review and evaluate wireless voice and data products in determining
the mix of products purchased for distribution and attempt to acquire
distribution rights for those products, which we believe have the potential for
enhanced financial return and significant market penetration. In 2004, 2003 and
2002, approximately 84%, 87% and 85%, respectively, of our total revenue was
derived from product distribution. In 2004, 2003 and 2002, approximately 38%,
53% and 46%, respectively, of our total wireless devices handled were sold
through product distribution. In 2004, 2003 and 2002, our gross margin on
product distribution revenue was 3.8%, 3.5% and 2.8%, respectively. Cost of
revenue for product distribution includes the costs of the products sold,
warehousing, labor and other costs.

      The wireless devices we distribute include a variety of devices designed
to work on various operating platforms and feature brand names such as Nokia,
Sony Ericsson, LG Electronics, Kyocera, Motorola, Samsung, Siemens, Audiovox,
and Qtek (a product of High Tech Computer Corp.). In 2004, 2003 and 2002, our
sales of wireless devices through product distribution totaled 10.3 million,
10.6 million, and 6.8 million units, respectively, and represented approximately
38%, 53% and 46%, respectively, of the total wireless devices we handled. In
2004, 2003 and 2002, our average selling prices for wireless devices were
approximately $143, $137, and $138 per unit, respectively.

      We also distribute accessories used in connection with wireless devices,
such as batteries, chargers, memory cards, car-kits, cases and "hands-free"
products. We purchase and resell original equipment manufacturer (OEM) and
aftermarket accessories, either prepackaged or in bulk. Our accessory packaging
services provide mobile

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operators and retail chains with custom packaged and/or branded accessories
based on the specific requirements of that customer.

      Logistics Services. Our logistics services include warehousing, software
loading, kitting and customized packaging, fulfillment, credit services and
receivables management, call center and activation services, website hosting and
e-fulfillment services. Generally, logistics services are a fee-based service.
In many of our markets, we have contracts with mobile operators and wireless
equipment manufacturers to which we provide our logistics services. These
customers include, but are not limited to, operating companies or subsidiaries
of Nextel (United States), Virgin Mobile (United States), TracFone (United
States), ALLTEL (United States), MetroPCS (United States), Cricket
Communications (United States), COMCEL (Colombia), Eurotel Bratislava, (Slovak
Republic) and Vodafone (Australia).

      During 2004, 2003 and 2002, logistics services accounted for approximately
16%, 13% and 15%, respectively, of our total revenue. In 2004, 2003 and 2002,
logistics services accounted for approximately 62%, 47% and 54%, respectively,
of the total wireless devices we handled. Over the last three years our
logistics services gross margin has ranged from 18% to 22%. Cost of revenue for
logistics services is primarily composed of direct and indirect labor,
warehousing, information technology and other operating costs. Since we
generally do not take ownership of the inventory in our logistics services
arrangements and the accounts receivable are lower due to the fee-based nature
of these services, the invested capital requirements in providing logistics
services generally are less than our distribution business.

      Channel Services. In our channel services business, we provide a
cost-effective channel for mobile operators and MVNO's to add new subscribers.
We do this by establishing and managing a network of independent authorized
retailers ("CS Network"). We provide our CS Network with access to products and
support them through commissions management, sales and marketing programs,
merchandising programs, training programs, incentive programs and co-op. As
these retailers activate or upgrade subscribers, they earn commissions from
mobile operators. We collect these commissions from the mobile operators and pay
the retailers their pro-rata portion of the commissions after deducting our
fees. For mobile operators and MVNOs, we provide them with incremental points of
sale, a variable-cost model for acquiring new subscribers and commissions
management for our CS Network. Sales of wireless devices and related accessories
to our network of independent authorized retailers are included in product
distribution revenues and fees earned from commissions management services are
included in logistics services revenues. We currently provide channel services
in France and the United States to mobile operators such as SFR (France), Orange
(France), Sprint PCS (United States), Virgin Mobile (United States) and Nextel
(United States).

      Prepaid Airtime. Through our prepaid airtime business model, we
participate in the ongoing revenue stream generated by prepaid subscribers. We
do this by purchasing physical scratch cards or electronic activation codes from
mobile operators and MVNOs and distributing them to retail channels.

      Much of our activity in the prepaid airtime business model is in our
Europe and Asia-Pacific divisions; however, we are seeing increased acceptance
of prepaid or pay-as-you-go subscriber plans in the United States. Sales of
physical scratch cards or electronic activation codes to retail customers are
included in logistics services revenues. We distribute prepaid airtime in many
of our operations on behalf of mobile operators and MVNOs such as: SFR (France),
Orange (France), Tele2 (Sweden), Vodafone (Australia and New Zealand), Sonofon
(Denmark), Virgin Mobile (United States) and TeliaSonera (Sweden).

OUR STRATEGY

      Our strategy is to continue to grow as a global leader in product
distribution and logistics services in the global wireless industry. Our
objectives are to increase the Company's earnings, increase market share in
existing markets, maintain or improve our return on invested capital within
certain debt-to-total-capital parameters and to enhance customer satisfaction by
increasing the value we offer relative to other service alternatives and service
offerings by our competitors.

      Our strategy incorporates industry trends such as increasing sales of
replacement devices, increasing subscribers, the migration to next generation
systems and new or expanding industry participants as described in detail in the

                                       7
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section entitled "GLOBAL WIRELESS INDUSTRY." We will endeavor to grow our
business through organic growth opportunities, new product and service
offerings, start-up operations, joint ventures or acquisitions as we contemplate
these current and anticipated trends. In evaluating opportunities for growth,
key components of our decision making process include anticipated long-term
rates of return, short-term returns on invested capital and risk profiles as
compared to the potential returns. No assurances can be given on the success of
our strategy, refer to "BUSINESS RISK FACTORS".

      Key elements of our strategy include:

      Expand into New Geographic Markets. We estimate that the global wireless
industry shipped 665 million wireless devices in 2004. In the geographic markets
where we currently operate, our addressable market, we estimate the market size
was approximately 174 million wireless devices in 2004. We believe we are in a
position to enter into new markets, thereby expanding our addressable market. In
2004, we entered into the Slovak Republic and Finland and continued to expand
our presence in India. In 2005, we believe that there may be additional
expansion opportunities in Europe and Asia.

      Add New Products and Services in Current Markets. With increasing
functionality of wireless devices due to technological advancements and enhanced
data speeds due to the migration to next generation systems, we believe that
device manufacturers may introduce innovative products, which we may distribute.
Our strategy includes the search for new products and service offerings within
the current geographic markets in which we operate. Potential new product
categories include wireless broadband; mobile content including ring tones,
images, games and music; and smart device enterprise solutions providing bundled
wireless solutions to small and medium enterprise customers through the
value-added resellers and system integrator channels.

      Expand Existing Product and Service Offerings in Current Markets. Our plan
includes the transfer of our industry know-how, relationships, and capabilities
from one market to another in an effort to expand our product and service
offerings within our current markets. This is intended to enhance the service
offerings and product lines of some of our operations, which have relatively
limited product lines and service offerings as compared to the collective
product and service offerings of the entire Company. Opportunities in expanding
our product lines include wireless handsets, data devices, memory cards,
sim-cards and accessories. Opportunities in expanding our service offerings
include product fulfillment, electronic prepaid recharge services, reverse
logistics management, repair services, and channel services.

      Continue to Build and Promote the Brightpoint Brand within the Global
Wireless Industry. Many of our customers and suppliers operate in many markets
globally. We believe that strengthening our corporate brand and delivering a
consistent message globally may allow us to compete for business more
effectively than local unbranded distribution companies or logistics services
providers who are not solely dedicated to serving the global wireless industry.
We have developed distribution and logistics expertise that is unique to the
global wireless industry and, with a solid brand, plan on pursuing opportunities
to further grow our business.

CUSTOMERS

      We provide our products and services to a customer base of approximately
20,000 mobile operators, MVNOs, manufacturers, independent agents and dealers,
retailers, and other distributors. During 2004, customers in each of our primary
sales channels include the following:

      Mobile Operators and MVNOs: Nextel (United States), Virgin Mobile (United
      States), Sprint PCS (United States), ALLTEL (United States), Dobson
      Cellular (United States), TracFone (United States), Comcel (Colombia),
      Tele2 (Sweden), Netcom (Norway), SFR (France), Orange (France), Reliance
      Infocomm (India), Tata TeleServices (India), Vodafone (Australia, New
      Zealand and Germany), Eurotel (Slovak Republic), Telstra (Australia) and
      SingTel (Australia)

      Dealers and Agents: Wireless One (United States), One Stop Cellular
      (United States), Moorehead Communications (United States), Dialect
      (Sweden), Klartsvar (Sweden), Fone Zone (Australia), First Mobile Group
      (New Zealand) and MV2 Telecoms Shop (Philippines)

                                       8
<PAGE>

      Mass Retailers: Pressbyran (Sweden), Best Buy (United States), Target
      (United States), Karstadt (Germany), Panini (France), McDonald's (Sweden),
      Strathfield (Australia) and Woolworth's Group (Australia)

      Other Distributors: American Connections (United States), Infosonics
      (United States), Computech Overseas International (Hong Kong), Charmley
      Trading Pte. Ltd (Singapore) and HCT Holdings Limited (Hong Kong)

      For 2004, 2003 and 2002, aggregate revenues generated from our five
largest customers accounted for approximately 21%, 32% and 31% of our total
revenue, respectively. In 2004, no customer accounted for more than 10% of our
total revenue. In 2003, Computech Overseas International ("Computech"), a
customer of our Brightpoint Asia Limited operations, accounted for approximately
10% of our total revenue and 19% of our Asia-Pacific division's revenue. In
2002, Computech accounted for approximately 13% of our total revenue and 30% of
our Asia-Pacific division's revenue. At December 31, 2003 and 2002, there were
no amounts owed to us from Computech. The loss or a significant reduction in
business activities by our principal customers could have a material adverse
affect on our revenue and results of operations.

      We generally sell our products pursuant to customer purchase orders and
subject to our terms and conditions. We generally ship products on the same day
orders are received from the customer. Unless otherwise requested, substantially
all of our products are delivered by common freight carriers. Because orders are
filled shortly after receipt, backlog is generally not material to our business.
Our logistics services are typically provided pursuant to agreements with terms
between one and three years which generally may be terminated by either party
subject to a short notice period.

PURCHASING AND SUPPLIERS

      We have established key relationships with leading manufacturers of
wireless voice and data equipment such as Nokia, Motorola, Kyocera, Audiovox, LG
Electronics, Sony Ericsson, Siemens, Samsung, and High Tech Computer Corp. We
generally negotiate directly with manufacturers and suppliers in order to obtain
inventories of brand name products. Inventory purchases are based on customer
demand, product availability, brand name recognition, price, service, and
quality. Certain of our suppliers may provide favorable purchasing terms to us,
including credit, price protection, cooperative advertising, volume incentive
rebates, stock balancing and marketing allowances. Product manufacturers
typically provide limited warranties directly to the end consumer or to us,
which we generally pass such warranties through to our customers.

      Nokia, our largest supplier of wireless devices and accessories, accounted
for approximately 63%, 79% and 63% of purchases for our product distribution
business in 2004, 2003, and 2002, respectively. None of our other suppliers
accounted for 10% or more of product purchases in 2004, 2003 or 2002. Loss of
the applicable contracts with Nokia or other suppliers, or failure by Nokia or
other suppliers to supply competitive products on a timely basis, at competitive
prices and on favorable terms, or at all, would have a material adverse effect
on our revenue and operating margins and our ability to obtain and deliver
products on a timely and competitive basis. See -- "COMPETITION."

      We maintain agreements with certain of our significant suppliers, all of
which relate to specific geographic areas. Our agreements may be subject to
certain conditions and exceptions including the retention by manufacturers of
certain direct accounts and restrictions regarding our sale of products supplied
by certain other competing manufacturers and to certain mobile operators.
Typically our agreements with suppliers are non-exclusive. Our supply agreements
may require us to satisfy purchase requirements based upon forecasts provided by
us, in which a portion of these forecasts may be binding. Our supply agreements
generally can be terminated on short notice by either party. We purchase
products from manufacturers pursuant to purchase orders placed from time to time
in the ordinary course of business. Purchase orders are typically filled,
subject to product availability, and shipped to our designated warehouses by
common freight carriers. In December of 2002, we entered into an amendment to
our distribution agreement with Nokia Inc. in the United States that, among
other provisions, changed certain purchasing and invoicing processes to create a
"Just-in-Time" inventory arrangement that allowed us to reduce the amount of
inventories of Nokia products that we owned prior to the expiration of this
arrangement in June 2003. This arrangement did not have a significant impact on
our December 31, 2004, 2003 or 2002 inventory carrying values. We believe that
our relationships with our suppliers are generally good. Any failure or delay by
our suppliers in supplying us with products on favorable terms and at
competitive prices would severely diminish our ability to

                                       9
<PAGE>

obtain and deliver products to our customers on a timely and competitive basis.
If we lose any of our significant suppliers, or if any supplier imposes
substantial price increases or eliminates favorable terms provided to us and
alternative sources of supply are not readily available, it may have a material
adverse effect on our results of operations.

SALES AND MARKETING

      We promote our product lines, our capabilities and the benefits of certain
of our business models through advertising in trade publications and attending
various international, national and regional trade shows, as well as through
direct mail solicitation, media advertising and telemarketing activities. Our
suppliers and customers use a variety of methods to promote their products and
services directly to consumers, including Internet, print and media advertising.

      Our sales and marketing efforts are coordinated in each of our three
regional divisions by key personnel responsible for that particular division.
Divisional management devotes a substantial amount of their time to developing
and maintaining relationships with our customers and suppliers. In addition to
managing the overall operations of the divisions, each division's sales and
operations centers are managed by either general or country managers who report
to the appropriate member of divisional management and are responsible for the
daily sales and operations of their particular location. Each country has sales
associates who specialize in or focus on sales of our products and services to a
specific customer or customer category (e.g., mobile operator, MVNOs, dealers
and agents, reseller, retailer, subscriber, etc.). In addition, in many markets
we have dedicated a sales force to manage most of our mobile operator
relationships and to promote our logistics services including our channel
services and prepaid airtime business models. Sales and marketing efforts for
our Brightpoint Asia Limited operations have been outsourced to Persequor
Limited, to whom we pay a management fee, including performance based
commissions. Persequor Limited is controlled by the former managing director of
the Company's operations in the Middle East and certain members of his
management team. Persequor Limited is a 15% partner in Brightpoint India Private
Limited and oversees our Brightpoint India Private Limited's operations.
Including support and retail outlet personnel, we had approximately 396
employees involved in sales and marketing at December 31, 2004, including 162 in
our Americas division, 128 in our Europe division, and 106 in our Asia-Pacific
division.

SEASONALITY

      The operating results of each of our three divisions may be influenced by
a number of seasonal factors in the different countries and markets in which we
operate. These factors may cause our revenue and operating results to fluctuate
on a quarterly basis. These fluctuations are a result of several factors,
including, but not limited to:

      -     promotions and subsidies by mobile operators;

      -     the timing of local holidays and other events affecting consumer
            demand;

      -     the timing of the introduction of new products by our suppliers and
            competitors;

      -     purchasing patterns of customers in different markets;

      -     general economic conditions; and

      -     product availability and pricing.

      Consumer electronics and retail sales in many geographic markets tend to
experience increased volumes of sales at the end of the calendar year, largely
because of gift-giving holidays. This and other seasonal factors have
contributed to increases in our revenue during the fourth quarter in certain
markets. Conversely, we have experienced decreases in demand in the first
quarter subsequent to the higher level of activity in the preceding fourth
quarter. Our operating results may continue to fluctuate significantly in the
future. If unanticipated events occur, including delays in securing adequate
inventories of competitive products at times of peak sales or significant
decreases in sales during these periods, it could have a material adverse effect
on our operating results. In addition, as a result of seasonal factors, interim
results may not be indicative of annual results. See "MANAGEMENT'S

                                       10
<PAGE>

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" for
additional analysis on seasonality.

COMPETITION

      We operate in a highly competitive industry and in highly competitive
markets and believe that such competition may intensify in the future. The
markets for wireless voice and data products are characterized by intense price
competition and significant price erosion over the lives of products. We compete
principally on the basis of value, in terms of price, capability, time, product
knowledge, reliability, customer service and product availability. Our
competitors may possess substantially greater financial, marketing, personnel
and other resources than we do which may enable them to withstand substantial
price competition, launch new products and implement extensive advertising and
promotional campaigns.

      The distribution of wireless devices and the provision of logistics
services within the global wireless industry have, in the past, been
characterized by relatively low barriers to entry. Our ability to continue to
compete successfully will be largely dependent on our ability to anticipate and
respond to various competitive and other factors affecting the industry,
including new or changing outsourcing requirements; new information technology
requirements; new product introductions; inconsistent or inadequate supply of
product; changes in consumer preferences; demographic trends; international,
national, regional and local economic conditions; and discount pricing
strategies and promotional activities by competitors.

      The markets for wireless communications products and integrated services
are characterized by rapidly changing technology and evolving industry
standards, often resulting in product obsolescence, short product life cycles
and changing competition. Accordingly, our success is dependent upon our ability
to anticipate technological changes in the industry and successfully identify
these changes and adapt our offering of products and services, to satisfy
evolving industry and customer requirements. The wireless device industry is
increasingly segmenting its product offering and introducing products with
enhanced functionality that compete with other non-wireless consumer electronic
products. Examples include wireless devices with embedded mega-pixel cameras,
which now compete to a certain extent with non-wireless digital cameras, and
wireless devices with MP3 capabilities that compete with non-wireless handheld
audio players. These non-wireless consumer electronic products are distributed
through other non-wireless distributors who may become our competitors as the
wireless industry continues to introduce wireless devices with enhanced
functionality. In addition, products that reach the market outside of normal
distribution channels, such as gray market resales, may also have an adverse
impact on our operations.

      Our current competition and specific competitors varies by business model
and division as follows:

      Product Distribution. Our product distribution business competes with
broad-based wireless distributors who carry similar product lines and specialty
distributors who may focus on segments within the wireless industry such as
WLAN, Wi-Fi and accessories. To a lesser extent we compete with information
technology distribution companies who offer wireless devices in certain markets.
Manufacturers also sell their products directly to large mobile operators and as
mobile operator customers grow in scale, manufacturers may pose a competitive
threat to our business.

      For product distribution, specific competitors and the divisions in which
they generally compete with us include CellStar Corporation (Americas and
Asia-Pacific), Tessco Technologies (Americas), BrightStar Corporation
(Americas), Infosonics (Americas), Dangaard Telecom Holding A/S (Europe),
Caudwell Communications Limited (Europe), Axcom (Europe), Ingram Micro (all
divisions) and Cellnet Group Ltd. (Asia-Pacific).

      Logistics Services. Our logistics services business competes with general
logistics services companies who provide logistics services to multiple
industries and specialize more in the warehousing and transportation of finished
goods. Manufacturers can also offer fulfillment services to our customers.
Certain mobile operators have their own distribution and logistics
infrastructure which competes with our outsource solutions.

      For logistics services, specific competitors and the division in which
they generally compete with us include Aftermarket Technologies Corp.
(Americas), Bertelsmann AG (Europe), Dangaard Telecom Holding A/S (Europe),

                                       11
<PAGE>

PFSweb, Inc. (Americas), Tessco Technologies (Americas), ACR Logistics (Europe),
and UPS Logistics (Americas).

      Channel Services. Our channel services business competes with other
specialists who establish and manage independent authorized retailers and
value-added resellers and with mobile operators who have the infrastructure
necessary to manage their indirect channels.

      For channel services, specific competitors and the division in which they
generally compete with us include Advantage Wireless (Americas), American
Wireless (Americas), Cellular Network Communication Group (Americas), Avenir
S.A. (Europe), Malsha (Americas), and QDI (Americas).

      Prepaid Airtime. Our prepaid airtime business competes with broad-based
wireless distributors who sell prepaid airtime, specialty distributors who focus
on prepaid airtime and companies who manufacture or distribute electronic
in-store terminals capable of delivering prepaid airtime. To a lesser extent we
compete with mobile operators themselves as they distribute prepaid airtime
through their own retail channels.

      For prepaid airtime, specific competitors and the divisions in which they
generally compete with us include American Wireless (Americas), Alphyra
(Europe), Euronet (Europe), Dangaard Telecom Holding A/S (Europe), InComm
(Americas), and PRE Solutions, Inc. (Americas).

INFORMATION SYSTEMS

      The success of our operations is largely dependent on the functionality,
architecture, performance and utilization of our information systems. We have,
and continue to implement, business applications that enable us to provide our
customers and suppliers with solutions in the distribution of their products.
These solutions include, but are not limited to, e-commerce; electronic data
interchange (EDI); Web-based order entry, account management, supply chain
management; warehouse management, serialized inventory tracking, inventory
management, and reporting. During 2004, 2003 and 2002, we invested approximately
$4.6 million, $5.2 million and $6.2 million, respectively, on our information
systems with the focus of increasing the functionality and flexibility of our
systems. In the future, we intend to invest to further develop those solutions
and integrate our internal information systems throughout all divisions. At
December 31, 2004, there were approximately 66 employees in our information
technology departments worldwide.

EMPLOYEES

      As of December 31, 2004, we had 1,264 employees; 666 in our Americas
division, 372 in our Asia-Pacific division, and 226 in our Europe division. Of
these employees, approximately 5 were in executive officer positions, 594 were
engaged in service operations, 396 were in sales and marketing and 269 were in
finance and administration (including information technology employees). Our
distribution activities and logistics services are labor-intensive and we
utilize temporary laborers, particularly in our Americas division. At December
31, 2004, we had approximately 715 temporary laborers; 613 in our Americas
division, 70 in our Asia-Pacific division and 32 in our Europe division. Of
these temporary laborers, approximately 573 were engaged in service operations,
94 were in sales and marketing and 48 were in finance and administration. None
of our United States-based employees are covered by a collective bargaining
agreement. All other non-United States based employees are not subject to
collective agreements, except for national collective labor agreements in France
and Finland. We believe that our relations with our employees are good. See
BUSINESS RISK FACTORS -- "OUR CONTINUED GROWTH DEPENDS ON RETAINING OUR CURRENT
KEY EMPLOYEES AND ATTRACTING ADDITIONAL QUALIFIED PERSONNEL," "WE ARE SUBJECT TO
A NUMBER OF REGULATORY AND CONTRACTUAL RESTRICTIONS GOVERNING OUR RELATIONS WITH
CERTAIN OF OUR EMPLOYEES" and "OUR LABOR FORCE EXPERIENCES A HIGH RATE OF
PERSONNEL TURNOVER."

BUSINESS RISK FACTORS

      There are many important factors that have affected, and in the future
could affect, our business, including the factors discussed below which should
be reviewed carefully, in conjunction with the other information contained in
this Form 10-K/A. Some of these factors are beyond our control and future trends
are difficult to predict. In addition,

                                       12
<PAGE>

various statements, discussions and analyses throughout this Form 10-K/A are not
based on historical fact and contain forward-looking statements. These
statements are also subject to certain risks and uncertainties, including those
discussed below, which could cause our actual results to differ materially from
those expressed or implied in any forward-looking statements made by us. Readers
are cautioned not to place undue reliance on any forward-looking statement
contained in this Form 10-K/A and should also be aware that we undertake no
obligation to update any forward-looking information contained herein to reflect
events or circumstances after the date of this Form 10-K/A or to reflect the
occurrence of unanticipated events.

      The loss or reduction in orders from principal customers or a reduction in
prices we are able to charge these customers could materially adversely affect
our business. -- For 2004 and 2003, aggregate revenues generated from our five
largest customers accounted for approximately 21% and 32%, respectively, of our
total revenues. In 2004, no customer accounted for more than 10% of our total
revenue. In 2003, Computech Overseas International ("Computech"), a customer of
our Brightpoint Asia Limited operations, accounted for approximately 10% of our
total revenue and 19% of our Asia-Pacific division's revenue. In 2002, Computech
accounted for approximately 13% of our total revenue and 30% of our Asia-Pacific
division's revenue. Although Nextel Communications, Inc. ("Nextel"), a fee-based
logistics service customer, is less than 10% of the Company's total revenue, it
is more than 10% of wireless devices handled in the Company's North American
business. Sprint is a customer and a supplier within the channel services
business in the Company's North American business. On December 15, 2004, Sprint
and Nextel announced a definitive agreement for a merger of equals. If the
merger occurs, the Company's relationship with the combined entity may be
negatively impacted. Many of our customers in the markets we serve have
experienced severe price competition and for this and other reasons may seek to
obtain products or services from us at lower prices than we have been able to
provide these customers in the past. The loss of any of our principal customers,
a reduction in the amount of product or services our principal customers order
from us or the inability to maintain current terms, including price, with these
or other customers could have an adverse effect on our financial condition,
results of operations and liquidity. Although we have entered into contracts
with certain of our largest logistics services customers, we previously have
experienced losses of certain of these customers through expiration or
cancellation of our contracts with them and there can be no assurance that any
of our customers will continue to purchase products or services from us or that
their purchases will be at the same or greater levels than in prior periods.

      Our business may be adversely impacted by consolidation of mobile
operators. -- The past several years have witnessed a consolidation within the
mobile operator community which trend is expected to continue. This trend could
result in a reduction or elimination of promotional activities by the remaining
mobile operators as they seek to reduce their expenditures, which could in turn,
result in decreased demand for our products or services. Moreover, consolidation
of mobile operators reduces the number of potential contracts available to us
and other providers of logistics services. We could also lose business if mobile
operators, which are our customers, are acquired by other mobile operators that
are not our customers.

      We buy a significant amount of our products from a limited number of
suppliers, who may not provide us with competitive products at reasonable prices
when we need them in the future. -- We purchase wireless devices and accessories
that we sell from wireless communications equipment manufacturers, distributors
and network operators. We depend on these suppliers to provide us with adequate
inventories of currently popular brand name products on a timely basis and on
favorable pricing and other terms. Our agreements with our suppliers are
generally non-exclusive, require us to satisfy minimum purchase requirements,
can be terminated on short notice and provide for certain territorial
restrictions, as is common in our industry. We generally purchase products
pursuant to purchase orders placed from time to time in the ordinary course of
business. In the future, our suppliers may not offer us competitive products on
favorable terms without delays. From time to time we have been unable to obtain
sufficient product supplies from manufacturers in many markets in which we
operate. Any future failure or delay by our suppliers in supplying us with
products on favorable terms would severely diminish our ability to obtain and
deliver products to our customers on a timely and competitive basis. If we lose
any of our principal suppliers, or if these suppliers are unable to fulfill our
product needs, or if any principal supplier imposes substantial price increases
and alternative sources of supply are not readily available, may result in a
loss of customers and may have a material adverse effect on our results of
operations.

      Internal control weakness could have an adverse effect on us. -- As
reported in Item 9A, our management concluded that we had deficiencies in our
internal control over financial reporting that resulted in material

                                       13
<PAGE>

weaknesses in our internal controls as of December 31, 2004. Management is
planning appropriate steps to remediate the material weaknesses, as discussed in
Item 9A, but there can be no assurance that we will be able to address these
material weaknesses in a timely manner. Insufficient internal controls could
result in lack of compliance with contractual agreements and misstatements in
our financial statements that could be material and could cause investors to
lose confidence in our reported financial information, which could have a
negative effect on the trading price of our stock. Finally, controls that
function effectively today may become inadequate due to changes in conditions.

      We may become subject to suits alleging medical risks associated with our
wireless devices. -- Lawsuits or claims have been filed or made against
manufacturers of wireless devices over the past years alleging possible medical
risks, including brain cancer, associated with the electromagnetic fields
emitted by wireless communications devices. There has been only limited relevant
research in this area, and this research has not been conclusive as to what
effects, if any, exposure to electromagnetic fields emitted by wireless devices
has on human cells. Substantially all of our revenues are derived, either
directly or indirectly, from sales of wireless devices. We may become subject to
lawsuits filed by plaintiffs alleging various health risks from our products. If
any future studies find possible health risks associated with the use of
wireless devices or if any damages claim against us is successful, it could have
a material adverse effect on our business. Even an unsubstantiated perception
that health risks exist could adversely affect our ability or the ability of our
customers to market wireless devices.

      We may have difficulty collecting our accounts receivable. -- We currently
offer and intend to offer open account terms to certain of our customers, which
may subject us to credit risks, particularly in the event that any receivables
represent sales to a limited number of customers or are concentrated in
particular geographic markets. We also enter into certain securitization
transactions with financing organizations with respect to portions of our
accounts receivable in order to reduce the amount of working capital required to
fund such receivables. We are the collection agent on behalf of the financing
organization for many of these arrangements. We have no significant retained
interest or servicing liabilities related to accounts receivable that we have
sold, although in limited circumstances, related primarily to our performance in
the original transactions, we may be required to repurchase the accounts
receivable. The collection of our accounts receivable and our ability to
accelerate our collection cycle through the sale of accounts receivable is
affected by several factors, including, but not limited to, our credit granting
policies, contractual provisions, our customers' and our overall credit rating
as determined by various credit rating agencies, industry and economic
conditions, the ability of the customer to provide security, collateral or
guarantees relative to credit granted by us, the customer's and our recent
operating results, financial position and cash flows and our ability to obtain
credit insurance on amounts that we are owed. Adverse changes in any of these
factors, certain of which may not be wholly in our control, could create delays
in collecting or an inability to collect our accounts receivable which could
have a material adverse effect on our financial position, cash flows and results
of operations.

      Our future operating results will depend on our ability to continue to
increase volumes and maintain margins. -- A large percentage of our total
revenues is derived from sales of wireless devices, a part of our business that
operates on a high-volume, low-margin basis. Our ability to generate these sales
is based upon demand for wireless voice and data products and our having
adequate supply of these products. The gross margins that we realize on sales of
wireless devices could be reduced due to increased competition or a growing
industry emphasis on cost containment. However, a sales mix shift to fee-based
logistics services may place negative pressure on our revenue growth while
having a positive impact on our gross margins. Therefore, our future
profitability will depend on our ability to maintain our margins or to increase
our sales to help offset future declines in margins. We may not be able to
maintain existing margins for products or services offered by us or increase our
sales. Even if our sales rates do increase, the gross margins that we receive
from our sales may not be sufficient to make our future operations profitable.

      Our business growth strategy includes acquisitions. -- We have acquired
other businesses in the past and plan to continue to do so in the future based
on our global business strategy. Acquisitions may not meet our expectations at
the time of purchase and could adversely affect our operations causing operating
losses and subsequent write-downs due to asset impairments.

      Our business in India began in 2003 and remains in the developmental
stage. -- We launched our India business in the second quarter of 2003, in which
we fulfilled orders of significant size to Reliance Infocomm, who heavily

                                       14
<PAGE>

promoted a specific Nokia CDMA handset model. Since then, this mobile operator
has changed its promotional activities and airtime offerings, which has affected
its handset buying patterns resulting in reduced purchases from us. We are in
the process of transitioning our business model in India to sell products
through channels to reach independent dealers, who can now activate handsets on
CDMA networks, including Reliance Infocomm's network. We believe this will
result in a more predictable business model. Currently, we are dependent on
Nokia as our supplier of wireless devices for India, and have a limited number
of mobile operator customers. In 2004, we incurred $2.4 million of operating
losses in our India business. As we continue our business development in India,
we may incur further losses, which could have a material adverse effect on our
financial position, cash flows and results of operations.

      The market price of our common stock may continue to be volatile. -- The
market price of our common stock has fluctuated significantly from time to time
since our initial public offering in April 1994. The trading price of our common
stock could experience significant fluctuations in the future in response to
certain factors, which could include actual or anticipated variations in our
quarterly operating results or financial position; repurchases of common stock;
commencement of litigation; the introduction of new services, products or
technologies by us, our suppliers or our competitors; changes in other
conditions or trends in the wireless voice and data industry; changes in
governmental regulation and the enforcement of such regulation; changes in the
assessment of our credit rating as determined by various credit rating agencies;
or changes in securities analysts' estimates of our future performance or that
of our competitors or our industry in general. General market price declines or
market volatility in the prices of stock for companies in the global wireless
industry or in the distribution or logistics services sectors of the global
wireless industry could also affect the market price of our common stock.

      Our business depends on the continued tendency of wireless equipment
manufacturers and network operators to outsource aspects of their business to us
in the future. -- We provide functions such as distribution, inventory
management, fulfillment, customized packaging, prepaid and e-commerce solutions,
activation management and other outsourced services for many of these wireless
manufacturers and network operators. Certain wireless equipment manufacturers
and network operators have elected, and others may elect, to undertake these
services internally. Additionally, our customer service levels, industry
consolidation, competition, deregulation, technological changes or other
developments could reduce the degree to which members of the global wireless
industry rely on outsourced logistics services such as the services we provide.
Any significant change in the market for our outsourced services could have a
material adverse effect on our business. Our outsourced services are generally
provided under multi-year renewable contractual arrangements. Service periods
under certain of our contractual arrangements are expiring or will expire in the
near future. The failure to obtain renewal or otherwise maintain these
agreements on terms, including price, consistent with our current terms could
have a material adverse effect on our business.

      We depend on third parties to manufacture products that we distribute and,
accordingly, rely on their quality control procedures. -- Product manufacturers
typically provide limited warranties directly to the end consumer or to us,
which we generally pass through to our customers. If a product we distribute for
a manufacturer has quality or performance problems, our ability to provide
products to our customers could be disrupted.

      Our operations may be materially affected by fluctuations in regional
demand patterns and economic factors. -- The demand for our products and
services has fluctuated and may continue to vary substantially within the
regions served by us. We believe that the enhanced functionality of wireless
devices and the roll-out of next generation systems has had and will continue to
have an effect on overall subscriber growth and handset replacement demand.
Economic slow-downs in regions served by us or changes in promotional programs
offered by mobile operators may lower consumer demand and create higher levels
of inventories in our distribution channels which results in lower than
anticipated demand for the products and services that we offer and can decrease
our gross and operating margins. During 2002, we recorded inventory valuation
adjustments to adjust inventories to their estimated net realizable value based
on the then current market conditions. These valuation adjustments were the
result of the over-supply of product in our distribution channel and the
lower-than-anticipated level of demand. A prolonged economic slow-down in the
United States or any other regions in which we have significant operations could
negatively impact our results of operations and financial position.

      Rapid technological changes in the global wireless industry could have a
material adverse effect on our business. -- The technology relating to wireless
voice and data equipment changes rapidly resulting in product

                                       15
<PAGE>

obsolescence or short product life cycles. We are required to anticipate future
technological changes in our industry and to continually identify, obtain and
market new products in order to satisfy evolving industry and customer
requirements. Competitors or manufacturers of wireless equipment may market
products or services which have perceived or actual advantages over our service
offerings or products that we handle or which otherwise render those products or
services obsolete or less marketable. We have made and continue to make
significant capital investments in accordance with evolving industry and
customer requirements including maintaining levels of inventories of currently
popular products that we believe are necessary based on current market
conditions. These concentrations of capital increase our risk of loss due to
product obsolescence.

      We rely on our suppliers to provide trade credit facilities to adequately
fund our on-going operations and product purchases. -- Our business is dependent
on our ability to obtain adequate supplies of currently popular product at
favorable pricing and on other favorable terms. Our ability to fund our product
purchases is dependent on our principal suppliers providing favorable payment
terms that allow us to maximize the efficiency of our capital usage. The payment
terms we receive from our suppliers is dependent on several factors, including,
but not limited to, pledged cash requirements, our payment history with the
supplier, the suppliers credit granting policies, contractual provisions, our
overall credit rating as determined by various credit rating agencies, industry
conditions, our recent operating results, financial position and cash flows and
the supplier's ability to obtain credit insurance on amounts that we owe them.
Adverse changes in any of these factors, certain of which may not be wholly in
our control, could have a material adverse effect on our operations.

      A significant percentage of our revenues are generated outside of the
United States in countries that may have volatile currencies or other risks. --
We maintain operations centers and sales offices in territories and countries
outside of the United States. The fact that our business operations are
conducted in a wide variety of countries exposes us to increased credit risks,
customs duties, import quotas and other trade restrictions, potentially greater
inflationary pressures, shipping delays, the risk of failure or material
interruption of wireless systems and services, possible wireless product supply
interruption and potentially significant increases in wireless product prices.
Changes may occur in social, political, regulatory and economic conditions or in
laws and policies governing foreign trade and investment in the territories and
countries where we currently have operations. U.S. laws and regulations relating
to investment and trade in foreign countries could also change to our detriment.
Any of these factors could have a material adverse effect on our business and
operations. We purchase and sell products and services in a number of foreign
currencies, many of which have experienced fluctuations in currency exchange
rates. In the past, we enter into forward exchange swaps, futures or options
contracts as a means of hedging our currency transaction and balance sheet
translation exposures. However, our management has had limited prior experience
in engaging in these types of transactions. Even if done well, hedging may not
effectively limit our exposure to a decline in operating results due to foreign
currency translation. We cannot predict the effect that future exchange rate
fluctuations will have on our operating results. We have ceased operations or
divested several of our foreign operations because they were not performing to
acceptable levels. These actions resulted in significant losses to us. We may in
the future, decide to divest certain existing foreign operations. This could
result in our incurring significant additional losses.

      We rely on a third party to manage certain significant operations in our
Asia-Pacific division. -- Sales and management services in our Brightpoint Asia
Limited operations are currently provided to us by Persequor Limited, an entity
controlled by the former managing director of our operations in the Middle East
and certain members of his management team and to whom we pay certain
performance based management fees. A failure of this entity to provide us with
satisfactory services or if these operations are negatively impacted by other
events could result in a loss of revenue generated from that division which
could adversely affect our revenue.

      Natural disasters, hostilities and terrorist acts could disrupt our
operations. -- Although we have implemented policies and procedures designed to
minimize the effect of a natural disaster, outbreak of hostilities or terrorist
attacks in markets served by us or on our facilities, the actual effect of any
such events on our operations cannot be determined at this time but our
operations could be adversely affected.

      We make significant investments in the technology used in our business and
rely on this technology to function effectively without interruptions. -- We
have made significant investments in information systems technology and have
focused on the application of this technology to provide customized logistics
services to wireless communications equipment manufacturers and network
operators. Our ability to meet our customers' technical and

                                       16
<PAGE>

performance requirements is highly dependent on the effective functioning of our
information technology systems. Further, certain of our contractual arrangements
to provide services contain performance measures and criteria that if not met
could result in early termination of the agreement and claims for damages. In
connection with the implementation of this technology we have incurred
significant costs and have experienced significant business interruptions. These
business interruptions can cause us to fall below acceptable performance levels
pursuant to our customers' requirements and could result in the loss of the
related business relationship. We may experience additional costs and periodic
business interruptions related to our information systems as we implement new
information systems in our various operations. Our sales and marketing efforts,
a large part of which are telemarketing based, are highly dependent on computer
and telephone equipment. We anticipate that we will need to continue to invest
significant amounts to enhance our information systems in order to maintain our
competitiveness and to develop new logistics services. Our property and business
interruption insurance may not compensate us adequately, or at all, for losses
that we may incur if we lose our equipment or systems either temporarily or
permanently. In addition, a significant increase in the costs of additional
technology or telephone services that are not recoverable through an increase in
the price of our services could have a material adverse effect on our results of
operations.

      We have debt facilities, which are secured by a portion of our assets and
which could prevent us from borrowing additional funds, if needed. -- Our United
States, Australia and New Zealand subsidiaries' credit facilities are secured by
primarily all of their respective assets and borrowing availability is based
primarily on a percentage of eligible accounts receivable and inventory.
Consequently, any significant decrease in eligible accounts receivable and
inventory could limit our subsidiaries' ability to borrow additional funds to
adequately finance our operations and expansion strategies. The terms of our
United States, Australia and New Zealand subsidiaries' credit facilities also
include negative covenants that, among other things, may limit our ability to
incur additional indebtedness, sell certain assets and make certain payments,
including but not limited to, dividends, repurchases of common stock and other
payments outside the normal course of business as well as prohibiting us from
merging or consolidating with another corporation or selling all or
substantially all of our assets in the United States, Australia and New Zealand.
If we violate any of these loan covenants, default on these obligations or
become subject to a change of control, our subsidiaries' indebtedness would
become immediately due and payable, and the banks could foreclose on its
security.

      The global wireless industry is intensely competitive and we may not be
able to continue to compete successfully in this industry. -- We compete for
sales of wireless voice and data equipment, and expect that we will continue to
compete, with numerous well-established mobile operators, distributors and
manufacturers, including our own suppliers. As a provider of logistics services,
we also compete with other distributors, logistics services companies and
electronic manufacturing services companies. Many of our competitors possess
greater financial and other resources than we do and may market similar products
or services directly to our customers. The global wireless industry has
generally had low barriers to entry. As a result, additional competitors may
choose to enter our industry in the future. The markets for wireless handsets
and accessories are characterized by intense price competition and significant
price erosion over the life of a product. Many of our competitors have the
financial resources to withstand substantial price competition and to implement
extensive advertising and promotional programs, both generally and in response
to efforts by additional competitors to enter into new markets or introduce new
products. Our ability to continue to compete successfully will depend largely on
our ability to maintain our current industry relationships. We may not be
successful in anticipating and responding to competitive factors affecting our
industry, including new or changing outsourcing requirements, the entry of
additional well-capitalized competitors, new products which may be introduced,
changes in consumer preferences, demographic trends, international, national,
regional and local economic conditions and competitors' discount pricing and
promotion strategies. As wireless telecommunications markets mature and as we
seek to enter into new markets and offer new products in the future, the
competition that we face may change and grow more intense.

      We may not be able to manage and sustain future growth at our historical
or current rates. -- In prior years we have experienced domestic and
international growth. We will need to manage our expanding operations
effectively, maintain or accelerate our growth as planned and integrate any new
businesses which we may acquire into our operations successfully in order to
continue our desired growth. If we are unable to do so, particularly in
instances in which we have made significant capital investments, it could have a
material adverse effect on our operations. Our ability to absorb, through
revenue growth, the increasing operating costs that we have incurred and
continue to incur in connection with our activities and the execution of our
strategy could have a material adverse effect on future

                                       17
<PAGE>

earnings. In addition, our growth prospects could be adversely affected by a
decline in the global wireless industry generally or in one of our regional
divisions, either of which could result in reduction or deferral of expenditures
by prospective customers.

      Our business strategy includes entering into relationships and financings,
which may provide us with minimal returns or losses on our investments. -- We
have entered into several relationships with wireless equipment manufacturers,
mobile operators and other participants in our industry. We intend to continue
to enter into similar relationships as opportunities arise. We may enter into
distribution or logistics services agreements with these parties and may provide
them with equity or debt financing. Our ability to achieve future profitability
through these relationships will depend in part upon the economic viability,
success and motivation of the entities we select as partners and the amount of
time and resources that these partners devote to our alliances. We may receive
minimal or no business from these relationships and joint ventures, and any
business we receive may not be significant or at the level we anticipated. The
returns we receive from these relationships, if any, may not offset possible
losses or our investments or the full amount of financings that we make upon
entering into these relationships. We may not achieve acceptable returns on our
investments with these parties within an acceptable period or at all.

      We have incurred significant losses in previous years. -- For the years
ended December 31, 2001 and 2002 we incurred net losses of $53 million and $42
million, respectively. The net losses for 2001 and 2002 include approximately
$56 million and $15 million, respectively, of losses related to discontinued
operations. Also included in the net loss in 2002 is the cumulative effect of a
change in accounting principle, net of tax, of $41 million. Several business
factors have contributed to our losses in these periods including costs related
to our restructuring plans, adjustments to the carrying value of certain
inventories, an inadequate supply of products for sale through our distribution
services, inadequate demand for our products and services, costs related to the
implementation of information systems and an impairment loss on a long-term
investment. We may incur additional future losses.

      Our operating results frequently vary significantly and respond to
seasonal fluctuations in purchasing patterns. -- The operating results of each
of our three divisions may be influenced by a number of seasonal factors in the
different countries and markets in which we operate. These factors may cause our
revenue and operating results to fluctuate on a quarterly basis. These
fluctuations are a result of several factors, including, but not limited to:

      -     promotions and subsidies by mobile operators;

      -     the timing of local holidays and other events affecting consumer
            demand;

      -     the timing of the introduction of new products by our suppliers and
            competitors;

      -     purchasing patterns of customers in different markets;

      -     general economic conditions; and

      -     product availability and pricing.

      Consumer electronics and retail sales in many geographic markets tend to
experience increased volumes of sales at the end of the calendar year, largely
because of gift-giving holidays. This and other seasonal factors have
contributed to increases in our sales during the fourth quarter in certain
markets. Conversely, we have experienced decreases in demand in the first
quarter subsequent to the higher level of activity in the preceding fourth
quarter. Our operating results may continue to fluctuate significantly in the
future. If unanticipated events occur, including delays in securing adequate
inventories of competitive products at times of peak sales or significant
decreases in sales during these periods, it could have a material adverse effect
on our operating results. In addition, as a result of seasonal factors, interim
results may not be indicative of annual results. See "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" for additional
analysis on seasonality.

      Our continued growth depends on retaining our current key employees and
attracting additional qualified personnel. -- Our success depends in large part
on the abilities and continued service of our executive officers and other key
employees. Although we have entered into employment agreements with several of
our officers and

                                       18
<PAGE>

employees, we may not be able to retain their services. We also have
non-competition agreements with our executive officers and some of our existing
key personnel. However, courts are sometimes reluctant to enforce
non-competition agreements. The loss of executive officers or other key
personnel could have a material adverse effect on us. In addition, in order to
support our continued growth, we will be required to effectively recruit,
develop and retain additional qualified management. Some labor markets are very
competitive. If we are unable to attract and retain additional necessary
personnel, it could delay or hinder our plans for growth.

      We are subject to a number of regulatory and contractual restrictions
governing our relations with certain of our employees. -- We are subject to a
number of regulatory and contractual restrictions governing our relations with
certain of our employees, including national collective labor agreements for
certain of our employees who are employed outside of the United States and
individual employer labor agreements. These arrangements address a number of
specific issues affecting our working conditions including hiring, work time,
wages and benefits, and termination of employment. We could be required to make
significant payments in order to comply with these requirements. The cost of
complying with these requirements may materially adversely affect our business
and financial condition.

      Our labor force experiences a high rate of personnel turnover. -- Our
distribution activities and logistics services are labor-intensive, and we
experience high personnel turnover and can be adversely affected by shortages in
the available labor force in geographical areas where we operate. A significant
portion of our labor force is contracted through temporary agencies and a
significant portion of our costs consists of wages to hourly workers. Growth in
our business, together with seasonal increases in net revenue, requires us to
recruit and train personnel at an accelerated rate from time to time. We may not
be able to continue to hire, train and retain a significant labor force of
qualified individuals when needed, or at all. An increase in hourly costs,
employee benefit costs, employment taxes or commission rates could have a
material adverse effect on our operations. In addition, if the turnover rate
among our labor force increased further, we could be required to increase our
recruiting and training efforts and costs, and our operating efficiencies and
productivity could decrease.

      We rely to a great extent on trade secret and copyright laws and
agreements with our key employees and other third parties to protect our
proprietary rights. -- Our business success is substantially dependent upon our
proprietary business methods and software applications relating to our
information systems. We currently hold one patent relating to certain of our
business methods.

      Concerning other business methods and software we rely on trade secret and
copyright laws to protect our proprietary knowledge. We also regularly enter
into non-disclosure agreements with our key employees and limit access to and
distribution of our trade secrets and other proprietary information. These
measures may not prove adequate to prevent misappropriation of our technology.
Our competitors could also independently develop technologies that are
substantially equivalent or superior to our technology, thereby eliminating one
of our competitive advantages. We also have offices and conduct our operations
in a wide variety of countries outside the United States. The laws of some other
countries do not protect our proprietary rights to the same extent, as do laws
in the United States. In addition, although we believe that our business methods
and proprietary software have been developed independently and do not infringe
upon the rights of others, third parties might assert infringement claims
against us in the future or our business methods and software may be found to
infringe upon the proprietary rights of others.

      We have significant future payment obligations pursuant to certain leases
and other long-term contracts. -- We lease our office and warehouse/distribution
facilities under real property and personal equipment leases. Many of these
leases are for terms that exceed one year and require us to pay significant
monetary charges for early termination or breach by us of the lease terms. We
cannot be certain of our ability to adequately fund these lease commitments from
our future operations and our decision to modify, change or abandon any of our
existing facilities could have a material adverse effect on our operations.

      We may be unable to obtain and maintain adequate business insurance at a
reasonable cost. -- Although we currently maintain general commercial, property
liability and transportation insurance in amounts we believe are appropriate, it
has become increasingly difficult in recent years to obtain adequate insurance
coverage at a reasonable cost. Our operations could be adversely affected by a
loss that is not covered by insurance due to our

                                       19
<PAGE>

inability in the future to obtain adequate insurance. Moreover, increasing
insurance premiums would adversely affect our future operating results.

      There are amounts of our securities, which are issuable pursuant to our
2004 Long-Term Incentive Plan, our Amended and Restated Independent Director
Stock Compensation Plan, 1994 Stock Option Plan, 1996 Stock Option Plan and our
Employee Stock Purchase Plan, which, if issued, could result in dilution to
existing shareholders and adversely affect the market price of our common stock.
-- We have reserved a significant number of shares of common stock that may be
issuable pursuant to these plans. Effective in our interim reporting period
ending September 30, 2005, as required under recently issued accounting
pronouncement Statement of Financial Accounting Standards No. 123R (Revised
2004), Share-Based Payment ("SFAS No. 123R"), the compensation cost relating to
share-based payment transactions will be recognized in financial statements. Pro
forma disclosure is no longer an alternative. This requirement will reduce
earnings, earnings per share, net operating cash flows and increase net
financing cash flows in periods after adoption.

      We have instituted measures to protect us against a takeover. -- Certain
provisions of our By-laws, shareholders rights and option plans, certain
employment agreements and the Indiana Business Corporation Law are designed to
protect us in the event of a takeover attempt. These provisions could prohibit
or delay mergers or attempted takeovers or changes in control of us and,
accordingly, may discourage attempts to acquire us.

SEGMENT AND GEOGRAPHIC FINANCIAL INFORMATION

      Financial information concerning our segments and other geographic
financial information is included in "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" under the heading "OPERATING
SEGMENTS AND GEOGRAPHIC INFORMATION" on page A-135 of this Annual Report on Form
10-K/A.

ITEM 2. PROPERTIES.

      We provide our distribution and logistics services from our sales and
operations centers located in various countries including Australia, Colombia,
Finland, France, Germany, India, New Zealand, Norway, the Philippines, the
Slovak Republic, Sweden, and the United States. All of these facilities are
occupied pursuant to operating leases. The table below summarizes information
about our sales and operations centers by operating division.

<TABLE>
<CAPTION>
                                    NUMBER OF          AGGREGATE     APPROXIMATE
                                   LOCATIONS(1)     SQUARE FOOTAGE   MONTHLY RENT
                                   -----------      --------------   -------------
<S>                                <C>              <C>              <C>
The Americas.................           3                753,775     $     401,538
Asia-Pacific.................           5                167,293            94,913
Europe.......................           9                180,740           202,990
                                      ---              ---------     -------------
                                       17              1,101,808     $     699,441
                                      ===              =========     =============
</TABLE>

----------

(1)   Refers to facilities operated by the Company, which are greater than 1,000
      square feet.

      We believe that our existing facilities are adequate for our current
requirements and that suitable additional space will be available as needed to
accommodate future expansion of our operations.

ITEM 3. LEGAL PROCEEDINGS

      The Company is from time to time involved in certain legal proceedings in
the ordinary course of conducting its business. While the ultimate liability
pursuant to these actions cannot currently be determined, the Company believes
these legal proceedings will not have a material adverse effect on its
Consolidated Financial Statements as a whole.

      In December 2004, the Company through its subsidiary in South Africa
settled an assessment from the South Africa Revenue Service ("SARS") regarding
value-added taxes, relating to certain product sale and purchase transactions
entered into by the Company's subsidiary in South Africa from 2000 to 2002. The
Company's South

                                       20
<PAGE>

African operations were discontinued pursuant to the 2001 Restructuring Plan. As
a result of the settlement, the Company has received $270 thousand U.S. dollars.
The gain was recorded within loss from discontinued operations.

      A Complaint was filed on January 4, 2005 against the Company in the
Circuit Court for Baltimore County, Maryland, Case No. 03-C-05-000067 CN,
entitled Iridium Satellite, LLC, Plaintiff v. Brightpoint, Inc., Defendant. In
the Complaint, the Plaintiff alleges claims of trover and conversion, fraudulent
misrepresentation and breach of contract. All claims relate to the ownership and
disposition of 1,500 Series 9500 satellite telephones. The Plaintiff seeks
damages in the amount of $750,000 with interest and costs. The time for the
Company to respond to the allegations in the lawsuit has not yet expired,
however, the Company intends to remove the case to federal court, to deny all
claims in the action and to vigorously defend the lawsuit.

      A Complaint was filed on November 23, 2001, against the Company and 87
other defendants in the United States District Court for the District of
Arizona, entitled Lemelson Medical, Education and Research Foundation LP v.
Federal Express Corporation, et.al., Cause No. CIV01-2287-PHX-PGR. The plaintiff
claims that the Company and other defendants have infringed 7 patents alleged to
cover bar code technology. The case seeks unspecified damages, treble damages
and injunctive relief. The Court has ordered the case stayed pending the
decision in a related case in which a number of bar code equipment manufacturers
have sought a declaration that the patents asserted are invalid and
unenforceable. That trial concluded in January 2003. In January 2004, the Court
rendered its decision that the patents asserted by Lemelson were found to be
invalid and unenforceable. Lemelson filed an appeal to the Court of Appeals for
the Federal Circuit on June 23, 2004. The Company continues to dispute these
claims and intend to defend this matter vigorously.

      The Company's Certificate of Incorporation and By-laws provide for it to
indemnify its officers and directors to the extent permitted by law. In
connection therewith, the Company has entered into indemnification agreements
with its executive officers and directors. In accordance with the terms of these
agreements, the Company has reimbursed certain of its former and current
executive officers and intends to reimburse its officers and directors for their
personal legal expenses arising from certain litigation and regulatory matters.

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

      Not Applicable.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
        AND ISSUER PURCHASES OF EQUITY SECURITIES.

      On November 30, 2004, we announced that our Board of Directors had
approved a share repurchase program authorizing the Company to repurchase up to
$20 million of the Company's common stock by December 31, 2005. During this
period, the Company repurchased 208,100 shares of its own common stock at an
average price of $19.28 per share, totaling $4.0 million. As of December 31,
2004, approximately $16.0 million may be used to purchase shares under this
program. Additionally, on June 4, 2004, we announced that our Board of Directors
had approved a share repurchase program authorizing the Company to repurchase up
to $20 million of our common stock. We made such repurchases in June of 2004
through open market and privately negotiated transactions. Detail of the
repurchases is provided in the table below.

      Issuer purchases of equity securities:

<TABLE>
<CAPTION>
                                                                     TOTAL NUMBER                      MAXIMUM
                                                                       OF SHARES    TOTAL AMOUNT   DOLLAR VALUE OF
                                                                     PURCHASED AS   PURCHASED AS     SHARES THAT
                                                                      PART OF THE    PART OF THE     MAY YET BE
                                         TOTAL NUMBER     AVERAGE      PUBLICLY       PUBLICLY        PURCHASED
                                           OF SHARES    PRICE PAID     ANNOUNCED      ANNOUNCED       UNDER THE
PERIOD OF PURCHASE                         PURCHASED     PER SHARE      PROGRAM        PROGRAM         PROGRAM
------------------                       ------------   ----------   ------------   -------------  ---------------
<S>                                      <C>            <C>          <C>            <C>            <C>
June 1 - 30, 2004................          1,397,500     $ 14.31        1,397,500   $  19,996,773           None
December 1 - 31, 2004............            208,100     $ 19.28          208,100   $   4,012,769   $ 15,987,231
                                           ---------     -------       ----------   -------------   ------------
Total/Average....................          1,605,600     $ 14.95        1,605,600   $  24,009,542   $ 15,987,231
                                           =========     =======       ==========   =============   ============
</TABLE>

                                       21
<PAGE>

      The information regarding market, market price range and dividend
information may be found in "Common Stock Information" on page A-137 of this
Form 10-K/A. The information regarding equity compensation plans is incorporated
by reference to Item 12 of this Form 10-K/A, which incorporates by reference the
information set forth under the caption "Equity Compensation Plans" in the
Company's Definitive Proxy Statement in connection with the 2005 Annual Meeting
of Shareholders to be held in 2005, which will be filed with the Securities and
Exchange Commission no later than 120 days following the end of the fiscal year.

ITEM 6. SELECTED FINANCIAL DATA.

      The information required by this Item is set forth in "Selected Financial
Data" on page A-139 of this Annual Report on Form 10-K/A.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

      The information required by this Item is set forth on pages A-92 to A-136
of this Annual Report on Form 10-K/A.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

      The information required by this Item is set forth in the subsection
"Financial Market Risk Management" of Management's Discussion and Analysis on
page A-137 of this Annual Report on Form 10-K/A.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

      The information required by this Item is set forth in our Consolidated
Financial Statements on pages A-53 to A-93 of this Annual Report on Form 10-K/A.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

      None.

ITEM 9A. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES (AS REVISED)

      The Company's management, including the Company's Principal Executive
Officer and its Senior Vice President, Corporate Controller, Chief Accounting
Officer and acting Chief Financial Officer ("Principal Financial Officer"), has
evaluated the effectiveness of its disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end
of the period covered by this annual report. Based on that evaluation, the
Principal Executive Officer and Principal Financial Officer have concluded that,
solely due to the material weaknesses related to internal controls, described
below under the heading "Management's Report on Internal Control Over Financial
Reporting (as revised)", the Company's disclosure controls and procedures were
not effective as of the end of the period covered by this annual report.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING (AS REVISED)

      Management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting. The Company's internal
control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.

      A material weakness is a significant deficiency, or combination of
significant deficiencies, that results in more than a remote likelihood that a
material misstatement of the annual or interim financial statements will not be
prevented or detected. A significant deficiency is a control deficiency, or
combination of control deficiencies, that adversely affects the Company's
ability to initiate, authorize, record, process, or report external financial

                                       22
<PAGE>

information reliably in accordance with generally accepted accounting principles
such that there is more than a remote likelihood that a misstatement of the
Company's annual or interim financial statements that is more than
inconsequential will not be prevented or detected.

      Our internal control over financial reporting includes those policies and
procedures that:

      -     pertain to the maintenance of records that, in reasonable detail,
            accurately and fairly reflect the transactions and dispositions of
            the assets of the Company;

      -     provide reasonable assurance that transactions are recorded as
            necessary to permit preparation of financial statements in
            accordance with generally accepted accounting principles and that
            receipts and expenditures are being made in accordance with
            authorizations of the Company's management and directors; and

      -     provide reasonable assurance regarding prevention or timely
            detection of unauthorized acquisition, use or disposition of our
            assets that could have a material effect on our financial
            statements.

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

      Management of the Company has revised its assessment of the effectiveness
of the Company's internal control over financial reporting as of December 31,
2004, originally included in Management's Report on Internal Control Over
Financial Reporting in the Company's annual report on Form 10-K filed on
February 3, 2005. In that report, management concluded that the Company's
internal control over financial reporting was effective as of December 31, 2004,
notwithstanding the existence of significant deficiencies that were deemed by
the Company's management not to be material weaknesses. Subsequent to filing its
annual report on Form 10-K on February 3, 2005, the Company identified errors in
its 2004 financial statements and has restated those annual financial
statements. Management has concluded that these errors resulted from control
deficiencies that represent material weaknesses in internal control over
financial reporting. As a result, management has revised its assessment of the
effectiveness of the Company's internal control over financial reporting due to
the following material weaknesses:

      -     The Company's operations in France receive mobile operator
            commission, subsidy, bonus and residual airtime revenues as a result
            of subscriber activations or subscriber upgrades generated by the
            Company's network of independent authorized retailers and the
            Company's directly owned retail stores. The financial reporting
            control procedures for certain account receivable reconciliations
            and revenue recognition control procedures for proper pricing and
            invoicing of these transactions failed to operate effectively and in
            a timely fashion as of December 31, 2004. In addition, revenue
            recognition control procedures for invoicing and cash application of
            receipts related to these transactions were ineffectively designed
            as of December 31, 2004. Due to errors made in recording these
            transactions, the Company's operations in France overstated revenue
            resulting in a related overstatement in accounts receivable. In
            addition, certain other related adjustments were made in error,
            which did not have an impact on net income, but resulted in an
            overall understatement of accounts receivable and accounts payable
            during the year ended December 31, 2004.

      -     The Company's operations in Australia failed to identify certain
            rebates that were not recorded related to a 2004 program, which
            resulted in an error in the December 31, 2004 financial statements.
            The communications process whereby new contracts are forwarded to
            regional finance personnel did not include communicating significant
            modifications to contracts. Accordingly, internal control in
            relation to the communication rebate arrangements (between the
            product manager/country manager and the finance team) and
            assessments as to whether the terms and conditions for rebates have
            been achieved did not operate effectively. This error resulted in an
            overstatement of cost of revenue and the understatement of vendor
            receivables that would have reduced accounts payable, resulting in
            an overstatement of accounts payable in the 2004 financial
            statements.

      The Company, under the supervision and with the participation of its
management, including its Principal Executive Officer and Principal Financial
Officer, is responsible for the preparation and integrity of the Company's

                                       23
<PAGE>

Consolidated Financial Statements, establishing and maintaining adequate
internal control over financial reporting for the Company and all related
information appearing in this Annual Report. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control-Integrated
Framework. Based on its revised assessment and those criteria, management
concludes that the Company did not maintain effective internal control over
financial reporting as of December 31, 2004 due to the material weaknesses
described above.

      The Company's Independent Registered Public Accounting Firm, Ernst & Young
LLP, has audited and issued a report on management's revised assessment of the
Company's internal control over financial reporting. The report of Ernst & Young
LLP is included in Appendix A to this Form 10-K/A.

SUBSEQUENT CONTROL CHANGES

      The Company has implemented changes in procedures for the reporting of
mobile operator commissions, subsidies and bonuses in its France operations and
rebates earned on non-financial key performance metrics in its Australia
operations and believes that these changes will assure proper recognition of
these items. As part of the assessment of its internal controls over financial
reporting, the Company has initiated immediate changes in processes in our
France and Australia operations to correct the errors that occurred and to
reduce the likelihood that similar errors could occur in the future. In
addition, management of the Company, with the assistance of certain members of
the Board of Directors, is reviewing the regional financial organizational
structure, instituting new financial reporting and revenue recognition controls
at all Brightpoint locations, performing supplementary detailed monthly review
of accounts by regional and corporate management and executing more frequent
internal audits.

      There were no changes in the Company's internal control over financial
reporting during the fourth quarter of 2004 that have materially affected, or
are reasonably likely to materially affect, the Company's internal control over
financial reporting.

ITEM 9B. OTHER INFORMATION

      Not applicable.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      Our By-laws provide that our Board of Directors is divided into three
classes (Class I, Class II and Class III). At each Annual Meeting of
Shareholders, directors constituting one class are elected for a three-year
term. Each of the directors will be elected to serve until a successor is
elected and qualified or until the director's earlier resignation or removal.

      The following table sets forth, for each director, the director's name,
age, principal occupation and length of continuous service as a Brightpoint
director:

                                CLASS I DIRECTORS
                             (TERM EXPIRES IN 2007)

<TABLE>
<CAPTION>
                                                                                                       DIRECTOR
NAME OF NOMINEE                            AGE           PRINCIPAL OCCUPATION OR EMPLOYMENT              SINCE
---------------                            ----    -----------------------------------------------      -------
<S>                                        <C>     <C>                                                  <C>
Eliza Hermann..........................     43     Vice President, Human Resources Strategy BP plc         2003
V. William Hunt........................     60     Chairman, Hunt Capital Partners, LLC                    2004
Stephen H. Simon.......................     39     President and Chief Executive Officer, Melvin           1994
                                                   Simon & Associates, Inc.
</TABLE>

                                       24
<PAGE>

                               CLASS II DIRECTORS
                             (TERM EXPIRES IN 2005)

<TABLE>
<CAPTION>
                                                                                                            DIRECTOR
NAME OF DIRECTOR            AGE                      PRINCIPAL OCCUPATION OR EMPLOYMENT                      SINCE
----------------            ----    -------------------------------------------------------------------      -------
<S>                         <C>     <C>                                                                      <C>
Robert J. Laikin........     41     Chairman of the Board and Chief Executive Officer of the Company            1989
Robert F. Wagner........     70     Partner of Law Firm of Lewis & Wagner                                       1994
Richard W. Roedel.......     55     Chief Executive Officer of Take-Two Interactive Software, Inc.              2002
</TABLE>

                               CLASS III DIRECTORS
                             (TERM EXPIRES IN 2006)

<TABLE>
<CAPTION>
                                                                                                           DIRECTOR
NAME OF DIRECTOR             AGE                 PRINCIPAL OCCUPATION OR EMPLOYMENT                         SINCE
----------------            ----  ----------------------------------------------------------------------   -------
<S>                         <C>                                                                            <C>
Catherine M. Dalton.....     42   Professor, Kelley School of Business at Indiana University                  2002
Marisa E. Pratt.........     40   Vice President -- Finance of Eli Lilly Canada                               2003
Jerre L. Stead..........     62   Retired Chairman and Chief Executive Officer of Ingram Micro Inc.           2000
</TABLE>

      Set forth below is a description of the backgrounds of each of our
directors and executive officers:

      Robert J. Laikin, founder of the Company, has been a director of the
Company since its inception in August 1989. Mr. Laikin has been Chairman of the
Board and Chief Executive Officer of the Company since January 1994. Mr. Laikin
was President of the Company from June 1992 until September 1996 and Vice
President and Treasurer of the Company from August 1989 until May 1992. From
July 1986 to December 1987, Mr. Laikin was Vice President and, from January 1988
to February 1993, President of Century Cellular Network, Inc., a company engaged
in the retail sale of cellular telephones and accessories.

      Catherine M. Dalton has been a director of the Company since October 2002
and is currently Chairperson of the Company's Corporate Governance and
Nominating Committee. Since 1997, Ms. Dalton has been a Professor at the Kelley
School of Business at Indiana University where she is currently the David H.
Jacobs Chair of Strategic Management. Prior thereto Ms. Dalton served on the
faculties of Purdue University and The Ohio State University.

      V. William Hunt has been a director of the Company since February 2004 and
is a member of the Audit Committee. Mr. Hunt is Chairman of Hunt Capital
Partners, LLC, a venture capital and consulting firm based in Indianapolis. He
serves on the boards of Breeze Industrial Products, Clarian Health Partners and
InProteo. Until August 2001, he was the Vice Chairman and President of
ArvinMeritor Inc., a global supplier of a broad range of integrated systems,
modules and components for light vehicle, commercial truck, trailer and
specialty original equipment manufacturers (OEMs) and related after-markets.
Prior to the July 2000 merger of Arvin Inc. and Meritor Automotive Inc., Mr.
Hunt was Chairman and CEO of Arvin, a global manufacturer of automotive
components, including exhaust systems; ride control products and air, oil and
fuel filters. Mr. Hunt joined Arvin as counsel in 1976, became Vice President,
Administration; Secretary in 1982; and Executive Vice President in 1990;
President in 1996; and CEO in 1998. A member of Arvin's board of directors since
1983, he was named Chairman in 1999. Before joining Arvin, Mr. Hunt practiced
labor relations law in Indianapolis and served as labor counsel to TRW
Automotive Worldwide.

      Eliza Hermann has been a director of the Company since January 2003 and is
currently the Chairperson of the Company's Compensation and Human Resources
Committee and a member of the Company's Corporate Governance and Nominating
Committee. Since 1985, Ms. Hermann has been employed by BP plc where she has
held a succession of international human resources, strategic planning and
business development roles, and currently serves as the Vice President Human
Resources Strategy.

      Marisa E. Pratt has been a director of the Company since January 2003 and
is currently a member of the Company's Audit Committee. Since 1991, Ms. Pratt
has been employed by Eli Lilly in various finance and treasury related
positions. Since October of 2002, Ms. Pratt has been Vice President -- Finance
of Eli Lilly Canada.

                                       25
<PAGE>

      Richard W. Roedel has been a director and Chairman of the Company's Audit
Committee since October 2002 and currently is a member of the Company's
Corporate Governance and Nominating Committee. Mr. Roedel has been the Chairman
of the Board of Directors and a director of Take-Two Interactive Software, Inc.
("Take-Two") a developer, publisher and distributor of video games since April
2004. He served as the Chief Executive Officer of Take-Two from June 2004 to
January 2005 and has been a consultant to Take-Two since January 2005. Mr.
Roedel is a director of Dade Behring Holdings, Inc., a medical diagnostics
equipment and related product manufacturer and IHS Inc., a leading content
provider servicing the technical and business information needs of engineering
and energy companies. Mr. Roedel is also a director of the Association of Audit
Committee Members, Inc., a non-profit association of audit committee members.
From 1999 to 2000, Mr. Roedel was Chairman and Chief Executive Officer of the
accounting firm BDO Seidman LLP, the United States member firm of BDO
International. Before becoming Chairman and Chief Executive Officer, he was the
Managing Partner of BDO Seidman's New York Metropolitan Area from 1994 to 1999,
the Managing Partner of its Chicago office from 1990 to 1994 and an Audit
Partner from 1985 to 1990. Mr. Roedel is a Certified Public Accountant.

      Stephen H. Simon has been a director of the Company since April 1994 and
is currently a member of the Company's Compensation and Human Resources
Committee. Mr. Simon has been President and Chief Executive Officer of Melvin
Simon & Associates, Inc., a privately-held shopping center development company,
since February 1997. From December 1993 until February 1997, Mr. Simon was
Director of Development for an affiliate of Simon Property Group, a
publicly-held real estate investment trust. From November 1991 to December 1993,
Mr. Simon was Development Manager of Melvin Simon & Associates, Inc. Mr. Simon
is a director of Gracenote, Inc., Method Products, Inc. and Pacers Basketball
Corp.

      Jerre L. Stead has been a director of the Company since June 2000 and
currently serves as the Company's Lead Independent Director. Mr. Stead is a
member of the Company's Compensation and Human Resources Committee and the
Company's Corporate Governance and Nominating Committee. Since December 2000,
Mr. Stead has been the Chairman of the Board of Directors and a Director of IHS
Inc. From August 1996 to June 2000 Mr. Stead was Chairman of the Board of Ingram
Micro Inc., a worldwide distributor of information technology products and
services. Concurrently from August 1996 to March 2000, Mr. Stead served as the
Chief Executive Officer of Ingram Micro Inc. Mr. Stead served as Chairman,
President and Chief Executive Officer of Legent Corporation, a software
development company from January 1995 until its sale in September 1995. From
1993 to 1994, Mr. Stead was Executive Vice President of American Telephone and
Telegraph Company, a telecommunications company and Chairman and Chief Executive
Officer of AT&T Global Information Solutions, a computer and communications
company, formerly NCR Corp. He was President of AT&T Global Business
Communications Systems, a communications company, from 1991 to 1993. Mr. Stead
was Chairman, President and Chief Executive Officer from 1989 to 1991 and
President from 1987 to 1989 of Square D Company, an industrial control and
electrical distribution products company. In addition, he held numerous
positions during a 21-year career at Honeywell. Mr. Stead is a director of
Mindspeed Technologies, Inc., Conexant Systems, Inc., Armstrong Holdings, Inc.
and Mobility Electronics, Inc.

      Robert F. Wagner has been a director of the Company since April 1994 and
is currently a member of the Company's Compensation and Human Resources
Committee. Mr. Wagner has been engaged in the practice of law with the firm of
Lewis & Wagner since 1973.

      Frank Terence, age 46, has been Executive Vice President, Chief Financial
Officer and Treasurer of the Company since April 2002. From August 2001 through
April 2002, Mr. Terence was the Chief Financial Officer of Velocitel, LLC, a
wireless telecommunications infrastructure company. From January 2000 through
January 2001, Mr. Terence was Chief Financial Officer of eTranslate, Inc., web
services company. From October 1994 through December 1999, Mr. Terence was
employed in various financial positions by Ingram Micro Inc., a technology
distribution company, which included Vice President and Chief Financial Officer
of its Frameworks Division and Vice President and Chief Financial Officer for
its Latin America Division. From 1990 to 1994, he held regional controllerships
and financial management roles for Borland International, a software development
company. From 1983 to 1990, he held various financial roles with NCR, Rockwell
International and PepsiCo. Mr. Terence is a Certified Management Accountant. On
March 15, 2005, the Company filed a Form 8-K announcing that Mr. Terence
experienced a stroke and, as a result of his medical condition, may not be able
to perform certain of his duties and responsibilities.

                                       26
<PAGE>

      Steven E. Fivel, age 44, has been Executive Vice President, General
Counsel and Secretary of the Company since January 1997. From December 1993
until January 1997, Mr. Fivel was an attorney with an affiliate of Simon
Property Group, a publicly-held real estate investment trust. From February 1988
to December 1993, Mr. Fivel was an attorney with Melvin Simon & Associates,
Inc., a privately-held shopping center development company.

      J. Mark Howell, age 40, has been President of the Company since September
1996 and Chief Operating Officer of the Company from August 1995 to April 16,
1998 and from July 16, 1998 to March 2003. He was Executive Vice President,
Finance, Chief Financial Officer, Treasurer and Secretary of the Company from
July 1994 until September 1996. From July 1992 until joining the Company, Mr.
Howell was Corporate Controller for ADESA Corporation, a company that owns and
operates automobile auctions in the United States and Canada. Prior thereto, Mr.
Howell was an accountant with Ernst & Young LLP.

      Lisa M. Kelley, age 38, has been Senior Vice President, Corporate
Controller and Chief Accounting Officer of the Company since July 2003. Ms.
Kelley was appointed by the Board of Directors to be the Acting Chief Financial
Officer and Principal Financial Officer during the period that Mr. Terence is
incapacitated. Ms. Kelley was formerly with Plexus Corp., a provider of product
realization services to original equipment manufacturers. During her tenure with
Plexus from 1992 to June 2003, she held several financial positions including
VP-Corporate Development, VP-Finance, Corporate Controller and Treasurer. From
1986 to 1992, Ms. Kelley held various financial positions with Virchow Krause &
Company LLP, a Midwest certified public accounting firm. Ms. Kelley is a
Certified Public Accountant and a Certified Management Accountant.

AUDIT COMMITTEE AND FINANCIAL EXPERT

      We have a separately designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934
comprised of Messrs. Hunt, Roedel (chairperson) and Ms. Pratt, each of whom is
"independent" as defined under Item 7(d)(3)(iv) of Schedule 14A of the Exchange
Act and under applicable NASDAQ Marketplace Rules. Our Board of Directors has
determined that Mr. Roedel is an "audit committee financial expert" as defined
under Item 401(h) of Regulation S-K.

CODE OF BUSINESS CONDUCT

      We have adopted a Code of Business Conduct that applies to our employees,
including our senior management, including our chief executive officer, chief
financial officer, controller and persons performing similar functions. Copies
of our Code of Business Conduct are available on our website
(www.brightpoint.com) and are also available without charge upon written request
directed to Investor Relations, Brightpoint, Inc., 501 Airtech Parkway,
Plainfield, Indiana 46168. If we make changes to our Code of Business Conduct in
any material respect or waive any provision of the Code of Business Conduct for
any of our senior financial officers, we expect to provide the public with
notice of any such change or waiver by publishing a description of such event on
our corporate website, www.brightpoint.com, or by other appropriate means as
required by applicable rules of the United States Securities and Exchange
Commission.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Based solely on a review of Forms 3, 4 and 5 and amendments thereto
furnished to us with respect to our most recent fiscal year, we believe that all
required reports were filed on a timely basis.

ITEM 11. EXECUTIVE COMPENSATION

      The information required by this item is incorporated by reference to the
information set forth under the caption "Executive Compensation and Other
Information" in the Company's Definitive Proxy Statement in connection with the
2005 Annual Meeting of Shareholders to be held in 2005, which will be filed with
the Securities and Exchange Commission no later than 120 days following the end
of the fiscal year.

                                       27
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS.

      The information required by this item is incorporated by reference to the
information set forth under the caption "Security Ownership of Certain
Beneficial Owners and Management" in the Company's Definitive Proxy Statement in
connection with the 2005 Annual Meeting of Shareholders to be held in 2005,
which will be filed with the Securities and Exchange Commission no later than
120 days following the end of the fiscal year.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      The information required by this item is incorporated by reference to the
information set forth under the caption "Certain Relationships and Related
Transactions" in the Company's Definitive Proxy Statement in connection with the
2005 Annual Meeting of Shareholders to be held in 2005, which will be filed with
the Securities and Exchange Commission no later than 120 days following the end
of the fiscal year.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

      The information required by this item is incorporated by reference to the
information set forth under the caption "Principal Accounting Fees and Services"
in the Company's Definitive Proxy Statement in connection with the 2005 Annual
Meeting of Shareholders to be held in 2005, which will be filed with the
Securities and Exchange Commission no later than 120 days following the end of
the fiscal year.

                                     PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

      (a)(1) The following financial statements and information are filed as a
part of our report commencing on page A-1:

      Reports of Independent Registered Public Accounting Firm

      Consolidated Statements of Operations for the Years Ended December 31,
2004 (As Restated), 2003 and 2002

      Consolidated Balance Sheets as of December 31, 2004 (As Restated) and 2003

      Consolidated Statements of Shareholders' Equity for the Years Ended
December 31, 2004 (As Restated), 2003 and 2002

      Consolidated Statements of Cash Flows for the Years Ended December 31,
2004 (As Restated), 2003 and 2002

      Notes to the Consolidated Financial Statements

      (a)(2) The following financial statement schedule for the year ended
December 31, 2004, is submitted herewith:

      Schedule II -- Valuation and Qualifying Accounts

      All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.

                                       28
<PAGE>

      (a)(3) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
 NUMBER                              DESCRIPTION
-------   ----------------------------------------------------------------------
<S>       <C>
2.1       Sale and Purchase Agreement between International (Asia
          Pacific) PTE Ltd and Chinatron Group Holdings Limited Dated October 2,
          2001(13)

2.1.1     Amendment dated January 18, 2002 to Sale and Purchase Agreement
          between Brightpoint International (Asia Pacific) PTE Ltd. and
          Chinatron Group Holding Limited dated October 2, 2001(13)

2.2       Shareholders agreement between Brightpoint India Private Limited,
          Brightpoint Holdings B.V., and Persequor Limited dated November 1,
          2003(20)

2.3       Agreement for the Sale and Purchase of the entire issued share capital
          of Brightpoint (Ireland) Limited dated February 19, 2004(20)

2.4       Plan and Agreement of Merger between Brightpoint, Inc. and Brightpoint
          Indiana Corp. dated April 23, 2004.(22)

3.1       Restated Articles of Incorporation of Brightpoint, Inc. (formerly
          Brightpoint Indiana Corp.)(27)

3.2       Amended and Restated By-Laws of Brightpoint, Inc. (formerly
          Brightpoint Indiana Corp.)(27)

4.1       Indenture between the Company and the Chase Manhattan Bank, as
          Trustee(2)

10.1      Rights Agreement, dated as of February 20, 1997, between the Company
          and Continental Stock Transfer and Trust Company, as Rights Agent(1)

10.1.1    Amendment Number 1 to the Rights Agreement (the "Agreement") by and
          between Brightpoint, Inc. (the "Company") and Continental Stock
          Transfer & Trust Company, as Rights Agent, appointing American Stock
          Transfer & Trust Company dated as of January 4, 1999(4)

10.1.2    Amendment Number 2 to the Rights Agreement (the "Agreement") by and
          between Brightpoint, Inc. (the "Company") and American Stock Transfer
          & Trust Company, as Rights Agent, dated as of April 12, 2004(25)

10.2      1994 Stock Option Plan, as amended(7)*

10.3      1996 Stock Option Plan, as amended(9)*

10.4      Employee Stock Purchase Plan(5)

10.5      Brightpoint, Inc. 401(k) Plan (2001 Restatement)(12)

10.6      Amendment to the Brightpoint, Inc. 401(k) Plan effective January 1,
          2002(12)

10.7      Brightpoint, Inc. 401(k) Plan, effective October 1, 2002(16)

10.8      2004 Long-Term Incentive Plan(23)*

10.8.1    Form of Stock Option Agreement pursuant to 2004 Long-Term Incentive
          Plan between the Company and Executive Grantee(21)*

10.8.2    Form of Stock Option Agreement pursuant to 2004 Long-Term Incentive
          Plan between the Company and Non-executive Grantee(21)*

10.8.3    Form of Restricted Stock Unit Award Agreement between the Company and
          Grantee(21)*

10.9      Amended and Restated Independent Director Stock Compensation Plan(24)*

10.10     Form of Indemnification Agreement between the Company and Officers(21)

10.10.1   Indemnification Agreement between Brightpoint and Mr. Frank Terence
          dated July 29, 2003(19)

10.10.2   Indemnification Agreement between Brightpoint and Mr. V. William Hunt
          dated February 11, 2004(20)

10.11     Amended and Restated Employment Agreement between the Company and
          Robert J. Laikin dated July 1, 1999(6)*

10.11.1   Amendment dated January 1, 2001 to the Amended and Restated Agreement
          between the Company and Robert J. Laikin dated July 1, 1999(8)*

10.11.2   Amendment dated January 1, 2003 to Amended and Restated Employment
          Agreement between the
</TABLE>

                                       29
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
 NUMBER                              DESCRIPTION
-------   ----------------------------------------------------------------------
<S>       <C>
          Company and Robert J. Laikin dated July 1, 1999(16)*

10.11.3   Amendment dated January 1, 2004 to Amended and Restated Employment
          Agreement between the Company and Robert J. Laikin dated July 1,
          1999(20)*

10.12     Amended and Restated Employment Agreement between the Company and J.
          Mark Howell dated July 1, 1999(6)*

10.12.1   Amendment dated January 1, 2001 to the Amended and Restated Employment
          Agreement between the Company and J. Mark Howell dated July 1,
          1999(8)*

10.12.2   Amendment dated January 1, 2003 to Amended and Restated Employment
          Agreement between the Company and J. Mark Howell dated July 1, 1999
          (16)*

10.12.3   Amendment dated January 1, 2004 to Amended and Restated Employment
          Agreement between the Company and J. Mark Howell dated July 1, 1999
          (20)*

10.13     Amended and Restated Employment Agreement between the Company and
          Steven E. Fivel dated July 1, 1999(6)*

10.13.1   Amendment dated January 1, 2001 to the Amended and Restated Employment
          Agreement between the Company and Steven E. Fivel dated July 1,
          1999(8)*

10.13.2   Amendment dated January 1, 2002 to the Amended and Restated Employment
          Agreement between the Company and Steven E. Fivel dated July 1,
          1999(12)*

10.13.3   Amendment dated January 1, 2003 to Amended and Restated Employment
          Agreement between the Company and Steven E. Fivel dated July 1,
          1999(16)*

10.13.4   Amendment dated January 1, 2004 to Amended and Restated Employment
          Agreement between the Company and Steven E. Fivel dated July 1,
          1999(20)*

10.14     Employment Agreement between the Company and Frank Terence dated April
          22, 2002(13)*

10.14.1   Amendment dated January 1, 2003 to the Employment Agreement between
          the Company and Frank Terence dated April 22, 2002(16)*

10.14.2   Amendment dated January 1, 2004 to Amended and Restated Employment
          Agreement between the Company and Frank Terence dated April 22,
          2002(20)*

10.15     Employment Agreement between the Company and Lisa M. Kelley dated June
          9, 2003(20)*

10.16     Lease Agreement between the Company and Airtech Parkway Associates,
          LLC, dated September 18, 1998(3)

10.17     Lease Agreement between the Company and Harbour Properties, LLC, dated
          April 25, 2000(8)

10.18     Lease Agreement between the Company and DP Industrial, LLC, dated as
          of October 1, 2004(29)

10.19     Lease Agreement between the Company and Perpetual Trustee Company
          Limited, dated November 10, 2004(31)

10.20     Distributor Agreement dated October 29, 2001 between Nokia Inc. and
          Brightpoint North America L.P.(12)**

10.20.1   Amendment dated December 19, 2002 to distribution agreement dated
          October 29, 2001 between Brightpoint North America L.P. and Nokia
          Inc.(16)**

10.20.2   Amendment No. 2 dated December 31, 2003 to Distributor Agreement
          between Brightpoint North America, L.P. and Nokia, Inc.(20) **

10.21     Credit Agreement dated as of October 31, 2001 (as amended) among
          Brightpoint North America, L.P., Wireless Fulfillment Services LLC,
          the other credit parties signatory thereto, the lenders signatory
          thereto from time to time and General Electric Capital
          Corporation(10)**

10.21.1   Amendment No. 2 dated September 27, 2002 to Credit Agreement among
          Brightpoint North America, L.P., Wireless Fulfillment Services, LLC,
          the other credit parties signatory thereto, the lenders signatory
          thereto and General Electric Capital Corporation(14)


10.21.2   Amendment No. 3 dated December 13, 2002 to Credit Agreement among
          Brightpoint North America, L.P., Wireless Fulfillment Services, LLC,
          the other credit parties signatory thereto, the lenders signatory
          thereto and General Electric Capital Corporation(15)
</TABLE>

                                       30
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
 NUMBER                             DESCRIPTION
-------   ----------------------------------------------------------------------
<S>       <C>
10.21.3   Amendment No. 4 dated December 13, 2002 to Credit Agreement among
          Brightpoint North America, L.P., Wireless Fulfillment Services, LLC,
          the other credit parties signatory thereto, the lenders signatory
          thereto and General Electric Capital Corporation(17)

10.21.4   Amendment No. 5 dated July 7, 2003 to Credit Agreement among
          Brightpoint North America, L.P., Wireless Fulfillment Services, LLC,
          the other credit parties signatory thereto, the lenders signatory
          thereto and General Electric Capital Corporation(18)

10.21.5   Amendment No. 6 dated November 3, 2003 to Credit Agreement among
          Brightpoint North America, L.P., Wireless Fulfillment Services, LLC,
          the other credit parties signatory thereto, the lenders signatory
          thereto and General Electric Capital Corporation(20)

10.21.6   Amended and Restated Credit Agreement dated as of March 18, 2004 among
          Brightpoint North America, L.P., Wireless Fulfillment Services, LLC,
          the other credit parties signatory thereto, the lenders signatory
          thereto and General Electric Capital Corporation(26)**

10.21.7   Amendment dated September 20, 2004 to Credit Agreement among
          Brightpoint North America, L.P., Wireless Fulfillment Services, LLC,
          the other credit parties signatory thereto, the lenders signatory
          thereto and General Electric Capital Corporation(28)

10.22     Credit Agreement dated December 24, 2002 between Brightpoint Australia
          Pty Limited, Advanced Portable Technologies Limited and GE Commercial
          Finance(16)

10.23     Credit Agreement dated as of November 28, 2003 between Brightpoint New
          Zealand Limited and GE Capital (NZ) Limited(20)

10.24     Agreement dated June 6, 2002 between the Company and Chanin Capital
          Partners(16) 10.24.1 Amendment dated July 8, 2002 to the Agreement
          between the Company and Chanin Capital Partners dated June 6, 2002(16)

10.25     Management Services Agreement between the Company and Persequor
          Limited, dated as of October 3, 2004(30)

21        Subsidiaries(31)

23        Consent of Independent Registered Public Accounting Firm(11)

31.1      Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of
          the Securities Exchange Act of 1934, implementing Section 302 of the
          Sarbanes-Oxley Act of 2002(31)

31.2      Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of
          the Securities Exchange Act of 1934, implementing Section 302 of the
          Sarbanes-Oxley Act of 2002(31)

32.1      Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
          1350, As Adopted Pursuant Section 906 of the Sarbanes-Oxley Act of
          2002(31)

32.2      Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
          1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002(31)

99.1      Cautionary Statements(31)
</TABLE>

----------
Footnotes

(1)   Incorporated by reference to the applicable exhibit filed with the
      Company's Current Report on Form 8-K, filed March 28, 1997 for the
      event dated February 20, 1997.

(2)   Incorporated by reference to the applicable exhibit filed with
      Company's Current Report on Form 8-K filed April 1, 1998 for the
      event dated March 5, 1998.

(3)   Incorporated by reference to the applicable exhibit filed with the
      Company's Quarterly Report on Form 10-Q for the quarter ended
      September 30, 1998.

(4)   Incorporated by reference to the applicable exhibit filed with the
      Company's Form 10-K for the fiscal year ended December 31, 1998.

                                       31
<PAGE>

(5)   Incorporated by reference to Appendix B filed with the Company's
      Proxy Statement dated April 15, 1999 relating to its Annual
      Shareholders meeting held May 18, 1999.

(6)   Incorporated by reference to the applicable exhibit filed with the
      Company's Quarterly report on Form 10-Q for the quarter ended June
      30, 1999.

(7)   Incorporated by reference to the applicable exhibit filed with the
      Company's Registration Statement on Form S-8 (333-87863) dated
      September 27, 1999.

(8)   Incorporated by reference to the applicable exhibit filed with Form
      10-K/A, Amendment No. 1 to the Company's Form 10-K for the year
      ended December 31, 2000.

(9)   Incorporated by reference to the applicable exhibit filed with the
      Company's Tender Offer Statement on Schedule TO dated August 31,
      2001.

(10)  Incorporated by reference to the applicable exhibit filed with the
      Company's Current Report on Form 8-K filed February 26, 2002 for the
      event dated November 1, 2001.

(11)  Filed as page F-1 of this report on Form 10-K.

(12)  Incorporated by reference to the applicable exhibit filed with the
      Company's Annual Report on Form 10-K for the year ended December 31,
      2001.

(13)  Incorporated by reference to the applicable exhibit filed with the
      Company's Quarterly Report on Form 10-Q for the quarter ended June
      30, 2002.

(14)  Incorporated by reference to the applicable exhibit filed with the
      Company's Current Report on Form 8-K filed October 2, 2002 for the
      event dated September 27, 2002.

(15)  Incorporated by reference to the applicable exhibit filed with the
      Company's Current Report on Form 8-K filed December 16, 2002 for the
      event dated December 13, 2002.

(16)  Incorporated by reference to the applicable exhibit filed with the
      Company's Annual Report on Form 10-K for the year ended December 31,
      2002

(17)  Incorporated by reference to the applicable exhibit filed with the
      Company's Quarterly Report on Form 10-Q for the quarter ended March
      31, 2003

(18)  Incorporated by reference to the applicable exhibit filed with the
      Company's Quarterly Report on Form 10-Q for the quarter ended June
      30, 2003

(19)  Incorporated by reference to the applicable exhibit filed with the
      Company's Quarterly Report on Form 10-Q for the quarter ended
      September 30, 2003

(20)  Incorporated by reference to the applicable exhibit filed with the
      Company's Annual Report on Form 10-K for the year ended December 31,
      2003

(21)  Incorporated by reference to the applicable exhibit filed with the
      Company's Quarterly Report on Form 10-Q for the quarter ended
      September 30, 2004

(22)  Incorporated by reference to Appendix E to Brightpoint, Inc.'s Proxy
      Statement dated April 26, 2004 relating to its Annual Stockholders
      meeting held June 3, 2004

(23)  Incorporated by reference to Appendix D to Brightpoint, Inc.'s Proxy
      Statement dated April 26, 2004 relating to its Annual Stockholders
      meeting held June 3, 2004

                                       32
<PAGE>

(24)  Incorporated by reference to Appendix C to Brightpoint, Inc.'s Proxy
      Statement dated April 26, 2004 relating to its Annual Stockholders
      meeting held June 3, 2004

(25)  Incorporated by reference to the applicable exhibit filed with the
      Company's Current Report on Form 8-K filed April 16, 2004 for the
      event dated April 12, 2004

(26)  Incorporated by reference to the applicable exhibit filed with the
      Company's Current Report on Form 8-K filed March 25, 2004 for the
      event dated March 18, 2004

(27)  Incorporated by reference to the applicable exhibit filed with the
      Company's Current Report of Form 8-K filed June 3, 2004 for the
      event dated June 3, 2004

(28)  Incorporated by reference to the applicable exhibit filed with the
      Company's Current Report on Form 8-K filed September 23, 2004 for
      the event dated September 20, 2004

(29)  Incorporated by reference to the applicable exhibit filed with the
      Company's Current Report on Form 8-K filed October 5, 2004 for the
      event dated October 1, 2004

(30)  Incorporated by reference to the applicable exhibit filed with the
      Company's Current Report on Form 8-K filed October 6, 2004 for the
      event dated October 3, 2004

(31)  Filed herewith

*     Denotes management compensation plan or arrangement.

**    Portions of this document have been omitted and filed separately
      with the Securities and Exchange Commission pursuant to a request
      for confidential treatment, which was granted under Rule 24b-2 of
      the Securities Exchange Act of 1934.

***   Portions of this document have been omitted and filed separately
      with the Securities and Exchange Commission pursuant to a request
      for confidential treatment under Rule 24b-2 of the Securities
      Exchange Act of 1934.

                                       33
<PAGE>

                                   SIGNATURES

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

                                         BRIGHTPOINT, INC.

                                         By:       /s/ ROBERT J. LAIKIN
                                            ------------------------------------
                                            Robert J. Laikin
                                            Chairman of the Board and
                                            Chief Executive Officer

Date: August 29, 2005

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

<TABLE>
<CAPTION>
                SIGNATURE                                             TITLE                               DATE
------------------------------------------      -----------------------------------------------      ---------------
<S>                                             <C>                                                  <C>
  /s/  ROBERT J. LAIKIN                                        Chairman of the Board                 August 29, 2005
------------------------------------------      Chief Executive Officer and Director (Principal
Robert J. Laikin                                                Executive Officer)

  /s/  ANTHONY W. BOOR                                  acting Chief Financial Officer               August 29, 2005
------------------------------------------           (acting Principal Financial Officer)
Anthony W. Boor

  /s/  GREGORY L. WILES                                 acting Chief Accounting Officer              August 29, 2005
------------------------------------------           (acting Principal Accounting Officer)
Gregory L. Wiles

  /s/  CATHERINE M. DALTON                                          Director                         August 29, 2005
------------------------------------------
Catherine M. Dalton

  /s/  ELIZA HERMANN                                                Director                         August 29, 2005
------------------------------------------
Eliza Hermann

  /s/  V. WILLIAM HUNT                                              Director                         August 29, 2005
------------------------------------------
V. William Hunt

  /s/  MARISA E. PRATT                                              Director                         August 29, 2005
------------------------------------------
Marisa E. Pratt

  /s/  RICHARD W. ROEDEL                                            Director                         August 29, 2005
------------------------------------------
Richard W. Roedel

  /s/  STEPHEN H. SIMON                                             Director                         August 29, 2005
------------------------------------------
Stephen H. Simon

  /s/  JERRE L. STEAD                                               Director                         August 29, 2005
------------------------------------------
Jerre L. Stead

  /s/  ROBERT F. WAGNER                                             Director                         August 29, 2005
------------------------------------------
Robert F. Wagner

</TABLE>

                                       34
<PAGE>

                                                                      APPENDIX A

FINANCIAL INFORMATION

  CONSOLIDATED FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS OF
  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

<TABLE>
<S>                                                                                 <C>
Reports of Independent Registered Public Accounting Firm........................    A-36
Consolidated Statements of Operations (As Restated).............................    A-39
Consolidated Balance Sheets (As Restated).......................................    A-40
Consolidated Statements of Cash Flows (As Restated).............................    A-41
Consolidated Statements of Shareholders' Equity (As Restated)...................    A-42
Notes to Consolidated Financial Statements (As Restated)........................    A-43
Management's Discussion and Analysis of Financial Condition and Results
 of Operations (As Restated)....................................................    A-73
Operating Segments (As Restated)................................................    A-106
Future Operating Results........................................................    A-107
Financial Market Risk Management................................................    A-108
Other Information...............................................................    A-109
</TABLE>

                                      A-35
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
Brightpoint, Inc.

      We have audited the accompanying Consolidated Balance Sheets of
Brightpoint, Inc. as of December 31, 2004 and 2003, and the related Consolidated
Statements of Operations, Shareholders' Equity and Cash Flows for each of the
three years in the period ended December 31, 2004. Our audits also include the
financial statement schedule listed in Item 15(a)(2). These financial statements
and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

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

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Brightpoint,
Inc. as of December 31, 2004 and 2003 and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2004, in conformity with U.S. generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the financial information set forth
therein.

      As discussed in Note 1 to the consolidated financial statements, the
Company adopted Statement of Financial Accounting Standards No. 142 "Goodwill
and Other Intangible Assets" on January 1, 2002.

      We have also audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the effectiveness of the
Company's internal control over financial reporting as of December 31, 2004,
based on the criteria established in Internal Control -- Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
and our report dated February 1, 2005, except for the effects of the material
weaknesses described in that report as to which the date is May 5, 2005,
expressed an unqualified opinion on management's revised assessment of the
effectiveness of the Company's internal control over financial reporting and an
adverse opinion on the effectiveness of the Company's internal control over
financial reporting.

                                                   /s/ ERNST & YOUNG LLP

Indianapolis, Indiana
February 1, 2005, except for Note 19,
as to which the date is May 5, 2005

                                      A-36
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
Brightpoint, Inc.

      We have audited management's assessment, included in the accompanying
"Management's Report on Internal Control Over Financial Reporting (as revised)",
that Brightpoint, Inc. did not maintain effective internal control over
financial reporting as of December 31, 2004, because of the effects of
inadequate controls over recording revenue and cash receipts at one location and
inadequate controls over recording rebate transactions at another location based
on criteria established in Internal Control -- Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission (the COSO
criteria). Brightpoint Inc.'s management is responsible for maintaining
effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting. Our
responsibility is to express an opinion on management's assessment and an
opinion on the effectiveness of the Company's internal control over financial
reporting based on our audit.

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

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

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

      In our report dated February 1, 2005, we expressed an unqualified opinion
on management's assessment that the Company maintained effective internal
control over financial reporting and an unqualified opinion on the effectiveness
of internal control over financial reporting. As described in the following
paragraph, the Company subsequently identified material misstatements in its
financial statements for 2004, necessitating restatement of the Company's
financial statements. These matters are considered to be material weaknesses as
further discussed in the following paragraph. Accordingly, management has
revised its assessment about the effectiveness of the Company's internal control
over financial reporting and our present opinion on the effectiveness of the
Company's internal control over financial reporting as of December 31, 2004, as
expressed herein, is different from that expressed in our previous report.

                                      A-37
<PAGE>

      A material weakness is a control deficiency, or combination of control
deficiencies, that results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented
or detected. The following material weaknesses have been identified and included
in management's revised assessment:

      The Company's operations in France receive mobile operator commission,
      subsidy, bonus and residual airtime revenues as a result of subscriber
      activations or subscriber upgrades generated by the Company's network of
      independent authorized retailers and the Company's directly owned retail
      stores. The financial reporting control procedures for certain account
      receivable reconciliations and revenue recognition control procedures for
      proper pricing and invoicing of these transactions failed to operate
      effectively and in a timely fashion as of December 31, 2004. In addition,
      revenue recognition control procedures for invoicing and cash application
      of receipts related to these transactions were ineffectively designed as
      of December 31, 2004. Due to errors made in recording these transactions,
      the Company's operations in France overstated revenue resulting in a
      related overstatement in accounts receivable. In addition, certain other
      related adjustments were made in error which did not have an impact on net
      income, but resulted in an overall understatement of accounts receivable
      and accounts payable during the year ended December 31, 2004.

      The Company's operations in Australia failed to identify certain rebates
      that were not recorded related to a 2004 program, which resulted in an
      error in the December 31, 2004 financial statements. The communications
      process whereby new contracts are forwarded to regional finance personnel
      did not include communicating significant modifications to contracts.
      Accordingly, internal control in relation to the communication of rebate
      arrangements (between the product manager/country manager and the finance
      team) and assessments as to whether the terms and conditions for rebates
      have been achieved did not operate effectively. This error resulted in an
      overstatement of cost of revenue and the understatement of vendor
      receivables, that would have reduced accounts payable, resulting in an
      overstatement of accounts payable in the 2004 financial statements.

      These material weaknesses resulted in a restatement of the Company's
previously issued interim and annual financial statements for the year ended
December 31, 2004, as described more fully in Note 19 to the consolidated
financial statements. These material weaknesses were considered in determining
the nature, timing, and extent of audit tests applied in our audit of the 2004
consolidated financial statements (as restated) of the Company and this report
does not affect our report dated February 1, 2005, except for Note 19, as to
which the date is May 5, 2005, on those financial statements.

      In our opinion, management's revised assessment that Brightpoint, Inc. did
not maintain effective internal control over financial reporting as of December
31, 2004, is fairly stated, in all material respects, based on the COSO control
criteria. Also in our opinion, because of the effect of the material weaknesses
described above on the achievement of the objectives of the control criteria,
Brightpoint, Inc. has not maintained effective internal control over financial
reporting as of December 31, 2004, based on the COSO control criteria.

                                                 /s/ ERNST & YOUNG LLP

Indianapolis, Indiana
February 1, 2005, except for the effects of the material weaknesses described
above, as to which the date is May 5, 2005

                                      A-38
<PAGE>

                                BRIGHTPOINT, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                          YEAR ENDED DECEMBER 31,
                                                                         --------------------------------------------------
                                                                              2004                2003              2002
                                                                         ----------------      -----------      -----------
                                                                         (AS RESTATED,
                                                                         SEE FOOTNOTE 19)
                                                                            (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                                      <C>                   <C>              <C>
Revenue
  Distribution revenue .............................................     $     1,559,109  $ 1,540,471      $ 1,048,493
  Logistics services revenue .......................................             300,246      225,905          181,284
                                                                         ---------------  -----------      -----------
Total revenue ......................................................           1,859,355    1,766,376        1,229,777
Cost of revenue
  Cost of distribution revenue .....................................           1,498,396    1,486,166        1,018,913
  Cost of logistics services revenue ...............................             246,902      180,930          141,950
                                                                         ---------------  -----------      -----------
Total cost of revenue ..............................................           1,745,298    1,667,096        1,160,863
                                                                         ---------------  -----------      -----------
Gross profit .......................................................             114,057       99,280           68,914
Selling, general and administrative expenses .......................              83,361       70,124           67,173
Facility consolidation charge (benefit) ............................                (236)       5,461               --
                                                                         ---------------  -----------      -----------
Operating income from continuing operations ........................              30,932       23,695            1,741
Interest expense ...................................................               1,870        1,815            6,172
Interest income ....................................................                (986)        (652)            (379)
Impairment loss on long-term investment ............................                  --           --            8,305
Loss (gain) on debt extinguishment .................................                  --          365          (44,378)
Other expenses .....................................................               1,860        2,251            1,630
                                                                         ---------------  -----------      -----------
Income from continuing operations before income taxes ..............              28,188       19,916           30,391
Income tax expense .................................................               8,230        4,793           15,431
                                                                         ---------------  -----------      -----------
Income from continuing operations before minority interest .........              19,958       15,123           14,960
Minority interest ..................................................                  --          (24)              --
                                                                         ---------------  -----------      -----------
Income from continuing operations ..................................              19,958       15,147           14,960
Discontinued operations:
   Loss from discontinued operations ...............................                (475)      (2,890)         (14,016)
   Loss on disposal of discontinued operations .....................              (5,713)        (528)          (2,617)
                                                                         ---------------  -----------      -----------
Total discontinued operations ......................................              (6,188)      (3,418)         (16,633)
Income (loss) before cumulative effect of a change in accounting
  principle ........................................................              13,770       11,729           (1,673)
Cumulative effect of a change in accounting principle, net of tax ..                  --           --          (40,748)
                                                                         ---------------  -----------      -----------
Net income (loss) ..................................................     $        13,770  $    11,729      $   (42,421)
                                                                         ===============  ===========      ===========

Basic per share:
   Income from continuing operations ...............................     $          1.08  $      0.83      $      0.83
   Discontinued operations .........................................               (0.34)       (0.19)           (0.93)
   Cumulative effect of a change in accounting principle, net of
    tax ............................................................                  --           --            (2.26)
                                                                         ---------------  -----------      -----------
   Net income (loss) ...............................................     $          0.74  $      0.64      $     (2.36)
                                                                         ===============  ===========      ===========

Diluted per share:
   Income from continuing operations ...............................     $          1.04  $      0.80      $      0.83
   Discontinued operations .........................................               (0.32)       (0.18)           (0.93)
   Cumulative effect of a change in accounting principle, net of tax                  --           --            (2.26)
                                                                         ---------------  -----------      -----------
   Net income (loss) ...............................................     $          0.72  $      0.62      $     (2.36)
                                                                         ===============  ===========      ===========

Weighted average common shares outstanding:
   Basic ...........................................................              18,552       18,170           17,996
                                                                         ===============  ===========      ===========
   Diluted .........................................................              19,169       19,002           18,019
                                                                         ===============  ===========      ===========
</TABLE>

                             See accompanying notes.

                                      A-39
<PAGE>

                                BRIGHTPOINT, INC.

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                                      DECEMBER 31,
                                                                                          -------------------------------------
                                                                                                2004                2003
                                                                                          ---------------      ----------------
                                                                                           (AS RESTATED)
                                                                                                (AMOUNTS IN THOUSANDS,
                                                                                                EXCEPT PER SHARE DATA)
<S>                                                                                       <C>                  <C>
                                     ASSETS
Current assets:
  Cash and cash equivalents .........................................................     $        72,120      $        98,879
  Pledged cash ......................................................................              13,830               22,042
  Accounts receivable (less allowance for doubtful accounts of $6,215 in 2004 and
   $7,683 in 2003) ..................................................................             148,321              132,944
  Inventories .......................................................................             110,089              108,665
  Contract financing receivable .....................................................              14,022               10,838
  Other current assets ..............................................................              23,132               13,083
                                                                                          ---------------      ---------------
Total current assets ................................................................             381,514              386,451
Property and equipment, net .........................................................              27,503               29,566
Goodwill and other intangibles, net .................................................              21,981               19,340
Other assets ........................................................................               6,586                9,333
                                                                                          ---------------      ---------------
Total assets ........................................................................     $       437,584      $       444,690
                                                                                          ===============      ===============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable ..................................................................     $       201,621      $       204,242
  Accrued expenses ..................................................................              61,851               60,960
  Unfunded portion of contract financing receivable .................................              23,375               15,697
  Lines of credit ...................................................................                  --               16,207
                                                                                          ---------------      ---------------
Total current liabilities ...........................................................             286,847              297,106
                                                                                          ===============      ===============

                          COMMITMENTS AND CONTINGENCIES


Minority interest ...................................................................                  --                   --
Shareholders' equity:
  Preferred stock, $0.01 par value: 1,000 shares authorized; no shares issued or
   outstanding ......................................................................                  --                   --
  Common stock, $0.01 par value: 100,000 shares authorized; 19,499 issued in 2004 and
   19,262 issued and outstanding in 2003 ............................................                 195                  193
  Treasury stock, at cost, 1,606 shares .............................................             (24,010)                  --
  Additional paid-in capital ........................................................             233,768              227,338
  Retained earnings (deficit) .......................................................             (63,968)             (77,738)
  Accumulated other comprehensive income (loss) .....................................               4,752               (2,209)
                                                                                          ---------------      ---------------
Total shareholders' equity ..........................................................             150,737              147,584
                                                                                          ---------------      ---------------
Total liabilities and shareholders' equity ..........................................     $       437,584      $       444,690
                                                                                          ===============      ===============
</TABLE>

                             See accompanying notes.

                                      A-40
<PAGE>

                                BRIGHTPOINT, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                  YEAR ENDED DECEMBER 31,
                                                                           -------------------------------------
                                                                            2004           2003           2002
                                                                          --------       --------       --------
                                                                        (AS RESTATED)
                                                                                  (AMOUNTS IN THOUSANDS)
<S>                                                                     <C>              <C>            <C>
OPERATING ACTIVITIES
Net income (loss) ...................................................     $ 13,770       $ 11,729       $(42,421)
Adjustments to reconcile net income (loss) to net cash provided by
  operating activities:
  Depreciation and amortization .....................................       10,815         12,733         12,431
   Amortization of debt discount ....................................            -             33          3,709
  Facility consolidation charge (benefit) ...........................         (236)         5,461              -
  Pledged cash requirements .........................................        3,212         (2,308)         1,923
  Change in deferred taxes ..........................................          563          2,010         12,852
  Discontinued operations ...........................................        6,188          3,418         16,633
  Net cash used by discontinued operations ..........................       (1,290)        (2,985)        (9,672)
   Income tax benefits from exercise of stock options ...............        5,418            445              -
  Gain (loss) on debt extinguishment ................................            -            365        (44,378)
  Minority interest .................................................            -             24              -
  Cumulative effect of a change in accounting principle, net of
    tax .............................................................            -              -         40,748
  Impairment loss on long-term investment ...........................            -              -          8,305
  Changes in operating assets and liabilities, net of effects from
   acquisitions and divestitures:
   Accounts receivable ..............................................      (19,744)        (4,306)        70,068
   Inventories ......................................................        1,588        (27,575)        53,888
   Other operating assets ...........................................       (2,103)           806         17,450
   Accounts payable and accrued expenses ............................      (10,439)        55,677        (71,415)
                                                                          --------       --------       --------
Net cash provided by operating activities ...........................        7,742         55,527         70,121
INVESTING ACTIVITIES
Capital expenditures ................................................       (8,343)        (6,057)        (8,671)
Purchase acquisitions, net of cash acquired .........................       (1,634)        (2,880)             -
Cash effect of divestitures .........................................          576          1,328         (3,549)
Decrease in funded contract financing receivables ...................        4,398          5,887         20,750
Decrease (increase) in other assets .................................         (920)           154            169
                                                                          --------       --------       --------
Net cash provided (used) by investing activities ....................       (5,923)        (1,568)         8,699
FINANCING ACTIVITIES
Net proceeds (payments) on credit facilities ........................      (16,500)         2,761        (18,436)
Pledged cash requirements ...........................................        5,000         (5,000)             -
Purchase of treasury stock ..........................................      (24,010)             -              -
Repurchase of convertible notes .....................................            -        (11,980)       (75,015)
Proceeds from common stock issuances under employee stock option and
  purchase plans ....................................................        1,013         12,383            173
                                                                          --------       --------       --------
Net cash used by financing activities ...............................      (34,497)        (1,836)       (93,278)
Effect of exchange rate changes on cash and cash equivalents ........        5,919          2,958            (39)
                                                                          --------       --------       --------
Net increase (decrease) in cash and cash equivalents ................      (26,759)        55,081        (14,497)
Cash and cash equivalents at beginning of year ......................       98,879         43,798         58,295
                                                                          --------       --------       --------
Cash and cash equivalents at end of year ............................     $ 72,120       $ 98,879       $ 43,798
                                                                          ========       ========       ========
</TABLE>

                             See accompanying notes.

                                      A-41
<PAGE>

                                BRIGHTPOINT, INC.

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                RETAINED     ACCUMULATED      TOTAL
                                                                 ADDITIONAL   COMPREHENSIVE     OTHER      COMPREHENSIVE
                                  COMMON   TREASURY    PAID-IN    EARNINGS       INCOME      SHAREHOLDERS'    INCOME
                                  STOCK      STOCK     CAPITAL    (DEFICIT)      (LOSS)         EQUITY        (LOSS)
                                  -----      -----     -------    ---------      ------         ------        ------
                                                                (AMOUNTS IN THOUSANDS)
<S>                               <C>      <C>        <C>        <C>          <C>            <C>           <C>
Balance at December 31, 2001      $ 180    $     --   $214,352    $ (47,046)    $ (17,473)    $ 150,013
 Net loss.................           --          --         --      (42,421)           --       (42,421)    $ (42,421)
 Other comprehensive income
  (loss):
  Currency translation of
   foreign investments....           --          --         --           --         5,929         5,929         5,929
  Unrealized loss on
   derivatives, net of
   income tax.............           --          --         --           --           (50)          (50)          (50)
  Common stock issued in
   connection with employee
   stock option and purchase
   plans and related income
   tax benefit............           --          --        172           --            --           172            --
                                  -----    --------   --------    ---------     ---------     ---------     ---------
Balance at December 31, 2002      $ 180    $     --   $214,524    $ (89,467)    $ (11,594)    $ 113,643     $ (36,542)
                                                                                                            =========
2003 Activity:
 Net income...............           --          --         --       11,729            --        11,729     $  11,729
 Other comprehensive income
  (loss):
  Currency translation of
   foreign investments....           --          --         --           --         9,385         9,385         9,385
  Common stock issued in
   connection with employee
   stock option and purchase
   plans and related income
   tax benefit............           13          --     12,814           --            --        12,827            --
                                  -----    --------   --------    ---------     ---------     ---------     ---------
Balance at December 31, 2003      $ 193    $     --   $227,338    $ (77,738)    $  (2,209)    $ 147,584     $  21,114
                                                                                                            =========
2004 Activity (As Restated):
 Net income...............           --          --         --       13,770            --        13,770     $  13,770
 Other comprehensive income
  (loss):
  Currency translation of
   foreign investments....           --          --         --           --         6,961         6,961         6,961
  Purchase of treasury
    stock ................           --     (24,010)        --           --            --       (24,010)           --
  Common stock issued in
   connection with employee
   stock option and purchase
   plans and related income
   tax benefit............            2          --      6,430           --            --         6,432            --
                                  -----    --------   --------    ---------     ---------     ---------     ---------
Balance at December 31, 2004
 (As Restated)............        $ 195    $(24,010)  $233,768    $ (63,968)    $   4,752     $ 150,737     $  20,731
                                                                                                            =========
</TABLE>

                             See accompanying notes.

                                      A-42
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

   NATURE OF BUSINESS

      Brightpoint, Inc. is one of the largest dedicated distributors of wireless
devices and accessories and providers of logistics services to mobile operators,
with operations centers and/or sales offices in various countries including
Australia, Colombia, Finland, France, Germany, India, New Zealand, Norway, the
Philippines, the Slovak Republic, Sweden, United Arab Emirates and the United
States. The Company provides logistics services including, procurement,
inventory management, customized packaging, fulfillment, activation management,
prepaid and e-business solutions within the global wireless industry. Customers
include wireless network operators (also referred to as "mobile operators"),
resellers, retailers and wireless equipment manufacturers. The Company handles
wireless products manufactured by wireless device manufacturers such as Nokia,
Motorola, Kyocera, Audiovox, LG Electronics, Sony Ericsson, Siemens, Samsung and
High Tech Computer Corp.

      The Company was incorporated under the laws of the State of Indiana in
August 1989 under the name Wholesale Cellular USA, Inc. and reincorporated under
the laws of the State of Delaware in March 1994. In September 1995, the Company
changed its name to Brightpoint, Inc. In June 2004, the Company reincorporated
under the laws of the State of Indiana under the name of Brightpoint, Inc.

   PRINCIPLES OF CONSOLIDATION

      The Consolidated Financial Statements include the accounts of the Company
and its subsidiaries, all of which are wholly-owned, with the exception of the
Brightpoint India Limited subsidiary that is 85% owned by the Company.
Significant intercompany accounts and transactions have been eliminated in
consolidation. Certain amounts in the 2003 and 2002 Consolidated Financial
Statements have been reclassified to conform to the 2004 presentation.

   USE OF ESTIMATES

      The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
disclosure of any contingent assets and liabilities at the financial statement
date and reported amounts of revenue and expenses during the reporting period.
On an on-going basis, the Company reviews its estimates and assumptions. The
Company's estimates were based on its historical experience and various other
assumptions that the Company believes to be reasonable under the circumstances.
Actual results are likely to differ from those estimates under different
assumptions or conditions, but management does not believe such differences will
materially affect the Company's financial position or results of operations.

   REVENUE RECOGNITION

      The Company recognizes revenue in accordance with SEC Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101") and
SEC Staff Accounting Bulletin No. 104, "Revenue Recognition" ("SAB 104").
Revenue is recognized when the title and risk of loss have passed to the
customer, there is persuasive evidence of an arrangement, delivery has occurred
or services have been rendered, the sales price is fixed or determinable, and
collectibility is reasonably assured. The amount of revenue is determined based
on either the gross method or the net method. The amount under the gross method
includes the value of the product sold while the amount under the net method
does not include the value of the product sold.

                                      A-43
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

      For distribution revenue, which is recorded using the gross method, the
criteria of SAB 101 and SAB 104 are generally met upon shipment to customers,
including title transfer, and, therefore, revenue is recognized at the time of
shipment. In some circumstances, the customer may take legal title and assume
risk of loss upon delivery and, therefore, revenue is recognized on the delivery
date. In certain countries, title is retained by the Company for collection
purposes only, which does not impact the timing of revenue recognition in
accordance to the provisions of SAB 101 and SAB 104. Sales are recorded net of
discounts, rebates, returns, and allowances. The Company does not have any
material post-shipment obligations (e.g. customer acceptance), warranties or
other arrangements. A portion of the Company's sales involves shipments of
products directly from its suppliers to its customers. In such circumstances,
the Company negotiates the price with the supplier and the customer, assumes
responsibility for the delivery of the product and, at times, takes the
ownership risk while the product is in transit, pays the supplier directly for
the product shipped, establishes payment terms and bears credit risk of
collecting payment from its customers. Furthermore, in these arrangements, the
Company bears responsibility for accepting returns of products from the
customer. Under these arrangements, the Company serves as the principal with the
customer, as defined by Emerging Issues Task Force Issue No. 99-19 ("EITF
99-19"), Reporting Revenue Gross as a Principal versus Net as an Agent, and
therefore recognizes the sale and cost of sale of the product upon receiving
notification from the supplier that the product has shipped or in cases of FOB
destination, CIP destination, or similar terms, the Company recognizes the sales
upon confirmation of delivery to the customer at the named destination.

      For logistics service revenue, the criteria of SAB 101 and SAB 104 are met
when the Company's logistics services have been performed and, therefore,
revenue is recognized at that time. As a part of our logistics services the
Company may, in certain circumstances, manage and distribute wireless devices
and prepaid recharge cards on behalf of various mobile operators and assumes
little or no ownership risk for the product, other than custodial risk of loss.
Under these arrangements the Company has an agency relationship in the
transaction as defined by EITF 99-19 and recognizes only the fee associated with
serving as an agent. In circumstances where the Company acts as the obligor in
the purchase and resale of prepaid recharge cards or electronic codes, the
Company recognizes the full sales price using the gross method. As part of the
logistics services, the Company may provide contract financing services to
mobile operators. In these arrangements, the service fee is recorded net and is
recognized when products have been shipped. In other logistics services
arrangements, the Company receives activation commissions for acquiring
subscribers on behalf of mobile operators through its independent dealer agents
or through Company-owned stores. In the event activation occurs through an
independent dealer/agent, a portion of the commission is passed on to the
dealer/agent. These arrangements may contain provisions for additional residual
commissions based on subscriber usage. These agreements may also provide for the
reduction or elimination of activation commissions if subscribers deactivate
service within stipulated periods. The Company recognizes revenue for activation
commissions upon activation of the subscriber's service and residual commissions
when earned. An allowance is established for estimated wireless service
deactivations as a reduction of accounts receivable and revenues. In
circumstances when the Company acts as the obligor and determines the commission
it will offer to independent dealer/agents, the Company recognizes the full
commission earned from the mobile operator using the gross method. In
circumstances where the Company is acting as an agent for mobile operators as
defined by EITF 99-19, the Company recognizes the revenue using the net method.
Performance penalty clauses may be included in certain contracts whereby the
Company provides for logistics services within its Americas division. In
general, these penalties are in the form of reduced per unit fees or a specific
dollar amount. In the event the Company has incurred performance penalties,
revenues are reduced accordingly within each calendar month.

   GROSS PROFIT

      The Company determines its gross profit as the difference between revenue
and cost of revenue. Cost of revenue includes the direct product costs, freight,
direct and indirect labor, facilities, equipment and related costs, including
depreciation, information systems, including related maintenance and
depreciation, and other indirect costs associated with products sold and
services provided.

   VENDOR PROGRAMS

      The Company has three major types of incentive arrangements with various
suppliers: price protection, volume incentive rebates, and marketing, training
and promotional funds. The Company follows Emerging Issues Task Force Issue No.
02-16, "Accounting by a Customer (Including a Reseller) for Certain
Consideration Received from

                                      A-44
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

a Vendor" and Emerging Issues Task Force No. 03-10, "Application of Issue No.
02-16 by Resellers to Sales Incentives Offered to Consumers by Manufacturers" in
accounting for vendor programs. To the extent that the Company receives excess
funds from suppliers for reimbursement of its costs, the Company recognizes the
excess as a liability due to the supplier, which is applied to future costs
incurred on behalf of the supplier.

      -  Price protection: consideration is received from certain, but not all,
         suppliers in the form of a credit memo based on market conditions as
         determined by the supplier. The amount is determined based on the
         difference between original purchase price from the supplier and
         revised list price from the supplier. The term of the price protection
         varies by supplier and product, but is typically less than one month
         from original date of purchase. This amount is accrued as a reduction
         of trade accounts payable until a credit memo is received and applied
         as a debit to the outstanding accounts payable. This same amount is
         either a reduction of inventory cost or is a reduction of cost of sales
         for those wireless devices already sold.

      -  Volume incentive rebates: consideration is received from certain
         suppliers when purchase or sell-through targets are attained or
         exceeded within a specified time period. The amount of rebate earned in
         any financial reporting period is accrued as a vendor receivable, which
         is classified as a reduction of trade accounts payable. This same
         amount is either a reduction of inventory cost or is a reduction of
         cost of sales for those devices already sold. In certain markets, the
         amount of the rebate is determined based on actual volumes purchased
         for the incentive period to date at the established rebate percentage
         without minimum volume purchase requirements. In other markets, where
         the arrangement has a tiered rate structure for increasing volumes, the
         rate of the rebate accrual is determined based on the actual volumes
         purchased plus reasonable, predictable estimates of future volumes
         within the incentive period. In the event the future volumes are not
         reasonably estimable, the Company records the incentive at the
         conclusion of the rebate period or at the point in time when the
         volumes are reasonably estimable. Upon expiration of the rebate period
         an adjustment is recognized through inventory or cost of sales for
         devices already sold if there is any variance between estimated rebate
         receivable and actual rebate earned. To the extent that the Company
         passes-through rebates to our customers, the amount is recognized as a
         liability in the period that it is probable and reasonably estimable.

      -  Marketing, training and promotional funds: consideration is received
         from certain suppliers for cooperative arrangements related to market
         development, training and special promotions agreed upon in advance.
         The amount received is generally in the form of a credit memo, which is
         applied to trade accounts payable. The same amount is recorded as a
         current liability. Expenditures made pursuant to the agreed upon
         activity reduces this liability. To the extent that the Company incurs
         costs in excess of the established supplier fund, the Company
         recognizes the amount as a selling expense.

   CASH AND CASH EQUIVALENTS

      All highly liquid investments with maturities of three months or less when
purchased are considered to be cash equivalents. Pledged cash represents cash
reserved as collateral for letters of credit issued by financial institutions on
behalf of the Company or its subsidiaries as collateral for vendor credit
facilities, on a short-term credit facility in India in 2003, and as collateral
for an accounts receivable sale facility in France.

   CONCENTRATIONS OF RISK

      Financial instruments that potentially expose the Company to
concentrations of credit risk consist primarily of trade accounts receivable.
These receivables are generated from product sales and services provided to
mobile operators, agents, resellers, dealers and retailers in the global
wireless industry and are dispersed throughout the world, including North
America, South America, Asia and the Pacific Rim and Europe. The Company
performs periodic credit evaluations of its customers and provides credit in the
normal course of business to a large number of its customers. However,
consistent with industry practice, the Company does not generally require
collateral from its customers to secure trade accounts receivable.

      In 2004, no customer accounted for more than 10% of our total revenue. In
2003, Computech Overseas International ("Computech"), a customer of the
Company's Brightpoint Asia Limited operations, accounted for approximately 10%
of the Company's total revenue and 19% of the Asia-Pacific division's revenue.
In 2002,

                                      A-45
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Computech accounted for approximately 13% of the Company's total revenue and 30%
of the Asia-Pacific division's revenue. At December 31, 2004 and 2003, there
were no amounts owed to the Company from Computech. Although Nextel
Communications, Inc. ("Nextel"), a fee-based logistics service customer, is less
than 10% of the Company's total revenue, it is more than 10% of wireless devices
handled in the Company's North American business. Sprint is a customer and a
supplier within the channel services business in the Company's North American
business. On December 15, 2004, Sprint and Nextel announced a definitive
agreement for a merger of equals. The loss or a significant reduction in
business activities by the Company's customers, including Computech Overseas
International and Nextel, could have a material adverse affect on the Company's
revenue and results of operations.

      The Company is primarily dependent upon wireless equipment manufacturers
for its supply of wireless voice and data equipment. Products sourced from the
Company's largest supplier, Nokia, accounted for approximately 63%, 79% and 63%
of product purchases in 2004, 2003 and 2002, respectively. The Company is
dependent on the ability of its suppliers to provide an adequate supply of
products on a timely basis and on favorable pricing terms. The loss of certain
principal suppliers or a significant reduction in product availability from
principal suppliers could have a material adverse effect on the Company. The
Company also relies on its suppliers to provide trade credit facilities and
favorable payment terms to adequately fund its on-going operations and product
purchases. In certain circumstances, the Company has issued cash-secured letters
of credit on behalf of certain of our subsidiaries in support of their vendor
credit facilities. The payment terms received from the Company's suppliers is
dependent on several factors, including, but not limited to, the Company's
payment history with the supplier, the suppliers credit granting policies,
contractual provisions, the Company's overall credit rating as determined by
various credit rating agencies, the Company's recent operating results,
financial position and cash flows and the supplier's ability to obtain credit
insurance on amounts that the Company owes them. Adverse changes in any of these
factors, certain of which may not be wholly in the Company's control, could have
a material adverse effect on the Company's operations. The Company believes that
its relationships with its suppliers are satisfactory, however, it has
periodically experienced inadequate supply of certain models from certain
wireless device manufacturers.

   ALLOWANCE FOR DOUBTFUL ACCOUNTS

      The Company evaluates the collectibility of its accounts receivable. In
circumstances where the Company is aware of a specific customer's inability to
meet its financial obligations, the Company records a specific allowance against
amounts due to reduce the net recognized receivable to the amount the Company
reasonably believes will be collected. For all other customers, the Company
recognizes allowances for doubtful accounts based on the length of time the
receivables are past due, the current business environment and the Company's
historical experience.

   ACCOUNTS RECEIVABLE TRANSFERS

      The Company from time to time enters into certain transactions with banks
and other third-party financing organizations with respect to the sale of a
portion of its accounts receivable in order to reduce the amount of working
capital required to fund such receivables. These transactions have been treated
as sales pursuant to the provisions of Financial Accounting Standards Board's
("FASB") Statement of Financial Accounting Standards ("SFAS") No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities. Net funds received from the sale of these certain accounts
receivable reduces the accounts receivable balance outstanding and are not
included in total revenue as reported in the Consolidated Statements of
Operations. Fees, in the form of discounts, are recorded as losses on the sale
of assets, which are included as a component of "Other expenses" in the
Consolidated Statements of Operations. The Company is the collection agent on
behalf of the financing organization for many of these arrangements and have no
significant retained interests or servicing liabilities related to accounts
receivable that it has sold, although in limited circumstances the Company may
be required to repurchase the accounts. See Note 9 to the Consolidated Financial
Statements for further discussion of these off-balance sheet transactions.

   CONTRACT FINANCE RECEIVABLES

      The Company offers financing of inventory and receivables to certain
mobile operator customers and their authorized dealer agents and wireless
equipment manufacturers under contractual arrangements. Under these
arrangements, the Company records the accounts receivable from sales on behalf
of these customers and inventory

                                      A-46
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

and accounts payable for product purchased under these arrangements, however,
the Company has the ability to require these customers, subject to certain
limitations, to assume the accounts receivable or repurchase the inventory that
it has purchased on their behalf. Consequently, the Company is financing these
receivables and inventory and has a receivable from these customers for amounts
it has financed. The amount financed pursuant to these arrangements is recorded
as a current asset under the caption "Contract financing receivable" and any
trade accounts payable pursuant to the arrangements is recorded as a current
liability under the heading "Unfunded portion of contract financing receivable."
The Company charges a fee for providing these contract financing services and
records revenue for these logistics services at the amount of the net margin
rather than the gross amount of the transactions. In addition, the Company has
commitments under certain contracts to provide inventory financing for these
customers pursuant to various limitations and provisions as defined in the
applicable service agreements.

      At December 31, 2004 and 2003, contract financing receivable of $14.0
million and $10.8 million, respectively, included $2.3 million and $1.9 million,
respectively, of wireless products located at the Company's facilities. In
addition, at December 31, 2004 and 2003, the Company had $23 million and $15.7
million, respectively, in vendor payables related to purchases made for these
arrangements, which it considers to be the unfunded portion of these
receivables.

      The Company's contract financing activities are provided to mobile
operators and their authorized dealer agents and wireless equipment
manufacturers located in the United States and Australia. Decisions to grant
credit under these arrangements are generally at the discretion of the Company,
are made within guidelines established by the mobile operators and wireless
equipment manufacturers and are subject to the Company's normal credit granting
and ongoing credit evaluation process. The Company's contract financing
services, and related fees, are included as an integral part of the Company's
logistics services and are not separately computed or accounted for. Logistics
service fees are included in revenues in the Statement of Income.

   INVENTORIES

      Inventories primarily consist of wireless devices and accessories and are
stated at the lower of cost or market. Overhead expenses are capitalized for
inventory held in stock and expensed at the time the inventory is sold. At each
balance sheet date, the Company evaluates its ending inventories for excess
quantities and obsolescence, considering any stock balancing or rights of return
that it may have with certain suppliers. This evaluation includes analyses of
sales levels by product and projections of future demand. The Company writes off
inventories that are considered obsolete. Remaining inventory balances are
adjusted to approximate the lower of cost or market value. Inventory adjustments
for obsolescence and lower of cost or market value may be expensed directly or
applied to an inventory valuation allowance, depending on the nature of the
adjustment. During the years ended December 31, 2004 and 2003, the Company had
no individually significant inventory valuation adjustments.

   FAIR VALUE OF FINANCIAL INSTRUMENTS

      The carrying amounts at December 31, 2004 and 2003, of cash and cash
equivalents, pledged cash, accounts receivable, contract financing receivable,
other current assets, accounts payable, accrued expenses, unfunded portion of
contract financing receivable and certain of the Company's credit facilities
approximate their fair values because of the short maturity of those
instruments. The carrying amount of short-term debt at December 31, 2004 and
2003, approximates fair value as this debt is revolving and has a variable
interest rate that fluctuates with market rates. See Note 3 for disclosure of
the fair value of the Company's investment in Chinatron Group Holdings Limited
("Chinatron") Class B Preference Shares.

   PROPERTY AND EQUIPMENT

      Property and equipment are stated at cost and depreciation is computed
using the straight-line method over the estimated useful lives of the assets,
generally three to fifteen years. Leasehold improvements are stated at cost and
depreciated ratably over the lease term of the associated property. Maintenance
and repairs are charged to expense as incurred.

                                      A-47
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

   IMPAIRMENT OF LONG-LIVED TANGIBLE AND FINITE-LIVED INTANGIBLE ASSETS

      The Company periodically considers whether indicators of impairment of
long-lived tangible and finite-lived intangible assets are present. If such
indicators are present, the Company determines whether the sum of the estimated
undiscounted cash flows attributable to the assets in question is less than
their carrying value. If less, the Company recognizes an impairment loss based
on the excess of the carrying amount of the assets over their respective fair
values. Fair value is determined by discounted future cash flows, appraisals or
other methods. If the assets determined to be impaired are to be held and used,
the Company recognizes an impairment charge to the extent the present value of
anticipated net cash flows attributable to the asset are less than the asset's
carrying value. The fair value of the asset then becomes the asset's new
carrying value, which, if applicable, the Company depreciates or amortizes over
the remaining estimated useful life of the asset. At December 31, 2004, the
finite-lived intangible assets total $3.0 million, net of accumulated
amortization of $1.9 million and are currently being amortized over three to
five years at approximately $517 thousand per year. For 2004 and 2003, the
Company incurred no impairment charges for these intangibles.

   GOODWILL

      The Company adopted the FASB Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets ("SFAS No. 142"), on January 1,
2002. Pursuant to the provisions of SFAS 142 the Company stopped amortizing
goodwill and performs an impairment test on its goodwill at least annually.
During the second quarter of 2002, the Company completed the transitional
impairment test required under SFAS No. 142. During the first quarter of 2002,
as a result of the initial transitional impairment test, the Company recorded an
impairment charge of approximately $41 million, which is presented as a
cumulative effect of a change in accounting principle, net of tax. In the fourth
quarter of 2004, 2003 and 2002, the Company performed the required annual
impairment test on its remaining goodwill and incurred no additional impairment
charges. The Company's reporting units are contained within three operating
segments, the Americas, Europe and Asia-Pacific as defined under SFAS 131,
Disclosures about Segments of an Enterprise and Related Information. Based on
the fact that each reporting unit constitutes a business, has discrete financial
information with similar economic characteristics, and the operating results of
the component are regularly reviewed by management, the Company applies the
provisions of SFAS 142 and performs the necessary goodwill impairment tests at
the reporting unit level.

      The changes in the carrying amount of goodwill by operating segment for
the year ended December 31, 2004, are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                          EUROPE    ASIA-PACIFIC     TOTAL
                                                                        ----------  ------------  ----------
<S>                                                                     <C>         <C>           <C>
Balance at December 31, 2003......................................      $   15,694    $  1,013    $   16,707
Goodwill from acquisitions........................................             555         392           947
Effects of foreign currency fluctuation...........................           1,260          90         1,350
                                                                        ----------    --------    ----------
Balance at December 31, 2004......................................      $   17,509    $  1,495    $   19,004
                                                                        ==========    ========    ==========
</TABLE>

   FOREIGN CURRENCY TRANSLATION

      The functional currency for most of the Company's foreign subsidiaries is
the respective local currency. Revenue and expenses denominated in foreign
currencies are translated to the U.S. dollar at average exchange rates in effect
during the year and assets and liabilities denominated in foreign currencies are
translated to the U.S. dollar at the exchange rate in effect at the end of the
period. Foreign currency transaction gains and losses are included in the
Consolidated Statements of Operations as a component of "Other expenses."
Currency translation of assets and liabilities (foreign investments) from the
functional currency to the U.S. dollar are included in the Consolidated Balance
Sheets as a component of accumulated other comprehensive income (loss) in
shareholders' equity.

   INCOME TAXES

      The Company accounts for income taxes under the asset and liability
method, which requires the recognition of deferred tax assets and liabilities
for the expected future tax consequence of events that have been recognized in
the Company's financial statements or income tax returns. Income taxes are
recognized during the year in which the underlying transactions are reflected in
the Consolidated Statements of Operations. Deferred taxes are provided for

                                      A-48
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

temporary differences between amounts of assets and liabilities as recorded for
financial reporting purposes and amounts recorded for tax purposes. After
determining the total amount of deferred tax assets, the Company determines
whether it is more likely than not that some portion of the deferred tax assets
will not be realized. If the Company determines that a deferred tax asset is not
likely to be realized, a valuation allowance will be established against that
asset to record it at its expected realizable value.

   DISCONTINUED OPERATIONS

      The Company records amounts in discontinued operations (see Note 7 to the
Consolidated Financial Statements for further discussion) as required by the
FASB Statement of Financial Accounting Standards No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets ("SFAS No. 144"). In accordance with
the adoption of SFAS No. 144, the results of operations and related disposal
costs, gains and losses for business units that the Company has eliminated or
sold are classified in discontinued operations for all periods presented.

   NET INCOME (LOSS) PER SHARE

      Basic net income (loss) per share is based on the weighted average number
of common shares outstanding during each year, and diluted net income (loss) per
share is based on the weighted average number of common shares and dilutive
common share equivalents outstanding during each year. The Company's common
share equivalents consist of stock options described in Note 14, to the
Consolidated Financial Statements.

      On October 15, 2003, and August 15, 2003, the Company effected 3 for 2
common stock splits, which the Company's Board of Directors approved. On June
26, 2002, the Company's stockholders approved a 1 for 7 reverse split of its
common stock (effective June 27, 2002). Per share amounts for all periods
presented in this report have been adjusted to reflect this reverse stock split
and the 3 for 2 common stock splits.

      The following is a reconciliation of the numerators and denominators of
the basic and diluted net income (loss) per share computations for 2004, 2003
and 2002 (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31,
                                                                 ---------------------------------------
                                                                     2004          2003         2002
                                                                 ------------   ----------   -----------
                                                                 (AS RESTATED)
<S>                                                              <C>            <C>          <C>
Income from continuing operations................................  $  19,958    $   15,147   $    14,960
Discontinued operations..........................................     (6,188)       (3,418)      (16,633)
Cumulative effect of a change in accounting principle, net
  of tax.........................................................         --            --       (40,748)
                                                                   ---------    ----------   -----------
Net income (loss)................................................  $  13,770    $   11,729   $   (42,421)
                                                                   =========    ==========   ===========
Basic:
  Weighted average shares outstanding............................     18,552        18,170        17,996
                                                                   =========    ==========   ===========
  Per share amount:
    Income from continuing operations............................  $    1.08    $     0.83   $      0.83
    Discontinued operations......................................      (0.34)        (0.19)        (0.93)
    Cumulative effect of a change in accounting principle,
     net of tax..................................................         --            --         (2.26)
                                                                   ---------    ----------   -----------
    Net income (loss)............................................  $    0.74    $     0.64   $     (2.36)
                                                                   =========    ==========   ===========
Diluted:
  Weighted average shares outstanding............................     18,552        18,170        17,996
  Net effect of dilutive stock options-based on the treasury
   stock method using average market price.......................        617           832            23
                                                                   ---------    ----------   -----------
  Total weighted average shares outstanding......................     19,169        19,002        18,019
                                                                   =========    ==========   ===========
  Per share amount:
    Income from continuing operations............................  $    1.04    $     0.80   $      0.83
    Discontinued operations......................................      (0.32)        (0.18)        (0.93)
</TABLE>

                                      A-49
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31,
                                                                 ---------------------------------------
                                                                     2004          2003         2002
                                                                 ------------   ----------   -----------
                                                                 (AS RESTATED)
<S>                                                              <C>            <C>          <C>
    Cumulative effect of a change in accounting principle,
     net of tax..................................................         --            --         (2.26)
                                                                   ---------    ----------   -----------
    Net income (loss)............................................  $    0.72    $    (0.62)  $     (2.36)
                                                                   =========    ==========   ===========
</TABLE>

   STOCK OPTIONS

      As more fully discussed in Note 14 to the Consolidated Financial
Statements, the Company uses the intrinsic value method, as opposed to the fair
value method, in accounting for stock options. Under the intrinsic value method,
no compensation expense has been recognized for stock options granted to
employees or stock sold pursuant to the employee stock purchase plan ("ESPP").
The table below presents a reconciliation of the Company's pro forma net income
(loss) giving effect to the estimated compensation expense related to stock
options and the ESPP that would have been reported if the Company utilized the
fair value method (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                              YEAR ENDED DECEMBER 31,
                                                                      -------------------------------------
                                                                         2004          2003        2002
                                                                      ----------    ----------  -----------
                                                                         (AS
                                                                       RESTATED)
<S>                                                                   <C>           <C>         <C>
Net income (loss) as reported.....................................    $   13,770    $   11,729  $   (42,421)
Stock-based employee compensation cost, net of related tax
  effects, that would have been included in the determination of
  net income (loss) if the fair value method had been applied.....        (2,690)         (713)        (906)
                                                                      ----------    ----------  -----------
Pro forma net income (loss).......................................    $   11,080    $   11,016  $   (43,327)
                                                                      ==========    ==========  ===========

Basic per share:
  Net income (loss), as reported..................................    $     0.74    $     0.64  $     (2.36)
  Stock-based employee compensation cost, net of related tax
   effects, that would have been included in the determination of
   net income (loss) if the fair value method had been applied....         (0.15)        (0.04)       (0.05)
                                                                      ----------    ----------  -----------
  Pro forma net income (loss).....................................    $     0.59    $     0.60  $     (2.41)
                                                                      ==========    ==========  ===========

Diluted per share:
  Net income (loss), as reported..................................    $     0.72    $     0.62  $     (2.36)
  Stock-based employee compensation cost, net of related tax
   effects, that would have been included in the determination of
   net income (loss) if the fair value method had been applied....         (0.14)        (0.04)       (0.05)
                                                                      ----------    ----------  -----------
  Pro forma net income (loss).....................................    $     0.58    $     0.58  $     (2.41)
                                                                      ==========    ==========  ===========
</TABLE>

   RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In December 2004, the FASB issued Statement of Financial Accounting
Standards No. 123R (Revised 2004), Share-Based Payment ("SFAS No. 123R"), which
requires that the compensation cost relating to share-based payment transactions
be recognized in financial statements based on alternative fair value models.
The share-based compensation cost will be measured based on the fair value of
the equity or liability instruments issued. The Company currently discloses pro
forma compensation expense quarterly and annually by calculating the stock
option grants' fair value using the Black-Scholes model and disclosing the
impact on net income and net income per share in a Note to the Consolidated
Financial Statements. Upon adoption, pro forma disclosure will no longer be an
alternative. The table above reflects the estimated impact that such a change in
accounting treatment would have had on our net income and net income per share
if it had been in effect during the year ended December 31, 2004. SFAS No. 123R
also requires the benefits of tax deductions in excess of recognized
compensation cost to be reported as a financing cash flow rather than as an
operating cash flow as required under current literature. This requirement will
reduce net operating cash flows and increase net financing cash flows in periods
after adoption. While the Company cannot estimate what those amounts will be in
the future, the amount of operating cash flows recognized for such deductions
were $5.4 million in 2004 and $445 thousand for 2003. The Company will begin to
apply SFAS No. 123R using the most appropriate fair value model as of the
interim reporting period ending September 30, 2005.

                                      A-50
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

OPERATING SEGMENTS

      The Company's operations are divided into three geographic operating
segments. These operating segments represent its three divisions: The Americas,
Asia-Pacific and Europe. These divisions all derive revenues from sales of
wireless devices, accessory programs and fees from the provision of logistics
services.

      The Company evaluates the performance of, and allocates resources to,
these segments based on operating income from continuing operations including
allocated corporate selling, general and administrative expenses. As discussed
in Note 7 to the Consolidated Financial Statements, the Company discontinued
several operating entities, which materially affected certain operating
segments. All years presented below have been reclassified to reflect the
reclassification of discontinued operating entities to discontinued operations.
A summary of the Company's operations by segment is presented below (in
thousands) for 2004, 2003 and 2002:

<TABLE>
<CAPTION>
                            PRODUCT     LOGISTICS                    OPERATING
                         DISTRIBUTION    SERVICES        TOTAL      INCOME (LOSS)                           ALLOCATED
                         REVENUE FROM  REVENUE FROM   REVENUE FROM      FROM        TOTAL     ALLOCATED    INCOME TAX
                           EXTERNAL      EXTERNAL      EXTERNAL      CONTINUING    SEGMENT   NET INTEREST    EXPENSE
                          CUSTOMERS     CUSTOMERS      CUSTOMERS    OPERATIONS(1)  ASSETS(2)  EXPENSE(3)   (BENEFIT)(3)
                          ---------     ---------      ---------    -------------  ---------  ----------   ------------
<S>                      <C>           <C>            <C>           <C>           <C>        <C>           <C>
2004: (As Restated)
The Americas.......      $   393,883    $ 111,252     $   505,135     $ 21,731    $ 152,401    $   312      $  6,286
Asia-Pacific.......          924,024       44,126         968,150       11,614      160,578        273         3,154
Europe.............          241,202      144,868         386,070       (2,413)     124,605        299        (1,210)
                         -----------    ---------     -----------     --------    ---------    -------      --------
                         $ 1,559,109    $ 300,246     $ 1,859,355     $ 30,932    $ 437,584    $   884      $  8,230
                         ===========    =========     ===========     ========    =========    =======      ========
2003:
The Americas.......      $   394,044    $  75,574     $   469,618     $  3,620    $ 190,077    $   594      $    610
Asia-Pacific.......          962,681       33,116         995,797       14,088      159,005        217         3,117
Europe.............          183,746      117,215         300,961        5,987       95,608        352         1,066
                         -----------    ---------     -----------     --------    ---------    -------      --------
                         $ 1,540,471    $ 225,905     $ 1,766,376     $ 23,695    $ 444,690    $ 1,163      $  4,793
                         ===========    =========     ===========     ========    =========    =======      ========
2002:
The Americas.......      $   418,121    $  75,056     $   493,176     $ (2,031)   $ 173,371    $ 3,109      $ 15,906
Asia-Pacific.......          504,886       22,613         527,499        6,466       84,920      1,717           476
Europe.............          125,486       83,615         209,102       (2,694)      78,011        966          (951)
                         -----------    ---------     -----------     --------    ---------    -------      --------
                         $ 1,048,493    $ 181,284     $ 1,229,777     $  1,741    $ 336,302    $ 5,792      $ 15,431
                         ===========    =========     ===========     ========    =========    =======      ========
</TABLE>

----------
(1) Certain corporate expenses are allocated to the segments based on total
    revenue.

(2) Corporate assets are included in the Americas segment.

(3) These items are allocated using various methods and are not necessarily
    indicative of the actual interest expense and income taxes for the
    applicable divisions.

    Additional segment information is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                    DECEMBER 31,
                                                                         ----------------------------------
                                                                            2004        2003        2002
                                                                         ----------  ----------  ----------
<S>                                                                      <C>         <C>         <C>
Long-lived assets:
The Americas(1)....................................................      $   21,952  $   27,121  $   38,274
Asia-Pacific.......................................................          10,608       9,636       7,479
Europe.............................................................          23,510      21,482      16,947
                                                                         ----------  ----------  ----------
                                                                         $   56,070  $   58,239  $   62,700
                                                                         ==========  ==========  ==========
</TABLE>

----------
(1) Includes corporate assets.

                                      A-51
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2.  FACILITY CONSOLIDATION CHARGE

      During 2003, the Company consolidated its Richmond, California, call
center operation into its Plainfield, Indiana, facility to reduce costs and
increase productivity and profitability in its Americas division. For the year
of 2003, the total pre-tax charge was $5.5 million which included approximately
$3.8 million for the present value of estimated lease costs, net of an
anticipated sublease, non-cash losses on the disposal of assets of approximately
$1.1 million and severance and other costs of approximately $600 thousand.
During 2003, $2.1 million of this charge was used. The Company terminated the
lease during the second quarter of 2004 utilizing $2.5 million of the reserve.
The remaining reserve balance was related to final facility equipment costs and
related legal fees.

      Reserve activity for the facility consolidation as of December 31, 2004
and 2003 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                  LEASE                  EMPLOYEE
                                               TERMINATION   FIXED     TERMINATION  OTHER EXIT
                                                   COSTS     ASSETS       COSTS       COSTS       TOTAL
                                                   -----     ------       -----       -----       -----
<S>                                            <C>          <C>        <C>          <C>         <C>
Provisions..............................         $  3,829   $  1,102      $  269      $  261    $  5,461
Cash usage..............................             (450)        --        (269)       (252)       (971)
Non-cash usage..........................               --     (1,102)         --          --      (1,102)
                                                 --------   --------      ------      ------    --------
December 31, 2003.......................         $  3,379   $     --       $  --       $   9    $  3,388
Provisions..............................             (236)        --          --          --        (236)
Cash usage..............................           (3,143)        --          --          (9)     (3,152)
                                                 --------   --------      ------      ------    --------
December 31, 2004.......................         $     --    $    --       $  --       $  --     $    --
                                                 --------   --------      ------      ------    --------
</TABLE>

3. IMPAIRMENT LOSS ON LONG-TERM INVESTMENT

      In January and April 2002, the Company received approximately $10 million
and $11 million face value of Chinatron Class B Preference Shares which mature
in 2007, respectively, pursuant to its divestiture of Brightpoint China Limited.
The Chinatron Class B Preference Shares were convertible into ordinary shares of
Chinatron at a ratio of 1:1, which represented approximately a 19.9% interest in
Chinatron at June 30, 2002. Additionally, the provisions of the Chinatron
shareholder agreement and the Chinatron preference shares allow the Company to
participate in certain capital raising activities to protect the Company against
dilution. As of June 30, 2002, the Company estimated that its investment in
Chinatron had a fair value of approximately $10.3 million based on the Company's
indirect ownership interest and the projected discounted free cash flows of
Chinatron. The $10.3 million valuation of the Class B Preference Shares at June
30, 2002, was based on the original discounted cash flow analysis used to
calculate the initial value of the Class B Preference Shares in the first
quarter of 2002. At June 30, 2002, there were no significant events or
circumstances that occurred subsequent to April 2002 that indicated the original
discounted cash flow analysis required updating.

      On September 5, 2002, the Company agreed that the exchange ratio of its
Class B Preference Shares would change from 1:1 to 1:0.181275964 pursuant to the
successful completion of a private offering of 200,000,000 ordinary shares of
Chinatron at US$0.01 per share ($2 million). In addition, the Company declined
to subscribe for its pro rata portion of the offering and waived its rights to
receive 25% of the funds raised as a redemption on the Class B Preference
Shares, due to the Company's own liquidity constraints and to induce other
parties to invest in Chinatron.

      On October 11, 2002, the Company declined to subscribe for its pro rata
portion of $5 million of loan notes and new warrants to be issued by Chinatron.
The $5 million was comprised of $3 million in direct shareholder loans and $2
million was provided in the form of shareholder guarantees to support an
incremental $2 million of bank financing. Warrants to purchase 163,058,794
shares, totaling 39% of the fully-diluted ordinary shares, of Chinatron were to
be issued to shareholders providing such loans and guarantees. The Company
declined to subscribe to its portion of the loan notes and warrants, due to the
Company's liquidity constraints. The Company also waived its right to receive
25% of the shareholder loans as redemption of the Class B Preference Shares to
induce other parties to invest in Chinatron.

      In summary, the Company waived its rights to participate in the
capital-raising activities described above and agreed to modify the conversion
ratio of the preference shares. These actions reduced the Company's indirect

                                      A-52
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

ownership interest in Chinatron from 19.9% to less than 1%. However, all other
rights of the Preference Shares, including the Company's rights to redeem all or
a portion of the Preference Shares under certain circumstances remained. The
Company's action helped secure additional funding for Chinatron, which the
Company believes improved Chinatron's ability to honor the remaining debt
obligations of the Preference Shares to the Company.

      As previously stated, the initial estimate of the value of the Chinatron
Class B Preference shares was based on a discounted cash flow analysis
calculating the equity value of Chinatron and applying the pro rata ownership
percentage assuming conversion of the Class B Preference Shares to ordinary
shares. Due to the modification of the conversion ratio and the resulting
dilution as set forth above, the debt elements of the Chinatron Class B
Preference Shares became superior to the equity value. Considering internal and
external valuations, the Company determined the investment in Chinatron Class B
Preference Shares had an estimated fair market value of approximately $1.7
million and $2 million at December 31, 2004 and 2003, respectively. At December
31, 2002, the Company recorded a non-cash impairment charge of $8.3 million
relating to its investment in the Chinatron Class B Preference Shares. This loss
was considered "other than temporary" as defined by SFAS 115, Accounting for
Certain Investments in Debt and Equity Securities, ("SFAS 115"). Management was
responsible for estimating the value of the Chinatron Class B Preference Shares.
In accordance with SFAS 115, the Company designated the Chinatron Class B
Preference Shares as held-to-maturity.

4. LOSS OR GAIN ON DEBT EXTINGUISHMENT

      On November 1, 2001, the Company's Board of Directors approved a plan
under which allowed the Company to repurchase its remaining 250,000 zero-coupon,
subordinated convertible notes due in the year 2018 ("Convertible Notes")
outstanding. Between January 1, and February 10, 2003, the Company repurchased
17,602 of its Convertible Notes outstanding. The aggregate purchase price for
the Convertible Notes was $9.7 million ($551 per Convertible Note). On March 11,
2003 the Company purchased 4,201 of the Convertible Notes pursuant to the
exercise of a put option by the bondholders at their accreted value of $2.3
million, which was paid in cash. The remaining 129 Convertible Notes were
redeemed on April 30, 2003 for $72 thousand ($555 per Convertible Note). In
2003, the Company recorded a loss on debt extinguishment related to these
transactions of $365 thousand. At December 31, 2004 and 2003, there were no
Convertible Notes outstanding.

      During 2002, the Company repurchased 228,068 of its 250,000 then
outstanding Convertible Notes. The aggregate purchase price for the Convertible
Notes was approximately $75 million (at an average cost of $329 per Convertible
Note) and was funded by a combination of working capital and a borrowing of $15
million under the credit facility with General Electric Commercial Finance and
the Company's primary North American operating subsidiaries, Brightpoint North
America L.P. and Wireless Fulfillment Services, LLC. Approximately $30 million
of the working capital funding came from Brightpoint Holdings B.V., the
Company's primary foreign finance subsidiary. These transactions resulted in a
pre-tax gain on debt extinguishment of $44 million.

5. INCOME TAX EXPENSE (BENEFIT)

      For financial reporting purposes, income (loss) from continuing operations
before income taxes, by tax jurisdiction, is comprised of the following (in
thousands):

<TABLE>
<CAPTION>
                                YEAR ENDED DECEMBER 31,
                         -------------------------------------
                            2004           2003       2002
                         ----------     ----------  ----------
                         (AS RESTATED)
<S>                      <C>            <C>         <C>
United States........    $    8,249     $   (6,118) $   29,961
Foreign..............        19,939         26,034         430
                         ----------     ----------  ----------
                         $   28,188     $   19,916  $   30,391
                         ==========     ==========  ==========
</TABLE>

      The reconciliation for 2004, 2003 and 2002 of income tax expense (benefit)
computed at the U.S. Federal statutory tax rate to the Company's effective
income tax rate is as follows:

<TABLE>
<CAPTION>
                                                                                 2004           2003     2002
                                                                                -----           ----     ----
                                                                            (AS RESTATED)
<S>                                                                         <C>                <C>       <C>
Tax at U.S. Federal statutory rate........................................       35.0%          35.0%    35.0%
</TABLE>

                                      A-53
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

<TABLE>
<CAPTION>
                                                                                 2004           2003     2002
                                                                                -----           ----     ----
                                                                            (AS RESTATED)
<S>                                                                         <C>                <C>       <C>
State and local income taxes, net of U.S. Federal benefit.................        1.5           (0.8)    (1.7)
Net benefit of tax on foreign operations..................................      (10.7)         (10.8)    17.4
Other.....................................................................        3.4            0.7      0.1
                                                                                -----           ----     ----
  Effective income tax rate...............................................       29.2%          24.1%    50.8%
                                                                                =====           ====     ====
</TABLE>

      Significant components of the provision for income tax expense (benefit)
from continuing operations are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                             YEAR ENDED DECEMBER 31,
                                                                      ------------------------------------
                                                                         2004          2003        2002
                                                                      ----------    ----------  ----------
                                                                         (AS
                                                                       RESTATED)
<S>                                                                   <C>           <C>         <C>
Current:
  Federal.......................................................      $    1,979    $   (3,011) $   (1,167)
  State.........................................................             647          (491)        375
  Foreign.......................................................           6,167         6,285       3,371
                                                                      ----------    ----------  ----------
                                                                           8,793         2,783       2,579
                                                                      ----------    ----------  ----------
Deferred:
  Federal.......................................................             710         1,323      11,606
  State.........................................................              86           289         684
  Foreign.......................................................          (1,359)          398         562
                                                                      ----------    ----------  ----------
                                                                            (563)        2,010      12,852
                                                                      ----------    ----------  ----------
                                                                      $    8,230    $    4,793  $   15,431
                                                                      ==========    ==========  ==========
</TABLE>

      There was a $455 thousand income tax benefit for 2004 from discontinued
operations. In 2003 and 2002, the income tax expense (benefit) from discontinued
operations were $164 thousand and $(3.4) million, respectively.

      Components of the Company's net deferred tax after valuation allowance are
as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                                 -------------------------
                                                                                     2004         2003
                                                                                 -----------   -----------
                                                                                    (AS
                                                                                  RESTATED)
<S>                                                                              <C>           <C>
Deferred tax assets:
  Current:
   Capitalization of inventory costs.......................................      $       189   $       345
   Allowance for doubtful accounts.........................................              904           370
   Accrued liabilities and other...........................................            5,579         2,319
  Noncurrent:
   Depreciation............................................................              475           --
   Other long-term investments.............................................              134         5,210
   Net operating losses and other carryforwards............................           17,224        14,312
                                                                                 -----------   -----------
                                                                                      24,505        22,556
  Valuation allowance......................................................          (13,029)      (15,471)
                                                                                 -----------   -----------
Total deferred tax assets..................................................           11,476         7,085
Deferred tax liabilities:
  Current:
    Other current liabilities..............................................           (2,442)          --
  Noncurrent:
   Depreciation............................................................           (4,931)       (4,160)
   Other assets............................................................           (1,381)       (4,018)
                                                                                 -----------   -----------
Total deferred tax liabilities.............................................           (8,754)       (8,178)
                                                                                 -----------   -----------
Net deferred tax liabilities...............................................      $     2,724   $    (1,093)
                                                                                 ===========   ===========
</TABLE>

      Income tax payments (receipts) were $4.5 million, $5.1 million and $(8.4)
million in 2004, 2003 and 2002, respectively.

                                      A-54
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

      At December 31, 2004, the Company had net operating loss carryforwards of
approximately $16.3 million, of which approximately $5.2 million have no
expiration date, approximately $3.2 million expires between 2007 and 2014, and
$7.9 million expires in 2023. Undistributed earnings of the Company's foreign
operations were approximately $27 million at December 31, 2004. Those earnings
are considered to be indefinitely reinvested and, accordingly, no provision for
U.S. federal or state income taxes or foreign withholding taxes has been made.
Upon distribution of those earnings, the Company would be subject to U.S. income
taxes (subject to a reduction for foreign tax credits) and withholding taxes
payable to the various foreign countries. Determination of the amount of
unrecognized deferred U.S. income tax liability is not practicable; however,
unrecognized foreign tax credit carryovers may be available to reduce some
portion of the U.S. tax liability.

      On October 22, 2004, the President of the United States signed into law
the American Jobs Creation Act of 2004 (the "Act"). The Act creates a temporary
incentive for U.S. corporations to repatriate undistributed income earned abroad
by providing an 85 percent dividends received deduction for certain dividends
from controlled foreign corporations. Currently, the Company is evaluating the
Act but does not believe that it will have a significant impact on the Company's
future tax position.

6. MINORITY INTEREST

      On October 31, 2003, the Company sold 15% of its interest in Brightpoint
India Private Limited to Persequor Limited ("Persequor") in exchange for a
management services agreement, in which Persequor will provide management
services to Brightpoint India Private Limited for five years (ending October 31,
2008). On the fourth anniversary of the effective date and annually thereafter,
Persequor has a right to require Brightpoint Holdings B.V. to purchase
Persequor's interest in Brightpoint India Private Limited at a price determined
by an appraisal method as defined in the shareholders' agreement. Termination of
the shareholders' agreement is the earlier of (i) the date on which each of the
Investors agree in writing or (ii) the tenth anniversary of the Effective Date.
Upon termination, Brightpoint India Private Limited becomes owned by its
shareholders and is no longer subject to a shareholders' agreement. As a result,
there are no options or puts subsequent to termination. Effective July 1, 2004,
Brightpoint India and Persequor amended the shareholders' agreement with respect
to the put agreement as it relates the form of payment of the put and the
mandatory redemption. The payment form is cash or 100% Brightpoint unregistered
shares with mandatory redemption at the discretion of Brightpoint. For all years
presented, the value of the put option is zero. The shares required to fulfill
the put option are included in the diluted share calculation for diluted
earnings per share, except when Brightpoint India's equity is negative and there
is no dilution.

      The minority interest of Brightpoint India Private Limited's profit (loss)
is calculated and recorded monthly. At no time will the minority interest on the
balance sheet be less than zero. The Company is assumed to be responsible for
all losses in excess of the minority's interest. When profits recover the excess
losses absorbed by the Company, minority interest will be recorded
proportionately.

7. DIVESTITURES AND DISCONTINUED OPERATIONS

      At the beginning of 2002, the Company adopted Statement of Financial
Accounting Standards No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets ("SFAS No. 144"). In connection with the adoption of SFAS No.
144, the results of operations and related disposal costs, gains and losses for
business units that the Company has eliminated or sold are classified in
discontinued operations, for all periods presented.

      Details of discontinued operations are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                              YEAR ENDED DECEMBER 31,
                                                                      -------------------------------------
                                                                         2004          2003        2002
                                                                      ----------   ----------   -----------
<S>                                                                   <C>          <C>          <C>
Revenue..........................................................     $    4,037   $   33,998   $   166,020
                                                                      ==========   ==========   ===========
Loss from discontinued operations
Net operating loss...............................................     $     (354)  $   (2,288)  $    (9,860)
  Restructuring plan charges.....................................           (120)         (65)       (3,753)
  Other..........................................................             (1)        (537)         (403)
                                                                      ----------   ----------   -----------
Total loss from discontinued operations..........................           (475)      (2,890)      (14,016)
                                                                      ----------   ----------   -----------
Gain (loss) on disposal of discontinued operations Restructuring
  plan charges...................................................         (1,340)      (1,634)        1,380
</TABLE>

                                      A-55
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

<TABLE>
<S>                                                                   <C>          <C>          <C>
  Net loss on sale of Ireland operations.........................         (3,751)          --            --
  Net loss on sale of Brazil operations..........................           (584)          --            --
  Net loss on sale of Mexico operations..........................             --           --        (2,244)
  Net loss on sale of Middle East operations.....................             --           --          (938)
  Recovery of contingent receivable..............................             --        1,328            --
  Other..........................................................            (38)        (222)         (815)
                                                                      ----------   ----------   -----------
Total gain (loss) on disposal of discontinued operations.........         (5,713)        (528)       (2,617)
                                                                      ----------   ----------   -----------
Total discontinued operations....................................     $   (6,188)  $   (3,418)  $   (16,633)
                                                                      ==========   ==========   ===========
</TABLE>

      Net assets, including reserves, related to discontinued operations are
classified in the Consolidated Balance Sheets as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                                   -------------------
                                                                                     2004      2003
                                                                                   -------  ----------
<S>                                                                                <C>      <C>
Total current assets........................................................       $   551  $   17,892
Other non-current assets....................................................           137         780
                                                                                   -------  ----------
Total assets................................................................       $   688  $   18,672
                                                                                   =======  ==========
Accounts payable............................................................       $    18  $   10,281
Accrued expenses and other liabilities......................................           752       1,493
                                                                                   -------  ----------
Total liabilities...........................................................       $   770  $   11,774
                                                                                   =======  ==========
</TABLE>

   BRAZIL OPERATIONS

      On May 7, 2004, through certain of the Company's subsidiaries the Company
completed the sale of its entire interest in Brightpoint do Brasil Ltda.
("Brightpoint Brazil"). The Company recorded a $584 thousand loss from the sale,
net of income taxes. Brightpoint Brazil was part of the 2001 Restructuring Plan
and has been included in discontinued operations for all periods presented.

   IRELAND OPERATIONS

      On February 19, 2004, the Company's subsidiary, Brightpoint Holdings B.V.,
completed the sale of its 100% interest in Brightpoint (Ireland) Limited
("Brightpoint Ireland") to Celtic Telecom Consultants Ltd. Consideration for the
sale consisted of cash of approximately $1.7 million. The Company recorded a
$3.8 million loss from the sale and a $310 thousand loss from Brightpoint
Ireland's results of operations during the first quarter of 2004. The loss
includes the non-cash write-off of approximately $1.6 million pertaining to
cumulative currency translation adjustments. Brightpoint Ireland was a part of
the Company's Europe division. The Consolidated Financial Statements include
Brightpoint Ireland's results in discontinued operations for all periods
presented.

   MEXICO OPERATIONS

      During the fourth quarter of 2002, the Company and certain of its
subsidiaries sold certain operating assets of Brightpoint de Mexico, S.A. de
C.V. and their respective ownership interests in Servicios Brightpoint de
Mexico, S.A. de C.V. to Soluciones Inteligentes para el Mercado Movil, S.A. de
C.V., an entity which is wholly-owned and controlled by Brightstar de Mexico
S.A. de C.V. Pursuant to the transaction, the Company received cash
consideration totaling approximately $1.7 million and a short-term promissory
note from Soluciones Inteligentes para el Mercado Movil, S.A. de C.V. totaling
approximately $1.1 million that matured in December 2002. The repayment of the
promissory note was guaranteed by Brightstar de Mexico S.A. de C.V. and was
collected in full. The Company recorded a net loss on the transaction of $2.2
million in 2002.

   MIDDLE EAST OPERATIONS

      During the third quarter of 2002, the Company and certain of its
subsidiaries sold their respective ownership interests in Brightpoint Middle
East FZE, and its subsidiary Fono Distribution Services LLC, and Brightpoint
Jordan Limited to Persequor Limited, an entity controlled by the former managing
director of the Company's operations in the Middle East and certain members of
his management team. Pursuant to the transaction, the Company received two
subordinated promissory notes with face values of $1.2 million and $3.0 million
that mature in 2004 and 2006, respectively. The notes bear interest at 4% per
annum and were recorded at a discount to face value. The $1.2

                                      A-56
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

million promissory note was paid in full during 2004. The outstanding amount
from the $3.0 million promissory note at December 31, 2004, was $3.3 million, of
which $338 thousand is payable in 2005. The Company recorded an initial loss on
the transaction of $1.6 million, including the recognition of accumulated
foreign currency translation gains of $300 thousand in 2002. The Company
received $1.3 million in contingent consideration in 2003. This loss and the
results of operations of the Company's former Middle East operations are
reflected in discontinued operations and prior periods have been reclassified
accordingly. Concurrent with the completion of this transaction, $5 million of
cash, which was pledged by Brightpoint Holdings B.V. to support letters of
credit utilized by the Company's operations in the Middle East, was released and
was classified as unrestricted. The Company has paid and expects to pay
management fees, including performance based bonuses, to Persequor for providing
management services relating to the export sales activities of Brightpoint Asia
Limited to certain markets in the Asia-Pacific division. The Company retained
Brightpoint Asia Limited pursuant to the transaction.

   2001 Restructuring Plan

      During 2001, the Company's Board of Directors approved a restructuring
plan ("2001 Restructuring Plan") that the Company began to implement in the
fourth quarter of 2001. The primary goal in adopting the 2001 Restructuring Plan
was to better position the Company for long-term and more consistent success by
improving its cost structure and divesting or closing operations in which the
Company believed potential returns were not likely to generate an acceptable
return on invested capital. Operations divested or closed included subsidiaries
in China, Brazil, Jamaica, South Africa, Venezuela and Zimbabwe, which had
unusually high risk profiles due to many factors, including, among other things,
high importation duties, currency restrictions and volatile political and
economic environments. The Company determined that the risks of operating in
these markets could no longer be justified given the profitability potential of
its operations in these markets, therefore, these operations were sold or
otherwise discontinued pursuant to the 2001 Restructuring Plan.

      The 2001 Restructuring Plan was also intended to improve the Company's
cost structure and, accordingly, the Company's former North America and Latin
America divisions were consolidated in 2001 and are managed as one division,
referred to as the Americas. Warehouse and logistics functions formerly based in
Miami were transferred to Indianapolis and the warehouse in Miami was closed.
Additionally the Company's operations and activities in Germany, the Netherlands
and Belgium, including regional management, were consolidated into a new
facility in Germany. In total, the 2001 Restructuring Plan resulted in a
headcount reduction of approximately 350 employees across most areas of the
Company, including marketing, operations, finance and administration. In
addition, the Miami business and its sales office were closed during the second
quarter of 2002. This closure is reflected in discontinued operations and prior
periods have been reclassified accordingly.

   2001 Restructuring Plan specific to the China Operations

      Additionally, pursuant to the 2001 Restructuring Plan, the Company
completed in January 2002, through certain of its subsidiaries, the formation of
a joint venture with Hong Kong-based Chinatron Group Holdings Limited
("Chinatron"). Chinatron is involved in the global wireless industry and, is
beneficially owned, in part, by the former managing director of Brightpoint
China Limited and by a former executive of Brightpoint, Inc. Originally, Jerre
L. Stead, a director of Brightpoint, Inc. was also a director of Chinatron. Mr.
Stead has not been a director of Chinatron since July 2004. The Company's
Chairman of the Board and Chief Executive Officer, Robert J. Laikin, and the
former managing director of Brightpoint China Limited were founding shareholders
of Chinatron. Prior to the Company entering into the agreement to form the joint
venture, Mr. Laikin, disposed of his interest in Chinatron primarily through the
sale of his interest to a company owned by the former managing director of
Brightpoint China Limited and by a former executive of Brightpoint, Inc. In
exchange, Mr. Laikin received the unconditional promise from their company to
pay him $327,019 ($300,000 of which has been paid to date).

      In exchange for a 50% interest in Brightpoint China Limited pursuant to
the formation of the joint venture, the Company received Chinatron Class B
Preference Shares with a face value of $10 million. On April 29, 2002, the
Company announced that it had completed the sale of its remaining 50% interest
in Brightpoint China Limited to Chinatron. Pursuant to this transaction, the
Company received additional Chinatron Class B Preference Shares with a face
value of $11 million. In accordance with SFAS 115, Accounting for Certain
Investments in Debt and Equity Securities, the Company designated the Chinatron
Class B Preference Shares as held-to-maturity. The carrying value was
approximately $2 million at December 31, 2003 and 2002. See Note 3 to the
Consolidated Financial Statements

                                      A-57
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

for further discussion regarding the Company's investment in Chinatron Class B
Preference Shares. Pursuant to these transactions, Chinatron and the Company
entered into a services agreement, whereby Chinatron provides warehouse
management services in Hong Kong supporting the Company's Brightpoint Asia
Limited operations managed by Persequor.

      The Company recorded losses related to the sale of Brightpoint China
Limited to Chinatron of approximately $8.5 million during the three months ended
March 31, 2002. Upon adoption of SFAS 142, as discussed below, the Company
reclassified these losses to cumulative effect of a change in accounting
principle effective January 1, 2002, as they related to goodwill that was
required to be written-off pursuant the transitional impairment test.

      As of December 31, 2004 and 2003, actions called for by the 2001
Restructuring Plan were substantially complete, however, the Company expects to
continue to record adjustments through discontinued operations as necessary. The
Company recorded losses related to the 2001 Restructuring Plan as presented
below (in thousands):

<TABLE>
<CAPTION>
                                                                                  YEAR ENDED DECEMBER 31,
                                                                            ----------------------------------
                                                                               2004        2003        2002
                                                                            ---------   ---------   ----------
<S>                                                                         <C>         <C>         <C>
Cash charges (credits):
  Sale of Brazil operations............................................     $   1,138   $      --    $      --
  VAT refund...........................................................          (269)         --           --
  Employee termination costs...........................................            --          20          248
  Lease termination costs..............................................            --          --          592
  Other exit costs.....................................................           214         156        1,129
                                                                            ---------   ---------   ----------
Total cash charges (credits)...........................................         1,083         176        1,969
                                                                            ---------   ---------   ----------
Non-cash charges (credits):
  Loss on investment...................................................          (203)         --         (104)
  Impairment of accounts receivable and inventories of restructured
   operations..........................................................           594          (2)        (848)
  Impairment of fixed and other assets.................................            --          72        3,366
  Income tax effect of restructuring actions...........................          (597)       (125)          65
  Write-off of cumulative foreign currency translation adjustments.....         1,167       1,576       (2,074)
                                                                            ---------   ---------   ----------
Total non-cash charges (credits).......................................           961       1,521          405
                                                                            ---------   ---------   ----------
Total restructuring plan charges.......................................     $   2,044   $   1,697   $    2,375
                                                                            =========   =========   ==========
</TABLE>

      Utilization of the 2001 Restructuring Plan charges discussed above is as
follows (in thousands):

<TABLE>
<CAPTION>
                                                               LEASE      EMPLOYEE
                                                            TERMINATION  TERMINATION  OTHER EXIT
                                                               COSTS        COSTS        COSTS        TOTAL
                                                               -----        -----        -----        -----
<S>                                                         <C>          <C>          <C>          <C>
December 31, 2001...................................         $    314    $      619   $    1,810   $    2,743
Provisions(1).......................................              348           502        1,199        2,049
Cash usage..........................................             (457)       (1,096)      (2,093)      (3,646)
Non-cash usage......................................               --            --         (189)        (189)
                                                             --------    ----------   ----------   ----------
December 31, 2002...................................         $    205    $       25   $      727   $      957
Provisions(1).......................................                6            --           41           47
Cash usage..........................................             (201)          (25)        (214)        (440)
Non-cash usage......................................               --            --         (145)        (145)
                                                             --------    ----------   ----------   ----------
December 31, 2003...................................         $     10    $       --    $     409   $      419
Provisions(1).......................................               --            --           97           97
Cash usage..........................................              (10)           --         (121)        (131)
Non-cash usage......................................               --            --         (309)        (309)
                                                             --------    ----------   ----------   ----------
December 31, 2004...................................         $     --     $      --    $      76   $       76
                                                             ========    ==========   ==========   ==========
</TABLE>

----------
(1) Provisions do not include items that were directly expensed in the period.

8. ACQUISITIONS

      Effective July 31, 2004, through certain of its subsidiaries, the Company
acquired 100% of the issued and outstanding shares of MF-Tukku Oy ("MF-Tukku")
for an initial consideration less than $500 thousand with

                                      A-58
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

potential future considerations of up to 1.1 million euros (which is the
currency of the obligation) based on the future financial performance of
MF-Tukku. MF-Tukku, subsequently renamed Brightpoint Finland Oy, based in
Helsinki, Finland, is a distributor of Sony Ericsson, Siemens and Motorola
wireless devices and accessories in Finland. Simultaneously with the acquisition
of MF-Tukku, MF-Tukku acquired substantially all of the assets of Codeal Oy
("Codeal"). Codeal, also based in Helsinki, Finland, was a distributor of
Samsung wireless devices and accessories in Finland.

      During the first quarter of 2003, one of the Company's subsidiaries in
France acquired certain net assets of three entities that provided activation
and other services to the wireless telecommunications industry in France. The
purpose of these acquisitions was to expand the Company's customer base and
geographic presence in France. These transactions were accounted for as
purchases and, accordingly, the Consolidated Financial Statements include the
operating results of these businesses from the effective dates of the
acquisitions. The combined purchase price was $2.6 million, which consisted of
$600 thousand in cash and $2.0 million in forgiveness of debt. As a result of
these acquisitions, the Company recorded goodwill and other intangible assets
totaling approximately $2.0 million.

      During the second quarter of 2003 and 2004, the Company recorded
approximately $600 thousand and $400 thousand, respectively, of goodwill related
to the payment of certain earn-out arrangement on a prior acquisition in the
Asia-Pacific division.

      The impact of the acquisitions discussed above was not material in
relation to the Company's consolidated results of operations. Consequently, pro
forma information is not presented.

9. ACCOUNTS RECEIVABLE TRANSFERS

      During the years ended December 31, 2004 and 2003, the Company entered
into certain transactions or agreements with banks and other third-party
financing organizations in France, Norway and Sweden, with respect to a portion
of its accounts receivable in order to reduce the amount of working capital
required to fund such receivables. During the year ended December 31, 2003, the
Company also entered into certain transactions or agreements with banks and
other third-party financing organizations in Ireland with respect to the sale of
a portion of its accounts receivable. These transactions have been treated as
sales pursuant to current United States generally accepted accounting principles
and, accordingly, are accounted for as off-balance sheet arrangements with the
exception of the receivable sale facility with GE Factofrance. In April 2004,
the Company through one of its subsidiaries, Brightpoint (France) SARL, entered
into a receivable sale facility with GE Factofrance. The facility does not meet
the requirements of a transfer under current United States generally accepted
accounting principles and therefore amounts advanced under this facility against
receivables not collected by GE Factofrance are included on the Consolidated
Balance Sheet under lines of credit and accounts receivable. No amounts are
outstanding under this agreement at December 31, 2004. Net funds received, other
than from GE Factofrance, reduced the accounts receivable outstanding while
increasing cash. Fees incurred are recorded as losses on the sale of assets and
are included as a component of "Other expenses" in the Consolidated Statements
of Operations.

      Net funds received from the sales of accounts receivable for continuing
operations during the years ended December 31, 2004 and 2003, totaled $381
million and $265 million, respectively. Fees, in the form of discounts, incurred
in connection with these sales totaled $1.2 million and $1.4 million during 2004
and 2003, respectively. Approximately $1.2 million and $1.3 million in 2004 and
2003, respectively, of these fees relate to continuing operations and are
included as a component of "Other expenses" in the Consolidated Statements of
Operations. The remainder of the fees in 2004 and 2003 was related to the
Company's former Ireland and Mexico operations and was included in loss from
discontinued operations in the Consolidated Statements of Operations.

      The Company is the collection agent on behalf of the bank or other
third-party financing organization for many of these arrangements and has no
significant retained interests or servicing liabilities related to accounts
receivable that it has sold. The Company may be required to repurchase certain
accounts receivable sold in certain circumstances, including, but not limited
to, accounts receivable in dispute or otherwise not collectible, accounts
receivable in which credit insurance is not maintained and a violation of, the
expiration or early termination of the agreement pursuant to which these
arrangements are conducted. During 2004 and 2003, as a result of the recourse
arrangements, the Company repurchased approximately $0 and $234 thousand of
receivables, respectively, from banks or other third party financing
institutions. These agreements require the Company's subsidiaries to provide

                                      A-59
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

collateral in the form of pledged assets and/or, in certain situations, a
guarantee by the Company of its subsidiaries' obligations.

      Pursuant to these arrangements, approximately $37 million and $46 million
of trade accounts receivable were sold to and held by banks and other
third-party financing institutions at December 31, 2004, and 2003, respectively.
Amounts held by banks or other financing institutions at December 31, 2004, were
for transactions related to the Company's France, Norway and Sweden
arrangements. All other arrangements have been terminated or expired.

10. PROPERTY AND EQUIPMENT

      The components of property and equipment are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                      DECEMBER 31,
                                                                              --------------------------
                                                                                  2004          2003
                                                                              ------------  ------------
<S>                                                                           <C>           <C>
Furniture and equipment.................................................      $    14,941   $    14,675
Information systems equipment and software..............................           69,246        64,692
Leasehold improvements..................................................            6,202         5,550
                                                                              -----------   -----------
                                                                                   90,389        84,917
Less accumulated depreciation...........................................          (62,886)      (55,351)
                                                                              -----------   -----------
                                                                              $    27,503   $    29,566
                                                                              ===========   ===========
</TABLE>

      Depreciation expense charged to continuing operations was $10.5 million,
$12.4 million and $11.9 million in 2004, 2003 and 2002, respectively.

11. LEASE ARRANGEMENTS

      The Company leases its office and warehouse space, as well as, certain
furniture and equipment under operating leases. Total rent expense for these
operating leases was $11.1 million, $10.8 million and $9.2 million for 2004,
2003 and 2002, respectively.

      In September 2004, the Company's Australian subsidiary entered into a new
facility lease arrangement to commence in the first quarter of 2005. The new
facility will provide additional space to support the growth of the business.
The Company expects to vacate its current location in Australia in the first
quarter of 2005 and to sublease the facility. The anticipated lease costs, net
of sublease income, for the remaining term of the current location is
approximately $900 thousand to $1.2 million and we expect to incur a charge in
the first quarter of 2005 within this range. If the Company is unsuccessful in
terminating the lease, finding a sub-lessee or if the terms of any sublease are
less than this estimate, the Company may incur additional expenses.

      The aggregate future minimum payments on the above leases are as follows
(in thousands):

<TABLE>
<S>                                                                <C>
YEAR ENDING DECEMBER 31,
2005..........................................................          8,918
2006..........................................................          8,423
2007..........................................................          5,904
2008..........................................................          5,379
2009..........................................................          6,029
Thereafter*...................................................         44,478
                                                                   ----------
                                                                   $   79,131
                                                                   ==========
</TABLE>

----------
*     Includes approximately $42 million related to the Company's 495,000 square
      foot facility located in Plainfield, Indiana, which the initial lease term
      expires in 2019.

12. LINES OF CREDIT

                                      A-60
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                                                      OUTSTANDING AT:
                                                                                ---------------------------
                                                                                DECEMBER 31,   DECEMBER 31,
CREDIT AGREEMENTS                                                                   2004           2003
-----------------                                                               ------------   ------------
<S>                                                                             <C>            <C>
 --  Asia-Pacific.........................................................          $ --        $  16,171
 --  The Americas.........................................................            --               --
 --  Europe...............................................................            --               36
                                                                                    ----        ---------
Total.....................................................................          $ --        $  16,207
                                                                                    ====        =========
</TABLE>

      At December 31, 2004 and 2003, the Company and its subsidiaries were in
compliance with the covenants in its credit agreements. For the years ended
December 31, 2004, 2003 and 2002, interest expense was approximately $1.9
million, $1.8 million and $6.2 million, respectively. Interest expense includes
fees paid for unused capacity on credit lines and amortization of deferred
financing fees.

   LINES OF CREDIT -- AMERICAS DIVISION

      On September 23, 2004, the Company's primary North American operating
subsidiaries, Brightpoint North America L.P. and Wireless Fulfillment Services,
LLC (the "Borrowers"), amended its Amended and Restated Credit Facility (the
"Revolver") dated March 18, 2004, between the Borrowers and General Electric
Capital Corporation ("GE Capital"). The amendment reduced the required tangible
net worth covenant by $20 million and allows for further reductions equal to the
purchase price of any issued and outstanding shares of common stock of the
Company repurchased by the Company in the future. GE Capital acted as the agent
for a syndicate of banks (the "Lenders"). The Revolver expires in March of 2007.
The Revolver provides borrowing availability, subject to borrowing base
calculations and other limitations, of up to a maximum of $70 million and at
December 31, 2004, bears interest, at the Borrowers' option, at the prime rate
plus 0.75% or LIBOR plus 1.75%. The applicable interest rate that the Borrowers
are subject to can be adjusted quarterly based upon certain financial
measurements defined in the Revolver. The Revolver is guaranteed by Brightpoint,
Inc., and is secured by, among other things, all of the Borrowers' assets. The
Revolver is subject to certain financial covenants, which include maintaining a
minimum fixed charge coverage ratio. The Revolver is a secured asset-based
facility where a borrowing base is calculated periodically using eligible
accounts receivable and inventory, subject to certain adjustments. Eligible
accounts receivable and inventories fluctuate over time, which can increase or
decrease borrowing availability. The Company also has pledged certain
intellectual property and the capital stock of certain of its subsidiaries as
collateral for the Revolver. At December 31, 2004 and 2003, there were no
amounts outstanding under the Revolver with available funding, net of the
applicable required availability minimum and letters of credit, of approximately
$33 million and $27 million, respectively.

   LINES OF CREDIT -- ASIA-PACIFIC

      In December of 2002, the Company's primary Australian operating
subsidiary, Brightpoint Australia Pty Ltd, entered into a revolving credit
facility (the "Facility") with GE Commercial Finance in Australia. The Facility,
which matures in December of 2005, provides borrowing availability, subject to
borrowing base calculations and other limitations, of up to a maximum amount of
50 million Australian dollars (approximately $38 million U.S. dollars at
December 31, 2004). Borrowings under the Facility are used for general working
capital purposes. The Facility is subject to certain financial covenants, which
include maintaining a minimum fixed charge coverage ratio and bears interest at
the Bank Bill Swap Reference rate plus 2.9% (totaling 8.34% at December 31,
2004). The Facility is a secured asset-based facility where a borrowing base is
calculated periodically using eligible accounts receivable and inventory,
subject to certain adjustments. Eligible accounts receivable and inventories
fluctuate over time, which can increase or decrease borrowing availability. At
December 31, 2004, there was no amount outstanding under the Facility with
available funding of $32 million. At December 31, 2003, there was $11.9 million
outstanding under the Facility at an interest rate of approximately 7.8% with
available funding of $13.4 million.

      In December of 2003, the Company's Brightpoint India Private Limited
subsidiary entered into a short-term credit facility with ABN Amro. At December
31, 2003, $4.3 million was outstanding at an interest rate of 6.5%. In January
2004, this credit facility was paid and terminated.

      In July of 2003, the Company's primary operating subsidiary in the
Philippines, Brightpoint Philippines, Inc. ("Brightpoint Philippines") entered
into a credit facility with Banco de Oro. The facility, which matures in April
of 2005, provides borrowing availability, up to a maximum amount of 50 million
Philippine Pesos (approximately $889 thousand U.S. dollars, at December 31,
2004), and is guaranteed by Brightpoint, Inc. The facility bears interest at the
Prime Lending Rate (12% at December 31, 2004). At December 31, 2004 and 2003,
the facility had no

                                      A-61
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

amounts outstanding with available funding of approximately $889 thousand and
$900 thousand, respectively. In April, 2004, Brightpoint Philippines entered
into another credit facility with Banco De Oro. This facility allows for letters
of credit to be issued to one of Brightpoint Philippine's main suppliers up to a
total of $4 million. As of December 31, 2004, no letters of credit have been
issued under this facility.

      In November 2003, the Company's primary operating subsidiary in New
Zealand, Brightpoint New Zealand Limited, entered into a revolving credit
facility with GE Commercial Finance in Australia. This facility, which matures
in November of 2006, provides borrowing availability, subject to borrowing base
calculations and other limitations, of up to a maximum amount of 12 million New
Zealand dollars (approximately $8.6 million U.S. dollars at December 31, 2004).
Borrowings under the facility may be used for general working capital purposes.
The facility is subject to certain financial covenants, which include
maintaining a minimum fixed charge coverage ratio and bears interest at the New
Zealand Index Rate plus 3.15% (9.82% at December 31, 2004). The facility is a
secured asset-based facility where a borrowing base is calculated periodically
using eligible accounts receivable and inventory, subject to certain
adjustments. Eligible accounts receivable and inventories fluctuate over time,
which can increase or decrease borrowing availability. At December 31, 2004 and
2003, there were no amounts outstanding under the facility with available
funding of approximately $8.5 million and $1.5 million, respectively.

      A $15 million standby letter of credit supporting the Company's
Brightpoint Asia Limited's vendor credit line has been issued by financial
institutions on the Company's behalf and was outstanding at December 31, 2004
and 2003. At December 31, 2004, the letter of credit was secured by $12 million
of cash, the assets of Brightpoint Asia Limited and a guarantee issued by
Brightpoint, Inc. At December 31, 2003, the letter of credit was secured by $15
million of cash. The related cash collateral has been reported under the heading
"Pledged cash" in the Consolidated Balance Sheet.

      In December 2003, the Company pledged $5 million to support a $4.2 million
short-term line of credit in India primarily due to restrictions on foreign
capital, which precluded us from utilizing our own funds, other than the amount
pledged, to meet these needs. This short-term line of credit was paid in the
first quarter of 2004, thus releasing the pledged cash. The related cash
collateral has been reported under the heading "Pledged cash" in the
Consolidated Balance Sheet.

   LINES OF CREDIT -- EUROPE

      The Company's primary operating subsidiary in Sweden, Brightpoint Sweden
AB, has a short-term line of credit facility with SEB Finans AB. The facility
has borrowing availability of up to 15 million Swedish Krona (approximately $2.2
million U.S. dollars at December 31, 2004) and bears interest at the SEB Banken
Base plus 0.75% (2.75% at December 31, 2004). The facility is supported by a
guarantee provided by the Company. At December 31, 2004 and 2003, there were no
amounts outstanding under the facility with available funding of approximately
$2.2 million and $2.1 million, respectively.

13. GUARANTEES

      In 2002, the Financial Accounting Standards Board issued Interpretation
No. 45 (FIN 45), Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN 45
requires guarantees to be recorded at fair value and requires a guarantor to
make significant new disclosure, even when the likelihood of making any payments
under the guarantee is remote.

      The Company has issued certain guarantees on behalf of its subsidiaries
with regard to lines of credit and long-term debt, for which the liability is
recorded in the Company's financial statements. Although the guarantees relating
to lines of credit and long-term debt are excluded from the scope of FIN 45, the
nature of these guarantees and the amount outstanding are described in Note 12
to the consolidated financial statements.

      In some circumstances, the Company purchases inventory with payment terms
requiring letters of credit. As of December 31, 2004, the Company has issued $24
million in standby letters of credit. These standby letters of credit are
generally issued for a one-year term and are supported by either availability
under the Company's credit facilities or cash deposits. The underlying
obligations for which these letters of credit have been issued are recorded in
the financial statements at their full value. Should the Company fail to pay its
obligation to one or all of these

                                      A-62
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

suppliers, the suppliers may draw on the standby letter of credit issued for
them. The maximum future payments under these letters of credit are $24 million.

      Additionally, the Company has issued certain guarantees on behalf of its
subsidiaries with regard to accounts receivable transferred, the nature of which
is described in Note 9. While the Company does not currently anticipate the
funding of these guarantees, the maximum potential amount of future payments
under these guarantees at December 31, 2004, is approximately $37 million.

      The Company has entered into indemnification agreements with its officers
and directors, to the extent permitted by law, pursuant to which the Company has
agreed to reimburse its officers and directors for legal expenses in the event
of litigation and regulatory matters. The terms of these indemnification
agreements provide for no limitation to the maximum potential future payments.
The Company has a directors and officers insurance policy that may, in certain
instances, mitigate the potential liability and payments.

14. SHAREHOLDERS' EQUITY

      In 2003, the Board of Directors approved two 3 for 2 stock splits in the
form of stock dividends primarily to increase the liquidity of the stock,
increase the number of shares in the market and to improve the affordability of
the stock for investors. All references in the financial statements related to
share amounts, per share amounts, average shares outstanding and information
concerning stock option plans have been adjusted retroactively to reflect stock
splits, including the Company's 3 for 2 stock splits of its common stock
effective August 25 and October 15, 2003 and the 1 for 7 reverse split of its
common stock effective June 27, 2002. The Company has a Shareholders' Rights
Agreement, commonly known as a "poison pill," which provides that in the event
an individual or entity becomes a beneficial holder of 15% or more of the shares
of the Company's capital stock, other shareholders of the Company shall have the
right to purchase shares of the Company's (or in some cases, the acquiror's)
common stock at 50% of its then market value.

      The Company has authorized 1.0 million shares of preferred stock, which
remain unissued. The Board of Directors has not yet determined the preferences,
qualifications, relative voting or other rights of the authorized shares of
preferred stock.

TREASURY STOCK

      On November 30, 2004, the Company announced that its Board of Directors
had approved a share repurchase program authorizing the Company to repurchase up
to $20 million of the Company's common stock by December 31, 2005. During this
period, the Company repurchased 208,100 shares of its common stock at an average
price of $19.28 per share, totaling $4.0 million. As of December 31, 2004,
approximately $16.0 million may be used to purchase shares under this program.

      On June 4, 2004, the Company announced that its Board of Directors had
approved a share repurchase program authorizing the Company to repurchase up to
$20 million of the Company's common stock. During June 2004, the Company
repurchased 1,397,500 shares of its common stock at an average price of $14.31
per share, totaling $20 million, thereby completing this approved share
repurchase program.

<TABLE>
<CAPTION>
                                                                         TOTAL NUMBER                    MAXIMUM
                                                                           OF SHARES   TOTAL AMOUNT  DOLLAR VALUE OF
                                                                         PURCHASED AS  PURCHASED AS    SHARES THAT
                                                                          PART OF THE   PART OF THE    MAY YET BE
                                               TOTAL NUMBER    AVERAGE     PUBLICLY      PUBLICLY       PURCHASED
                                                 OF SHARES   PRICE PAID    ANNOUNCED     ANNOUNCED      UNDER THE
QUARTER OF PURCHASE                              PURCHASED    PER SHARE     PROGRAM       PROGRAM        PROGRAM
-------------------                            ------------  ----------  ------------  ------------  ---------------
<S>                                            <C>           <C>         <C>           <C>           <C>
Second quarter 2004..........................    1,397,500    $ 14.31      1,397,500   $ 19,996,773        None
Fourth quarter 2004..........................      208,100    $ 19.28        208,100   $  4,012,769   $ 15,987,231
                                                 ---------    -------    -----------   ------------   ------------
Total/Average................................    1,605,600    $ 14.95      1,605,600   $ 24,009,542   $ 15,987,231
                                                 =========    =======    ===========   ============   ============
</TABLE>

EQUITY COMPENSATION PLANS

                                      A-63
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

      The Company has equity compensation plans, which reserve shares of common
stock for issuance to executives, key employees, directors and others.

   1994 STOCK OPTION PLAN

      The Company maintains the 1994 Stock Option Plan whereby employees of the
      Company and others were eligible to be granted incentive stock options or
      non-qualified stock options. This Plan expired on April 7, 2004. Under the
      plan there were 3.4 million common shares reserved for issuance of which
      1.1 million and 1.3 million were authorized but unissued at December 31,
      2004 and 2003, respectively. No further grants will be made under this
      plan.

   1996 STOCK OPTION PLAN

      The Company also maintains the 1996 Stock Option Plan whereby employees of
      the Company and others are eligible to be granted non-qualified stock
      options. Of the 1.8 million common shares reserved for issuance under this
      plan, 635 thousand and 752 thousand were authorized but unissued at
      December 31, 2004 and 2003, respectively. Under this plan, 139 thousand
      shares remain available for grant.

   2004 LONG-TERM INCENTIVE PLAN

      During 2004, the Company's shareholders approved the 2004 Long-Term
      Incentive Plan ("LTI Plan") whereby officers and other key employees of
      the Company and others are eligible to be granted non-qualified incentive
      stock options, performance units, restricted stock, other stock-based
      awards, and/or cash awards. No participant may be granted under the LTI
      Plan, during any year, options or any other awards relating to more than
      750,000 shares of common stock in the aggregate. Additionally, the number
      of shares that are subject to non-option awards under the LTI Plan shall
      not exceed 750,000 shares of common stock in the aggregate. There are 1.5
      million common shares reserved for issuance under the LTI Plan, of which
      approximately 1.5 million were authorized but unissued at December 31,
      2004. Under this LTI Plan, the Company granted 12,000 Restricted Stock
      Units to one of its executive officers in August 2004, which vest over
      three years.

      For the above plans, the Compensation and Human Resources Committee of the
Board of Directors determines the time or times at which the grants will be
awarded, selects the officers or others and determines the number of shares
covered by each grant, as well as, the purchase price, time of exercise (not to
exceed ten years from the date of the grant) and other terms and conditions. The
Board of Directors has delegated authority to the Company's Chief Executive
Officer to grant up to 225,000 of awards to non-officer employees per calendar
year.

   AMENDED AND RESTATED INDEPENDENT DIRECTOR STOCK COMPENSATION PLAN

      During 2004, the Company's shareholders approved an Amended and Restated
Independent Director Stock Compensation Plan (the "Director Stock Compensation
Plan"), pursuant to which 900,000 shares of common stock are reserved for
issuance to non-employee directors. The Director Stock Compensation Plan
provides for Initial Awards, consisting of restricted shares of the Company's
common stock granted to an Independent Director when he or she joins the Board;
Annual Awards, consisting of up to an aggregate of 2,000 restricted shares of
the Company's common stock granted to all Independent Directors on an annual
basis; and Elective Awards, consisting of an award of restricted shares of the
Company's common stock equal to a percentage of the Independent Director's board
compensation, which are paid in June and December of each year. Under the
Director Stock Compensation Plan, subject to certain exceptions and the
satisfaction of certain conditions, at least 30% for 2004 and 50% for 2005 of
each Independent Director's annual board compensation (but not committee
compensation) will be paid in the form of restricted shares of the Company's
common stock. An aggregate of 29,126 restricted shares of common stock were
granted to Independent Directors pursuant to the Director Stock Compensation
Plan in 2004.

   NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

      The Company also maintains the Non-Employee Directors Stock Option Plan
whereby non-employee directors are eligible to be granted non-qualified stock
options. Under this plan there are 0.3 million common shares reserved

                                      A-64
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

for issuance of which zero and 0.1 million were authorized but unissued at
December 31, 2004 and 2003. Effective as of December 31, 2002, no further grants
will be made under the Plan by action of the Board of Directors of the Company.

   1994 AND 1996 STOCK OPTION PLANS

      The exercise price of stock options granted may not be less than the fair
market value of a share of common stock on the date of the grant. Options become
exercisable in periods ranging from one to three years after the date of the
grant. Information regarding these option plans for 2004, 2003 and 2002 is as
follows:

<TABLE>
<CAPTION>
                                                     2004                     2003                    2002
                                             ---------------------   ----------------------   ---------------------
                                             WEIGHTED                WEIGHTED                 WEIGHTED
                                              AVERAGE                 AVERAGE                  AVERAGE
                                             EXERCISE                EXERCISE                 EXERCISE
                                               PRICE      SHARES       PRICE      SHARES        PRICE      SHARES
                                             --------   ----------   --------   -----------   --------   ----------
<S>                                          <C>        <C>          <C>        <C>           <C>        <C>
Options outstanding, beginning of year....   $  7.00    1,510,911    $ 10.03     3,071,567    $ 20.76    1,643,033
Options granted...........................     18.19      464,000       8.36       104,125       2.94    1,806,241
Options exercised.........................      3.80     (201,815)     10.27    (1,199,042)        --           --
Options canceled..........................     20.25     (137,576)     18.87      (465,739)     22.81     (377,707)
                                             -------    ---------    -------    ----------    -------    ---------
Options outstanding, end of year..........   $  9.45    1,635,520    $  7.00     1,510,911    $ 10.03    3,071,567
                                             -------    ---------    -------    ----------    -------    ---------
Options exercisable, end of year..........   $  8.09      602,838    $ 18.00       326,890    $ 19.48    1,117,751
                                             -------    ---------    -------    ----------    -------    ---------
Option price range at end of year.........       $0.66-$30.18             $0.66-$30.18            $0.66-$54.45
Option price range for exercised shares...       $0.66-$15.65             $0.66-$20.91                 --
Options available for grant at year end...         138,872                  685,663                 324,049
Weighted average fair market value of
  options granted during the year.........          $18.19                   $8.36                   $2.94
</TABLE>

      The following table summarizes information about the fixed price stock
options outstanding at December 31, 2004.

<TABLE>
<CAPTION>
                                                                             EXERCISABLE
                                     WEIGHTED                      -------------------------------
                       NUMBER         AVERAGE                          NUMBER
                   OUTSTANDING AT    REMAINING       WEIGHTED      OUTSTANDING AT      WEIGHTED
    RANGE OF        DECEMBER 31,    CONTRACTUAL       AVERAGE       DECEMBER 31,        AVERAGE
 EXERCISE PRICES        2004           LIFE       EXERCISE PRICE        2004        EXERCISE PRICE
----------------   --------------   -----------   --------------   --------------   --------------
<C>                <C>              <C>           <C>              <C>              <C>
$ 0.66-$ 2.83           429,024       3 years         $  2.20          179,185          $  2.12
$ 3.86-$ 5.23           495,000       3 years         $  3.89          240,000          $  3.88
$ 5.37-$17.58           530,894       4 years         $ 15.37           97,144          $ 11.95
$18.47-$30.18           180,602       3 years         $ 24.52           86,509          $ 27.77
                      ---------                                        -------
                      1,635,520                                        602,838
                      ---------                                        -------
</TABLE>

INDEPENDENT DIRECTOR STOCK COMPENSATION PLAN AND LONG-TERM INCENTIVE PLAN

<TABLE>
<CAPTION>
                                                                               2004
                                                                    -------------------------
                                                                         RESTRICTED SHARES
                                                                    -------------------------
                                                                      INDEPENDENT
                                                                    DIRECTOR STOCK  LONG-TERM
                                                                     COMPENSATION   INCENTIVE
                                                                         PLAN         PLAN
                                                                    --------------  ---------
<S>                                                                 <C>             <C>
Restricted shares/units outstanding, beginning of year...........           --           --
  Restricted shares issued.......................................       29,126           --
Restricted units issued..........................................         N/A        12,000
Shares previously restricted.....................................           --           --
                                                                        ------       ------
Restricted shares/units outstanding end of year..................       29,126       12,000
                                                                        ======       ======
</TABLE>

      Disclosure of pro forma information regarding net income and earnings per
share is required to be presented as if the Company has accounted for its
employee stock options under the fair value method. The fair value for options
granted by the Company is estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions:

                                      A-65
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                                              2004     2003     2002
                                                                              -----    -----    -----
<S>                                                                           <C>      <C>      <C>
Risk-free interest rate...............................................        3.36%    2.47%    2.74%
Dividend yield........................................................        0.00%    0.00%    0.00%
Expected volatility...................................................         .85      .85      .84
Expected life of the options (years)..................................        3.24     3.20     2.75
</TABLE>

      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 expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

EMPLOYEE STOCK PURCHASE PLAN

      During 1999, the Company's shareholders approved the 1999 Brightpoint,
Inc. Employee Stock Purchase Plan ("ESPP"). The ESPP, available to substantially
all employees of the Company, is designed to comply with Section 423 of the
Internal Revenue Code for employees living in the United States and eligible
employees may authorize payroll deductions of up to 10% of their monthly salary
to purchase shares of the Company's common stock at 85% of the lower of the fair
market value as of the beginning or ending of each month. Each employee is
limited to a total monthly payroll deduction of $2,000 for ESPP purchases. The
Company reserved 2,000,000 shares for issuance under the ESPP. During 2004, 2003
and 2002, employees made contributions to the ESPP to purchase 7,224, 6,249 and
41,662 shares, respectively, at a weighted-average price of $11.45, $11.72 and
$2.65 per share, respectively.

      The Company accounts for the ESPP and the 15% discount offered to
employees who purchase shares through the Plan under APB 25. The ESPP meets the
four characteristics of a non-compensatory plan under paragraph 7 of APB 25.
Accordingly, no compensation expense is recorded for the 15% discount under APB
25.

PREFERRED SHARE PURCHASE RIGHTS

      The Company has a Shareholders' Rights Agreement, as amended, commonly
known as a "poison pill," which provides that in the event an individual or
entity becomes a beneficial holder of 15% or more of the shares of the Company's
capital stock (an "Acquiring Event"), other shareholders of the Company shall
have the right to purchase shares of the Company's (or in some cases, the
acquirer's) common stock at 50% of its then market value. Pursuant to the Rights
Agreement, a dividend of Preferred Share Purchase Rights was paid to holders of
record of common stock on the record date as of the close of business on
February 20, 1997. Each of these Rights entitles the registered holder to
purchase one one-thousandth of a share of our Series A Junior Participating
Preferred Stock, par value $.01 per share. Holders of the Company's common stock
will, upon the occurrence of an Acquiring Event, be entitled to purchase these
Preferred Shares from the Company at a price of $135 per one one-thousandth of a
Preferred Share, subject to adjustment in certain circumstances. The description
and terms of the Rights are set forth in a Rights Agreement between the Company
and American Stock Transfer and Trust Company, as Rights Agent. Preferred Shares
will not be redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but will be entitled
to an aggregate dividend of 1,000 times the dividend declared per share of
common stock. In the event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment of $1.00 per
share but will be entitled to an aggregate payment of 1,000 times the payment
made per share of common stock. Each Preferred Share will have 1,000 votes,
voting together with the Common Stock.

15. EMPLOYEE SAVINGS PLAN

      The Company maintains an employee savings plan, which permits employees
based in the United States with at least thirty days of service to make
contributions by salary reduction pursuant to section 401(k) of the Internal
Revenue Code. After one year of service, the Company matches 50% of employee
contributions, up to 6% of each employee's salary in cash. In connection with
the required match, the Company's contributions to the Plan were $299 thousand,
$300 thousand and $300 thousand in 2004, 2003 and 2002, respectively.

16. LEGAL PROCEEDINGS AND CONTINGENCIES

                                      A-66
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

      The Company is from time to time involved in certain legal proceedings in
the ordinary course of conducting its business. While the ultimate liability
pursuant to these actions cannot currently be determined, the Company believes
these legal proceedings will not have a material adverse effect on its
Consolidated Financial Statements as a whole.

      In December 2004, the Company through its subsidiary in South Africa
settled an assessment from the South Africa Revenue Service ("SARS") regarding
value-added taxes, relating to certain product sale and purchase transactions
entered into by the Company's subsidiary in South Africa from 2000 to 2002. The
Company's South African operations were discontinued pursuant to the 2001
Restructuring Plan. As a result of the settlement, the Company has received $270
thousand U.S. dollars. The gain was recorded within loss from discontinued
operations.

      A Complaint was filed on January 4, 2005 against the Company in the
Circuit Court for Baltimore County, Maryland, Case No. 03-C-05-000067 CN,
entitled Iridium Satellite, LLC, Plaintiff v. Brightpoint, Inc., Defendant. In
the Complaint, the Plaintiff alleges claims of trover and conversion, fraudulent
misrepresentation and breach of contract. All claims relate to the ownership and
disposition of 1,500 Series 9500 satellite telephones. The Plaintiff seeks
damages in the amount of $750,000 with interest and costs. The time for the
Company to respond to the allegations in the lawsuit has not yet expired,
however, the Company intends to remove the case to federal court, to deny all
claims in the action and to vigorously defend the lawsuit.

      A Complaint was filed on November 23, 2001, against us and 87 other
defendants in the United States District Court for the District of Arizona,
entitled Lemelson Medical, Education and Research Foundation LP v. Federal
Express Corporation, et.al., Cause No. CIV01-2287-PHX-PGR. The plaintiff claims
that the Company and other defendants have infringed 7 patents alleged to cover
bar code technology. The case seeks unspecified damages, treble damages and
injunctive relief. The Court has ordered the case stayed pending the decision in
a related case in which a number of bar code equipment manufacturers have sought
a declaration that the patents asserted are invalid and unenforceable. That
trial concluded in January 2003. In January 2004, the Court rendered its
decision that the patents asserted by Lemelson were found to be invalid and
unenforceable. Lemelson filed an appeal to the Court of Appeals for the Federal
Circuit on June 23, 2004. The Company continues to dispute these claims and
intends to defend this matter vigorously.

      In October 2003, the Company settled the action brought against it by
Chanin Capital Partners LLC ("Chanin") on November 25, 2002, in the United
States District Court for the Southern District of Indiana Civil Action No.
1:02-CV-1834-JDT-WTL. Pursuant to the settlement the Company paid Chanin $725
thousand and the action was dismissed with prejudice. Net of amounts accrued in
2002, an additional $100 thousand was recorded as a loss on debt extinguishment
in 2003.

      In September 2003, the Company settled the investigation of certain
matters including its accounting treatment of a certain contract entered into
with an insurance company conducted by the SEC. Pursuant to the settlement, the
Company, without admitting or denying any of the SEC's allegations, consented to
the entry of an administrative order to cease and desist from violations of the
anti-fraud, books and records, internal control and periodic reporting
provisions of the Securities Exchange Act of 1934 and the anti-fraud provisions
of the Securities Act of 1933. The Company also paid a fine of $450 thousand
pursuant to an order entered in the United States District Court for the
Southern District of New York.

17. RELATED PARTY TRANSACTIONS

      The Company utilizes the services of a third party for the purchase of
corporate gifts, promotional items and standard personalized stationery. Mrs.
Judy Laikin, the mother of Robert J. Laikin, the Company's Chief Executive
Officer, was the owner of this third party until June 1, 2000, and is an
independent consultant to this third party. The Company purchased approximately
$86,052 and $63,321 of services and products from this third party during 2004
and 2003. The Company believes that such purchases were made on terms and
conditions that were no less than favorable than generally available in the
market.

      During the fiscal years ended December 31, 2004 and 2003, the Company paid
to an insurance brokerage firm, for which the father of Robert J. Laikin acts as
an independent insurance broker, $205,000 and $225,415,

                                      A-67
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

respectively, in service fees. In addition, the Company pays certain insurance
premiums to the insurance brokerage firm, which premiums were forwarded to the
Company's respective insurance carriers. The Company believes that such
purchases were made on terms and conditions that were no less than favorable
than generally available in the market.

      The Company's Certificate of Incorporation and By-laws provide that it
indemnify its officers and directors to the extent permitted by law. In
connection therewith, the Company entered into indemnification agreements with
its executive officers and directors. In accordance with the terms of these
agreements the Company has reimbursed certain of its former executive officers
for their legal fees and expenses incurred in connection with certain litigation
and regulatory matters. The Company did not make any such reimbursement payments
during 2004.

18. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

      The quarterly results of operations are as follows (in thousands, except
per share data):

<TABLE>
<CAPTION>
2004 (AS RESTATED)                                          FIRST        SECOND        THIRD        FOURTH
------------------                                      ------------  -----------  -----------   -----------
<S>                                                     <C>           <C>          <C>           <C>
Revenue..........................................       $   440,210   $   463,074  $   453,046   $   503,025
Gross profit.....................................            24,068        26,643       28,493        34,854
Income from continuing operations................             2,354         4,790        4,727         8,087
Net income (loss)................................            (2,221)        3,964        4,547         7,480
Basic per share:
  Income from continuing operations..............       $      0.12   $      0.25  $      0.26   $      0.45
  Net income (loss)..............................       $     (0.12)  $      0.21  $      0.25   $      0.42
Diluted per share:
  Income from continuing operations..............       $      0.12   $      0.24  $      0.26   $      0.44
  Net income (loss)..............................       $     (0.11)  $      0.20  $      0.25   $      0.40
</TABLE>

<TABLE>
<CAPTION>
2003                                                        FIRST        SECOND        THIRD        FOURTH
----                                                    ------------  -----------  -----------   -----------
<S>                                                     <C>           <C>          <C>           <C>
Revenue..........................................       $   332,159   $   371,932  $   527,900   $   534,385
Gross profit.....................................            18,463        22,477       26,932        31,407
Income (loss) from continuing operations.........            (1,980)        5,240        5,675         6,211
Net income (loss)................................            (2,848)        4,317        4,844         5,416
Basic per share:
  Income (loss) from continuing operations.......       $     (0.11)  $      0.29  $      0.31   $      0.34
  Net income (loss)..............................       $     (0.16)  $      0.24  $      0.27   $      0.29
Diluted per share:
  Income (loss) from continuing operations.......       $     (0.11)  $      0.28  $      0.30   $      0.32
  Net income (loss)..............................       $     (0.15)  $      0.23  $      0.26   $      0.28
</TABLE>

      Note: Information in any one quarterly period should not be considered
indicative of annual results due to the effects of seasonality on the Company's
business in certain markets. Due to rounding the sum of each quarterly earnings
per share may not total the annual earnings per share. The information presented
above reflects:

      -     the effects of the 3 for 2 common stock splits on October 15, 2003,
            and August 15, 2003, and the 1 for 7 reverse common stock split on
            June 27, 2002;

      -     the effects of the Richmond, California, facility consolidation
            charge as more fully described in Note 2;

      -     and the effects of divestitures and the related change in
            classification of discontinued operations as more fully described in
            Note 7 to the Consolidated Financial Statements;

19. RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

      The Company's operations in France receive mobile operator commission,
subsidy, bonus and residual airtime revenues as a result of subscriber
activations or subscriber upgrades generated by the Company's network of
independent authorized retailers and the Company's directly owned retail stores.
Due to errors made in recording these transactions, the Company's operations in
France overstated revenue resulting in a related overstatement of accounts
receivable. In addition, certain other related adjustments were made in error,
which did not have an impact

                                      A-68
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

on net income, but resulted in an overall understatement of accounts receivable
and accounts payable during the year ended December 31, 2004.

      The Company's operations in Australia, in error, failed to identify and
record certain vendor rebates related to a 2004 vendor program. This error
resulted in an overstatement of cost of revenue and the understatement of vendor
receivables, that would have reduced accounts payable, resulting in an
overstatement of accounts payable in the 2004 financial statements.

      The Company corrected the above accounting errors by decreasing revenue
$6.2 million and increasing costs of revenue $200 thousand related to its
operations in France and decreasing costs of revenue $1.7 million related to its
operations in Australia. These corrections relate to the year ended December 31,
2004, with the exception of $968 thousand ($629 thousand, net of tax), which
relate to the year ended December 31, 2003, and are included in the restated
results for December 31, 2004, based on materiality. Additionally, bonuses
previously paid to the named executive officers will be returned to the Company
by the named executive officers on their own initiative. These bonuses,
originally recorded in the amount of approximately $1.0 million, have been
reflected as a reduction to selling, general and administrative expenses in the
restated results, as a result of bonus targets relating to the 2004 bonus plan
no longer having been met based upon the restated financial results.

      The impact of the Restatement on our consolidated balance sheet as of
December 31, 2004, and our consolidated statements of operations and cash flows
for the year ended December 31, 2004, is shown in the accompanying tables below.

                                      A-69
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATED STATEMENT OF OPERATIONS

      The following table presents the effect of the Restatement on the
consolidated statements of operations for the year ended December 31, 2004:

<TABLE>
<CAPTION>
                                                                                  YEAR ENDED DECEMBER 31, 2004
                                                                                 ------------------------------
                                                                                 (AS PREVIOUSLY
                                                                                    REPORTED)     (AS RESTATED)
                                                                                  (AMOUNTS IN THOUSANDS, EXCEPT
                                                                                         PER SHARE DATA)
<S>                                                                              <C>              <C>
Revenue
  Distribution revenue........................................................   $   1,559,109    $   1,559,109
  Logistics services revenue..................................................         306,478          300,246
                                                                                 -------------    -------------
Total revenue.................................................................       1,865,587        1,859,355
Cost of revenue
  Cost of distribution revenue................................................       1,500,105        1,498,396
  Cost of logistics services revenue..........................................         246,709          246,902
                                                                                 -------------    -------------
Total cost of revenue.........................................................       1,746,814        1,745,298
                                                                                 -------------    -------------
Gross profit..................................................................         118,773          114,057
Selling, general and administrative expenses..................................          84,775           83,361
Facility consolidation charge (benefit).......................................            (236)            (236)
                                                                                 -------------    -------------
Operating income from continuing operations...................................          34,234           30,932
Interest expense..............................................................           1,870            1,870
Interest income...............................................................            (986)            (986)
Impairment loss on long-term investment.......................................              --               --
Loss (gain) on debt extinguishment............................................              --               --
Other expenses................................................................           1,860            1,860
                                                                                 -------------    -------------
Income from continuing operations before income taxes.........................          31,490           28,188
Income tax expense............................................................           9,017            8,230
                                                                                 -------------    -------------
Income from continuing operations before minority interest....................          22,473           19,958
Minority interest.............................................................             --               --
                                                                                 -------------    -------------
Income from continuing operations.............................................          22,473           19,958
Discontinued operations:
  Loss from discontinued operations...........................................            (475)            (475)
  Loss on disposal of discontinued operations.................................          (5,713)          (5,713)
                                                                                 -------------    -------------
Total discontinued operations.................................................          (6,188)          (6,188)
Income (loss) before cumulative effect of a change in accounting principle....          16,285           13,770
Cumulative effect of a change in accounting principle, net of tax.............              --               --
                                                                                 -------------    -------------
Net income (loss).............................................................   $      16,285    $      13,770
                                                                                 =============    =============
Basic per share:
  Income from continuing operations...........................................   $        1.21    $        1.08
  Discontinued operations.....................................................           (0.33)           (0.34)
  Cumulative effect of a change in accounting principle, net of tax...........              --               --
                                                                                 -------------    -------------
  Net income (loss)...........................................................   $        0.88    $        0.74
                                                                                 =============    =============
Diluted per share:
  Income from continuing operations...........................................   $        1.17    $        1.04
  Discontinued operations.....................................................           (0.32)           (0.32)
  Cumulative effect of a change in accounting principle, net of tax...........              --               --
                                                                                 -------------    -------------
  Net income (loss)...........................................................   $        0.85    $        0.72
                                                                                 =============    =============
Weighted average common shares outstanding:
  Basic.......................................................................          18,552           18,552
                                                                                 =============    =============
  Diluted.....................................................................          19,169           19,169
                                                                                 =============    =============
</TABLE>

                                      A-70
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATED BALANCE SHEETS

      The following table presents the effect of the Restatement on the
consolidated balance sheet as of December 31, 2004:

<TABLE>
<CAPTION>
                                                                                           DECEMBER 31, 2004
                                                                                     -----------------------------
                                                                                     (AS PREVIOUSLY
                                                                                        REPORTED)    (AS RESTATED)
                                                                                     (AMOUNTS IN THOUSANDS, EXCEPT
                                                                                            PER SHARE DATA)
                                              ASSETS
<S>                                                                                  <C>             <C>
Current assets:
  Cash and cash equivalents....................................................       $    72,120     $    72,120
  Pledged cash.................................................................            13,830          13,830
  Accounts receivable (less allowance for doubtful accounts of $6,215).........           144,106         148,321
  Inventories..................................................................           109,559         110,089
  Contract financing receivable................................................            14,022          14,022
  Other current assets.........................................................            20,641          23,132
                                                                                      -----------     -----------
Total current assets...........................................................           374,278         381,514
Property and equipment, net....................................................            27,503          27,503
Goodwill and other intangibles, net............................................            21,981          21,981
Other assets...................................................................             6,586           6,586
                                                                                      -----------     -----------
Total assets...................................................................       $   430,348     $   437,584
                                                                                      ===========     ===========
                               LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable.............................................................       $   191,820     $   201,621
  Accrued expenses.............................................................            61,660          61,851
  Unfunded portion of contract financing receivable............................            23,375          23,375
  Lines of credit..............................................................                --              --
                                                                                      -----------     -----------
Total current liabilities......................................................           276,855         286,847
                                                                                      -----------     -----------
                                  COMMITMENTS AND CONTINGENCIES

Minority interest..............................................................                --              --
Shareholders' equity:
  Preferred stock, $0.01 par value: 1,000 shares authorized; no shares issued
   or outstanding..............................................................                --              --
  Common stock, $0.01 par value: 100,000 shares authorized;
     19,499 issued as of 2004..................................................               195             195
     Treasury stock, at cost, 1,606 shares.....................................           (24,010)        (24,010)
  Additional paid-in capital...................................................           233,768         233,768
  Retained earnings (deficit)..................................................           (61,453)        (63,968)
  Accumulated other comprehensive income (loss)................................             4,993           4,752
                                                                                      -----------     -----------
Total shareholders' equity.....................................................           153,493         150,737
                                                                                      -----------     -----------
Total liabilities and shareholders' equity.....................................       $   430,348     $   437,584
                                                                                      ===========     ===========
</TABLE>

                                      A-71
<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATED STATEMENT OF CASH FLOWS

      The following table presents the effect of the Restatement on the
consolidated statements of cash flows for the year ended December 31, 2004:

<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31, 2004
                                                                        -------------------------------
                                                                        (AS PREVIOUSLY
                                                                           REPORTED)      (AS RESTATED)
                                                                            (AMOUNTS IN THOUSANDS)
<S>                                                                     <C>               <C>
OPERATING ACTIVITIES
Net income (loss).................................................       $    16,285      $    13,770
Adjustments to reconcile net income (loss) to net cash
  provided by operating activities:
  Depreciation and amortization...................................            10,815           10,815
     Amortization of debt discount................................                --               --
  Facility consolidation charge (benefit).........................              (236)            (236)
  Pledged cash requirements.......................................             3,212            3,212
  Change in deferred taxes........................................               609              563
  Discontinued operations.........................................             6,188            6,188
  Net cash used by discontinued operations........................            (1,290)          (1,290)
     Income tax benefits from exercise of stock options...........             5,418            5,418
  Gain (loss) on debt extinguishment..............................                --               --
  Minority interest...............................................                --               --
  Cumulative effect of a change in accounting principle, net
     of tax.......................................................                --               --
  Impairment loss on long-term investment.........................                --               --
  Changes in operating assets and liabilities, net of
     effects from acquisitions and divestitures:
       Accounts receivable........................................           (15,678)         (19,744)
       Inventories................................................             2,100            1,588
       Other operating assets.....................................            (1,412)          (2,103)
       Accounts payable and accrued expenses......................           (18,370)         (10,439)
                                                                         -----------      -----------
Net cash provided by operating activities.........................             7,641            7,742
INVESTING ACTIVITIES
Capital expenditures..............................................            (8,343)          (8,343)
Purchase acquisitions, net of cash acquired.......................            (1,634)          (1,634)
Cash effect of divestitures.......................................               576              576
Decrease in funded contract financing receivables.................             4,398            4,398
Decrease (increase) in other assets...............................              (920)            (920)
                                                                         -----------      -----------
Net cash provided (used) by investing activities..................            (5,923)          (5,923)
FINANCING ACTIVITIES
Net proceeds (payments) on credit facilities......................           (16,500)         (16,500)
Pledged cash requirements.........................................             5,000            5,000
Purchase of treasury stock........................................           (24,010)         (24,010)
Repurchase of convertible notes...................................                --               --
Proceeds from common stock issuances under employee stock
  option and purchase plans.......................................             1,013            1,013
                                                                         -----------      -----------
Net cash used by financing activities.............................           (34,497)         (34,497)
Effect of exchange rate changes on cash and cash
  equivalents.....................................................             6,020            5,919
                                                                         -----------      -----------
Net increase (decrease) in cash and cash equivalents..............           (26,759)         (26,759)
Cash and cash equivalents at beginning of year....................            98,879           98,879
                                                                         -----------      -----------
Cash and cash equivalents at end of year..........................       $    72,120      $    72,120
                                                                         ===========      ===========
</TABLE>

                                      A-72
<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

      This Management's Discussion and Analysis reflects the restatement of our
consolidated financial statements, as discussed in Note 19 to the consolidated
financial statements.

EXECUTIVE OVERVIEW

      Brightpoint is one of the largest dedicated distribution and logistics
companies in the global wireless industry. There are many large-scale
competitors that provide similar services for multiple industries, however,
Brightpoint is one of a few that specialize in the wireless industry and
maintains logistics and distribution services within the wireless industry as
its core competency.

      Brightpoint dedicates the majority of its resources to and generates the
majority of its revenues from the provision of distribution and logistics
services to customers in the global wireless industry. The primary source of
revenue is the handling of the wireless device through either the purchase and
resale of the wireless device (distribution) or through the handling of the
wireless device on behalf of mobile operators and manufacturers for a fee
(logistics services). The purchase and resale of the wireless device includes
the value of the product that generates a relatively higher revenue transaction
per unit, while the handling of the device through logistics services generates
a relatively lower revenue transaction per unit in the form of a fee. Therefore,
our predominant source of revenue and related cost of revenue is in the
distribution of wireless devices, while the provision of logistics services is a
lesser source of revenue. In terms of total revenue in 2004, distribution
represented 84% and logistics services represented 16%. In terms of wireless
devices handled in 2004, distribution represented 38% while logistics services
represented 62%. It is important to recognize that although revenue related to
logistics services is significantly lower than distribution services, the
investment in working capital and the risk related to working capital is
relatively lower. In addition to sales of wireless devices, distribution revenue
includes sales of wireless accessories. Included in logistics services are an
array of services that do not necessarily include the handling of the wireless
device. These include, but are not limited to, the purchase and resale or the
handling for a fee of prepaid wireless services recharge cards, activation
services, the handling of accessories, call center services, web hosting
services and the provision of credit management services.

      Our revenues are significantly influenced by growth in the total number of
wireless devices sold to subscribers globally by the entire industry. In 2004,
it is estimated that 665 million wireless devices were sold to subscribers. This
was up 29% from 2003. The total number of wireless devices handled by us grew by
34% from 2003. Our growth rate will be explained further in this section. In
prior years, the majority of wireless devices sold were to new subscribers as
wireless services proliferated throughout the world. Recently, the trend has
shifted more toward replacement wireless devices purchased by existing
subscribers. The limited operating life of wireless devices, combined with the
introduction of more fully-featured wireless devices by manufacturers and the
promotional activity of mobile operators to motivate subscribers to switch
networks or add services to subscriber plans, which generally require or include
a new wireless device, have been underlying causes for the shift to replacement
sales. Within the industry this trend is commonly referred to as the
"replacement cycle."

      We are organized geographically where our operating divisions focus solely
on their respective geographies. Our divisions are: The Americas, Asia-Pacific,
and Europe, which are led by divisional presidents. We have 17 distribution
centers (three of which are outsourced to third parties) in 14 countries
Worldwide. As of December 31, 2004, we had 1,264 employees and 715 full-time
equivalent temporary workers.

   AREAS OF MANAGEMENT FOCUS

      We focus a great deal of our time on growing the volume of wireless
devices handled. We are indifferent as to whether they are handled via
distribution sales or logistics services. Both channels generate operating
margins for the Company and we believe we currently have a diversified sales
mix. Earning an adequate gross margin on both sets of transactions is important
to us. Improving our operating efficiencies and consequently reducing our
average cost per transaction is essential to our profitability and prospects for
earnings growth. We measure our business entities by operating income growth,
which incorporates the elements described above.

                                      A-73
<PAGE>

      Profitability in the context of capital efficiency is important to us. We
measure this concept with a metric entitled return on invested capital from
operations ("ROIC"). We look at our operating income from continuing operations,
excluding unusual items, such as the 2003 facility consolidation charges
incurred, and apply an estimated income tax rate and compare this net result to
a simple average of capital employed during the period. In our case, capital
employed is shareholders' equity and gross debt. Additionally, we focus on cash
provided by operations. Change in our cash conversion cycle is an indicator of
whether we are increasing or decreasing our working capital excluding debt. In
certain instances, increases in our working capital excluding debt are
contributory to the success of the business; therefore, an increase in the cash
conversion cycle may not necessarily be a negative indicator. To position the
Company for future growth opportunities and to confront unanticipated adversity,
we have been highly focused on generating cash and having borrowing
availability. We utilize a metric we call liquidity, which is the summation of
unrestricted, and therefore available, cash and unused borrowing availability.
We are currently using a portion of our liquidity to expand into new markets.
Additionally, in 2004, we used $24 million of our liquidity to repurchase 1.6
million shares of our common stock pursuant to the share repurchase programs
approved by the Board of Directors.

      On June 5, 2003, the SEC issued new rules on internal control over
financial reporting that were mandated by Section 404 of the Sarbanes-Oxley Act
of 2002 ("Section 404"). These new rules require management reporting on
internal control over financial reporting. We employed the Internal Control --
Integrated Framework founded by the Committee of Sponsoring Organizations of the
Treadway Commission to evaluate the effectiveness of the Company's internal
control over financial reporting. Management of the Company has revised its
assessment of the effectiveness of the Company's internal control over financial
reporting as of December 31, 2004, originally included in Management's Report on
Internal Control Over Financial Reporting in the Company's annual report on Form
10-K filed on February 3, 2005, in which management concluded that the Company's
internal control over financial reporting was effective as of December 31, 2004,
notwithstanding the existence of significant deficiencies that were deemed by
the Company's management to not be a material weakness. Subsequent to filing its
annual report on Form 10-K on February 3, 2005, the Company identified errors in
its 2004 financial statements. Management has concluded that these errors
resulted from material weaknesses in internal control in the Company's
operations in France and Australia. As a result, management has revised its
assessment of the effectiveness of the Company's internal control over financial
reporting.

      Management spends a significant amount of time traveling with the purpose
of spending time with key customers, suppliers, and employees. We believe that
these relationships are vital to the success of the Company and will continue to
dedicate a significant amount of time in this area. Other areas that we focus on
include management execution, quality, risk management, employee development,
legal and ethical compliance, and corporate governance.

      We believe the ultimate beneficiary of the areas of focus above is the
shareholder and we keep the shareholder at the forefront of our discussions and
decision-making.

   KEY INDICATORS OF PERFORMANCE

      Key indicators of performance for the Company, which are referred to
further in this discussion, include:

      -     Wireless devices handled

      -     Revenue growth

      -     Gross margin percent

      -     Operating income growth

      -     Cash conversion cycle, which includes days sales outstanding, days
            inventory on-hand and days payables outstanding

      -     Net cash provided by operating activities

                                      A-74
<PAGE>

      -     ROIC

      -     Liquidity

   TRENDS, CHALLENGES, RISKS AND GROWTH OPPORTUNITIES

      Wireless industry trends, challenges, risks and growth opportunities
include:

      -     Maturation of the industry. It is estimated that there are 1.6
            billion wireless subscribers worldwide -- an amount greater than
            wireline subscribers. Penetration rates are approaching 100% in
            Western Europe and are as high as 65% in key Asian markets. In the
            United States, the penetration rate is approximately 59%. Developing
            markets such as India, China, Russia and Eastern Europe still have
            relatively lower penetration rates, however, they are growing
            rapidly. As global penetration rates increase, the wireless device
            industry will rely more upon the replacement of wireless devices to
            existing subscribers. The implications for the Company are that
            replacement sales are becoming a more significant source of revenue.
            The risks include the predictability of replacement cycles across
            various markets. We believe that we are currently operating in an
            environment of increasing replacement sales, which contributed to
            our growth in 2004. There are no assurances this trend will continue
            in the future.

      -     Recent growth in wireless device sales. In 2004 and 2003, industry
            wireless device sales grew by approximately 29% and 22%,
            respectively. In 2002, the wireless device industry experienced
            modest growth of 3%. Current forecasts by industry analysts expect
            growth rates of approximately 10% in 2005. A rapid decline in
            wireless device sales growth could negatively impact the Company's
            revenues. Higher than anticipated growth in demand could strain our
            resources and affect our ability to meet unanticipated demand.

      -     Availability of product and channel inventory. In the past we have
            experienced shortages in supply of products that were in high
            demand. These types of shortages can be caused by the inability of
            manufacturers to procure all of the components necessary to build
            sufficient quantities of products in demand, our inability or
            manufacturers inability to precisely anticipate demand, or for other
            reasons. Shortages can have the effect of constraining our ability
            to meet demand and, therefore, can adversely affect our revenue.
            Conversely, our customers or competitors may hold more inventory
            than is required to meet demand. This can have the effect of
            reducing our sales through the period until the customer inventory
            is sold through and may reduce our gross margin due to the market
            experiencing an excess of supply relative to demand. It is difficult
            to predict demand patterns and supply conditions, which can affect
            our ability to meet demand or sell products at acceptable gross
            margins.

      -     Pricing trends. In 2004, it is estimated that the industry's average
            selling price for wireless devices declined by approximately 2%.
            Although manufacturers have been adding features and functionality
            to wireless devices to offset industry trends toward average selling
            price erosion, we believe the trend of price declines may continue.
            This can affect the Company's revenue since the average selling
            price in conjunction with the volumes we sell are direct components
            of our revenue. Product sales mix can affect our average selling
            prices.

      Company specific trends, challenges, risks and growth opportunities
include:

      -     Unit and revenue growth. In 2004, the Company experienced 34% growth
            in wireless devices handled and 5% growth in revenue. Our growth in
            wireless devices handled in the Americas division was the
            predominant contributor to the Company's overall unit growth. In
            2003, the Company experienced 36% growth in wireless devices handled
            on 44% growth in revenue. This difference in growth rates was
            influenced by a sales mix shift toward distribution sales.

      -     Sales mix shift between product distribution and logistics services.
            Over the past several years, we have been growing our fee-based
            logistics services business such that it has become a significant
            portion of our income generating activity. In 2004, fee-based
            logistics services represented 47% of our gross profit. Our offering
            includes services associated with wireless devices and non-wireless
            device products such as accessories and prepaid recharge cards. A
            significant portion of the activity in this business is the handling
            of wireless

                                      A-75
6
<PAGE>

      devices. Fees for these services exclude the value of the product and are
      generally less than $10 per unit. Distribution revenue, on the other hand,
      includes the value of the product, which had an average selling price of
      $142 per unit in 2004. We focus on the handling of wireless devices
      regardless of whether they are handled as a logistics service or a
      distribution sale. The disparity in revenue per unit between a logistics
      service unit and a distribution sale unit combined with shifts in sales
      mix have created sensitivity in historical revenue patterns. When
      percentage unit sales mix has shifted from fee-based logistics services
      toward product distribution sales, we have seen higher percentage
      increases in revenue relative to the increases in wireless devices
      handled. Conversely, when percentage unit sales mix has shifted from
      product distribution sales toward fee-based logistics services, we have
      seen lower percentage increases in revenue relative to the increases in
      wireless devices handled. For this reason, we place a high importance on
      total wireless devices handled in measuring the growth of our business. In
      2004, distribution represented 38% while logistics services represented
      62% of wireless devices handled. In terms of total revenue, distribution
      represented 84% and logistics services represented 16%. Our total revenue
      grew by 5% in 2004 as compared to 2003, while the wireless devices handled
      grew by 34% in the same period. This difference in growth rates was
      influenced by a sales mix shift toward logistics services. Contrarily, in
      2003, our total revenue grew by 44% while the wireless devices handled
      grew by 36%. This difference in growth rates was influenced by a sales mix
      shift toward distribution sales. We expect sales mix shifts, such as
      these, to occur in future periods.

-     Earnings growth. The Company incurred significant losses in 2002 and in
      2001. The Company has established a recent trend, beginning in late 2002,
      of quarterly earnings growth and stability. Our strategy incorporates
      growth elements for revenue and our operating plans incorporate
      improvements in efficiencies, which we hope will result in continued
      earnings growth. However, there can be no assurances this trend will
      continue. As we may potentially invest in growth opportunities in new
      markets and assume additional risks, our earnings trend may alter.

-     Fluctuations in our cash conversion cycle. We have experienced
      fluctuations in our average annual cash conversion cycle from 13 days in
      2002 down to 5 days in 2003 and up to 7 days in 2004. Change in our cash
      conversion cycle is an indicator of whether we are increasing or
      decreasing our working capital excluding debt. In certain instances,
      increases in our working capital excluding debt are contributory to the
      success of the business; therefore, an increase in the cash conversion
      cycle may not necessarily be a negative indicator. We continually focus on
      our balance sheet and adequate cash balances as appropriate for the
      success of our business. Historical high levels of debt and the March 11,
      2003, put option feature in our Convertible Notes necessitated this level
      of focus. Positioning the Company for future growth motivated us to pursue
      this trend. A cash conversion cycle of 7 days is a low number for a
      distribution company. As we may potentially invest in future growth
      opportunities in new markets and assume additional risks, our cash
      conversion cycle may increase. Additionally, our performance in this area
      is dependent upon, but not limited to, customer payment patterns,
      suppliers' terms and conditions, our ability to manage our inventory, and
      our ability to sell accounts receivables in certain markets.

-     Net cash provided by operating activities. We have been able to generate
      positive operating cash flow for most quarters during the last three
      years. As we may potentially invest in growth opportunities in new markets
      and assume additional risks, our cash flow trends may alter.

-     Reduction of debt. We have reduced our total debt from $166 million in
      2001 to zero in 2004. A key metric of ours,
      gross-debt-to-total-capitalization ratio, has reduced from 53% in 2001 to
      0% in 2004, as measured by the December 31 dates of the respective years.
      As we continue to execute upon our growth strategy, we may need to utilize
      our credit facilities to fund our investments, which may add debt to our
      capital structure.

-     The strengthening of foreign currencies relative to the U.S. dollar. 44%
      of our revenue in 2004 was denominated in foreign currencies. Our total
      revenue in 2004 grew by 5% as compared to 2003. Four percentage points
      were attributable to the strengthening of foreign currencies relative to
      the U.S. dollar. This effect had a favorable impact on our operating
      income. Should the recent trends in currency exchange rates take a reverse
      direction, the effect could be unfavorable to the Company. Although we
      hedge transactional currency risk, we do not hedge foreign currency
      revenue or operating income. We also do not hedge our investment in
      foreign subsidiaries, where fluctuations in foreign currency exchange
      rates may affect our comprehensive income or loss.

                                      A-76
<PAGE>

      There are many inherent risks and challenges in the trends described
above. Also, please refer to the Business Risk Factors section. We plan on
continuing to focus on volume and revenue growth opportunities, managing our
gross margin and cost structure, and consequently, potential growth in operating
income. We plan on continuing to focus on capital efficiency as measured by ROIC
and the cash conversion cycle. Cash and cash flow will continue to be a focus
area for us. Additionally, we plan on continuing our focus on customer,
supplier, and employee relationships, management execution, quality, risk
management, employee development, legal and ethical compliance, and corporate
governance.

      Potential growth opportunities include:

      -     Enter into new geographic markets

      -     Add new products and services in current markets

      -     Expand existing product and service offerings in current markets

   IMPACT OF INFLATION

      For 2004, inflation did not have a significant impact on our overall
operating results.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

   REVENUE RECOGNITION

      We recognize revenue when the title and risk of loss have passed to the
customer, there is persuasive evidence of an arrangement, delivery has occurred
or services have been rendered, the sales price is fixed or determinable, and
collectibility is reasonably assured. Our total revenue in 2004 was $1.9
billion. Distribution revenue was 84% and logistics services revenue was 16%.
For distribution revenue, which is generally recorded using the gross method,
revenue recognition occurs upon shipment to customers and transfer of title. In
some circumstances, the customer may take legal title and assume risk of loss
upon delivery and, therefore, revenue is recognized on the delivery date. Sales
are recorded net of discounts, rebates, returns, and allowances. As a part of
our logistics services we manage and distribute wireless devices and prepaid
recharge cards on behalf of various mobile operators and assume little or no
ownership risk for the product, other than custodial risk of loss. Under these
arrangements we have an agency relationship in the transaction and recognize
only the fee associated with serving as an agent. In other logistics services
arrangements, we receive activation commissions for acquiring subscribers on
behalf of mobile operators through independent dealer agents or through
Company-owned stores. In the event activation occurs through an independent
dealer/agent, a portion of the commission is passed on to the dealer/agent.
These arrangements may contain provisions for additional residual commissions
based on subscriber usage or for the reduction or elimination of activation
commissions if subscribers deactivate service within stipulated periods. The
Company recognizes revenue for activation commissions upon activation of the
subscriber's service and residual commissions when earned. An allowance is
established for estimated wireless service deactivations as a reduction of
accounts receivable and revenues.

   PRODUCT COSTS

      We incurred $1.5 billion in product costs in 2004 that were reported
within distribution cost of revenue. On December 31, 2004, we carried $110
million of inventory. Included in our inventory are estimates of reductions of
inventory value due to lower market prices than our original purchase prices,
estimates for excess inventory and obsolescence risks, supplier incentives
earned through purchases but unrealized pending the sale of the related products
and estimates for capitalized operating costs related to the handling of
inventory. As of December 31, 2004, our total inventory allowance balance was
$5.2 million and the total amount of capitalized operating costs were $1.5
million. Included in our cost of goods sold are estimates of supplier incentives
associated with products sold, the changes in inventory allowance accounts that
result from the actual disposition of products during the period, changes in the
capitalization of operating costs, and estimates for freight costs. These
estimates are dependent upon monthly and quarterly processes we undertake
throughout our operations worldwide. Rapidly

                                      A-77
<PAGE>

changing market conditions may affect the market value of inventory that we have
on hand. Because we do not have complete knowledge of the projected disposition
of products either through sales to customers, returns to suppliers, or through
liquidators, actual results may vary from our estimates.

   NON-PRODUCT COST OF REVENUE

      Our cost of revenue includes operating expenses that are directly related
to the acquisition and production of wireless devices sold through distribution
or handled through logistics services. These operating expenses are comprised of
labor, product insurance, facility costs (rent, insurance, utilities, etc.),
warehouse equipment costs and shipping costs. The allocation of these costs
between cost of distribution revenue, cost of logistics services revenue and
selling, general and administrative expenses require estimates based on various
cost drivers such as square footage or number of employees and other estimation
methodologies.

   ALLOWANCES FOR UNCOLLECTIBLE ACCOUNTS AND RELATED PROVISIONS

      We provide credit to certain customers in the ordinary course of business.
Through credit analysis processes, credit insurance, and letters of credit, we
try to mitigate the risk associated with providing credit. We are unable to
cover our risk entirely and are exposed to potential payment defaults by our
customers. We estimate the probable loss on specific accounts. As of December
31, 2004, the allowance for doubtful accounts totaled $6.2 million. Because we
do not have complete knowledge on the projected collectibility of amounts owed
to us by customers, actual results may vary from our estimates.

   DEFERRED TAXES AND EFFECTIVE TAX RATES

      We estimate the effective tax rates and associated liabilities or assets
for each legal entity in accordance with FAS 109. We use tax-planning to
minimize or defer tax liabilities to future periods. In recording effective tax
rates and related liabilities and assets, we rely upon estimates, which are
based upon our interpretation of United States and local tax laws as they apply
to our legal entities and our overall tax structure. Audits by local tax
jurisdictions, including the United States Government, could yield different
interpretations from our own and cause the Company to owe more taxes than
originally recorded. We utilize internal and external skilled resources in the
various tax jurisdictions to evaluate our position and to assist in our
calculation of our tax expense and related liabilities.

      For interim periods, we accrue our tax provision at the effective tax rate
that we expect for the full year. As the actual results from our various
businesses vary from our estimates earlier in the year, we adjust the succeeding
interim periods effective tax rates to reflect our best estimate for the
year-to-date results and for the full year. As part of the effective tax rate,
if we determine that a deferred tax asset arising from temporary differences is
not likely to be utilized, we will establish a valuation allowance against that
asset to record it at its expected realizable value.

GOODWILL AND LONG-LIVED ASSET IMPAIRMENT

      We periodically consider whether indicators of impairment of goodwill and
long-lived assets are present.

      At December 31, 2004, we had $19.0 million of goodwill recorded as an
asset. During 2004, we performed an analysis and determined there was not
impairment in the value of this asset. In the analysis we estimate an enterprise
value based on the present value of anticipated net cash flows. If the analysis
indicates the net assets of the Company is greater than the estimated enterprise
value, we recognize an impairment loss to the extent the present value of
anticipated net cash flows attributable to the asset are less than the asset's
carrying value.

      At December 31, 2004, we reviewed $6.5 million of our long-lived assets
for potential impairment. For long-lived assets impairment testing, we determine
whether the sum of the estimated undiscounted cash flows attributable to the
assets in question is less than their carrying value. If less, we recognize an
impairment loss based on the excess of the carrying amount of the assets over
their respective fair values. Fair value is determined by discounted future cash
flows, appraisals or other methods. If the assets determined to be impaired are
to be held and used, the Company recognizes an impairment charge to the extent
the present value of anticipated net cash flows attributable to the asset are
less than the asset's carrying value. The fair value of the asset then becomes
the asset's new carrying

                                      A-78
<PAGE>

value, which the Company depreciates over the remaining estimated useful life of
the asset. Our long-lived assets were recorded at their fair value and there
were no material impairment charges in 2004.

RESULTS OF OPERATIONS -- 2004 COMPARISON TO 2003

   REVENUE AND WIRELESS DEVICES HANDLED

      We estimate that worldwide industry shipments of wireless devices grew
approximately 29% to 665 million in 2004. In 2003, we estimate that worldwide
industry shipments of wireless devices grew approximately 22%. The total
worldwide wireless subscriber base grew to approximately 1.6 billion subscribers
at the end of 2004.

      The global wireless device industry, which prior to 2002, grew at a rapid
pace through the acquisition of first-time subscribers by mobile operators, has
been undergoing a shift in demand to replacement sales to existing subscribers.
We believe this shift in demand, which we refer to as the "replacement cycle,"
was a primary driver for growth these last two years. Wireless devices were
originally designed to operate as mobile telephones offering voice capabilities
only. Both manufacturers and mobile operators have recognized that subscribers
are prepared to use their wireless devices as terminals with additional
functionality such as digital imaging and messaging, access to the Internet,
access to email, text messaging, gaming, and MP3 music playback. Concurrently,
mobile operators have been upgrading their wireless networks and service plan
offerings to enable subscribers to utilize these new choices in functionality.
Additionally, both manufacturers and mobile operators have recognized the
personal affinity subscribers have for their wireless devices and have offered a
wider selection of form factors -- i.e., style, color, size, etc., and the
personalization of displays and ring tones. A high resolution color screen is a
prerequisite for many of these capabilities. Subscriber acceptance of this new
functionality and personalization of wireless devices has been high and this has
been the catalyst for this replacement cycle. We estimate that 60% of worldwide
wireless device shipments were for replacement sales.

      Although lesser in percentage terms, we believe the acquisition of new
subscribers continued to be significant in 2004. We estimate that 40% of
worldwide wireless device shipments were for new subscribers. Lower subscriber
penetration rate markets such as Latin America, Eastern Europe, China, and India
grew at a rapid pace in 2004. Higher penetration rate markets such as Europe and
the U.S. also added new subscribers, although at a lower rate.

      In conjunction with this increase in demand, manufacturers and mobile
operators promoted their products and services extensively in 2004. Mobile
operators also continued with their practice of subsidizing the subscriber
purchase price of the wireless device in exchange for term contractual
commitments on service plans or in the anticipation of future sales of airtime.
We believe these activities further fueled demand.

      The average wholesale selling price, which we estimate has historically
decreased 10 -- 15% per year, declined by an estimated 2% in 2004. We believe
the added value of the additional functionality of wireless devices reduced the
rate of decrease of the average wholesale selling price.

      In 2004, Brightpoint benefited from the increased global demand caused by
the replacement cycle, the acquisition of new subscribers, promotional activity
by mobile operators and manufacturers and the reduction of the rate of decline
of the average wholesale selling price of wireless devices.

      Wireless Devices Handled by Division:

<TABLE>
<CAPTION>

                                                                    YEAR ENDED                     CHANGE
                                                 -----------------------------------------------    FROM
                                                  DECEMBER 31,     % OF    DECEMBER 31,     % OF   2003 TO
                                                      2004         TOTAL       2003         TOTAL   2004
                                                 -------------     -----   ------------     -----  -------
                                                                      (AMOUNTS IN 000S)
<S>                                              <C>               <C>     <C>              <C>    <C>
The Americas...............................         18,886          70%        12,403        62%     52%
Asia-Pacific...............................          6,956          26%         6,940        34%      -%
Europe.....................................          1,166           4%           791         4%     47%
                                                    ------         ---        -------       ---      --
  Total....................................         27,008         100%        20,134       100%     34%
                                                    ======         ===        =======       ===      ==
</TABLE>

                                     A-79
<PAGE>

      For the total Company, wireless devices handled grew by 34%. This compares
to our estimated growth of the global wireless devices industry of 29%. Our 2004
growth rate is similar to the 36% year-over-year growth rate we experienced in
2003.

      Of the 6.9 million increase in wireless devices handled, 6.5 million
occurred in the Americas division, which experienced a 52% rate of growth, and
represented 70% of the total Company's wireless devices handled. The Americas
proportion of total Company wireless devices handled grew from 62% in 2003.
Within the Americas division, our North America business experienced a 40%
increase and our Colombia business experienced a 166% increase. In North
America, the logistics services business experienced a 57% increase. This was
driven by an overall strength in demand in the U.S. market, which benefited our
mobile operator customers such as Nextel, Virgin Mobile, Metro PCS and Tracfone.
Additionally, we acquired a significant new customer, Cricket Communications, a
subsidiary of Leap Wireless International, Inc., in 2004, which contributed to
our growth rate. Growth in our North America business was tempered by a 7%
decline in wireless devices handled in our distribution business. This decline
was significantly attributable to the transition of certain regional mobile
operators from TDMA to either GSM or CDMA and we lost market share in this
channel due to a key supplier's relatively weaker market position in GSM and
CDMA as compared to TDMA. We were able to fill a portion of the demand with
alternative suppliers, however, not sufficiently enough to maintain our
historical market share in this segment. Additionally, a certain mobile operator
promoted wireless devices directly to its dealer channel at subsidized pricing
that made our offering to our dealer channel for that same mobile operator's
wireless devices uncompetitive. The increase in our Colombia business was
ascribable to a successful conversion from TDMA to GSM of our key logistics
mobile operator customer, combined with promotional activity and with a general
increase in demand in the Colombia market.

      The remainder of the increase in wireless devices handled was in the
Europe division, which experienced a 47% increase. This was principally due to
our entries into the Slovak Republic and Finland during 2004. Demand was
generally higher in our European markets and we were able to fill growing demand
for high-end wireless data devices.

      Wireless devices handled in the Asia-Pacific division were flat. 73% and
31% increases in our Australia and New Zealand businesses, respectively, were
offset by a 72% decline in our India CDMA business and a 43% decline in our
Philippines business. Shipments of GSM wireless devices through our Brightpoint
Asia Limited business, which represented 16% of our total Company wireless
devices handled, experienced a modest growth rate of 8% from 2003. Our Australia
and New Zealand businesses benefited from significant promotional activity by
mobile operators and the replacement cycle. In India, in 2003, we were
successful at launching a certain model of a CDMA wireless device with a large
mobile operator. In 2004, we were unable to launch follow-on CDMA products at
the same quantities. With regards to Brightpoint Asia Limited, we believe that
shifts toward in-country product sourcing in a key export market tempered growth
in GSM export sales. GSM wireless device shipments through Brightpoint Asia
Limited grew 97% and 101% in 2003 and 2002, respectively. We believe this
business was closer to reaching its volume potential in 2004 than in prior
years; therefore, we experienced market demand resistance to further significant
growth.

      Wireless Devices Handled by Service Line:

<TABLE>
<CAPTION>
                                                            YEAR ENDED                     CHANGE
                                         ----------------------------------------------     FROM
                                         DECEMBER 31,    % OF     DECEMBER 31,    % OF     2003 TO
                                             2004        TOTAL        2003        TOTAL     2004
                                         ------------    -----    ------------    -----    -------
                                                            (AMOUNTS IN 000S)
<S>                                      <C>             <C>      <C>             <C>      <C>
Product distribution.................        10,255        38%        10,632        53%      (4)%
Logistics services...................        16,753        62%         9,502        47%      76%
                                             ------       ---         ------       ---       --
  Total..............................        27,008       100%        20,134       100%      34%
                                             ======       ===         ======       ===       ==
</TABLE>

      The decrease in wireless devices handled through product distribution was
significantly caused by a 7% decline in the Americas division due to a shift in
demand from TDMA wireless devices, a segment where we previously had a leading
product offering, to GSM and CDMA, due to a key supplier's relatively weaker
market position in GSM and CDMA as compared to TDMA. A disparity in our pricing
in a certain channel relative to a certain mobile operator's subsidized pricing
further contributed to the decline. Additionally, we experienced 72% decline in
India

                                     A-80
<PAGE>

CDMA volumes. Our entry into Finland with a distribution business model and a
general increase in demand in our European division, particularly for high-end
wireless data devices, partially offset the decrease.

      The strength and relatively large scale of our Americas logistics services
business, combined with our entry into the Slovak Republic with a logistics
services offering and an increase in demand by a key logistics services customer
in Australia generated the 76% increase in wireless devices handled through
logistics services.

      Revenue Change Analysis: (As Restated)

<TABLE>
<CAPTION>
                                                                                                  YEAR OVER YEAR
                                                                                                 ----------------
                                                                                                 UNITS    REVENUE
                                                                                                 -----    -------
<S>                                                                                              <C>      <C>
Effect of change in wireless devices handled on revenue (volume)...............................   34%        29%
Mix shift of wireless devices handled from product distribution to fee-based logistics
  services.....................................................................................             (30)%
Change in prices...............................................................................               -%
Effect of foreign currency.....................................................................              4%
Other..........................................................................................              2%
                                                                                                            ---
  Overall percentage change in revenue from prior year.........................................              5%
                                                                                                            ===
</TABLE>

      Within the 27 million wireless devices handled and as compared to the 20
million units that we handled last year, we saw a significant sales mix shift
from product distribution sales to fee-based logistics services. Total wireless
devices handled drive our profitability and our business model benefits from
activity in both product distribution and logistics services. Shifts in sales
mix from one to another can affect our revenue line without having as much of an
impact on profitability.

      The table above reconciles our wireless device unit growth to our overall
revenue growth, which includes wireless device revenue through both logistics
services and distribution and other non-wireless device revenue. Although our
wireless devices handled growth was 34%, our revenue growth was 5%. Holding the
prior year's sales mix constant, this growth in wireless devices handled would
have had a 29% favorable effect on total revenue. Because we experienced a
significant shift in sales mix from higher-revenue distribution sales to
lower-revenue fee-based logistics services, the effect of the 34% increase in
volume had marginal impact on revenue. The effect was more noticeable in gross
profit and gross margin, which grew 15% and was up 0.5 percentage points,
respectively. Logistics services grew from 47% of total wireless devices handled
in 2003 to 62% in 2004. Conversely, distribution declined from 53% to 38% of
total wireless devices handled in 2004. Please see the discussion under
"Wireless Devices Handled by Division" and "Wireless Devices Handled by Service
Line" for more details on year-over-year changes in wireless devices handled.

      As indicated further in the table above, changes in prices had a
negligible effect on our revenue growth. Changes in prices include both
distribution and logistics services. The general strengthening of foreign
currencies relative to the U.S. dollar had a 4% favorable effect on our revenue
growth. Growth in non-wireless device revenue and other items had a 2% favorable
effect on our revenue growth.

      Revenue by Service Line:

<TABLE>
<CAPTION>
                                                             YEAR ENDED                       CHANGE
                                         ------------------------------------------------      FROM
                                         DECEMBER 31,      % OF     DECEMBER 31,     % OF     2003 TO
                                            2004          TOTAL        2003         TOTAL      2004
                                         -------------    -----     ------------    -----     -------
                                         (AS RESTATED)
                                                                 (AMOUNTS IN 000S)
<S>                                      <C>              <C>       <C>             <C>       <C>
Distribution........................      $ 1,559,109       84%      $ 1,540,471      87%        1%
Logistics services..................          300,246       16%          225,905      13%       33%
                                          -----------      ---       -----------     ---        --
  Total.............................      $ 1,859,355      100%      $ 1,766,376     100%        5%
                                          ===========      ===       ===========     ===        ==
</TABLE>

      Product distribution revenue grew modestly at 1%. A 4% decline in wireless
devices handled through distribution was offset by a 4% uplift due to the
general strengthening of foreign currencies relative to the U.S. dollar, a
slight increase in the average selling price of wireless devices and a slight
increase in accessory revenue.

                                      A-81
2
<PAGE>

      Although the overall increase in average selling price of wireless devices
was up slightly, we experienced different rates of change within each division.
Excluding the effect of the general strengthening of foreign currencies relative
to the U.S. dollar, the Europe and Americas divisions experienced 14% and 9%
increases in average selling prices, respectively. This was primarily due to the
increased functionality and consequently higher market value of wireless devices
in 2004 as compared to products sold in 2003. The Asia-Pacific division, on the
other hand, experienced a 6% decline in average selling price (excluding the
effects of foreign currency fluctuations). In the second quarter, Nokia, a key
supplier, launched an aggressive pricing campaign that significantly reduced our
average selling price in the Asia-Pacific division. The pressure on average
selling price caused by this action was mostly limited to the second quarter.
Our Australia business experienced a 34% decline in average selling price
(excluding the effects of foreign currency fluctuations) due to a notable shift
in demand to lower end wireless devices. This shift was a function of a key
mobile operator promoting and subsidizing low-end prepaid wireless devices and
subscriptions.

      Logistics services revenue increased as a result of a 47% increase in the
sales of prepaid airtime, which was up across all three divisions, and a 76%
increase in wireless devices handled. The increase in sales of prepaid airtime
was a result of the continued success of prepaid airtime offerings by our
customers such as Tele2, Vodafone, SFR and Virgin Mobile, and the continued
expansion of our electronic recharge terminals in our Europe division. The
strength and relatively large scale of our Americas logistics services business,
combined with our entry into the Slovak Republic with a logistics services
offering and an increase in demand by a key logistics services customer in
Australia, generated the significant increase in wireless devices handled
through logistics services. The revenue increase due to wireless device volume
increases were partially offset by negotiated price decreases with key
customers, customers qualifying for additional volume discounts, sales mix
changes among logistics customers (we were able to reduce operating costs in
line with average fee reductions).

      Revenue by Division:

<TABLE>
<CAPTION>
                                                              YEAR ENDED                      CHANGE
                                         ------------------------------------------------      FROM
                                          DECEMBER 31,    % OF      DECEMBER 31,     % OF     2003 TO
                                              2004        TOTAL        2003         TOTAL       2004
                                         -------------    -----     ------------    -----     -------
                                         (AS RESTATED)
                                                                 (AMOUNTS IN 000S)
<S>                                      <C>              <C>       <C>             <C>       <C>
The Americas........................      $   505,135       27%     $    469,618      27%        8%
Asia-Pacific........................          968,150       52%          995,798      56%       (2)%
Europe..............................          386,070       21%          300,960      17%       28%
                                          -----------      ---      ------------     ---        --
  Total.............................      $ 1,859,355      100%     $  1,766,376     100%        5%
                                          ===========      ===      ============     ===        ==
</TABLE>

      As discussed in the section entitled "Wireless Devices Handled by
Division," the Americas division generated the majority of the Company's 34%
growth in wireless devices handled. This was primarily accomplished through its
logistics services business, which does not have as much relative sensitivity to
the total revenue line. Europe, on the other hand, experienced higher relative
growth in its distribution business, which does have higher sensitivity in the
total revenue line. The Europe division generated the majority of the Company's
revenue growth. The Asia-Pacific division experienced a modest decline.

      The Europe division experienced a 14% increase in the average selling
price (excluding the effect of foreign currency fluctuations) and a 9% increase
in wireless devices handled through distribution. This contributed to $48
million of the Europe division's $85 million revenue growth. The added
functionality of wireless devices and an increase in mix of high-end wireless
data devices were principal causes of the increase in the average selling price.
The effect of the general strengthening of European currencies relative to the
U.S. dollar further contributed $31 million to our revenue growth. Excluding the
effect of foreign currency fluctuations, the Europe division's logistics
services business increased by $14.2 million. Growth in the sale of prepaid
airtime, which is classified under logistics services, constituted the majority
of the increase. Our entry into Finland (distribution) and the Slovak Republic
(logistics services) also contributed to the Europe division's revenue growth,
partially offset by a decline in accessories sold.

      The increase in revenue in the Americas division was predominantly due to
a 75% growth rate in wireless devices handled through its logistics services
business and the significant growth of prepaid airtime to its revenue stream.
This was partially offset by a reduction in the average fee in wireless device
transactions due to negotiated

                                     A-82
<PAGE>

price decreases with key customers, customers qualifying for additional volume
discounts and sales mix changes among logistics customers. The Americas division
was able to reduce its operating costs in line with average fee reductions.
Distribution revenue was flat. This was as a result of a 7% decline in wireless
devices handled through distribution, coupled with a decline in accessories
revenue and offset by a 9% increase in the average selling price of wireless
devices sold. The increase in the average selling price was due to the added
functionality of wireless devices.

      The Asia-Pacific division experienced a slight decrease in revenue. A 4%
decrease in wireless devices handled through distribution, combined with a 6%
decrease in average selling price (excluding the effect of foreign currency
fluctuations) were key contributors to the decrease. The general strengthening
of foreign currencies relative to the U.S. dollar, an increase in accessories
revenue and an increase in wireless devices handled through logistics services
partially offset the overall revenue decline.

GROSS PROFIT AND GROSS MARGIN

      Gross Profit by Service Line:

<TABLE>
<CAPTION>
                                                       YEAR ENDED                      CHANGE
                                    -----------------------------------------------     FROM
                                     DECEMBER 31,    % OF     DECEMBER 31,    % OF     2003 TO
                                         2004        TOTAL        2003        TOTAL     2004
                                    -------------    -----    ------------    -----    -------
                                    (AS RESTATED)
                                                          (AMOUNTS IN 000S)
<S>                                 <C>              <C>      <C>             <C>      <C>
Distribution...............           $  60,713        53%      $ 54,305        55%      12%
                                      ---------       ---       --------       ---       --
Logistics services                       53,344        47%        44,975        45%      19%
                                      ---------       ---       --------       ---       --
  Total....................           $ 114,057       100%      $ 99,280       100%      15%
                                      =========       ===       ========       ===       ==
</TABLE>

      Our gross profit was up 15%, which was significantly higher than our
revenue growth of 5%. Our 34% increase in wireless devices handled was the
primary driver for the increase in gross profit. Wireless devices handled
through logistics services grew by 76%, while wireless devices handled through
distribution declined by 4%. The gross profit per wireless device handled in
logistics services was lower than the gross profit per wireless device handled
through distribution (which is generally the case). The significant sales mix
shift toward logistics services, combined with the lower gross profit yield per
unit, explain the lower 15% growth in gross profit as compared to the 34% growth
in wireless devices handled. Logistics services generally requires less invested
capital and sales and administrative resources and has a lower risk profile than
distribution; therefore, logistics services generally warrants a lower gross
profit per unit. Improved efficiencies due to higher volumes and productivity
improvements also contributed to the increase in gross profit. The general
strengthening of foreign currencies relative to the U.S. dollar contributed $5.4
million to the increase.

      A significant portion of the increase in gross profit was generated by the
Americas division, which experienced high growth in wireless devices handled and
drove improvements in productivity. Through its revenue increase and as a result
of the general strengthening of foreign currencies relative to the U.S. dollar,
the Europe division also contributed to the improvement in gross profit. As a
result of a modest revenue decline and a 0.1 percentage point decrease in gross
margin, the Asia-Pacific division experienced a 1% decline in gross profit.

      The 12% improvement in gross profit in product distribution in light of a
1% increase in revenue was due to a sales mix shift from lower gross margin
distribution revenue in the Asia-Pacific division to the higher relative gross
margin distribution revenue in the Europe division, productivity improvements
and manufacturer promotional programs in Australia.

      The 19% improvement in gross profit in logistics services was primarily
the result of a 33% increase in revenue offset by a 2.1 percentage point
decrease in gross margin due to reduced activations and related mobile operator
promotional bonuses in our France operations.

                                     A-83
<PAGE>

      Gross Margin by Service Line:

<TABLE>
<CAPTION>
                                                            YEAR ENDED
                                                   ----------------------------   CHANGE FROM
                                                    DECEMBER 31,   DECEMBER 31,      2003 TO
                                                        2004           2003           2004
                                                   -------------   ------------   -------------
                                                   (AS RESTATED)
                                                                (AMOUNTS IN 000S)
<S>                                                <C>             <C>            <C>
Distribution................................             3.9%           3.5%       0.4% points
Logistics services..........................            17.8%          19.9%      (2.1)% points
                                                        ----           ----       -------------
  Total.....................................             6.1%           5.6%       0.5% points
                                                        ====           ====       =============
</TABLE>

      Gross margin improved by 0.5 percentage points to 6.1%. This was
principally the result of a sales mix shift from lower relative gross margin
distribution sales to higher relative gross margin logistics services revenue.

      The 0.4 percentage point increase in product distribution gross margin was
the result an increase in relative weight of the Europe division's revenue and
associated gross margin, which yielded a higher gross margin than the Americas
and Asia-Pacific divisions. The increase in sales of higher end higher gross
margin wireless devices and improvements in gross margin in accessory sales
further improved the Europe division's product distribution gross margin as
compared to 2003. The Asia-Pacific division gross margin through product
distribution was relatively flat as compared to 2003. This was the result
reduced sales in our India CDMA business and the tightening of incentives by a
key supplier within the division. The Americas experienced a slight increase in
product distribution gross margin because of improvements in productivity.

      Logistics services experienced a decline in gross margin due to a 47%
increase in the sale of prepaid airtime, which generally yields a lower gross
margin, and reduced activations and related fees in our operations in France.
The Americas division experienced a slight increase in logistics services gross
margin as a consequence of higher volumes and productivity improvements. These
offset reductions in average fees earned in the provision of services on
wireless devices.

   SELLING, GENERAL AND ADMINISTRATIVE ("SG&A") EXPENSES

<TABLE>
<CAPTION>
                                                            YEAR ENDED
                                                   ----------------------------    CHANGE FROM
                                                    DECEMBER 31,   DECEMBER 31,      2003 TO
                                                        2004           2003            2004
                                                   -------------   ------------   -------------
                                                   (AS RESTATED)
                                                                (AMOUNTS IN 000S)
<S>                                                <C>             <C>            <C>
SG&A expenses.................................      $   83,361     $   70,124      19%
Percentage of revenue.........................             4.4%           4.0%    0.4% points
                                                    ----------     ----------     ------------
</TABLE>

      SG&A expenses increased $13.2 million, or 19%, in 2004. As a percent of
revenue, SG&A expenses increased 0.4 percentage points. The increase in dollars
and SG&A as a percent of revenue was a result of:

      -     $3.7 million unfavorable effect of the strengthening of foreign
            currencies relative to the U.S. dollar,

      -     our entry into Finland and the Slovak Republic,

      -     increases in variable costs to support our growth and expansion in
            current markets, including our continued business development in
            India,

      -     a $2.1 million increase in expenses related to being a publicly
            traded company, which included $1.6 million related to compliance
            efforts with Section 404 of the Sarbanes-Oxley Act of 2002, and

      -     the effect of the benefit of a $900 thousand legal expense recovery
            in 2003, which did not recur in 2004.

      -     partially offset by a reduction of our named executive officer's
            bonuses of approximately $1.1 million

      SG&A expenses as a percent of revenue was adversely impacted by the effect
of a sales mix shift from product distribution to fee-based logistics services
had on total revenue growth. Since our 5% revenue growth did not

                                     A-84
<PAGE>

correlate with the 34% growth in wireless devices handled, comparisons of SG&A
expenses as a percent of revenue on a year-over-year basis may not be as
meaningful. As a percent of gross profit, SG&A expenses were flat, year over
year.

OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS

      Operating Income (Loss) by Division:

<TABLE>
<CAPTION>
                                                               YEAR ENDED
                                            ---------------------------------------------    CHANGE FROM
                                             DECEMBER 31,    % OF    DECEMBER 31,    % OF      2003 TO
                                                2004        TOTAL       2003        TOTAL        2004
                                            -------------   -----    -----------    -----    -----------
                                            (AS RESTATED)          (AMOUNTS IN 000S)
<S>                                         <C>             <C>      <C>            <C>      <C>
The Americas(1)...........................    $ 21,731       70        $  3,620       15        500%
Asia-Pacific..............................      11,614       38          14,088       59        (18)%
Europe....................................      (2,413)      (8)          5,987       26       (140)%
                                              --------      ---        --------      ---       ----
  Total...................................    $ 30,932      100%       $ 23,695      100        31%
                                              ========      ===        ========      ===       ===
</TABLE>

      Operating Income (Loss) as a Percent of Revenue by Division:

<TABLE>
<CAPTION>
                                                                    YEAR ENDED              CHANGE FROM
                                                           ----------------------------
                                                            DECEMBER 31,   DECEMBER 31,       2003 TO
                                                                2004           2003            2004
                                                           -------------   ------------    -------------
                                                           (AS RESTATED)
                                                                         (AMOUNTS IN 000S)
<S>                                                        <C>             <C>             <C>
The Americas(1)........................................         4.3%          0.8%          3.5% points
Asia-Pacific...........................................         1.2%          1.4%         (0.2%) points
Europe.................................................        (0.6)%         2.0%         (2.6%) points
                                                               ----           ---          -------------
  Total................................................         1.7%          1.3%         0.4% points
                                                               ====           ===          =============
</TABLE>

----------
(1) Includes a facility consolidation charge of $5.5 million in 2003.

      Operating income from continuing operations grew by $7.2 million, or 31%.
This improvement was chiefly the direct result of a 34% increase in wireless
devices handled that generated a $14.8 million, or 15%, increase in gross
profit, partially offset by a $13.2 million, or 19%, increase in SG&A spending.
The facility consolidation charges of $5.5 million in 2003, which did not recur
in 2004, also contributed to the improvement.

      The 34% increase in wireless devices handled was primarily driven by a 52%
growth rate in our largest division, the Americas division, as measured by
wireless devices handled. A high growth rate of our logistics services business
in the Americas division was the chief contributor to its growth. The Europe
division, which represented 4% of the Company's total wireless devices handled,
experienced a 47% growth rate. The Asia Pacific division, which represented 26%
of the Company's total wireless devices handled, experienced a less than 1%
increase. Although worldwide demand was strong in the wireless device industry,
declines in volume in our India CDMA business and modest volume growth in our
Brightpoint Asia Limited GSM export business contained the Asia-Pacific
division's overall growth. For the total Company, a sales mix shift from high
revenue product distribution wireless devices handled to lower revenue fee-based
logistics wireless devices handled affected our revenue growth rate, which was
5%. Included in our revenue growth was the sale of prepaid airtime, which grew
in all divisions, however, the increase was more apparent in the Europe
division. The higher volumes contributed to a 15% increase in gross profit and
the sales mix shift to higher gross margin logistics services revenue
contributed to a 0.5 percentage point increase in gross margin.

      The increase in SG&A expenses was related to $3.7 million unfavorable
effect of the strengthening of foreign currencies relative to the U.S. dollar,
our entry into Finland and the Slovak Republic, increases in variable costs to
support our growth and expansion in current markets, including our continued
business development in India, a $2.1 million increase in expenses related to
being a publicly traded company, which included $1.6 million related to

                                     A-85
<PAGE>

compliance efforts with Section 404 of the Sarbanes-Oxley Act of 2002, and the
effect of the benefit of a $900 thousand legal expense recovery in 2003, which
did not recur in 2004.

      The general strengthening of foreign currencies relative to the U.S.
dollar had an increasing effect on revenue, gross profit, SG&A expenses and
operating income. The effect on operating income was 6%.

      The Americas division experienced a $18.1 million increase in operating
income from continuing operations. This was the result of a 52% increase in
wireless devices handled that contributed to a 40% increase in gross profit in
conjunction with a modest 5% increase in SGA expenses, excluding corporate
allocations. The increase in wireless devices handled was predominantly driven
by its logistics services business and was partially offset by a decline in its
product distribution business. Demand was strong in the Americas division for
our logistics services customers for whom we fulfilled orders. Demand in our
distribution business was significantly and negatively affected by a key
supplier's relatively weaker market position in GSM and CDMA as compared to TDMA
and in related shifts in demand by our mobile operator customers. The facility
consolidation charges of $5.5 million in 2003 related to the closure of our
former Richmond, California, call center, which did not recur in 2004, also
contributed to the improvement. The Americas division's operating income was
also negatively affected by our increased costs of being a public company.

      The increase in operating income from continuing operations in the
Americas division was partially offset by reductions in the Asia-Pacific and
Europe divisions. The reduction in the Asia-Pacific division was related to
mixed operating results among the various subsidiaries within the division.
Significant increases in wireless devices handled in Australia and New Zealand
were offset by declines in volume in our India CDMA business and in the
Philippines. Additionally, relatively modest volume increase of 7% in our
Brightpoint Asia Limited GSM export business contained the Asia-Pacific
division's overall growth. Primarily due to a decrease in the average selling
price of wireless devices handled through distribution and partially offset by
the favorable effect of the general weakening of the U.S. dollar relative to
foreign currencies, revenue for the division declined by 2%. Furthermore, the
division experienced a 0.3 percentage point decline in gross margin. This was
largely the result of reduced sales in our India CDMA business and the
tightening of incentives by a key supplier in certain markets. A significant
contributor to the reduction in operating income from continuing operations was
a $2.4 million operating loss in our India CDMA business. This business was
profitable in 2003 when we were successful at launching a certain model of a
CDMA wireless device with a large mobile operator. In 2004, we were unable to
launch follow-on CDMA products at the same quantities and incurred additional
costs related to building our operating infrastructure for the long term. The
Asia-Pacific division's operating income was also negatively affected by our
increased costs of being a public company.

      Although our Europe division experienced a 47% increase in wireless
devices handled and a related 28% increase in revenue, its operating income
declined by $8.4 million, or 140%. Our France business, which incurred high bad
debt expenses mostly in its distribution business and higher SG&A expenses
related to the expansion of its retail outlets, decreased its operating income
significantly. We entered into Finland and the Slovak Republic in 2004 and both
businesses incurred operating losses. Conversely, our Germany business, which
had incurred significant operating losses in previous years, generated a
positive operating result. The initiation of sales of high-end wireless data
devices contributed to our Germany business' improved operating results. The
Europe division's operating income was also negatively affected by our increased
costs of being a public company.

NET INTEREST EXPENSE

<TABLE>
<CAPTION>
                                                                                  YEAR ENDED
                                                                          -----------------------------    CHANGE FROM
                                                                          DECEMBER 31,     DECEMBER 31,       2003 TO
                                                                              2004           2003              2004
                                                                          ------------     -------------   ------------
                                                                                        (AMOUNTS IN 000S)
<S>                                                                       <C>              <C>             <C>
Interest expense.....................................................      $   1,870        $   1,815                3%
Interest income......................................................           (986)            (652)              51%
                                                                           ---------        ---------      ------------
Net interest expense.................................................      $     884        $   1,163              (24)%
                                                                           =========        =========      =============
Percentage of revenue................................................            0.0%             0.1%     (0.1)% points
</TABLE>

      Net interest expense declined by $279 thousand, or 24%, from 2003.
Interest expense includes interest on outstanding debt, fees paid for unused
capacity on credit lines and amortization of deferred financing fees. Interest

                                     A-86
<PAGE>


expense was offset by an increase in interest income from short-term
investments. Our cash balances fluctuate throughout the year as we routinely
make large payments to suppliers and collect large receipts from customers.
These payments or collections can be in excess of $10 million on any given day
and the timing of these payments or collections can cause a need to draw against
our existing credit facilities or provide excess cash to invest on a short-term
basis, which can affect our interest expense and interest income.

OTHER EXPENSES

<TABLE>
<CAPTION>
                                                      YEAR ENDED                    CHANGE
                                           ---------------------------------         FROM
                                            DECEMBER 31,       DECEMBER 31,         2003 TO
                                               2004               2003               2004
                                           -------------    ----------------       -------
                                                            (AMOUNTS IN 000s)
<S>                                        <C>              <C>                    <C>
Other expenses.......................        $   1,860          $   2,251            (17)%
Percentage of revenue................              0.1%               0.1%
</TABLE>

      Other expenses decreased by $391 thousand, or 17%. This line item is
composed of the cost on the sale of certain receivables to financial
institutions conducted routinely throughout the year by certain subsidiaries,
fines and penalties, and other items that are not operating expenses. The cost
on the sale of certain receivables was $1.2 million and $1.3 million for 2004
and 2003, respectively. Total receivables sold were $383 million and $265
million during 2004 and 2003, respectively. Included in other expenses in 2003
was a $450 thousand fine paid in connection with the Company's settlement with
the SEC, which did not recur in 2004.

INCOME TAX EXPENSE

<TABLE>
<CAPTION>
                                                      YEAR ENDED                     CHANGE
                                           ---------------------------------          FROM
                                            DECEMBER 31,       DECEMBER 31,          2003 TO
                                               2004               2003                2004
                                           -------------    ----------------       -----------
                                           (AS RESTATED)
                                                            (AMOUNTS IN 000s)
<S>                                        <C>              <C>                    <C>
Income tax expense..................        $   8,230            $   4,793             72%
Effective tax rate..................             29.2%                24.1%         5.1% points
</TABLE>

      The $3.4 million increase in income tax expense was a result of increased
operating income and a 29.2% effective income tax rate in 2004, as compared to a
24.1% effective income tax rate in 2003. The increase in the effective income
tax rate was primarily attributable to the increased profitability of our
business in certain jurisdictions such as North America and Australia, which
have higher statutory tax rates than other jurisdictions that we operate in, and
the recognition of valuation allowances against the tax benefit of net operating
losses for four subsidiaries whose ability to realize the benefits of net
operating losses is uncertain at this time. Our effective income tax rate
differs from the United States Federal income tax rate of 35% due to a
significant portion of our taxable income having been generated in foreign tax
jurisdictions, many which have lower tax rates.

INCOME FROM CONTINUING OPERATIONS

<TABLE>
<CAPTION>
                                                                                        YEAR ENDED                     CHANGE
                                                                             ---------------------------------          FROM
                                                                              DECEMBER 31,       DECEMBER 31,          2003 TO
                                                                                 2004               2003                2004
                                                                             -------------    ----------------       -----------
                                                                             (AS RESTATED)
                                                                                              (AMOUNTS IN 000s)
<S>                                                                          <C>              <C>                    <C>
Operating income........................................................         $  30,932        $  23,695              31%
Interest expense -- net.................................................               884            1,163             (24)%
Loss on extinguishment of debt..........................................               --               365             N/A
Other expenses..........................................................             1,860            2,251             (17)%
                                                                                 ---------        ---------             ----
Income from continuing operations before taxes..........................            28,188           19,916              42%
Income tax expense......................................................             8,230            4,793              72%
                                                                                 ---------        ---------             ----
Income from continuing operations before minority interest..............            19,958           15,123              32%
Income from continuing operations.......................................            19,958           15,147              32%
Diluted earnings per share..............................................         $    1.04        $    0.80              30%
</TABLE>

                                       A-87

<PAGE>

      Income from continuing operations grew by $4.8 million, or 32%. This
improvement was chiefly the direct result of a 34% increase in wireless devices
handled that generated a $14.8 million, or 15%, increase in gross profit,
partially offset by a $13.2 million, or 19%, increase in SG&A spending and $3.4
million increase in income tax expense. The facility consolidation charges of
$5.5 million in 2003, which did not recur in 2004, also contributed to the
improvement. Our effective income tax rate increased from 24.1% to 29.2% in
2004, which was primarily attributable to the increased profitability in certain
tax jurisdictions such as North America and Australia, which have higher average
statutory tax rates than other tax jurisdictions where we operate, and the
recognition of valuation allowances against the tax benefit of net operating
losses for four subsidiaries whose ability to realize the benefits of net
operating losses is uncertain at this time.

      Income from continuing operations per diluted share was $1.04, as compared
to $0.80 in 2003.

  DISCONTINUED OPERATIONS

<TABLE>
<CAPTION>
                                                                                      YEAR ENDED                     CHANGE
                                                                           ---------------------------------          FROM
                                                                            DECEMBER 31,       DECEMBER 31,         2003 TO
                                                                               2004               2003                2004
                                                                           -------------    ----------------      ------------
                                                                                            (AMOUNTS IN 000S)
<S>                                                                        <C>              <C>                   <C>
Loss from discontinued operations.....................................       $    (475)       $  (2,890)                   (84)%
Loss on disposal of discontinued operations...........................          (5,713)            (528)                   982%
                                                                             ---------        ---------           ------------
  Total discontinued operations.......................................       $  (6,188)       $  (3,418)                    81%
                                                                             =========        =========           ============
Percentage of Revenue.................................................            (0.3)%           (0.2)%          0.1% points
Diluted earnings per share............................................       $   (0.32)       $   (0.18)                    78%
</TABLE>

      The loss from discontinued operations for 2004 was mainly ascribable to
losses incurred in Brightpoint Ireland's operations of $309 thousand, an
unrealizable asset written off and various professional and liquidation fees.
The loss on disposal of discontinued operations for 2004, was largely
attributable to a $3.8 million loss on the sale of Brightpoint Ireland, a $584
thousand loss on the sale of one of our subsidiaries, Brightpoint do Brasil
Ltda., and unrealized foreign currency translation losses caused by the
strengthening of foreign currencies relative to the U.S. dollar. On February 19,
2004, our subsidiary, Brightpoint Holdings B.V., completed the sale of its
entire interest in Brightpoint Ireland to Celtic Telecom Consultants Ltd. Cash
consideration for the sale was approximately $1.7 million. The $3.8 million loss
included the non-cash write-off of approximately $1.6 million of cumulative
currency translation adjustments.

      The loss from discontinued operations for 2003 was primarily attributable
to losses incurred by Brightpoint Ireland's operations of $2.2 million and
various professional and liquidation fees. The loss on disposal of discontinued
operations for 2003 was significantly comprised of unrealized foreign currency
translation losses caused by the strengthening of foreign currencies relative to
the U.S. dollar and various professional and liquidation fees, substantially
offset by the receipt of $1.3 million in contingent consideration relating to
the divestiture of our Middle East operations in the third quarter of 2002.

      Our decisions to exit certain markets were based upon historical and
projected profitability, historical and projected return on invested capital,
the economic, legal, and regulatory environment and other factors. We plan on
continuing to evaluate non-performing businesses and may restructure those
businesses or exit the markets in which they operate. We have been successful at
restructuring certain non-performing businesses and have made decisions to
remain in certain markets due to the improved financial performance and
prospects for continual improvement.

  NET INCOME

<TABLE>
<CAPTION>
                                                                                        YEAR ENDED                     CHANGE
                                                                             ---------------------------------          FROM
                                                                              DECEMBER 31,       DECEMBER 31,          2003 TO
                                                                                 2004               2003                2004
                                                                             -------------    ----------------       -----------
                                                                             (AS RESTATED)
                                                                                              (AMOUNTS IN 000S)
<S>                                                                          <C>              <C>                    <C>
Net income (loss).....................................................        $   13,770        $   11,729                    17%
Percentage of revenue.................................................               0.7%              0.7%           0.0% points
Diluted earnings per share............................................        $     0.72        $     0.62                    16%
</TABLE>

                                      A-88
<PAGE>

      Net income grew by $2.0 million, or 17%. This improvement was chiefly the
direct result of a 34% increase in wireless devices handled that generated a
$14.8 million, or 15%, increase in gross profit, partially offset by a $13.2
million, or 19%, increase in SG&A spending, $3.4 million increase in income tax
expense and $2.8 million increased loss from discontinued operations. The
facility consolidation charges of $5.5 million in 2003, which did not recur in
2004, also contributed to the improvement. Our effective income tax rate
increased from 24.1% to 29.2% in 2004, which was primarily attributable to the
increased profitability in certain jurisdictions such as North America and
Australia, which have higher average statutory tax rates than other
jurisdictions that we operate in, and the recognition of valuation allowances
against the tax benefit of net operating losses for four subsidiaries whose
ability to realize the benefits of net operating losses is uncertain at this
time. The loss from discontinued operations for 2004 was largely attributable to
a loss on the sale of Brightpoint Ireland, a loss on the sale of Brightpoint
Brazil and unrealized foreign currency translation losses caused by the
strengthening of foreign currencies relative to the U.S. dollar.

      Net income per diluted share was $0.72, as compared to $0.62 in 2003.

RETURN ON INVESTED CAPITAL FROM OPERATIONS, LIQUIDITY AND CAPITAL RESOURCES

   RETURN ON INVESTED CAPITAL FROM OPERATIONS ("ROIC")

      We believe that it is equally as important for a business to manage its
balance sheet as its statement of operations. A measurement that ties the
statement of operation performance with the balance sheet performance is Return
on Invested Capital from Operations, or ROIC. We believe if we are able to grow
our earnings while minimizing the use of invested capital, we will be optimizing
shareholder value and concurrently preserving resources in preparation for
further potential growth opportunities. We take a simple approach in calculating
ROIC: we apply an estimated average tax rate to the operating income of our
continuing operations with adjustments for unusual items, such as facility
consolidation charges, and apply this tax-adjusted operating income to our
average capital base, which, in our case, is our shareholders' equity and debt.
The details of this measurement for 2004, 2003 and 2002 are outlined below.

<TABLE>
<CAPTION>
                                                                               YEAR ENDED DECEMBER 31,
                                                                     ------------------------------------------
                                                                          2004          2003           2002
                                                                     -------------   -----------   ------------
                                                                     (AS RESTATED)
                                                                                  (AMOUNTS IN 000S)
<S>                                                                  <C>             <C>           <C>
Operating income after taxes:
Operating income from continuing operations......................    $    30,932     $    23,695   $     1,741
Plus: facility consolidation charge..............................           (236)          5,461            --
Less: estimated income taxes(1)..................................         (8,963)         (7,027)         (686)
                                                                     -----------     -----------   -----------
  Operating income after taxes...................................    $    21,773     $    22,129   $     1,055
                                                                     ===========     ===========   ===========
Invested capital:
Debt.............................................................             --     $    16,207   $    22,120
Shareholders' equity.............................................        150,737         147,584       113,643
                                                                     -----------     -----------   -----------
  Invested capital...............................................    $   150,737     $   163,791   $   135,763
                                                                     ===========     ===========   ===========
Average invested capital(2)......................................    $   144,363     $   137,463   $   215,432
                                                                     ===========     ===========   ===========
ROIC(3)..........................................................             15%             16%            1%
                                                                     ===========     ===========   ===========
</TABLE>

--------------
(1)   Estimated income taxes were calculated by multiplying the sum of operating
      income from continuing operations and the facility consolidation charge by
      the respective periods' effective tax rate.

(2)   Average invested capital for annual periods represents the simple average
      of the invested capital amounts for the prior year end and at each quarter
      end in the respective annual period.

(3)   ROIC is calculated by dividing operating income after taxes by average
      invested capital.

      Our ROIC was approximately 15% for 2004 and approximately 16% for 2003 and
1% for 2002. For 2004, the increase in average invested capital was offset by
the decrease in operating income after taxes. The increase in

                                      A-89
<PAGE>

average invested capital is a result of earned income, increased common stock
and additional paid-in capital through the exercise of employee stock options
and related tax benefits and a reduction in accumulated other comprehensive
income (loss) due to the general strengthening of foreign currencies relative to
the U.S. dollar, partially offset by purchases of the Company's common stock and
a decrease in debt. The primary causes for the improvement in ROIC in 2003 as
compared to 2002 was the $22 million improvement in operating income.

      CASH CONVERSION CYCLE

<TABLE>
<CAPTION>
                                                                  YEAR ENDED
                                                                  DECEMBER 31,
                                                          ---------------------------
                                                              2004       2003   2002
                                                          AS RESTATED
<S>                                                       <C>            <C>    <C>
Days sales outstanding in accounts receivable.........         27         24      29
Days inventory on-hand................................         24         25      23
Days payable outstanding..............................        (44)       (44)    (39)
                                                              ---        ---     ---
  Cash conversion cycle days..........................          7          5      13
                                                              ===        ===     ===
</TABLE>

      A key source of our liquidity is our ability to invest in inventory, sell
the inventory to our customers, pay our suppliers and collect cash from our
customers. We refer to this as the cash conversion cycle. The cash conversion
cycle is measured by the number of days it takes to effect the cycle of
investing in inventory, selling the inventory, paying suppliers and collecting
cash from customers. The components in the cash conversion cycle are days of
sales outstanding in accounts receivable, days of inventory on hand, and days of
payables outstanding. The cash conversion cycle, as we measure it, is the
netting of days of sales outstanding in accounts receivable and days of
inventory on hand with the days of payable outstanding. Circumstances when the
cash conversion cycle decreases generally generate cash for the Company.
Conversely, circumstances when the cash conversion cycle increases generally
consume cash in the form of additional investment in working capital.

      During 2004, the cash conversion cycle increased to 7 days from 5 days in
2003. The change in the cash conversion cycle was the result of a 2-day decrease
in the days of payable and a 2-day increase in the days of sales outstanding,
partially offset by a 1-day decrease in the days of inventory outstanding. The
decrease in days of payable outstanding was substantially due to the timing of
inventory received in conjunction with related payment terms from certain
suppliers and a mix shift in purchases from our largest supplier, Nokia, from
whom we have negotiated certain credit terms to other suppliers with whom our
purchasing power is limited and were not able to negotiate comparable credit
terms. The increase in the days of sales outstanding was mostly due to the high
level of sales in the fourth quarter relative to the first three quarters caused
by high demand for our products and services during the holiday season. We were
able to attain days of inventory on hand of 24 days by monitoring our inventory
levels very closely and consciously striving to keep our investment low while
still holding enough inventory to meet the high customer demand during the
holiday season.

      A cash conversion cycle of 7 days is a low number for a distribution
company and it is unlikely that we can sustain this short cycle for an extended
period of time. From time to time, we may pay our suppliers prior to the invoice
due date in order to take advantage of early settlement discounts. Increases in
the cash conversion cycle would have the effect of consuming our cash, causing
us to borrow from lenders or issuing stockholders' equity to fund the related
increase in working capital. Our potential investments in new markets may cause
us to increase our inventory levels in conditions where our customer base is
relatively new and whose purchasing behavior is less predictable. This situation
can have the effect of increasing our cash conversion cycle and consequently
consume our cash or increase our debt levels.

      The detail calculation of the components of the cash conversion cycle is
as follows:

            (A) Days sales outstanding in accounts receivable = Ending accounts
      receivable for continuing operations divided by average daily revenue
      (inclusive of value-added taxes for foreign operations) for the period.

            (B) Days inventory on-hand = Ending inventory for continuing
      operations divided by average daily cost of revenue (excluding indirect
      product and service costs) for the period.

                                       A-90
<PAGE>

            (C) Days payables outstanding = Ending accounts payable for
      continuing operations divided by average daily cost of revenue (excluding
      indirect product and service costs) for the period.

<TABLE>
<CAPTION>
                                                                                                 YEAR ENDED DECEMBER 31,
                                                                                ---------------------------------------------------
                                                                                     2004               2003               2002
                                                                                ---------------    ---------------    -------------
                                                                                 (AS RESTATED)
                                                                                                  (AMOUNTS IN 000S)
<S>                                                                             <C>                <C>                <C>
DAYS SALES OUTSTANDING IN ACCOUNTS RECEIVABLE:
  Continuing operations revenue.............................................    $     1,859,355    $     1,766,376    $   1,229,777
  Value-added taxes invoiced for continuing operations......................            129,043            102,961           61,637
                                                                                ---------------    ---------------    -------------
  Total continuing operations revenue and value-added taxes.................          1,988,398          1,869,337        1,291,415
  Daily sales including value-added taxes...................................              5,523              5,193            3,587
  Continuing operations ending accounts receivable..........................    $       148,321    $       122,273    $     103,453
  Days sales outstanding in Accounts Receivable(A)..........................                 27                 24               29
                                                                                ===============    ===============    =============
DAYS INVENTORY ON-HAND
  Continuing operations cost of revenue.....................................    $     1,745,298    $     1,666,334    $   1,162,432
  Indirect product and service costs........................................           (100,995)           (89,837)         (90,156)
                                                                                ---------------    ---------------    -------------
  Total continuing operations cost of products sold.........................          1,644,303          1,576,497        1,072,276
  Daily cost of products sold...............................................              4,568              4,379            2,979
  Continuing operations ending inventory....................................    $       110,089    $       107,763    $      67,677
  Days inventory on-hand(B).................................................                 24                 25               23
                                                                                ===============    ===============    =============
DAYS PAYABLES OUTSTANDING IN ACCOUNTS PAYABLE
  Daily cost of products sold...............................................    $         4,568    $         4,379    $       2,979
  Continuing operations ending accounts payable.............................    $       201,602    $       193,961    $     115,500
  Days payable outstanding(C)...............................................                 44                 44               39
                                                                                ===============    ===============    =============
  Cash conversion cycle days (A+B-C)........................................                  7                  5               13
                                                                                ===============    ===============    =============
</TABLE>

CONSOLIDATED STATEMENTS OF CASH FLOWS

      We use the indirect method of preparing and presenting our statements of
cash flows. In our opinion, it is more practical than the direct method and
provides the reader with a good perspective and analysis of the Company's cash
flows.

NET CASH PROVIDED BY OPERATING ACTIVITIES

      Net cash provided by operating activities was $7.7 million. The
significant items within the adjustments to reconcile net income to net cash
provided by operating activities include:

<TABLE>
<CAPTION>
                                                                                         YEAR ENDED DECEMBER 31,
                                                                                      -----------------------------
                                                                                          2004             2003
                                                                                      -------------    ------------
                                                                                      (AS RESTATED)
                                                                                            (AMOUNTS IN 000S)
<S>                                                                                   <C>              <C>
Net income.................................................................           $      13,770    $     11,729
Adjustments to reconcile net income to net cash provided by operating
  activities:
  Depreciation and amortization............................................                  10,815          12,733
  Facility consolidation charge............................................                    (236)          5,461
  Change in deferred taxes.................................................                     563           2,010
  Discontinued operations..................................................                   6,188           3,418
  Net cash used by discontinued operations.................................                  (1,290)         (2,985)
     Income tax benefits from exercise of stock options....................                   5,418             445
  Gain on debt extinguishment..............................................                      --             365
  Pledged cash requirements and other......................................                   3,212          (2,251)
Changes in operating assets and liabilities, net of effects from
  acquisitions and divestitures:
     Accounts receivable...................................................                 (19,744)         (4,306)
     Inventories...........................................................                   1,588         (27,575)
     Other operating assets................................................                  (2,103)            806
     Accounts payable and accrued expenses.................................                 (10,439)         55,677
                                                                                      -------------    ------------
Net cash provided by operating activities..................................           $       7,742    $     55,527
                                                                                      =============    ============
</TABLE>

                                      A-91

<PAGE>

      Our primary source of cash in 2004 was the cash generated by operating
income. The cash generated by operations was partially offset by the use of cash
in operating assets and liabilities. The increase in accounts receivable and
decrease accounts payable consumed cash during the year, and was partially
offset by a reduction in inventories. The increase in accounts receivable was
attributable to a higher proportion of sales at the end of December 2004 as
compared to 2003. The decrease in accounts payable was due primarily to timing
of inventory receipts and related payments, increased purchases from suppliers
who offer less favorable terms than in previous years and our determination to
utilize certain suppliers' offers of early settlement discounts. The decrease in
inventories was due to our continued focus in optimizing inventory levels.

<TABLE>
<CAPTION>
                                               DECEMBER 31,   DECEMBER 31,
                                                   2004           2003
                                              -------------   ------------
                                              (AS RESTATED)
                                                   (AMOUNTS IN 000S)
<S>                                           <C>             <C>
Working capital...........................    $     94,667    $    89,345
Current ratio.............................        1.33 : 1       1.30 : 1
</TABLE>

      We have historically satisfied our working capital requirements
principally through cash flow from operations, vendor financing, bank borrowings
and the issuance of equity and debt securities. The increase in working capital
at December 31, 2004, compared to December 31, 2003, was mostly comprised of an
increase in accounts receivable and unfunded contract financing activities,
offset by the $24 million repurchase of our common stock and a decrease in
accounts payable. We believe that positive cash flow from operations and
available bank borrowings will be sufficient to continue funding our short-term
capital requirements. However, significant changes in our business model,
significant operating losses or expansion of operations in the future may
require us to seek additional and alternative sources of capital. Consequently,
there can be no assurance that we will be able to obtain any additional funding
on terms acceptable to us or at all.

INVESTING ACTIVITIES

<TABLE>
<CAPTION>
                                                                       YEAR ENDED
                                                                      DECEMBER 31,
                                                                ----------------------
                                                                   2004        2003
                                                                ----------  ----------
                                                                   (AMOUNTS IN 000S)
<S>                                                             <C>         <C>
Capital expenditures..........................................  $   (8,343) $   (6,057)
Purchase acquisitions, net of cash acquired...................      (1,634)     (2,880)
Cash effect of divestitures...................................         576       1,328
Decrease in funded contract financing receivables.............       4,398       5,887
Other.........................................................        (920)        154
                                                                ----------  ----------
Net cash used in investing activities.........................  $   (5,923) $   (1,568)
                                                                ==========  ==========
</TABLE>

      Net cash used in investing activities was $5.9 million largely due to $8.3
million used for capital expenditures partly offset by a $4.4 million decrease
in net funded contract financing receivables. Capital expenditures were
primarily directed toward improving our information systems, particularly in the
United States and Australia, our entries into India and the Slovak Republic,
which included new office space and basic information systems infrastructure,
the purchase of operating assets in the U.S. that were previously leased and
retail development in France. We offer financing of inventory and receivables to
certain mobile operator customers and their agents and manufacturer customers
under contractual arrangements. Under these contracts we manage and finance
inventories and receivables for these customers resulting in a contract
financing receivable. The decrease in contract financing receivables was due to
timing of product receipts and payments at the end of the quarter.

FINANCING ACTIVITIES

<TABLE>
<CAPTION>
                                                                              YEAR ENDED
                                                                             DECEMBER 31,
                                                                    ------------------------------
                                                                        2004               2003
                                                                    -----------        -----------
                                                                           (AMOUNTS IN 000S)
<S>                                                                 <C>                <C>
Net proceeds (payments) on credit facilities.....................   $   (16,500)       $     2,761
Pledged cash requirements........................................         5,000             (5,000)
Purchase of treasury stock.......................................       (24,010)                 -
</TABLE>

                                     A-92
<PAGE>

<TABLE>
<S>                                                                                <C>                <C>
Repurchase of convertible notes.................................................             -            (11,980)
Proceeds from common stock issuances under employee stock option and purchase
  plans.........................................................................         1,013             12,383
                                                                                   -----------        -----------
Net cash used in financing activities...........................................   $   (34,497)       $    (1,836)
                                                                                   ===========        ===========
</TABLE>

      Net cash used in financing activities was primarily comprised of $24
million repurchase of our common stock and $16 million for repayment of credit
facilities, partially offset by a reduction in pledged cash of $5 million. On
November 30, 2004, we announced that our Board of Directors had approved a share
repurchase program authorizing the Company to repurchase up to $20 million of
the Company's common stock by December 31, 2005. During this period, the Company
repurchased 208,100 shares of its own common stock at an average price of $19.28
per share, totaling $4.0 million. As of December 31, 2004, approximately $16.0
million may be used to purchase shares under this program. Additionally, on June
4, 2004, we announced that our Board of Directors had approved a share
repurchase program authorizing the Company to repurchase up to $20 million of
our common stock. We made such repurchases in June of 2004 through open market
and a privately negotiated transaction. Detail of the repurchases is provided in
the table below.

Issuer purchases of equity securities:

<TABLE>
<CAPTION>
                                                                    TOTAL NUMBER                       MAXIMUM
                                                                      OF SHARES     TOTAL AMOUNT   DOLLAR VALUE OF
                                                                    PURCHASED AS    PURCHASED AS     SHARES THAT
                                                                     PART OF THE     PART OF THE     MAY YET BE
                                           TOTAL NUMBER   AVERAGE     PUBLICLY        PUBLICLY        PURCHASED
                                            OF SHARES   PRICE PAID    ANNOUNCED       ANNOUNCED       UNDER THE
QUARTER OF PURCHASE                         PURCHASED    PER SHARE     PROGRAM         PROGRAM         PROGRAM
-------------------                         ----------  ----------  ------------   -------------    ------------
<S>                                        <C>          <C>         <C>            <C>              <C>
Second quarter 2004....................      1,397,500   $ 14.31      1,397,500     $ 19,996,773            None
Fourth quarter 2004....................        208,100   $ 19.28        208,100     $  4,012,769    $ 15,987,231
                                             ---------   -------      ---------     ------------    ------------
Total/Average..........................      1,605,600   $ 14.95      1,605,600     $ 24,009,542    $ 15,987,231
                                             =========   =======      =========     ============    ============
</TABLE>

      In December 2003, we pledged $5 million to support a $4.2 million
short-term line of credit in India, due to restrictions on foreign capital,
which precluded us from utilizing our own funds, other than the amount pledged,
to meet these needs. This short-term line of credit was paid in the first
quarter of 2004, thus releasing the pledged cash. We may from time to time
pledge cash to collateralize lines of credit in markets where there are
restrictions of the movement of funds.

LINES OF CREDIT

      The table below summarizes lines of credit that were available to the
Company as of December 31, 2004:

<TABLE>
<CAPTION>

                                                                                         LETTERS OF CREDIT &        NET
                                      COMMITMENT  GROSS AVAILABILITY     OUTSTANDING         GUARANTEES        AVAILABILITY
                                      ----------  ------------------     -----------         ----------        ------------
                                                                        (AMOUNTS IN 000S)
<S>                                   <C>         <C>                    <C>             <C>                   <C>
North America......................   $  70,000        $ 38,427              $ --              $ 5,000          $  33,427
Australia..........................      37,879          36,477                --                4,349             32,128
New Zealand........................       8,618           8,543                --                   --              8,543
Sweden.............................       2,159           2,159                --                   --              2,159
Philippines........................         889             889                --                   --                889
France.............................          --              --                --                   --                 --
                                      ---------        --------              ----              -------          ---------
Total..............................   $ 119,545        $ 86,495              $ --              $ 9,349          $  77,146
                                      =========        ========              ====              =======          =========
</TABLE>

      Additional details on the above lines of credit are disclosed in Note 12
of the Notes to Consolidated Financial Statements.

      We prefer our subsidiaries to open local lines of credit to support their
borrowing needs. For subsidiaries where we do not have local lending
relationships, we use our foreign finance subsidiary, Brightpoint Holdings B.V.,
to act as a lender through intercompany loans. Brightpoint Holdings B.V. funds a
significant portion of its intercompany loans through deposits from certain
subsidiaries, which have generated excess cash. There are circumstances where

                                     A-93
<PAGE>

subsidiaries utilize both local lenders and our foreign finance subsidiary. We
plan on continuing our pursuit of third party lending relationships in the
countries where our subsidiaries conduct business.

      Brightpoint North America L.P. entered into an agreement with GE Capital
in 2001, which has been amended periodically as circumstances warranted changes
to the agreement and was amended and restated in 2004 to, among other things,
extend the term through 2007. Management believes these amendments have
generally been favorable to the Company. We believe that we have developed a
good relationship with GE Commercial Finance, which has led to the inception of
facilities in Australia in 2002 and New Zealand in 2003.

      Our financial condition has improved significantly since 2001. Our debt
structure as measured by gross-debt-to-total-capitalization ratio has dropped
from 53% in 2001 to 0% in 2004. Our cash conversion cycle has dropped from over
13 days in 2002 to 7 days in 2004. This is indicative of improved management of
key balance sheet accounts such as accounts receivable, inventory, and accounts
payable. These factors, among others, have improved our risk profile in the eyes
of current and potential lenders.

OFF-BALANCE SHEET ARRANGEMENTS -- ACCOUNTS RECEIVABLE TRANSFERS

      During the years ended December 31, 2004 and 2003, we entered into certain
transactions or agreements with banks and other third-party financing
organizations in France, Norway and Sweden, with respect to a portion of its
accounts receivable in order to reduce the amount of working capital required to
fund such receivables. During the year ended December 31, 2003, we also entered
into certain transactions or agreements with banks and other third-party
financing organizations in Ireland with respect to the sale of a portion of its
accounts receivable. These transactions have been treated as sales pursuant to
current accounting principles generally accepted in the United States and,
accordingly, are accounted for as off-balance sheet arrangements with the
exception of the receivable sale facility with GE Factofrance. In April 2004,
through one of our subsidiaries, Brightpoint (France) SARL, entered into a
receivable sale facility with GE Factofrance. The facility does not meet the
requirements of a transfer under current accounting principles generally
accepted in the United States and therefore amounts advanced under this facility
against receivables not collected by GE Factofrance are included on the
Consolidated Balance Sheet under lines of credit and accounts receivable. Net
funds received, other than from GE Factofrance, reduced the accounts receivable
outstanding while increasing cash. Fees incurred are recorded as losses on the
sale of assets and are included as a component of "Other expenses" in the
Consolidated Statements of Operations.

      Net funds received from the sales of accounts receivable for continuing
operations during the years ended December 31, 2004 and 2003, totaled $381
million and $265 million, respectively. Fees, in the form of discounts, incurred
in connection with these sales totaled $1.2 million and $1.4 million during 2004
and 2003, respectively. Approximately $1.2 million and $1.3 million in 2004 and
2003, respectively, of these fees relate to continuing operations and are
included as a component of "Other expenses" in the Consolidated Statements of
Operations. The remainder of the fees in 2003 was related to our former Mexico
operations and was included in loss from discontinued operations in the
Consolidated Statements of Operations.

      We are the collection agent on behalf of the bank or other third-party
financing organization for many of these arrangements and have no significant
retained interests or servicing liabilities related to accounts receivable sold.
We may be required to repurchase certain accounts receivable sold in certain
circumstances, including, but not limited to, accounts receivable in dispute or
otherwise not collectible, accounts receivable in which credit insurance is not
maintained and a violation of, the expiration or early termination of the
agreement pursuant to which these arrangements are conducted. During 2004 and
2003, as a result of the recourse arrangements, we repurchased approximately $0
and $234 thousand of receivables, respectively, from banks or other third party
financing institutions. These agreements require our subsidiaries to provide
collateral in the form of pledged assets and/or, in certain situations, a
guarantee by the Company of its subsidiaries' obligations.

      Pursuant to these arrangements, approximately $37 million and $46 million
of trade accounts receivable were sold to and held by banks and other
third-party financing institutions at December 31, 2004, and 2003, respectively.
Amounts held by banks or other financing institutions at December 31, 2004, were
for transactions related to the Company's Norway, Sweden and France
arrangements. All other arrangements have been terminated or expired.

                                     A-94
<PAGE>

CAPITAL RESOURCES

      Capital expenditures were $8.3 million, $6.1 million and $8.7 million for
2004, 2003 and 2002, respectively. Capital expenditures were largely directed
toward improving our information systems, particularly in the U.S., our entries
into India and the Slovak Republic, which included new office space and basic
information systems infrastructure and the purchase of operating assets in the
U.S. that were previously leased. Expenditures for capital resources
historically have been generally composed of information systems, including
upgrades and improvements, leasehold improvements for warehouse, office, and
retail facilities, and warehouse equipment. We expect this pattern to continue
in future periods. We expect to invest in a range of $10 million to $14 million
in 2005. A key component of our strategic plan is geographic expansion. We
expect our level of capital expenditures to be affected by our geographic
expansion activity.

      On October 31, 2003, the Company sold 15% of its interest in Brightpoint
India Private Limited to Persequor Limited ("Persequor") in exchange for a
management services agreement, in which Persequor will provide management
services to Brightpoint India Private Limited for five years (ending October 31,
2008). On the fourth anniversary of the effective date and annually thereafter,
Persequor has a right to require Brightpoint Holdings B.V. to purchase
Persequor's interest in Brightpoint India Private Limited at a price determined
by an appraisal method as defined in the shareholders' agreement. Termination of
the shareholders' agreement is the earlier of (i) the date on which each of the
Investors agree in writing or (ii) the tenth anniversary of the Effective Date.
Upon termination, Brightpoint India Private Limited becomes owned by its
shareholders and is no longer subject to a shareholders' agreement. As a result,
there are no options or puts subsequent to termination. Effective July 1, 2004,
Brightpoint India and Persequor amended the shareholders' agreement with respect
to the put agreement as it relates the form of payment of the put and the
mandatory redemption. The payment form is cash or 100% Brightpoint unregistered
shares with mandatory redemption at the discretion of Brightpoint. The shares
required to fulfill the put option are included in the diluted share calculation
for diluted earnings per share, except when Brightpoint India's equity is
negative and there is no dilution.

      The minority interest of Brightpoint India Private Limited's profit (loss)
is calculated and recorded monthly. At no time will the minority interest on the
balance sheet be less than zero. The Company is assumed to be responsible for
all losses in excess of the minority's interest. When profits recover the excess
losses absorbed by the Company, minority interest will be recorded
proportionately.

LIQUIDITY ANALYSIS

      We measure liquidity in a certain way and use this measurement as an
indicator of how much access to cash we have to either grow the business through
investment in new markets, acquisitions, or through expansion of existing
service or product lines or to contend with adversity such as unforeseen
operating losses potentially caused by reduced demand for our products and
services, a material uncollectible accounts receivable, or a material inventory
write-down, as examples. Our measurement for liquidity is the summation of total
unrestricted cash and unused borrowing availability. The table below shows this
calculation.

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                     ------------------------
                                                         2004         2003        % CHANGE
                                                     -----------  -----------     --------
                                                               (AMOUNTS IN 000S)
<S>                                                  <C>          <C>             <C>
Unrestricted cash................................    $    72,120  $    98,879        (27)%
Unused borrowing availability....................         77,146       45,362         70%
                                                      ----------  -----------        ---
Liquidity........................................    $   149,266  $   144,241          3%
                                                     ===========  ===========        ===
</TABLE>

      As of December 31, 2004, our liquidity was $149 million, which was up 3%
from December 31, 2003. Our borrowing availability increased by $32 million
while our cash decreased by $27 million. Our unused borrowing availability
increased relative to the increase in accounts receivable and the reduction in
outstanding debt. Our net cash decline was primarily from the $24 million
purchase of the Company's common stock, payments of outstanding debt and capital
expenditures, partially offset by $7.6 million provided by operating activities.

      We routinely make large payments, in certain occasions in excess of $10
million, to suppliers and routinely collect large payments from customers, in
certain occasions in excess of $10 million. The timing of these payments or
collections has caused our cash balances and borrowings to fluctuate throughout
the year. During 2004, our

                                     A-95
<PAGE>

largest outstanding borrowings on a given day were approximately $24 million
with an average outstanding balance of approximately $5.8 million.

      Our cash balance as of December 31, 2004, was $72 million. With an unused
borrowing availability of $77 million on December 31, 2004, the Company could
operate successfully without the $72 million in cash, given that the Company
continues to provide cash from operations. Therefore, we believe we have
adequate liquidity to operate the business successfully for the next 12 months
and to invest in growth opportunities. As of December 31, 2004, our
gross-debt-to-total capitalization ratio was 0%. On December 24, 2005, our
credit facility with GE Commercial Finance in Australia expires. As of December
31, 2004, we had no amount outstanding on the facility. Our relationship with GE
Commercial Finance is good; therefore, we expect to be in a position to either
extend this facility or to find an alternative lender.

      Our cash balance at December 31, 2004, was distributed throughout our
subsidiaries worldwide. However, we had higher concentrations of cash in the
U.S. and in Asia-Pacific, which were denominated in U.S. dollars. Although we
can generally move funds freely across our subsidiaries, if we were to
repatriate funds to the U.S. from foreign subsidiaries we could incur tax
consequences, which may cause us to pay higher taxes and consume additional cash
as a consequence. In certain subsidiaries, our local lenders restrict the amount
of funds that can be transferred offshore to affiliates and the parent company.
Additionally, there are foreign capital restrictions in India, which would
restrict our ability to repatriate cash from India.

      We currently fund a portion of our discontinued operations with cash
generated from our continuing operations. Our total net liabilities for
discontinued operations were $770 thousand as of December 31, 2004, and we
expect to consume cash in the future to pay these liabilities. Local tax
authorities generally review or audit tax returns for discontinued operations.
Assessments beyond liabilities that are known and accrued for may result from
any tax audit and such assessment could consume additional cash.

CREDIT RATING

      We are rated by Standard & Poor's. As of December 31, 2004, our rating was
B+ with a "stable" outlook. Standard & Poor's upgraded their rating for the
Company on August 28, 2003 from B with a "stable" outlook.

SEASONALITY

      The Company is subject to seasonal patterns that generally affect the
wireless device industry. The wireless device is generally used by businesses,
governments and consumers. For businesses and governments, purchasing behavior
is affected by fiscal year ends, while consumers are affected by holiday
gift-giving seasons. For the global wireless device industry, seasonal patterns
for wireless device units handled have been as follows:

<TABLE>
<CAPTION>
              YEAR                    1ST QUARTER  2ND QUARTER   3RD QUARTER   4TH QUARTER
              ----                   ------------  -----------   -----------   -----------
<S>                                  <C>           <C>           <C>           <C>
2004.............................         23%          23%           25%           29%
2003.............................         22%          22%           26%           30%
2002.............................         22%          24%           25%           29%
</TABLE>

      For the Company, seasonal patterns for wireless devices handled have been
as follows:

<TABLE>
<CAPTION>
              YEAR                    1ST QUARTER  2ND QUARTER   3RD QUARTER   4TH QUARTER
              ----                   ------------  -----------   -----------   -----------
<S>                                  <C>           <C>           <C>           <C>
2004.............................         21%          21%           25%           33%
2003.............................         19%          20%           30%           31%
2002.............................         23%          24%           25%           28%
</TABLE>

      As can be seen in the table above, the wireless device industry has been
prone to experiencing increases in demand in the fourth quarter, primarily due
to enterprise purchasing for companies whose fiscal year ends coincide with the
calendar year end and gift-giving holidays. Mobile operators often increase
promotional activity, which can further stimulate demand during this period.
Conversely, the global wireless industry has experienced decreases in demand in
the first quarter subsequent to the higher level of activity in the preceding
fourth quarter.

                                      A-96
<PAGE>

      The Company's seasonal patterns are significantly influenced by the global
wireless industry's seasonal patterns. We had a stronger fourth quarter in 2004
than in 2003 or 2002, which was the result of strong demand in many of the
markets where we operate and a full quarter of operations of the Slovak Republic
and Finland, both businesses, which commenced operations in the third quarter of
2004. In 2003, our high growth in our Asia-Pacific Division, which included our
entry into India in the second quarter of 2003, has partially caused our
seasonal patterns to differ from the global wireless industry. The Chinese New
Year, which is in the first quarter of each year, historically has had a
positive influence in demand in the first quarter. This has affected demand in
certain markets in our Asia-Pacific division. The gift-giving holiday in India
generally occurs in October. In certain markets in the Asia-Pacific division,
enterprise and government fiscal years commonly end on June 30, which
historically has had a positive effect on demand in the second quarter. As
compared to the global wireless industry, our seasonality will likely be
affected by the quantity of wireless devices handled in markets whose
seasonality differs from the global wireless industry. Additionally, should we
enter into new markets throughout the year, the additional wireless devices
handled in those new markets may affect the distribution of sales across the
four quarters of the year as compared to the global wireless and our own
historical seasonal patterns. There can be no assurances that our future
seasonal patterns will resemble that of the global wireless industry or that of
our own historical patterns. Additionally, interim results may not be indicative
of annual results.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

      Our disclosures regarding cash requirements of contractual obligations and
commercial commitments are located in various parts of our regulatory filings.
Information in the following table provides a summary of our contractual
obligations and commercial commitments as of December 31, 2004.

<TABLE>
<CAPTION>
                                                                         PAYMENTS DUE BY PERIOD
                                                          -----------------------------------------------------
                                                                      LESS THAN   1 TO 3    3 TO 5
                                                             TOTAL      1 YEAR     YEARS     YEARS   THEREAFTER
                                                          ----------  ---------  --------  --------  ----------
                                                                            (AMOUNTS IN 000S)
<S>                                                       <C>         <C>        <C>       <C>       <C>
Operating leases.................................         $   79,131   $  8,918  $ 14,327  $ 11,408    $ 44,478
Third-party debt and lines of credit(1)..........                 --         --        --        --          --
Purchase obligations(2)..........................             10,829     10,829        --        --          --
Letters of credit................................             24,479     24,479        --        --          --
Other(3).........................................              3,441      2,062       711       668          --
                                                          ----------   --------  --------  --------    --------
  Total..........................................         $  117,880   $ 46,288  $ 15,038  $ 12,076    $ 44,478
                                                          ==========   ========  ========  ========    ========
</TABLE>

----------
(1)   reflects amounts included on the Consolidated Balance Sheet

(2)   purchase obligations exclude agreements that are cancelable without
      penalty

(3)   includes obligations under maintenance contracts, acquisition agreements
      and related potential future consideration, and other commercial
      commitments

RESULTS OF OPERATIONS -- 2003 COMPARISON TO 2002

REVENUE AND WIRELESS DEVICES HANDLED

Wireless Devices Handled by Division:

<TABLE>
<CAPTION>

                                                                       YEAR ENDED                       CHANGE
                                                    ------------------------------------------------     FROM
                                                    DECEMBER 31,      % OF   DECEMBER 31,     % OF      2002 TO
                                                        2003          TOTAL      2002         TOTAL      2003
                                                    ------------      -----  ------------     ------   --------
                                                                       (AMOUNTS IN 000S)
<S>                                                 <C>               <C>    <C>              <C>      <C>
Asia-Pacific.....................................        6,940          34%       3,189          22%      118%
The Americas.....................................       12,403          62%      10,969          74%       13%
Europe...........................................          791           4%         667           4%       19%
                                                       -------         ---      -------         ---       ---
  Total..........................................       20,134         100%      14,825         100%       36%
                                                       =======         ===      =======         ===       ===
</TABLE>

                                     A-97
<PAGE>

      Wireless Devices Handled by Service Line:

<TABLE>
<CAPTION>
                                                    YEAR ENDED                                 CHANGE
                        ------------------------------------------------------------------      FROM
                           DECEMBER 31,         % OF         DECEMBER 31,         % OF         2002 TO
                               2003             TOTAL            2002             TOTAL         2003
                        -----------------   ------------  -----------------   ------------    -----------
                                                  (AMOUNTS IN 000S)
<S>                     <C>                 <C>           <C>                 <C>             <C>
Product distribution..       10,632             53%             6,824             46%             56%
Logistics services....        9,502             47%             8,001             54%             19%
                             ------            ---             ------            ---              --
  Total...............       20,134            100%            14,825            100%             36%
                             ======            ===             ======            ===              ==
</TABLE>

      Worldwide shipments of wireless devices grew approximately 22% to 520
million devices in 2003, according to Company and industry analysts estimates.
The industry generally experienced improving economic conditions worldwide as
compared to 2002, which was more noticeably felt in the second half of 2003. In
conjunction with an improved economic environment, wireless device manufacturers
were active in launching new products with added features and functionality such
as color screens, embedded cameras, music playback, video gaming, internet and
e-mail access, and generally improved appearance and ergonomics (commonly
referred to as form factors). In parallel, many mobile operators launched
additional services that utilized the added functionality of the wireless
devices. Services include multimedia messaging, which allows a subscriber to
send a digital image or digital video recording to another subscriber or an
email address and access to internet web sites. In 2003, mobile operators were
active in promoting their services and wireless device offerings. The three
factors described above: improving economic conditions, more fully-featured
wireless devices, and mobile operators' service offering expansion and related
promotional activity have motivated many subscribers to replace their aging
wireless devices. Mobile operators have also engaged in promotional activity to
attract subscribers from competing networks. In many markets, the act of
switching networks by a subscriber is generally accompanied with the acquisition
of a new wireless device. Emerging markets, such as India, where penetration
rates have been historically lower than industrialized markets, generally
experienced high growth rates in subscriber acquisition, which drove high growth
rates in wireless device sales. These events contributed to our growth in
wireless devices handled.

      For the Company, wireless devices handled grew by 36% in 2003, as compared
to 2002. Strong demand for our products and services in the Asia-Pacific
division, combined with our entry into the India market in the third quarter of
2003, were significant contributors to our growth. For the Asia-Pacific
division, wireless devices handled grew by 118%, as compared to 2002. The
Americas division, which handled 62% of the wireless devices for the Company in
2003, grew by 13%. Mobile operator customers of our logistics services business
in the U.S., particularly those that target the prepaid wireless segment,
experienced high levels of demand and consequently increased our volumes as
compared to 2002. These volumes were partially offset by reduced sales in our
U.S. distribution business, which was negatively impacted by a lack of CDMA
products available to us from our primary supplier. Wireless devices handled in
the Europe division grew by 19%, as compared to 2002, mostly from continued
growth related to our entry in the Norway market in 2002.

      We experienced higher growth rates in wireless devices handled in the
second half of 2003 as compared to the first half of 2003. The spread of the
SARS virus throughout the Asia-Pacific region modestly and negatively affected
our Asia-Pacific division; global uncertainty revolving around the Iraq War
negatively affected many markets; and a harsh winter in the U.S. and the lack of
CDMA products from a certain supplier negatively affected the Americas division.
All of these events, which did not prevail in the second half of 2003,
negatively affected our growth in wireless devices handled. In the first half of
2003, wireless devices grew by 13% over the same period in the prior year
(primarily the Asia-Pacific division) and in the second half of 2003, which
included our entry into the India market, wireless devices handled grew by 57%.
In the second half of 2003, many manufacturers were unable to respond to an
unanticipated increase in demand and therefore, we experienced supply
constraints for certain products. We are unable to quantify the effect of these
constraints on our business.

                                      A-98
<PAGE>

      Revenue by Division:

<TABLE>
<CAPTION>
                                                 YEAR ENDED                                CHANGE
                      -----------------------------------------------------------------     FROM
                        DECEMBER 31,         % OF         DECEMBER 31,         % OF         2002 TO
                            2003             TOTAL            2002             TOTAL        2003
                      ----------------   ------------  -----------------   ------------  --------
                                              (AMOUNTS IN 000S)
<S>                   <C>                <C>           <C>                 <C>           <C>
Asia-Pacific........   $      995,798          56%       $      527,499          43%           89 %
The Americas........          469,618          27%              493,176          40%           (5)%
Europe..............          300,960          17%              209,102          17%           44 %
                       --------------        ----        --------------        ----           ----
  Total.............   $    1,766,376         100%       $    1,229,777         100%           44 %
                       ==============        ====        ==============        ====           ====
</TABLE>

      Revenue by Service Line:

<TABLE>
<CAPTION>
                                                    YEAR ENDED                                CHANGE
                        ------------------------------------------------------------------     FROM
                           DECEMBER 31,         % OF         DECEMBER 31,         % OF        2002 TO
                               2003             TOTAL            2002             TOTAL        2003
                        -----------------   ------------  -----------------   ------------  --------
                                                        (AMOUNTS IN 000S)
<S>                     <C>                 <C>           <C>                 <C>           <C>
Distribution..........    $    1,540,471          87%       $    1,048,493          85%           47%
Logistics services....           225,905          13%              181,284          15%           25%
                          --------------        ----        --------------        ----           ---
  Total...............    $    1,766,376         100%       $    1,229,777         100%           44%
                          ==============        ====        ==============        ====           ===
</TABLE>

      Total revenue grew by 44%, which was driven by a 56% growth rate of
wireless devices sold through our distribution businesses. As discussed above,
the Asia-Pacific division, which is primarily composed of distribution
businesses, experienced significant growth in wireless devices handled and was a
key contributor to our revenue growth.

      Product distribution revenue grew by 47%. Separating the effect of
fluctuating foreign currency exchange rates, the average selling price of
wireless devices sold through our distribution businesses declined by 4%. In
local currency terms, a 20% decline in the average selling price in the
Asia-Pacific division, primarily caused by the sale of low-end wireless devices
in India, was partially offset by 9% and 8% increases in average selling prices
in the Americas and Europe divisions, respectively. The high growth in the
Asia-Pacific division's wireless device sales minimized the effect the decrease
in average selling price had on product distribution revenue. The increase in
average selling price in the Americas division increased product distribution
revenue for wireless devices, despite a decline in wireless devices sold. The
shift of an accessory program for a key customer from product distribution to
fee-based logistics services reduced the Americas distribution revenue by
approximately $24 million, which contributed to the overall decline in the
Americas revenue in 2003. The Europe division's increase in average selling
price, combined with wireless devices growth and additional sales of
accessories, increased our total product distribution revenue. The increase in
average selling prices in the Americas and Europe divisions is due to the sale
of more fully-featured and functional wireless devices. The strengthening of
foreign currencies relative to the U.S. dollar, which primarily affected the
Europe division and to a lesser extent, the Asia-Pacific division, increased
average selling prices by 4%.

      Logistics services revenue increased by 25%. An increase in the sales of
prepaid wireless airtime in Europe contributed to this increase. Although the
Americas division was able to increase its wireless devices handled through
logistics services by 21%, price reductions related to certain customers
significantly offset any notable revenue gains. As described above, mobile
operator customers in the U.S., particularly those that target the prepaid
wireless segment, experienced high levels of demand and consequently increased
our volumes as compared to 2002.

      The effect of the strengthening of foreign currencies relative to the U.S.
dollar contributed to 7 percentage points of the 44% total revenue increase.
This effect accounted for 21 percentage points of the 44% revenue increase for
the Europe division and 8 percentage points of the 89% increase in the
Asia-Pacific Division.

                                      A-99
<PAGE>

GROSS PROFIT AND GROSS MARGIN

      Gross Profit by Service Line:

<TABLE>
<CAPTION>
                                                    YEAR ENDED                                CHANGE
                        ------------------------------------------------------------------     FROM
                           DECEMBER 31,         % OF         DECEMBER 31,         % OF         2002 TO
                               2003             TOTAL            2002             TOTAL         2003
                        -----------------   ------------  -----------------   ------------  --------
                                                        (AMOUNTS IN 000S)
<S>                     <C>                 <C>           <C>                 <C>           <C>
Distribution..........     $    54,305            55%        $    29,580            43%           84%
Logistics services....          44,975            45%             39,334            57%           14%
                           -----------          ----         -----------          ----           ---
  Total...............     $    99,280           100%        $    68,914           100%           44%
                           ===========          ====         ===========          ====           ===
</TABLE>

      Gross Margin by Service Line:

<TABLE>
<CAPTION>
                                      YEAR ENDED
                        -------------------------------------        CHANGE FROM
                           DECEMBER 31,        DECEMBER 31,            2002 TO
                               2003                2002                 2003
                        -----------------   -----------------   -------------------
                                              (AMOUNTS IN 000S)
<S>                     <C>                 <C>                 <C>
Distribution.........           3.5%                2.8%                0.7% points
Logistics services...          19.9%               21.7%              (1.8)% points
                              -----               -----         -------------------
  Total..............           5.6%                5.6%                0.0% points
                              =====               =====         ===================
</TABLE>

      The 44% increase in gross profit was primarily attributable to a 36%
increase in wireless devices handled and a 44% increase in total revenue from
2002.

      The Americas and Europe divisions improved their gross margin performance,
which was primarily in product distribution. These improvements were offset by
the weighting effect of the increased proportion of total revenue of the
Asia-Pacific division, which historically operated with a relatively lower gross
margin percent. In 2002, the Asia-Pacific division's total revenue accounted for
43% of total revenue, while in 2003 the proportion was 56%. Additionally, in
2003 the Asia-Pacific division entered into the India market and sold
significant volumes of low-end lower gross margin CDMA wireless devices and
experienced a general reduction in supplier incentives, which reduced its gross
margin and partially offset gross profit growth.

      The 84% increase in gross profit related to product distribution revenue
was primarily attributable to a 56% increase in wireless devices handled and a
47% increase in product distribution revenue from 2002. The higher rate of
growth in gross profit as compared to revenue was attributable to the 0.7
percentage point improvement in gross margin. In 2002, demand was relatively low
which induced some pricing pressure for wireless devices, we incurred $3.6
million in inventory valuation adjustments primarily related to writing down
inventory to its net realizable value in Germany and the U.S., and we recognized
a $2.6 million loss related to a minimum purchase obligation to an accessories
supplier in the U.S. These unfavorable events or similar events of a material
nature did not occur in 2003. Additionally, an improved selling-price
environment and strengthened inventory controls contributed to our improved
gross margin performance in 2003.

      The 14% increase in gross profit in logistics services was attributable to
a 25% increase in revenue, partially offset by price reductions in the Americas
and lower gross margin on the sale of prepaid wireless airtime in the Europe
division. Although the Americas division was able to increase its wireless
devices handled through logistics services by 21%, price reductions related to
certain customers significantly offset gross profit increases related to volume.
The Americas division was able to reduce their operating costs to significantly
offset the price reductions. Additionally, in 2003 the Americas division
consolidated its Richmond, California, call center with its Plainfield, Indiana,
call center. By utilizing existing infrastructure in Plainfield, Indiana, we
originally expected to realize pre-tax cost savings, beginning in the second
quarter of 2003, of approximately $2.0 million to $2.5 million annually. We
believe we have met these expected cost savings. The Europe division experienced
a 30% increase in the sale of prepaid wireless airtime, which contributed to the
revenue and gross profit increase in logistics services, however, due to its
generally lower gross margin as compared to other logistics services gross
margins, it had an unfavorable effect on the overall gross margin percent.

                                     A-100
<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE ("SG&A") EXPENSES

<TABLE>
<CAPTION>
                                         YEAR ENDED
                           -------------------------------------       CHANGE FROM
                              DECEMBER 31,        DECEMBER 31,            2002 TO
                                  2003                2002                 2003
                           -----------------   -----------------   ----------------
                                                 (AMOUNTS IN 000S)
<S>                        <C>                 <C>                 <C>
SG&A expenses...........    $      70,124       $      67,173                  4%
Percentage of revenue...              4.0%                5.5%      (1.5)% points
</TABLE>

      SG&A expenses incre  ased 4% in 2003 in conjunction with a 44% increase in
revenue. Cost reduction action such as reductions in force, the consolidation of
corporate offices with our North America facility in Plainfield, Indiana, and
tight controls on spending helped contain our spending growth to 4%. The
reduction of accessory programs in our North America business where selling
commissions were paid to mobile operators on accessory sales through their
channels reduced SG&A expenses by approximately $3 million. Offsetting our
spending decreases were variable costs related to the revenue and operating
income increases, which included variable compensation expenses, travel and
entertainment, entry into the India market, and growth of our business in
Norway. The strengthening of foreign currencies relative to the U.S. dollar had
an estimated $3.2 million unfavorable effect on SG&A. In 2002, SG&A expenses
included $1.5 million in employee separation costs.

      As a percent of revenue, SG&A expenses were reduced from 5.5% to 4.0%. The
44% increase in revenue, combined with a 4% increase in SG&A expenses drove the
decrease.

FACILITY CONSOLIDATION CHARGE

      During 2003, we consolidated our Richmond, California, call center
operation into our Plainfield, Indiana, facility to reduce costs and increase
productivity and profitability in our Americas division. We completed the
consolidation of the facility in April of 2003 and terminated the lease in the
second quarter of 2004. During 2003, the Company recorded a pre-tax charge of
$5.5 million which includes approximately $3.8 million for the present value of
estimated lease costs, net of an anticipated sublease, non-cash losses on the
disposal of assets of approximately $1.1 million and severance and other costs
of approximately $600 thousand. By utilizing existing infrastructure in
Plainfield, Indiana, we originally expected to realize pre-tax cost savings,
beginning in the second quarter of 2003, of approximately $2.0 million to $2.5
million annually. We believe we have met these expected cost savings. In 2003,
total cash outflows relating to the charge were approximately $1.3 million.

OPERATING INCOME

      Operating Income by Division:

<TABLE>
<CAPTION>
                                                  YEAR ENDED                               CHANGE
                      ------------------------------------------------------------------    FROM
                         DECEMBER 31,         % OF         DECEMBER 31,         % OF       2002 TO
                             2003             TOTAL            2002             TOTAL       2003
                      -----------------   ------------  -----------------   ------------  --------
                                                      (AMOUNTS IN 000S)
<S>                   <C>                 <C>           <C>                 <C>           <C>
Asia-Pacific........     $    14,088            60%        $     6,456        N/M            118%
The Americas(1).....           3,620            15%             (2,028)       N/M            N/M
Europe..............           5,987            25%             (2,687)       N/M            N/M
                         -----------          ----         -----------        ----           ---
  Total.............     $    23,695           100%        $     1,741        100%           N/M
                         ===========          ====         ===========        ====           ===
</TABLE>

----------

N/M: Not Meaningful

                                     A-101
<PAGE>

      Operating Income as a Percent of Revenue by Division:

<TABLE>
<CAPTION>
                                      YEAR ENDED
                        -------------------------------------    CHANGE FROM
                           DECEMBER 31,        DECEMBER 31,        2002 TO
                               2003                2002              2003
                        -----------------   -----------------    -----------
                                             (AMOUNTS IN 000S)
<S>                     <C>                 <C>                  <C>
Asia-Pacific..........         1.4%                 1.2%         0.2% points
The Americas(1).......         0.8%                (0.4)%        1.2% points
Europe................         2.0%                (1.3)%        3.3% points
                               ---                -----          -----------
  Total...............         1.3%                 0.1%         1.2% points
                               ===                =====          ===========
</TABLE>

----------

(1) Includes a facility consolidation charge of $5.5 million.

      Operating income grew substantially from 2002. Overall, the 44% increase
in gross profit from $69 million to $99 million primarily caused by a 44%
increase in revenue, coupled with limited growth in SG&A expenses (4%) were the
primary contributors to the increase. Facilities consolidation charges of $5.5
million in the Americas division partially reduced our growth in operating
income.

      The 89% growth in revenue in the Asia-Pacific division, partially offset
by a decline in gross margin, in conjunction with a reduction in SG&A expenses
as a percent of revenue were the primary drivers behind its operating income
growth of 118%. Strong demand for our products and services, combined with our
entry into India in the third quarter of 2003 were the principal causes for our
revenue growth. Gross margin declined in the Asia-Pacific division due to the
sale of significant volumes of low-end CDMA products in India and a general
reduction in suppler incentives.

      Although the Americas division's revenue declined by 5%, a 21% increase in
wireless devices handled through fee-based logistics services, combined with
cost reduction action taken in 2002 and 2003 and improved product cost
management contributed to the $5.6 million improvement in operating income. The
$5.5 million facility consolidation charge related to the consolidation of its
Richmond, California, call center with its Plainfield, Indiana, call center
partially offset this improvement.

      The Europe division experienced a 44% increase in revenue. The
strengthening of European currencies relative to the U.S. dollar contributed to
21 percentage points of the revenue increase. Operating expenses, including cost
of good sold, were negatively affected by European currency rate movement. The
net effect on operating income was a benefit of approximately $1 million. In
local currency terms, revenue grew by 11%, which was derived from increased
sales of prepaid wireless airtime and a 12% increase in average selling prices
for wireless devices sold. In 2002, our Germany operation incurred significant
losses related to inventory write-downs and excessive cost structure. In 2003,
our Germany operation grew its revenue by 42%, significantly reduced its cost
structure, and generated an operating income in the fourth quarter of 2003.

  NET INTEREST EXPENSE

      Net Interest Expense:

<TABLE>
<CAPTION>
                                            YEAR ENDED
                              -------------------------------------     CHANGE FROM
                                 DECEMBER 31,        DECEMBER 31,         2002 TO
                                     2003                2002              2003
                              -----------------   -----------------    ------------
                                                    (AMOUNTS IN 000S)
<S>                           <C>                 <C>                 <C>
Interest expense...........      $     1,815         $     6,172                (71)%
Interest income............             (652)               (379)                 72%
                                 -----------         -----------      --------------
Net interest expense.......      $     1,163         $     5,793                (80)%
Percentage of revenue......              0.1%                0.5%       (0.4)% points
</TABLE>

                                     A-102
<PAGE>

<TABLE>
<CAPTION>
                                                            OUTSTANDING AT DECEMBER 31,
                                                 -----------------------------------------------
SUMMARY OF SHORT-TERM AND LONG-TERM DEBT              2003            2002              2001
----------------------------------------         -------------   -------------    ---------------
<S>                                              <C>             <C>              <C>
Lines of Credit -- Asia-Pacific................  $      16,171   $      10,052    $         4,440
     -- The Americas...........................              -               -             24,160
     -- Europe.................................             36              51              6,142
Convertible Notes..............................              -          12,017            131,647
                                                 -------------   -------------    ---------------
  Total........................................  $      16,207   $      22,120    $       166,389
                                                 =============   =============    ===============
</TABLE>

      Net interest expense declined by $4.6 million, or 80%, from 2002. This
reduction was a result of the Company significantly reducing its overall debt.
On December 31, 2001, the Company had $132 million of accreted value in
Convertible Notes outstanding and $34 million in other debt for a total of $166
million in total debt. This total debt represented a
gross-debt-to-total-capitalization ratio of 53%. During 2002, the Company
generated $70 million in net cash from operating activities and used the
proceeds toward the repurchase $120 million of accreted value in Convertible
Notes for $75 million in cash and the reduction of other debt by $25 million.
Through the repurchase of the Convertible Notes, we realized a gain of $44
million, which is reported as a gain on the extinguishment of debt. These
repurchases were made during the second, third, and fourth quarters of 2002.
During 2003, we repurchased the remaining outstanding Convertible Notes ($12.0
million in accreted value) and increased our other debt from $10.1 million to
$16.2 million. Our total debt decreased from $22 million on December 31, 2002,
to $16.2 on December 31, 2003, representing a decrease in our
gross-debt-to-total-capitalization ratio from 16% to 10%.

IMPAIRMENT ON LONG-TERM INVESTMENT

      In 2003, we incurred no impairment losses on our long-term investment. The
Company designated the Chinatron Class B Preference Shares as held-to-maturity.
The carrying value was approximately $2 million at December 31, 2003 and 2002.

      During the second half of 2001, we experienced lower than desired
operating results and returns on invested capital in our Brightpoint China
Limited operation primarily due to: i) continuing migration of Brightpoint
China's business from Hong Kong to mainland China ii) continuing reliance on a
single supplier for products within China with no exclusive product lines and
iii) the level of invested capital required to conduct this business was
substantial considering the risk of operating in China. A number of alternatives
were considered with respect to decreasing our financial and economic exposure
to the China market and as a result, in January 2002, we formed a joint venture
with Chinatron through their purchase of a 50% interest in Brightpoint China
Limited, which was at the time our wholly-owned subsidiary. In this transaction,
we granted Chinatron the option to purchase an additional 30% interest in this
subsidiary. We received 6,414,607 Chinatron Class B Preference Shares with a
face value of $10 million convertible into 10% of the issued and outstanding
ordinary shares of Chinatron as consideration. At the formation of the joint
venture, Brightpoint China Limited had a net book value of $18.8 million. In
March of 2002, rather than exercising its option, Chinatron offered to purchase
our remaining interest in Brightpoint China Limited for 7,928,166 Chinatron
Class B Preference Shares with a face value of $11 million that were convertible
into 11% of the issued and outstanding ordinary shares in Chinatron. This
transaction closed in April 2002, bringing our aggregate holdings in Chinatron
to 14,342,773 Class B Preference Shares with an aggregate face value of $21
million that were convertible into 19.9% of the issued and outstanding ordinary
shares of Chinatron. The net book value of Brightpoint China Limited at the time
of the sale of remaining 50% interest in Brightpoint China Limited was $5.2
million. At the time of the formation of the joint venture, the Company was not
aware that the actual value of the Chinatron Class B Preference Shares was
significantly below the face value because the Company had not yet completed a
valuation of the shares.

      When the Company's internal valuations and analyses were completed, we
estimated a fair market value of $10.3 million for our aggregate holdings of
14,342,773 Chinatron Class B Preference Shares with a face value of $21 million.
As of June 30, 2002, we believed the Chinatron Class B Preference Shares
continued to have an estimated fair market value of approximately $10.3 million.

      During the third quarter of 2002, Chinatron sought to raise additional
capital to fund its operations and meet its business objectives. In September
and October of 2002, because of our own liquidity constraints and to help
Chinatron secure funding from other parties, which we believed would improve
Chinatron's ability to honor its remaining debt obligations of the Chinatron
Class B Preference Shares owned by us, we waived our right to

                                     A-103
<PAGE>

participate in these capital-raising activities, waived our right to require
Chinatron to redeem a portion of the Class B Preference Shares and agreed to
modify the conversion ratio of the preference shares. Collectively, these
actions reduced our ownership interest in Chinatron from 19.9% to less than 1%.
However, all other rights of the Chinatron Class B Preference Shares, including
our right to require Chinatron to redeem all or a portion of the Chinatron Class
B Preference Shares under certain circumstances, remained.

      As discussed in greater detail in Note 3 to the Consolidated Financial
Statements, we recorded a non-cash impairment charge during the third quarter of
2002 of $8.3 million relating to our investment in the Chinatron Class B
Preference Shares. Management is responsible for estimating the value of the
Chinatron Class B Preference Shares. In accordance with SFAS 115, Accounting for
Certain Investments in Debt and Equity Securities, the Company designated the
Chinatron Class B Preference Shares as held-to-maturity. The carrying value was
approximately $2 million at December 31, 2003 and 2002. Management currently
estimates there was no gross unrealized holding gain on this security. See Notes
3 and 7 to the Consolidated Financial Statements for further discussion of the
divestiture of Brightpoint China Limited and our Chinatron investment.

OTHER EXPENSES

<TABLE>
<CAPTION>
                                                                                  YEAR ENDED           CHANGE FROM
                                                                          DECEMBER 31,   DECEMBER 31,    2002 TO
                                                                             2003           2002           2003
                                                                          ------------   ------------  -----------
                                                                                      (AMOUNTS IN 000S)
<S>                                                                       <C>            <C>           <C>
Other expenses........................................................    $      2,251   $      1,630            38%
Percentage of revenue.................................................             0.1%           0.1%  0.0% points
</TABLE>

      Other expenses increased by $620 thousand, or 38%. This line item is
composed of the cost on the sale of certain receivables to financial
institutions conducted routinely throughout the year by certain subsidiaries,
fines and penalties, and other items that are not operating expenses. The cost
on the sale of certain receivables was $1.3 million and $1.6 million for 2003
and 2002, respectively. Total receivables sold were $265 million and $187
million during 2003 and 2002, respectively. Included in other expenses in 2003
was a $450 thousand fine paid in connection with the Company's settlement with
the SEC.

INCOME TAX EXPENSE

<TABLE>
<CAPTION>
                                                                           YEAR ENDED               CHANGE FROM
                                                                   DECEMBER 31,   DECEMBER 31,       2002 TO
                                                                       2003           2002             2003
                                                                   ------------   ------------     --------------
                                                                             (AMOUNTS IN 000S)
<S>                                                                 <C>           <C>              <C>
Income tax expense................................................. $   4,793     $   15,431                 (70)%
Effective tax rate.................................................      24.1%          50.8%      (26.7)% points
</TABLE>

      The effective tax rate for 2003 was 24.1%. This differs from the United
States Federal income tax rate of 35% due to a significant portion of the
Company's taxable income having been generated in jurisdictions, which have
lower tax rates. In 2003, the reduction in the effective tax rate was partially
offset by the recognition of valuation allowances for the tax benefit of net
operating losses for four subsidiaries whose ability to realize the benefits of
net operating losses is uncertain at this time. This compares to an effective
tax rate of 50.8% recorded in 2002. In 2002, the Company incurred a $44.4
million gain on extinguishment of debt, which was taxed at an effective income
tax rate of 40%. The effective rate in 2002 was also affected by non-deductible
$8.3 million impairment loss on long-term investment. The negative tax effects
of the gain on debt extinguishment and the impairment loss on long-term
investment were partially offset by higher taxable income in jurisdictions that
have lower tax rates.

                                     A-104

<PAGE>

INCOME FROM CONTINUING OPERATIONS

<TABLE>
<CAPTION>
                                                                                                         CHANGE
                                                                                YEAR ENDED                FROM
                                                                         DECEMBER 31,     DECEMBER 31,   2002 TO
                                                                            2003             2002         2003
                                                                         ------------     ------------   --------
                                                                                   (AMOUNTS IN 000S)
<S>                                                                      <C>              <C>            <C>
Operating income.......................................................  $     23,695     $      1,741        N/M
Interest expense.......................................................         1,163            5,793        (80)%
Loss (gain) on extinguishment of debt..................................           365          (44,378)       N/M
Other expenses.........................................................         2,250            1,630         38%
Impairment of loss on long-term investment.............................            --            8,305       (100)%
                                                                         ------------     ------------
Income from continuing operations before taxes.........................        19,916           30,391        (34)%
 Income tax expense....................................................         4,793           15,431        (69)%
                                                                         ------------     ------------
Income (loss) from continuing operations before minority interest......        15,123           14,960          1%
Income from continuing operations......................................        15,147           14,960          1%
Diluted earnings per share.............................................  $       0.80     $       0.83         (4)%
</TABLE>

      Income from continuing operations increased by $187 thousand, or 1%, from
$14.9 million in 2002. The increase in income from continuing operations from
2002 resulted from the $22 million improvement in operating income, a $4.6
million decrease in net interest expense and a reduction in the effective tax
rate from 50.8% to 24.1%, mostly offset by a $44 million gain on extinguishment
of debt related to the repurchase of Convertible Notes in 2002 and a $8.3
million impairment on long-term investment in 2002, which both transactions did
not recur in 2003. The $22 million improvement in operating income was due to a
44% increase in revenue, a 44% increase in gross profit, partially offset by a
4% increase in SG&A expenses and $5.5 million in facility consolidation charges.

      On a diluted per share basis, income from continuing operations decreased
by 4% from 2002, as a result of the increase of outstanding shares due primarily
to the exercise of stock options in 2003 partially offset by a 1% increase in
income from continuing operations.

DISCONTINUED OPERATIONS

<TABLE>
<CAPTION>

                                                                                                         CHANGE
                                                                                YEAR ENDED                FROM
                                                                         DECEMBER 31,   DECEMBER 31,     2002 TO
                                                                            2003           2002           2003
                                                                         ------------   ------------     --------
                                                                                   (AMOUNTS IN 000S)
<S>                                                                      <C>            <C>              <C>
Loss from discontinued operations.....................................   $      2,890   $     14,016         (79)%
Loss on disposal of discontinued operations...........................            528          2,617         (79)%
                                                                         ------------   ------------
  Total discontinued operations.......................................   $      3,418   $     16,633         (79)%
                                                                         ------------   ------------
Percentage of Revenue.................................................            0.2%           1.4%       (1.2)%
</TABLE>

      Loss from discontinued operations in 2003 was $3.4 million, or $0.18 per
diluted share, compared to $16.6 million, or $0.93 per diluted share, in 2002.
The loss from discontinued operations in 2003 was primarily due to the losses
generated in the Company's discontinued operations in Ireland, unrealized
foreign currency translation losses caused by the strengthening of foreign
currencies relative to the U.S. dollar and costs incurred in connection with the
liquidation of discontinued operations, offset by the receipt of contingent
consideration relating to the divestiture of the Company's Middle East
operations. On February 19, 2004, the Company's subsidiary, Brightpoint Holdings
B.V., completed the sale of its 100% interest in Brightpoint (Ireland) Limited
("Brightpoint Ireland") to Celtic Telecom Consultants Ltd. Consideration for the
sale consisted of cash of approximately $1.4 million and deferred consideration
of approximately $300 thousand, which was received in April 2004. The results of
operations from Brightpoint Ireland are classified as a part of discontinued
operations in the Company's consolidated statement of operations for all years
presented. The loss from discontinued operations in 2002 was primarily due to
the sale of the Company's operations in China, the Middle East and Mexico.

                                      A-105

<PAGE>

NET INCOME

<TABLE>
<CAPTION>
                                                                              YEAR ENDED             CHANGE FROM
                                                                     DECEMBER 31,   DECEMBER 31,       2002 TO
                                                                         2003           2002            2003
                                                                    -------------   ------------     -----------
                                                                                 (AMOUNTS IN 000S)
<S>                                                                  <C>            <C>              <C>
Net income (loss)...............................................     $     11,729   $    (42,421)    N/M
Percentage of revenue...........................................              0.7%          (3.4)%   4.1% points
</TABLE>

      Net income was $11.7 million, as compared to a net loss of $42 million in
2002. This improvement in net income was primarily due to a cumulative effect of
a change of accounting principle related to the implementation of SFAS 142,
Goodwill and Other Intangible Assets, in 2002 which did not occur in 2003 and a
reduction in the loss in discontinued operations from $16.6 million to $3.4
million. The improvement in net income was also aided by a $20 million
improvement in operating income (primarily caused by a 44% increase in revenue,
an associated 44% increase in gross profit, which was partially offset by a 4%
increase in SG&A expenses and a $5.5 million in facility consolidation charge),
a $4.6 million decrease in net interest expenses, an $8.3 million impairment
loss on investment in 2002 that did not recur in 2003, and a reduction in the
effective tax rate in continuing operations from 50.8% to 24.1%. These items
substantially offset a $44 million gain in debt extinguishment in 2002 that did
not recur in 2003.

      On a diluted per share basis, net income of $0.62 improved from a net loss
of $2.36. The exercise of stock options in 2003 had a 5% dilutive effect on
weighted average shares outstanding in 2003.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In December 2004, the FASB issued Statement of Financial Accounting
Standards No. 123R (Revised 2004), Share-Based Payment ("SFAS No. 123R"), which
requires that the compensation cost relating to share-based payment transactions
be recognized in financial statements based on alternative fair value models.
The share-based compensation cost will be measured based on the fair value of
the equity or liability instruments issued. We currently discloses pro forma
compensation expense quarterly and annually by calculating the stock option
grants' fair value using the Black-Scholes model and disclosing the impact on
net income and net income per share in a Note to the Consolidated Financial
Statements. Upon adoption, pro forma disclosure will no longer be an
alternative. Note 1 of our Consolidated Financial Statements reflects the impact
that such a change in accounting treatment would have had on our net income and
net income per share if it had been in effect during the year ended December 31,
2004. SFAS No. 123R also requires the benefits of tax deductions in excess of
recognized compensation cost to be reported as a financing cash flow rather than
as an operating cash flow as required under current literature. This requirement
will reduce net operating cash flows and increase net financing cash flows in
periods after adoption. While the Company cannot estimate what those amounts
will be in the future, the amount of operating cash flows recognized for such
deductions were $5.4 million, $0.4 million, and $0 in 2004, 2003 and 2002,
respectively. We will begin to apply SFAS No. 123R using the most appropriate
fair value model as of the interim reporting period ending September 30, 2005.

OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION

      The Company's operations are divided into three geographic operating
segments. These operating segments represent its three divisions: The Americas,
Asia-Pacific and Europe. These divisions all derive revenues from sales of
wireless devices, accessory programs and fees from the provision of logistics
services.

      The Company evaluates the performance of, and allocates resources to,
these segments based on operating income from continuing operations including
allocated corporate selling, general and administrative expenses. As discussed
in Note 7 to the Consolidated Financial Statements, the Company discontinued
several operating entities, which materially affected certain operating
segments. All years presented below have been reclassified to reflect the
reclassification of discontinued operating entities to discontinued operations.
A summary of the Company's operations by segment is presented below (in
thousands) for 2004, 2003 and 2002:

                                     A-106

<PAGE>

<TABLE>
<CAPTION>
                           PRODUCT
                         DISTRIBUTION    LOGISTICS                   OPERATING
                           REVENUE       SERVICES         TOTAL        INCOME                                  ALLOCATED
                            FROM       REVENUE FROM   REVENUE FROM  (LOSS) FROM      TOTAL       ALLOCATED     INCOME TAX
                           EXTERNAL      EXTERNAL       EXTERNAL     CONTINUING     SEGMENT    NET INTEREST    EXPENSE
                           CUSTOMERS     CUSTOMERS      CUSTOMERS   OPERATIONS(1)  ASSETS(2)    EXPENSE(3)    (BENEFIT)(3)
                         -----------   ------------   ------------  -------------  ---------   -------------  ------------
<S>                      <C>           <C>            <C>           <C>            <C>         <C>            <C>
2004: (As Restated)
The Americas.........    $   393,883   $    111,252   $    505,135  $     21,731   $ 152,401   $        312   $      6,286
Asia-Pacific.........        924,024         44,126        968,150        11,614     160,578            273          3,154
Europe...............        241,202        144,868        386,070        (2,413)    124,604            299         (1,210)
                         -----------   ------------   ------------  ------------   ---------   ------------   ------------
                         $ 1,559,109   $    300,246   $  1,859,355  $     30,932   $ 437,584   $        884   $      8,230
                         ===========   ============   ============  ============   =========   ============   ============
2003:
The Americas.........    $   394,044   $     75,574   $    469,618  $      3,620   $ 190,077   $        594   $        610
Asia-Pacific.........        962,681         33,116        995,797        14,088     159,005            217          3,117
Europe...............        183,746        117,215        300,961         5,987      95,608            352          1,066
                         -----------   ------------   ------------  ------------   ---------   ------------   ------------
                         $ 1,540,471   $    225,905   $  1,766,376  $     23,695   $ 444,690   $      1,163   $      4,793
                         ===========   ============   ============  ============   =========   ============   ============
2002:
The Americas.........    $   418,121   $     75,056   $    493,176  $     (2,031)  $ 173,371   $      3,109   $     15,906
Asia-Pacific.........        504,886         22,613        527,499         6,466      84,920          1,717            476
Europe...............        125,486         83,615        209,102        (2,694)     78,011            966           (951)
                         -----------   ------------   ------------  ------------   ---------   ------------   ------------
                         $ 1,048,493   $    181,284   $  1,229,777  $      1,741   $ 336,302   $      5,792   $     15,431
                         ===========   ============   ============  ============   =========   ============   ============
</TABLE>

----------
(1)   Certain corporate expenses are allocated to the segments based on total
      revenue.

(2)   Corporate assets are included in the Americas segment.

(3)   These items are allocated using various methods and are not necessarily
      indicative of the actual interest expense and income taxes for the
      applicable divisions.

      Additional segment information is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                               2004         2003        2002
                                                                            ----------   ----------  -------
<S>                                                                         <C>          <C>         <C>
Long-lived assets:
The Americas(1).....................................................        $   21,952   $   27,121  $   38,274
Asia-Pacific........................................................            10,608        9,636       7,479
Europe..............................................................            23,510       21,482      16,947
                                                                            ----------   ----------  ----------
                                                                            $   56,070   $   58,239  $   62,700
                                                                            ==========   ==========  ==========
</TABLE>

----------
(1) Includes corporate assets.

FUTURE OPERATING RESULTS

      Various statements, discussions and analyses throughout this Annual Report
on Form 10-K/A are not based on historical fact and contain forward-looking
statements. Actual future results may differ materially from the forward-looking
statements in this Annual Report on Form 10-K/A. Future trends for revenue and
profitability are difficult to predict due to a variety of known and unknown
risks and uncertainties, including, without limitation, (i) loss of significant
customers or a reduction in prices we charge these customers; (ii) possible
adverse effect on demand for our products resulting from consolidation of mobile
operator customers; (iii) dependence upon principal suppliers and availability
and price of wireless products; (iv) possible adverse effects of future medical
claims regarding the use of wireless handsets; (v) possible difficulties
collecting our accounts receivable; (vi) our ability to absorb, through revenue
growth, the increasing operating costs that we have incurred and continue to
incur in connection with our activities; (vii) lack of demand for our products
and services in certain markets and our inability to maintain margins; (viii)
our ability to expand geographically on a satisfactory basis, through
acquisition or otherwise; (ix) potential future losses and capital required in
connection with our India business; (x) uncertainty whether wireless

                                     A-107

<PAGE>

equipment manufacturers and wireless network operators will continue to
outsource aspects of their business to us; (xi) our reliance upon third parties
to manufacture products which we distribute and reliance upon their quality
control procedures; (xii) our operations may be materially affected by
fluctuations in regional demand and economic factors; (xiii) ability to respond
to rapid technological changes in the wireless communications and data industry;
(xiv) access to or the cost of increasing amounts of capital, trade credit or
other financing; (xv) reliance on a third party to manage significant operations
in our Asia-Pacific division; (xvi) investment in sophisticated information
systems technologies and our reliance upon the proper functioning of such
systems (xvii) ability to manage and sustain future growth at our historical or
industry rates and our ability to meet intense industry competition; (xviii)
effect of hostilities or terrorist attacks on our operations; (xix) our history
of significant losses in previous; (xx) the impact that seasonality may have on
our business and results; (xxi) risks of foreign operations, including currency,
trade restrictions and political risks in our foreign markets; (xxii) ability to
attract and retain qualified management and other personnel and cost of
complying with labor agreements; (xxiii) ability to protect our proprietary
information; (xxiv) high rate of personnel turnover; (xxv) our significant
payment obligations under certain lease and other contractual arrangements;
(xxvi) the potential issuance of additional equity, including our common shares,
which could result in dilution of existing shareholders and may have an adverse
impact on the price of our common shares; (xxvii) uncertainties regarding the
outcome of pending litigation; (xxviii) ability to maintain adequate insurance
at a reasonable cost and (xxix) existence of anti-takeover measures. Because of
the aforementioned uncertainties affecting our future operating results, past
performance should not be considered to be a reliable indicator of future
performance, and investors should not use historical trends to anticipate future
results or trends.

FINANCIAL MARKET RISK MANAGEMENT

 CONCENTRATION OF CREDIT RISK

      Financial instruments, which potentially subject us to concentrations of
credit risk, consist principally of cash investments, forward currency contracts
and accounts receivable. We maintain cash investments primarily in AAA rated
money market mutual funds and overnight repurchase agreements, which have
minimal credit risk. We place forward currency contracts with high
credit-quality financial institutions in order to minimize credit risk exposure.
Concentrations of credit risk with respect to accounts receivable are limited
due to the large number of geographically dispersed customers. We perform
ongoing credit evaluations of our customers' financial condition and generally
do not require collateral to secure accounts receivable.

 EXCHANGE RATE RISK MANAGEMENT

      A substantial portion of our revenue and expenses are transacted in
markets worldwide and may be denominated in currencies other than the U.S.
dollar. Accordingly, our future results could be adversely affected by a variety
of factors, including changes in specific countries' political, economic or
regulatory conditions and trade protection measures.

      Our foreign currency risk management program is designed to reduce, but
not eliminate, unanticipated fluctuations in earnings and cash flows caused by
volatility in currency exchange rates by hedging. Generally, through purchase of
forward contracts, we hedge transactional currency risk, but do not hedge
foreign currency revenue or future operating income. Also, we do not hedge our
investment in foreign subsidiaries, where fluctuations in foreign currency
exchange rates may affect our comprehensive income or loss. At December 31, 2004
and 2003, the face amount of outstanding forward currency contracts to buy U.S.
dollars to hedge those currency exposures associated with certain assets and
liabilities denominated in non-functional currencies was $23 million and $17.3
million, respectively. An adverse change (defined as a 10% strengthening of the
U.S. dollar) in all exchange rates, relative to our foreign currency risk
management program, would have had no material impact on our results of
operations for 2004 or 2003. At December 31, 2004, there was no cash flow or net
investment hedges open. Our sensitivity analysis of foreign currency exchange
rate movements does not factor in a potential change in volumes or local
currency prices of our products sold or services provided. Actual results may
differ materially from those discussed above.

                                     A-108

<PAGE>

 INTEREST RATE RISK MANAGEMENT

      We are exposed to potential loss due to changes in interest rates.
Investments with interest rate risk include short-term marketable securities.
Debt with interest rate risk includes the fixed and variable rate debt. To
mitigate interest rate risks, we have, in the past, utilized interest rate swaps
to convert certain portions of our variable rate debt to fixed interest rates.

      We are exposed to changes in interest rates on our variable interest rate
revolving lines of credit. A 10% increase in short-term borrowing rates during
the quarter would have resulted in only a nominal increase in interest expense.
We did not have any interest rate swaps outstanding at December 31, 2004.

OTHER INFORMATION

 COMMON STOCK INFORMATION (UNAUDITED)

      Our Common Stock is listed on the NASDAQ Stock Market(R) under the symbol
CELL. The following tables set forth, for the periods indicated, the high and
low sale prices for the Common Stock as reported by the NASDAQ Stock Market(R).

<TABLE>
<CAPTION>
2004                                                                                           HIGH       LOW
----                                                                                        ---------  ---------
<S>                                                                                         <C>        <C>
First Quarter......................................................................         $   22.90  $   13.75
Second Quarter.....................................................................             16.37       9.64
Third Quarter......................................................................             17.20      11.53
Fourth Quarter.....................................................................             20.52      15.19
</TABLE>

<TABLE>
<CAPTION>
2003                                                                                           HIGH      LOW
----                                                                                        ---------  ---------
<S>                                                                                         <C>        <C>
First quarter......................................................................         $    7.71  $    3.54
Second quarter.....................................................................              7.42       4.94
Third quarter......................................................................             24.85       5.36
Fourth quarter.....................................................................             28.65      15.90
</TABLE>

      At January 28, 2005, there were approximately 445 shareholders of record.

      We have not paid cash dividends on our Common Stock other than S
corporation distributions made to shareholders during periods prior to the
rescissions of S corporation elections by our predecessors or us. In addition,
certain of our bank agreements require consent from the lender prior to
declaring or paying cash dividends, making capital distributions or other
payments to shareholders. The Board of Directors intends to continue a policy of
retaining earnings to finance the growth and development of our business and
does not expect to declare or pay any cash dividends in the foreseeable future.
However, the Board of Directors has approved two share repurchase programs in
2004. The first share repurchase program was completed in June 2004. The second
share repurchase program will continue in 2005.

      We have declared the following forward and reverse common stock splits.
All of the forward stock splits were effected in the form of common stock
dividends.

<TABLE>
<CAPTION>
                                                                               DIVIDEND PAYMENT OR
DECLARATION DATE                                                            STOCK SPLIT EFFECTIVE DATE     SPLIT RATIO
----------------                                                            --------------------------     ----------
<S>                                                                         <C>                            <C>
August 31, 1995.....................................................        September 20, 1995               5 for 4
November 12, 1996...................................................        December 17, 1996                3 for 2
January 28, 1997....................................................        March 3, 1997                    5 for 4
October 22, 1997....................................................        November 21, 1997                2 for 1
June 26, 2002.......................................................        June 27, 2002                    1 for 7
July 29, 2003.......................................................        August 25, 2003                  3 for 2
September 15, 2003..................................................        October 15, 2003                 3 for 2
</TABLE>

                                     A-109

<PAGE>

SELECTED FINANCIAL DATA (1)

<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31,
                                                   ------------------------------------------------------------------
                                                       2004          2003          2002         2001          2000
                                                   ------------  ------------  ------------ ------------  --------
                                                   (AS RESTATED,
                                                        SEE
                                                   FOOTNOTE 19)
                                                              (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                 <C>          <C>           <C>          <C>           <C>
Revenue(2).....................................     $ 1,859,355  $ 1,766,376   $ 1,229,777  $ 1,182,346   $ 1,197,578
Gross profit(2)................................         114,057       99,280        68,914       69,512       126,814
Operating income from continuing operations(2).          30,932       23,695         1,741        5,182        49,862
Income (loss) from continuing operations(2)....          19,958       15,147        14,960        4,222        38,174
Total discontinued operations(2)...............          (6,188)      (3,418)      (16,633)     (57,523)        5,509
Income (loss) before cumulative effect.........          13,770       11,729        (1,673)     (53,301)       43,683
Net income (loss)..............................     $    13,770  $    11,729   $   (42,421) $   (53,301)  $    43,683
Basic per share:
Income (loss) from continuing operations.......     $     1.08   $      0.83   $      0.83  $      0.24   $      2.14
Discontinued operations........................          (0.34)        (0.19)        (0.92)       (3.21)         0.31
  Cumulative effect of accounting change, net
   of tax......................................             --           --          (2.26)         --            --
                                                    -----------  -----------   -----------  -----------   ----------
  Net income (loss)............................     $     0.74   $      0.64   $     (2.35) $     (2.97)  $      2.45
                                                    ==========   ===========   ===========  ===========   ===========
Diluted per share:
Income (loss) from continuing operations.......     $     1.04   $      0.80   $      0.83  $      0.24   $      2.11
Discontinued operations........................          (0.32)        (0.18)        (0.93)       (3.21)         0.31
 Cumulative effect of accounting change, net
   of tax......................................             --           --          (2.26)         --            --
                                                    -----------  -----------   -----------  -----------   ----------
  Net income (loss)............................     $     0.72   $      0.62   $     (2.36) $     (2.97)  $      2.42
                                                    ==========   ===========   ===========  ===========   ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                                   DECEMBER 31,
                                                             ---------------------------------------------------------
                                                                2004           2003     2002       2001        2000
                                                             -------------  --------  ---------  ---------  ----------
                                                             (AS RESTATED)
<S>                                                          <C>            <C>       <C>        <C>        <C>
Working capital...........................................   $      94,667  $ 89,345  $  50,943  $ 160,015  $  267,557
Total assets..............................................         437,584   444,690    336,302    609,420     687,787
Long-term obligations.....................................              --        --         --    131,647     198,441
Total liabilities.........................................         286,847   297,106    222,659    459,407     493,690
Shareholders' equity......................................         150,737   147,584    113,643    150,013     194,097
</TABLE>

----------

(1)   Operating data includes certain items that were recorded in the years
      presented as follows: facility consolidation charges in 2003, 2001 and
      2000;and the cumulative effect of an accounting change in 2002. See
      Management's Discussion and Analysis of Financial Condition and Results of
      Operations and Notes to Consolidated Financial Statements.

(2)   We have reclassified certain prior year amounts to conform to the 2004
      presentation. The amounts reclassified had no effect on net income or
      earnings per share.

                                     A-110

<PAGE>

                                BRIGHTPOINT, INC.
                     INDEX TO FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
                                                                                    Page
                                                                                    ----
<S>                                                                                 <C>
Consent of Independent Registered Public Accounting Firm........................     F-1
Financial Statement Schedule for the years 2004, 2003 and 2002:
  SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS..............................     F-2
</TABLE>

                                     A-111

<PAGE>

            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

      We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-87863) pertaining to the Brightpoint, Inc. 1994 Stock Option
Plan, as amended, the 1996 Brightpoint, Inc. Stock Option Plan, as amended, the
Brightpoint, Inc. Non-employee Director Stock Option Plan and the Brightpoint,
Inc. Employee Stock Purchase Plan, and in the Registration Statement (Form S-8
No. 333-108496) pertaining to the Brightpoint, Inc. Amended and Restated
Independent Director Stock Compensation Plan, and in the Registration Statement
(Form S-8 No. 333-118769) pertaining to the Brightpoint, Inc. 2004 Long-Term
Incentive Plan of our report dated February 1, 2005, except Note 19 as to which
the date is May 5, 2005, with respect to the Consolidated Financial Statements
and Schedules of Brightpoint, Inc., and our report dated February 1, 2005 except
for the effects of the material weaknesses described in that report, as to which
the date is May 5, 2005, with respect to management's assessment of the
effectiveness of internal control over financial reporting of Brightpoint, Inc.,
and the effectiveness of internal control over financial reporting of
Brightpoint, Inc., included in this Form 10-K/A.

                                                           /s/ ERNST & YOUNG LLP

INDIANAPOLIS, INDIANA
AUGUST 29, 2005

                                      F-1

<PAGE>

                                BRIGHTPOINT, INC.

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                                     COL. A       COL. B       COL. C     COL. D        COL. E
                                                                   -----------  -----------    ------  ------------   -----------
                                                                                              CHARGED
                                                                    BALANCE AT  CHARGED TO       TO                    BALANCE AT
                                                                    BEGINNING    COSTS AND      OTHER                    END
DESCRIPTION                                                         OF PERIOD    EXPENSES     ACCOUNTS  DEDUCTIONS     OF PERIOD
-----------                                                        -----------  -----------    ------  ------------   -----------
                                                                                      (AMOUNTS IN THOUSANDS)
<S>                                                                <C>          <C>           <C>      <C>            <C>
Year ended December 31, 2004:
  Deducted from asset accounts:
  Allowance for doubtful accounts..............................    $     7,683  $     4,420    $   --  $     (5,888)  $     6,215
  Inventory valuation reserve..................................    $     5,043  $     5,205    $   --  $     (5,050)  $     5,198
                                                                   -----------  -----------    ------  ------------   -----------
  Total........................................................    $    12,726  $     9,625    $   --  $    (10,938)  $    11,413
                                                                   ===========  ===========    ======  ============   ===========
Year ended December 31, 2003:
  Deducted from asset accounts:
  Allowance for doubtful accounts..............................    $    13,948  $     3,861    $   --  $    (10,126)  $     7,683
  Inventory valuation reserve..................................    $     3,962  $     4,663    $   --  $     (3,582)  $     5,043
                                                                   -----------  -----------    ------  ------------   -----------
  Total........................................................    $    17,910  $     8,524    $   --  $    (13,708)  $    12,726
                                                                   ===========  ===========    ======  ============   ===========
Year ended December 31, 2002:
  Deducted from asset accounts:
  Allowance for doubtful accounts..............................    $    15,669  $     5,561    $   --  $     (7,282)  $    13,948
  Inventory valuation reserve..................................    $     9,894  $     9,769    $   --  $    (15,701)  $     3,962
                                                                   -----------  -----------    ------  ------------   -----------
  Total........................................................    $    25,563  $    15,330    $   --  $    (22,983)  $    17,910
                                                                   ===========  ===========    ======  ============   ===========
</TABLE>

Note: Amounts in table includes continuing and discontinuing operations.

                                      F-2