##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
 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. Employerincorporation)
    
    Identification No.)
 2601 METROPOLIS PARKWAY, SUITE 210, 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:
 Title of each class
    
    Name of each exchange on which registeredCommon Stock, $.01 Par value 
Preferred Share Purchase Rights
    
    The NASDAQ Stock Market LLC (NASDAQ Global Select Market)
 Securities registered pursuant to Section 12(g) of the Act: NONE
 o þ
 o þ
 þ o
 o
  o þ o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE:




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PART I
 Item 1. Business.
 General
      Financial Overview and Recent Developments
 
    
    Proposed Dangaard Telecom A/S Transaction. On February 19, 2007, we entered into a Stock Purchase Agreement, referred to as the Purchase
Agreement, by and among us, Dangaard Holding A/S, a Danish company, referred to as the Shareholder,
Dangaard Telecom A/S, a Danish company, referred to as the Target, and Nordic Capital Fund VI (for
purposes of Sections 6.16 and 12.4 only), consisting of: Nordic Capital VI Alpha, L.P. and Nordic
Capital Beta, L.P., Jersey limited partnerships acting through their general partner Nordic Capital
VI Limited, a Jersey company, NC VI Limited, a Jersey company, and Nordic Industries Limited, a
Jersey company.Upon consummation of the transactions contemplated by the Purchase Agreement, we will purchase all
of the issued and outstanding capital stock of the Target from the Shareholder for a purchase price
of (i) $100,000 in cash and (ii) 30,000,000 shares of our common stock, $0.01 par value, referred
to as the Shares.As a condition to the closing of the transactions contemplated by the Purchase Agreement, we will
execute the following additional agreements as of closing: (i) a Registration Rights Agreement by
and between us and the Shareholder, referred to as the Registration Agreement, (ii) a Shareholder
Agreement by and between us and the Shareholder, referred to as the Shareholder Agreement, and
(iii) an Escrow Agreement by and among us, the Shareholder and an escrow agent, selected by us and
reasonably acceptable to the Shareholder, referred to as the Escrow Agreement.In accordance with the Escrow Agreement, at closing, 3,000,000 of the Shares will be deposited into
escrow for a period of three years to secure the indemnity obligations of the Shareholder to us
under the Purchase Agreement.Under the Registration Agreement, we granted certain registration obligations to the Shareholder
and its successors and permitted assigns.Under the Shareholder Agreement, at the closing we are required to take all action to cause our
Board of Directors to be comprised of nine Directors, which will include up to three Directors
proposed by the Shareholder for review and approval by the Corporate Governance and Nominating
Committee of our Board as nominees to our Board at closing. Thereafter, the number of directors
that the Shareholder will have the right to propose to the Corporate Governance and Nominating
Committee of our Board for future election to our Board (between none and three) will depend upon
the level of the Shareholders ownership percentage of our common stock as stated in the
Shareholder Agreement.The closing is subject to various conditions, including, but not limited to, certain regulatory
approvals, lender approvals and the approval by our stockholders. We currently expect the
transaction to close during June or July of 2007.
 
    
    New Global Credit Facility.On February 16, 2007, we entered into a Credit Agreement, referred to as the Credit Agreement, by
and among us (and certain of our subsidiaries identified therein), Banc of America Securities LLC,
as sole lead arranger and book manager, General Electric Capital Corporation, as syndication agent,
ABN AMRO Bank N.V., as documentation agent, Wells Fargo Bank, N.A., as documentation agent, Bank of
America, N.A., as administration agent and the other lenders party
thereto. The Credit Agreement
 2




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establishes a five year senior secured revolving credit facility with
a line of credit in the initial amount of $165.0 million. The line of credit contains an
uncommitted accordion facility pursuant to which we may be able to increase the total commitment
under the revolving credit facility up to $240.0 million. The Credit Agreement is subject to
certain financial covenants and is secured by a lien on certain of our property and a pledge of the
voting stock issued by certain of our subsidiaries. The Credit Agreement replaces our $70.0 million
North American asset based credit facility under the Amended and Restated Credit Agreement dated as
of March 18, 2004, as amended, and the $50.0 million Australian Dollar (approximately $39.0 million
U.S. Dollars) asset based credit facility in Australia under the Credit Agreement dated December
24, 2002, as amended.
 
    
    Proposed CellStar Corporation Transaction. On December 18, 2006,
our wholly-owned subsidiary, 2601 Metropolis Corp., entered into a
definitive agreement with CellStar Corporation and certain of its
subsidiaries (CellStar) to acquire specific assets (and assume
certain liabilities) used in connection with CellStars U.S.
operations and its Miami-based Latin America business for $88
million in cash (subject to certain adjustments). The closing of
the proposed transaction, which is subject to the approval of
Cellstars stockholders and the completion of customary closing
conditions, is expected to occur in late March or early April of
2007.
 
    
    Supplier Diversification. In September 2006, we
made a significant
purchase of wireless device inventory under the terms of an
existing supply agreement in the Philippines. On November 7, 2006,
we entered into a distribution agreement, whereby we were
appointed as a distributor for Motorola wireless devices and
related accessories covering various regions, with the initial
focus of this master distribution agreement on Central Europe. In
December 2006, we made a significant purchase of wireless device
inventory under the terms of this new distribution agreement. The
wireless devices were procured in our Asia-Pacific region;
however, we intend to sell the products through all of our
international operations including those outside of the
Asia-Pacific region.In addition, on November 7, 2006 our primary North American
subsidiary, Brightpoint North America L.P., entered into a
logistic services agreement with Motorola to provide a wide range
of outsourced logistic services to support Motorolas retail and
direct-to-consumer channels for Motorolas Mobile Devices Business
and Connected Home Business.In the first quarter of 2006, Brightpoint North America L.P.
entered into an agreement with Motorola to distribute wireless
devices and related accessories to certain of our customers in the
United States.
 
    
    Purchase of Trio Industries, Inc. (TrioTek).In October 2006,
Wireless Fulfillment Services LLC, a subsidiary of our Americas
division, completed its acquisition of TrioTek for an initial
purchase price of approximately $0.6 million. The acquisition of
TrioTek was part of the Companys continued investment in Advanced
Wireless Services (AWS) in the Americas.
 
    
    T-Mobile USA, Inc. (T-Mobile) Master Service Agreement. In
August 2006, we entered into a Master Service Agreement (the
Agreement) with T-Mobile in the United States to provide a full
range of integrated forward logistic services enabling T-Mobile to
deliver its wireless devices to its direct and indirect
distribution channels, as well as directly to T-Mobiles
subscribers. Revenue and direct costs associated with the initial
facility preparation phase of the Agreement have been deferred as
further discussed in Note 3 to the Consolidated Financial
Statements.
 
    
    Purchase of Persequor Limited (Persequor).In February 2006, we
acquired all of the outstanding shares of Persequor for
approximately $0.6 million (net of cash acquired).
 Global Wireless Industry
  
    
    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 MVNOs.
 
    
    Infrastructure designers, manufacturers, builders, and operators:companies who operate
in this segment provide mobile operators with technology, equipment, and cell sites to host
and operate the networks.
 
    
    Component designers and manufacturers:design technology and components that are embedded
within a wireless device. Components include semiconductor chip sets, displays, antennae and
others.
 
    
    Content providers: develop mobile content for use with wireless devices and provide
consumers with content such as ring tones, messaging, music, streaming video and television,
games and other applications.
 3




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
    
    Wireless device manufacturers:design, manufacture, and market wireless devices, such as
cellular phones, wireless personal digital assistants, smart-phones and pagers, which
connect subscribers to a wireless network.
 
    
    Distributors, retailers and resellers:distributors provide logistic 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; retailers,
value-added resellers and system integrators provide subscribers and potential subscribers
with an access point, either physical or on-line, to purchase a subscription and/or a
wireless device.
  Generation
    
    Technology Standards1G Analog
    
    AMPS2G Digital
    
    TDMA, CDMA, GSM, iDEN2.5G Digital
    
    GPRS, EDGE, CDMA 1xRTT3G Digital
    
    W-CDMA/UMTS, CDMA 1xEV-DO, HSDPA
    Replacement Devices.
 Increasing Subscribers.
 4




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Next Generation Systems.
 New or Expanding Industry Participants.
 Pricing Factors and Average Selling Prices.
 Our Business
  Product Distribution.
 5




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Logistic Services.
  Activation Services.
 Prepaid Airtime.
 Our Strategy
  6




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Expand into New Geographic Markets.
 Add New Products and Services in Current Markets.
 Expand Existing Product and Service Offerings in Current Markets.
 Continue to Build and Promote the Brightpoint Brand within the Global Wireless Industry.
 Customers
  Mobile Operators and MVNOs:ALLTEL (United States), Ampd Mobile (United States), Dobson Cellular
(United States), IDT (United States), MetroPCS (United States), Sprint Nextel (United States),
T-Mobile (United States), TracFone (United States), Virgin Mobile (United States), COMCEL
(Colombia), SingTel (Australia), Telstra (Australia), Vodafone (Australia, New Zealand and
Germany), Reliance Infocomm (India), Tata TeleServices (India), Netcom (Norway), Tele2 (Sweden)
and T-Mobile Slovensko (Slovakia)Dealers and Agents:Moorehead Communications (United States), One Stop Cellular (United States),
Wireless One (United States), Fone Zone (Australia), First Mobile Group (New Zealand), MV2
Telecoms Shop (Philippines), Dialect (Sweden) and Klartsvar (Sweden)
 7




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Mass Retailers:Best Buy (United States), Target (United States), Strathfield (Australia),
Woolworths Group (Australia), and Pressbyran (Sweden)Other Distributors:Strax (United States), Wireless Channels (United States), Generation Next
Group (formerly Computech) (Hong Kong and Singapore), Raduga Pte. Ltd (Singapore) and Excel
International Limited (Hong Kong)
   Purchasing and Suppliers
    Sales and Marketing
  8




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Seasonality
  
    
    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.
  Competition
   9




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Product Distribution.
  Logistic Services.
  Activation Services.
  Prepaid Airtime.
  Information Systems
  10




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Employees
  Segment and Geographic Financial Information
  Item 1A. Risk Factors.
  We have significant future payment obligations pursuant to purchases of wireless devices, including
significant purchases of wireless devices as part of an expanded global relationship with a major
original equipment manufacturer.
 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.
 Our business may be adversely impacted by consolidation of mobile operators.
 11




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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 have debt facilities, which could prevent us from borrowing additional funds, if needed.
 We may have difficulty collecting our accounts receivable.
 Our future operating results will depend on our ability to continue to increase volumes and
maintain margins.
 Our business growth strategy includes acquisitions.
 12




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The market price of our Common Stock may continue to be volatile.
 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 depend on third parties to manufacture products that we distribute and, accordingly, rely on
their quality control procedures.
 Our operations may be materially affected by fluctuations in regional demand patterns and economic
factors.
 Rapid technological changes in the global wireless industry could have a material adverse effect on
our business.
 We rely on our suppliers to provide trade credit facilities to adequately fund our on-going
operations and product purchases.
 13




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A significant percentage of our revenues are generated outside of the United States in countries
that may have volatile currencies or other risks.
 Natural disasters, epidemics, hostilities and terrorist acts could disrupt our operations.
 We make significant investments in the technology used in our business and rely on that technology
to function effectively without interruptions.
 We may become subject to suits alleging medical risks associated with our wireless devices.
 The global wireless industry is intensely competitive and we may not be able to continue to compete
successfully in this industry.
 14




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We may not be able to manage and sustain future growth at our historical or current rates.
 Our business strategy includes entering into relationships and financings, which may provide us
with minimal returns or losses on our investments.
 Our operating results frequently vary significantly and respond to seasonal fluctuations in
purchasing patterns.
  We are subject to certain personnel related issues.
 15




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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.
  We have significant future payment obligations pursuant to certain leases and other long-term
contracts.
 We may be unable to obtain and maintain adequate business insurance at a reasonable cost.
 There are amounts of our securities issuable pursuant to our 2004 Long-Term Incentive Plan and our
Amended and Restated Independent Director Stock Compensation Plan that, if issued, could result in
dilution to existing shareholders, reduce earnings in future periods and adversely affect the
market price of our Common Stock.
 We have instituted measures to protect us against a takeover.
 16




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Item 1B. Unresolved Staff Comments.
  17




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Item 2. Properties.
  Number of
    
    AggregateLocations(1)
    
    Square FootageAmericas
    
    
    5
    
    
    
    1,300,323Asia-Pacific
    
    
    5
    
    
    
    161,762Europe
    
    
    5
    
    
    
    161,62315
    
    
    
    1,623,708
 
 (1)
    
    Refers to facilities operated by the Company that are greater than 1,000 square feet.  Item 3. Legal Proceedings.
  Item 4. Submission of Matters to a Vote of Security Holders.
  18




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PART II
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
  2006
    
    High
    
    LowFirst Quarter
    
    $
    25.88
    
    
    $
    15.94Second Quarter
    
    
    27.90
    
    
    
    13.25Third Quarter
    
    
    17.10
    
    
    
    10.96Fourth Quarter
    
    
    14.65
    
    
    
    11.35
 2005
    
    High
    
    LowFirst Quarter
    
    $
    7.64
    
    
    $
    5.89Second Quarter
    
    
    8.74
    
    
    
    6.83Third Quarter
    
    
    11.07
    
    
    
    8.43Fourth Quarter
    
    
    16.71
    
    
    
    10.13
  Dividend Payment orDeclaration Date
    
    Stock Split Effective Date
    
    Split RatioAugust 31, 1995
    
    September 20, 1995
    
    5 for 4November 12, 1996
    
    December 17, 1996
    
    3 for 2January 28, 1997
    
    March 3, 1997
    
    5 for 4October 22, 1997
    
    November 21, 1997
    
    2 for 1June 26, 2002
    
    June 27, 2002
    
    1 for 7July 29, 2003
    
    August 25, 2003
    
    3 for 2September 15, 2003
    
    October 15, 2003
    
    3 for 2August 12, 2005
    
    September 15, 2005
    
    3 for 2December 5, 2005
    
    December 30, 2005
    
    3 for 2May 9, 2006
    
    May 31, 2006
    
    6 for 5
     19




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Total numberof shares
    
    Total amountpurchased as
    
    purchased as
    
    Maximum dollarpart of the
    
    part
    
    of value of sharesTotal number
    
    Average
    
    publicly
    
    the publicly
    
    that may yet beof shares
    
    price paid
    
    announced
    
    announced
    
    purchased underMonth of purchase
    
    Purchased (1)
    
    per share
    
    program
    
    program
    
    the programOctober 1  October 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    November 1  November 30, 2006
    
    
    552
    
    
    $
    13.24
    
    
    
    
    
    
    
    
    
    
    
    December 1  December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    552
    
    
    $
    13.24
    
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    Represents shares of Common Stock repurchased by the Company to pay employee
withholding taxes due upon the vesting of restricted stock units. 20




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##### 



Item 6. Selected Financial Data.
  Year Ended December 31,2006(1)
    
    2005(1)
    
    2004
    
    2003(1)
    
    2002(1)Revenue
    
    $
    2,425,373
    
    
    $
    2,140,177
    
    
    $
    1,772,424
    
    
    $
    1,692,580
    
    
    $
    1,162,825Gross profit
    
    
    150,906
    
    
    
    132,012
    
    
    
    104,764
    
    
    
    86,324
    
    
    
    59,609Operating income (loss) from continuing
operations
    
    
    48,371
    
    
    
    44,353
    
    
    
    35,567
    
    
    
    20,355
    
    
    
    (1,150
    )Income from continuing operations
    
    
    36,190
    
    
    
    31,918
    
    
    
    23,826
    
    
    
    13,861
    
    
    
    13,922Total loss from discontinued operations, net of
income taxes
    
    
    (580
    )
    
    
    (21,478
    )
    
    
    (10,056
    )
    
    
    (2,132
    )
    
    
    (15,595
    )Income (loss) before cumulative effect
    
    
    35,610
    
    
    
    10,440
    
    
    
    13,770
    
    
    
    11,729
    
    
    
    (1,673
    )Net income (loss)
    
    
    35,610
    
    
    
    10,440
    
    
    
    13,770
    
    
    
    11,729
    
    
    
    (42,421
    )Earnings (loss) per share  basic:(2)Income from continuing operations
    
    $
    0.74
    
    
    $
    0.67
    
    
    $
    0.48
    
    
    $
    0.28
    
    
    $
    0.28Discontinued operations
    
    
    (0.01
    )
    
    
    (0.45
    )
    
    
    (0.20
    )
    
    
    (0.04
    )
    
    
    (0.32
    )Cumulative effect of accounting change,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.84
    )Net income (loss)
    
    $
    0.73
    
    
    $
    0.22
    
    
    $
    0.28
    
    
    $
    0.24
    
    
    $
    (0.88
    )Earnings (loss) per share  diluted:(2)Income from continuing operations
    
    $
    0.72
    
    
    $
    0.64
    
    
    $
    0.46
    
    
    $
    0.27
    
    
    $
    0.28Discontinued operations
    
    
    (0.02
    )
    
    
    (0.43
    )
    
    
    (0.19
    )
    
    
    (0.04
    )
    
    
    (0.32
    )Cumulative effect of accounting change,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.84
    )Net income (loss)
    
    $
    0.70
    
    
    $
    0.21
    
    
    $
    0.27
    
    
    $
    0.23
    
    
    $
    (0.88
    )
 2006
    
    2005
    
    2004
    
    2003
    
    2002Working capital
    
    $
    159,760
    
    
    $
    121,336
    
    
    $
    103,525
    
    
    $
    96,839
    
    
    $
    58,981Total assets
    
    
    778,353
    
    
    
    487,824
    
    
    
    437,584
    
    
    
    444,690
    
    
    
    336,302Long-term obligations
    
    
    3,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities
    
    
    583,525
    
    
    
    338,782
    
    
    
    286,847
    
    
    
    297,106
    
    
    
    222,659Shareholders equity
    
    
    194,828
    
    
    
    149,042
    
    
    
    150,737
    
    
    
    147,584
    
    
    
    113,643
 
 (1)
    
    Operating data includes certain items that were recorded in the years presented as
follows: facility consolidation charges (benefit) in 2006, 2005 and 2003; and cumulative effect of
an accounting change in 2002. See Item 7, Managements Discussion and Analysis of Financial
Condition.(2)
    
    Per share amounts for all periods have been adjusted to reflect the 6 for 5 Common Stock split
(paid in the form of a stock dividend) effected on May 31, 2006, the 3 for 2 common stock splits
(paid in the form of stock dividends) effected on December 30, 2005, September 15, 2005, October
15, 2003, and August 15, 2003, and the 1 for 7 reverse split effected on June 27, 2002. 21




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 OVERVIEW AND RECENT DEVELOPMENTS
      
    
    Proposed Dangaard Telecom A/S Transaction. On February 19, 2007, we entered into a Stock Purchase Agreement, referred to as the Purchase
Agreement, by and among us, Dangaard Holding A/S, a Danish company, referred to as the Shareholder,
Dangaard Telecom A/S, a Danish company, referred to as the Target, and Nordic Capital Fund VI (for
purposes of Sections 6.16 and 12.4 only), consisting of: Nordic Capital VI Alpha, L.P. and Nordic
Capital Beta, L.P., Jersey limited partnerships acting through their general partner Nordic Capital
VI Limited, a Jersey company, NC VI Limited, a Jersey company, and Nordic Industries Limited, a
Jersey company.Upon consummation of the transactions contemplated by the Purchase Agreement, we will purchase all
of the issued and outstanding capital stock of the Target from the Shareholder for a purchase price
of (i) $100,000 in cash and (ii) 30,000,000 shares of our common stock, $0.01 par value, referred
to as the Shares.As a condition to the closing of the transactions contemplated by the Purchase Agreement, we will
execute the following additional agreements as of closing: (i) a Registration Rights Agreement by
and between us and the Shareholder, referred to as the Registration Agreement, (ii) a Shareholder
Agreement by and between us and the Shareholder, referred to as the Shareholder Agreement, and
(iii) an Escrow Agreement by and among us, the Shareholder and an escrow agent, selected by us and
reasonably acceptable to the Shareholder, referred to as the Escrow Agreement.In accordance with the Escrow Agreement, at closing, 3,000,000 of the Shares will be deposited into
escrow for a period of three years to secure the indemnity obligations of the Shareholder to us
under the Purchase Agreement.Under the Registration Agreement, we granted certain registration obligations to the Shareholder
and its successors and permitted assigns.Under the Shareholder Agreement, at the closing we are required to take all action to cause our
Board of Directors to be comprised of nine Directors, which will include up to three Directors
proposed by the Shareholder for review and approval by the Corporate Governance and Nominating
Committee of our Board as nominees to our Board at closing. Thereafter, the number of directors
that the Shareholder will have the right to propose to the Corporate Governance and Nominating
Committee of our Board for future election to our Board (between none and three) will depend upon
the level of the Shareholders ownership percentage of our common stock as stated in the
Shareholder Agreement.The closing is subject to various conditions, including, but not limited to, certain regulatory
approvals, lender approvals and the approval by our stockholders. We currently expect the
transaction to close during June or July of 2007.
 
    
    New Global Credit Facility.On February 16, 2007, we entered into a Credit Agreement, referred to as the Credit Agreement, by
and among us (and certain of our subsidiaries identified therein), Banc of America Securities LLC,
as sole lead arranger and book manager, General Electric Capital Corporation, as syndication agent,
ABN AMRO Bank N.V., as documentation agent, Wells Fargo Bank, N.A., as documentation agent, Bank of
America, N.A., as administration agent and the other lenders party thereto. The Credit Agreement establishes a five year senior secured revolving credit facility with
a line of credit in the initial amount of $165.0 million. The line of credit contains an
uncommitted accordion facility pursuant to which we may be able to increase the total commitment
under the revolving credit facility up to $240.0 million. The Credit Agreement is subject to
certain financial covenants and is secured by a lien on certain of our property and a pledge of the
voting stock issued by certain of our subsidiaries. The Credit Agreement replaces our $70.0 million
North American asset based credit facility under the Amended and Restated Credit Agreement dated as
of March 18, 2004, as amended, and the $50.0 million Australian Dollar (approximately $39.0 million
U.S. Dollars) asset based credit facility in Australia under the Credit Agreement dated December
24, 2002, as amended.
 22




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##### 




    
    Proposed CellStar Corporation Transaction. On December 18, 2006,
our wholly-owned subsidiary, 2601 Metropolis Corp., entered into
a definitive agreement with CellStar Corporation and certain of
its subsidiaries (CellStar) to acquire specific assets (and assume
certain liabilities) used in connection with CellStars U.S.
operations and its Miami-based Latin America business for $88
million in cash (subject to certain adjustments). The closing of
the proposed transaction, which is subject to the approval of
Cellstars stockholders and the completion of customary closing
conditions, is expected to occur in late March or early April of
2007.
 
    
    Supplier Diversification. In September 2006, we
made a significant
purchase of wireless device inventory under the terms of an
existing supply agreement in the Philippines. On November 7, 2006,
we entered into a distribution agreement, whereby we were
appointed as a distributor for Motorola wireless devices and
related accessories covering various regions, with the initial
focus of this master distribution agreement on Central Europe. In
December 2006, we made a significant purchase of wireless device
inventory under the terms of this new distribution agreement. The
wireless devices were procured in our Asia-Pacific region;
however, we intend to sell the products through all of our
international operations including those outside of the
Asia-Pacific region.In addition, on November 7, 2006 our primary North American
subsidiary, Brightpoint North America L.P., entered into a
logistic services agreement with Motorola to provide a wide range
of outsourced logistic services to support Motorolas retail and
direct-to-consumer channels for Motorolas Mobile Devices Business
and Connected Home Business.In the first quarter of 2006, Brightpoint North America L.P.
entered into an agreement with Motorola to distribute wireless
devices and related accessories to certain of our customers in the
United States.
 
    
    Purchase of Trio Industries, Inc. (TrioTek).In October 2006,
Wireless Fulfillment Services LLC, a subsidiary of our Americas
division, completed its acquisition of TrioTek for an initial
purchase price of approximately $0.6 million. The acquisition of
TrioTek was part of our continued investment in Advanced Wireless
Services (AWS) in the Americas.
 
    
    T-Mobile USA, Inc. (T-Mobile) Master Service Agreement. In August
2006, we entered into a Master Service Agreement (the Agreement)
with T-Mobile in the United States to provide a full range of
integrated forward logistic services enabling T-Mobile to deliver
its wireless devices to its direct and indirect distribution
channels, as well as directly to T-Mobiles subscribers. Revenue
and direct costs associated with the initial facility preparation
phase of the Agreement have been deferred as further discussed in
Note 3 to the Consolidated Financial Statements.
 
    
    Purchase of Persequor Limited (Persequor).In February 2006, we
acquired all of the outstanding shares of Persequor for
approximately $0.6 million (net of cash acquired).
 23




---



##### 



2006 RESULTS OF OPERATIONS
 Revenue and Wireless Devices Handled
 Year Ended December 31,% of
    
    
    
    
    
    % of2006
    
    Total
    
    2005
    
    Total
    
    Change(Amounts in 000s)REVENUE BY DIVISION:Americas
    
    $
    814,588
    
    
    
    34
    %
    
    $
    675,074
    
    
    
    32
    %
    
    
    21
    %Asia-Pacific
    
    
    1,115,734
    
    
    
    46
    %
    
    
    1,081,529
    
    
    
    50
    %
    
    
    3
    %Europe
    
    
    495,051
    
    
    
    20
    %
    
    
    383,574
    
    
    
    18
    %
    
    
    29
    %Total
    
    $
    2,425,373
    
    
    
    100
    %
    
    $
    2,140,177
    
    
    
    100
    %
    
    
    13
    %REVENUE BY SERVICE LINE:Distribution
    
    $
    2,097,510
    
    
    
    86
    %
    
    $
    1,845,983
    
    
    
    86
    %
    
    
    14
    %Logistic services
    
    
    327,863
    
    
    
    14
    %
    
    
    294,194
    
    
    
    14
    %
    
    
    11
    %Total
    
    $
    2,425,373
    
    
    
    100
    %
    
    $
    2,140,177
    
    
    
    100
    %
    
    
    13
    %WIRELESS DEVICES HANDLED BY DIVISION:Americas
    
    
    42,740
    
    
    
    80
    %
    
    
    33,002
    
    
    
    78
    %
    
    
    30
    %Asia-Pacific
    
    
    9,035
    
    
    
    17
    %
    
    
    7,762
    
    
    
    19
    %
    
    
    16
    %Europe
    
    
    1,764
    
    
    
    3
    %
    
    
    1,317
    
    
    
    3
    %
    
    
    34
    %Total
    
    
    53,539
    
    
    
    100
    %
    
    
    42,081
    
    
    
    100
    %
    
    
    27
    %WIRELESS DEVICES HANDLED BY SERVICE LINE:Distribution
    
    
    12,841
    
    
    
    24
    %
    
    
    11,769
    
    
    
    28
    %
    
    
    9
    %Logistic services
    
    
    40,698
    
    
    
    76
    %
    
    
    30,312
    
    
    
    72
    %
    
    
    34
    %Total
    
    
    53,539
    
    
    
    100
    %
    
    
    42,081
    
    
    
    100
    %
    
    
    27
    %
   24




---



##### 



Revenue and wireless devices handled by division
 Americas
    
    Year Ended December 31,(Amounts in 000s)
    
    
    
    
    
    % of
    
    
    
    
    
    % of2006
    
    Total
    
    2005
    
    Total
    
    ChangeREVENUE:Distribution
    
    $
    612,386
    
    
    
    75
    %
    
    $
    507,508
    
    
    
    75
    %
    
    
    21
    %Logistic services
    
    
    202,202
    
    
    
    25
    %
    
    
    167,566
    
    
    
    25
    %
    
    
    21
    %Total
    
    $
    814,588
    
    
    
    100
    %
    
    $
    675,074
    
    
    
    100
    %
    
    
    21
    %WIRELESS DEVICES HANDLED :Distribution
    
    
    4,294
    
    
    
    10
    %
    
    
    3,566
    
    
    
    11
    %
    
    
    20
    %Logistic services
    
    
    38,446
    
    
    
    90
    %
    
    
    29,436
    
    
    
    89
    %
    
    
    31
    %Total
    
    
    42,740
    
    
    
    100
    %
    
    
    33,002
    
    
    
    100
    %
    
    
    30
    %
   25




---



##### 



Year Ended December 31,Asia-Pacific
    
    
    
    
    
    % of
    
    
    
    
    
    % of(Amounts in 000s)
    
    2006
    
    Total
    
    2005
    
    Total
    
    ChangeREVENUE:Distribution
    
    $
    1,088,247
    
    
    
    98
    %
    
    $
    1,054,051
    
    
    
    97
    %
    
    
    3
    %Logistic services
    
    
    27,487
    
    
    
    2
    %
    
    
    27,478
    
    
    
    3
    %
    
    
    0
    %Total
    
    $
    1,115,734
    
    
    
    100
    %
    
    $
    1,081,529
    
    
    
    100
    %
    
    
    3
    %WIRELESS DEVICES HANDLED :Distribution
    
    
    7,347
    
    
    
    81
    %
    
    
    7,329
    
    
    
    94
    %
    
    
    0
    %Logistic services
    
    
    1,688
    
    
    
    19
    %
    
    
    433
    
    
    
    6
    %
    
    
    290
    %Total
    
    
    9,035
    
    
    
    100
    %
    
    
    7,762
    
    
    
    100
    %
    
    
    16
    %
   26




---



##### 



Year Ended December 31,Europe
    
    
    
    
    
    % of
    
    
    
    
    
    % of(Amounts in 000s)
    
    2006
    
    Total
    
    2005
    
    Total
    
    ChangeREVENUE:Distribution
    
    $
    396,877
    
    
    
    80
    %
    
    $
    284,424
    
    
    
    74
    %
    
    
    40
    %Logistic services
    
    
    98,174
    
    
    
    20
    %
    
    
    99,150
    
    
    
    26
    %
    
    
    (1
    )%Total
    
    $
    495,051
    
    
    
    100
    %
    
    $
    383,574
    
    
    
    100
    %
    
    
    29
    %WIRELESS DEVICES HANDLED:Distribution
    
    
    1,200
    
    
    
    68
    %
    
    
    875
    
    
    
    66
    %
    
    
    37
    %Logistic services
    
    
    564
    
    
    
    32
    %
    
    
    442
    
    
    
    34
    %
    
    
    28
    %Total
    
    
    1,764
    
    
    
    100
    %
    
    
    1,317
    
    
    
    100
    %
    
    
    34
    %
   Gross Profit and Gross Margin
 Year EndedDecember 31,% of
    
    
    
    
    
    % of2006
    
    Total
    
    2005
    
    Total
    
    Change(Amounts in 000s)Distribution
    
    $
    81,774
    
    
    
    54
    %
    
    $
    71,371
    
    
    
    54
    %
    
    
    15
    %Logistic services
    
    
    69,132
    
    
    
    46
    %
    
    
    60,641
    
    
    
    46
    %
    
    
    14
    %Gross profit
    
    $
    150,906
    
    
    
    100
    %
    
    $
    132,012
    
    
    
    100
    %
    
    
    14
    %Distribution
    
    
    3.9
    %
    
    
    
    
    
    
    3.9
    %
    
    
    0.0
    % pointsLogistic services
    
    
    21.1
    %
    
    
    
    
    
    
    20.6
    %
    
    
    0.5
    % pointsGross margin
    
    
    6.2
    %
    
    
    
    
    
    
    6.2
    %
    
    
    0.0
    % points
   27




---



##### 



Selling General and Administrative (SG&A) Expenses
 Year EndedDecember 31,2006
    
    2005
    
    Change(Amounts in 000s)SG&A expenses
    
    $
    102,544
    
    
    $
    86,726
    
    
    
    18
    %Percent of revenue
    
    
    4.2
    %
    
    
    4.1
    %
    
    
    0.1
    % points
  Operating Income from Continuing Operations
 Year EndedDecember 31,% of
    
    
    
    
    
    % of2006
    
    Total
    
    2005
    
    Total
    
    Change(Amounts in 000s)Americas
    
    $
    41,377
    
    
    
    85
    %
    
    $
    39,921
    
    
    
    90
    %
    
    
    4
    %Asia-Pacific
    
    
    17,564
    
    
    
    36
    %
    
    
    18,939
    
    
    
    43
    %
    
    
    (7
    )%Europe
    
    
    11,391
    
    
    
    24
    %
    
    
    4,634
    
    
    
    10
    %
    
    
    146
    %Corporate
    
    
    (21,961
    )
    
    
    (45
    %)
    
    
    (19,141
    )
    
    
    (43
    %)
    
    
    15
    %Total
    
    $
    48,371
    
    
    
    100
    %
    
    $
    44,353
    
    
    
    100
    %
    
    
    9
    %
  Year EndedDecember 31,2006
    
    2005
    
    ChangeAmericas
    
    
    5.1
    %
    
    
    5.9
    %
    
    (0.8)% pointsAsia-Pacific
    
    
    1.6
    %
    
    
    1.8
    %
    
    (0.2)% pointsEurope
    
    
    2.3
    %
    
    
    1.2
    %
    
    1.1% pointsTotal
    
    
    2.0
    %
    
    
    2.1
    %
    
    (0.1)% points
  28




---



##### 



Interest
  Year EndedDecember 31,2006
    
    2005
    
    Change(Amounts in 000s)Interest expense
    
    $
    2,278
    
    
    $
    1,163
    
    
    
    96
    %Interest income
    
    
    (1,725
    )
    
    
    (1,309
    )
    
    
    32
    %Interest, net
    
    $
    553
    
    
    $
    (146
    )
    
    
    (479
    )%
  29




---



##### 



Other (Income) Expenses
 Year EndedDecember 31,2006
    
    2005
    
    Change(Amounts in 000s)Other (income) expenses
    
    $
    (610
    )
    
    $
    1,523
    
    
    
    (140
    )%Percent of revenue
    
    
    0.0
    %
    
    
    0.1
    %
    
    (0.1)%points
  Income Tax Expense
 Year EndedDecember 31,2006
    
    2005
    
    Change(Amounts in 000s)Income tax expense
    
    $
    12,238
    
    
    $
    11,058
    
    
    
    11
    %Effective tax rate
    
    
    25.3
    %
    
    
    25.7
    %
    
    
    (0.4
    )%points
  New Accounting Pronouncements
 Share-Based Payment Accounting for Stock Issued
to Employees
   30




---



##### 



Return on Invested Capital from Operations (ROIC)
  Year Ended December 31,2006
    
    
    2005
    
    
    2004(Amounts in 000s)Operating income after taxes:Operating income from continuing operations
    
    $
    48,371
    
    
    $
    44,353
    
    
    $
    35,567Plus: Facility consolidation charge (benefit)
    
    
    (9
    )
    
    
    933
    
    
    
    (236
    )Less: estimated income taxes (1)
    
    
    (12,254
    )
    
    
    (11,728
    )
    
    
    (10,633
    )Operating income after taxes
    
    $
    36,108
    
    
    $
    33,558
    
    
    $
    24,698Invested Capital:Debt
    
    $
    17,625
    
    
    $
    
    
    
    $
    Shareholders equity
    
    
    194,828
    
    
    
    149,042
    
    
    
    150,737Invested capital
    
    $
    212,453
    
    
    $
    149,042
    
    
    $
    150,737Average invested capital (2)
    
    $
    170,480
    
    
    $
    149,578
    
    
    $
    145,998ROIC (3)
    
    
    21
    %
    
    
    22
    %
    
    
    17
    %
 
 (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 the annual periods represents the simple average of the invested
capital amounts for the current and four prior quarter period ends.(3)
    
    ROIC is calculated by dividing operating income after taxes by average invested capital. 31




---



##### 



2005 RESULTS OF OPERATIONS
 Revenue and Wireless Devices Handled
 Year EndedDecember 31,
    
    % of
    
    December 31,
    
    % of2005
    
    Total
    
    2004
    
    Total
    
    Change(Amounts in 000s)REVENUE BY DIVISION:The Americas
    
    $
    675,074
    
    
    
    32
    %
    
    $
    505,135
    
    
    
    28
    %
    
    
    34
    %Asia-Pacific
    
    
    1,081,529
    
    
    
    50
    %
    
    
    968,150
    
    
    
    55
    %
    
    
    12
    %Europe
    
    
    383,574
    
    
    
    18
    %
    
    
    299,139
    
    
    
    17
    %
    
    
    28
    %Total
    
    $
    2,140,177
    
    
    
    100
    %
    
    $
    1,772,424
    
    
    
    100
    %
    
    
    21
    %REVENUE BY SERVICE LINE:Distribution
    
    $
    1,845,983
    
    
    
    86
    %
    
    $
    1,523,717
    
    
    
    86
    %
    
    
    21
    %Logistic services
    
    
    294,194
    
    
    
    14
    %
    
    
    248,707
    
    
    
    14
    %
    
    
    18
    %Total
    
    $
    2,140,177
    
    
    
    100
    %
    
    $
    1,772,424
    
    
    
    100
    %
    
    
    21
    %WIRELESS DEVICES HANDLED BY DIVISION:The Americas
    
    
    33,002
    
    
    
    78
    %
    
    
    18,886
    
    
    
    70
    %
    
    
    75
    %Asia-Pacific
    
    
    7,762
    
    
    
    19
    %
    
    
    6,956
    
    
    
    26
    %
    
    
    12
    %Europe
    
    
    1,317
    
    
    
    3
    %
    
    
    985
    
    
    
    4
    %
    
    
    34
    %Total
    
    
    42,081
    
    
    
    100
    %
    
    
    26,827
    
    
    
    100
    %
    
    
    57
    %WIRELESS DEVICES HANDLED BY SERVICE
LINE:Distribution
    
    
    11,769
    
    
    
    28
    %
    
    
    10,074
    
    
    
    38
    %
    
    
    17
    %Logistic services
    
    
    30,312
    
    
    
    72
    %
    
    
    16,753
    
    
    
    62
    %
    
    
    81
    %Total
    
    
    42,081
    
    
    
    100
    %
    
    
    26,827
    
    
    
    100
    %
    
    
    57
    %
   32




---



##### 



Revenue and wireless devices handled by division
 Americas
    
    Year EndedDecember 31,
    
    % of
    
    December 31,
    
    % of2005
    
    Total
    
    2004
    
    Total
    
    Change(Amounts in 000s)REVENUE:Distribution
    
    $
    507,508
    
    
    
    75
    %
    
    $
    393,883
    
    
    
    78
    %
    
    
    29
    %Logistic services
    
    
    167,566
    
    
    
    25
    %
    
    
    111,252
    
    
    
    22
    %
    
    
    51
    %Total
    
    $
    675,074
    
    
    
    100
    %
    
    $
    505,135
    
    
    
    100
    %
    
    
    34
    %WIRELESS DEVICES:Distribution
    
    
    3,566
    
    
    
    11
    %
    
    
    2,845
    
    
    
    15
    %
    
    
    25
    %Logistic services
    
    
    29,436
    
    
    
    89
    %
    
    
    16,041
    
    
    
    85
    %
    
    
    84
    %Total
    
    
    33,002
    
    
    
    100
    %
    
    
    18,886
    
    
    
    100
    %
    
    
    75
    %
   33




---



##### 



Asia-Pacific
    
    Year EndedDecember 31,
    
    % of
    
    December 31,
    
    % of2005
    
    Total
    
    2004
    
    Total
    
    Change(Amounts in 000s)REVENUE:Distribution
    
    $
    1,054,051
    
    
    
    97
    %
    
    $
    924,024
    
    
    
    95
    %
    
    
    14
    %Logistic services
    
    
    27,478
    
    
    
    3
    %
    
    
    44,126
    
    
    
    5
    %
    
    
    (38
    )%Total
    
    $
    1,081,529
    
    
    
    100
    %
    
    $
    968,150
    
    
    
    100
    %
    
    
    12
    %WIRELESS DEVICES:Distribution
    
    
    7,329
    
    
    
    94
    %
    
    
    6,545
    
    
    
    94
    %
    
    
    12
    %Logistic services
    
    
    433
    
    
    
    6
    %
    
    
    411
    
    
    
    6
    %
    
    
    5
    %Total
    
    
    7,762
    
    
    
    100
    %
    
    
    6,956
    
    
    
    100
    %
    
    
    12
    %
   Europe
    
    Year EndedDecember 31,
    
    % of
    
    December 31,
    
    % of2005
    
    Total
    
    2004
    
    Total
    
    Change(Amounts in 000s)REVENUE:Distribution
    
    $
    284,424
    
    
    
    74
    %
    
    $
    205,810
    
    
    
    69
    %
    
    
    38
    %Logistic services
    
    
    99,150
    
    
    
    26
    %
    
    
    93,329
    
    
    
    31
    %
    
    
    6
    %Total
    
    $
    383,574
    
    
    
    100
    %
    
    $
    299,139
    
    
    
    100
    %
    
    
    28
    %WIRELESS DEVICES:Distribution
    
    
    875
    
    
    
    66
    %
    
    
    684
    
    
    
    69
    %
    
    
    28
    %Logistic services
    
    
    442
    
    
    
    34
    %
    
    
    301
    
    
    
    31
    %
    
    
    47
    %Total
    
    
    1,317
    
    
    
    100
    %
    
    
    985
    
    
    
    100
    %
    
    
    34
    %
   34




---



##### 



Gross Profit and Gross Margin
 Year EndedDecember 31,
    
    % of
    
    December 31,
    
    % of2005
    
    Total
    
    2004
    
    Total
    
    Change(Amounts in 000s)Distribution
    
    $
    71,371
    
    
    
    54
    %
    
    $
    59,598
    
    
    
    57
    %
    
    
    20
    %Logistic services
    
    
    60,641
    
    
    
    46
    %
    
    
    45,166
    
    
    
    43
    %
    
    
    34
    %Gross profit
    
    $
    132,012
    
    
    
    100
    %
    
    $
    104,764
    
    
    
    100
    %
    
    
    26
    %Distribution
    
    
    3.9
    %
    
    
    
    
    
    
    3.9
    %
    
    
    
    
    
    
    0.0
    %pointsLogistic services
    
    
    20.6
    %
    
    
    
    
    
    
    18.2
    %
    
    
    
    
    
    
    2.4
    %pointsGross margin
    
    
    6.2
    %
    
    
    
    
    
    
    5.9
    %
    
    
    
    
    
    
    0.3
    %points
    Selling, General and Administrative (SG&A) Expenses
 Year EndedDecember 31,
    
    December 31,2005
    
    2004
    
    Change(Amounts in 000s)SG&A expenses
    
    $
    86,726
    
    
    $
    69,433
    
    
    
    25
    %Percentage of revenue
    
    
    4.1
    %
    
    
    3.9
    %
    
    
    0.2
    %points
  Facility Consolidation Charge
  35




---



##### 



Operating Income from Continuing Operations
  Year EndedDecember 31,% of
    
    
    
    
    
    % of2005
    
    Total
    
    2004
    
    Total
    
    Change(Amounts in 000s)Americas
    
    $
    39,921
    
    
    
    90
    %
    
    $
    25,245
    
    
    
    71
    %
    
    
    58
    %Asia-Pacific
    
    
    18,939
    
    
    
    43
    %
    
    
    18,546
    
    
    
    52
    %
    
    
    2
    %Europe
    
    
    4,634
    
    
    
    10
    %
    
    
    4,908
    
    
    
    14
    %
    
    
    (6
    )%Corporate
    
    
    (19,141
    )
    
    
    (43
    %)
    
    
    (13,132
    )
    
    
    (37
    %)
    
    
    46
    %Total
    
    $
    44,353
    
    
    
    100
    %
    
    $
    35,567
    
    
    
    100
    %
    
    
    25
    %
  Year EndedDecember 31,2005
    
    2004
    
    ChangeAmericas
    
    
    5.9
    %
    
    
    5.0
    %
    
    
    0.9
    % pointsAsia-Pacific
    
    
    1.8
    %
    
    
    1.9
    %
    
    
    (0.1
    )%pointsEurope
    
    
    1.2
    %
    
    
    1.6
    %
    
    
    (0.4
    )%pointsTotal
    
    
    2.1
    %
    
    
    2.0
    %
    
    
    0.1
    % points
     Income Tax Expense
 Year EndedDecember 31,
    
    December 31,2005
    
    2004
    
    Change(Amounts in 000s)Income tax expense
    
    $
    11,058
    
    
    $
    10,252
    
    
    
    7.9
    %Effective tax rate
    
    
    25.7
    %
    
    
    30.1
    %
    
    
    (4.4
    )% points
  36




---



##### 



Discontinued Operations
 Year EndedDecember 31,
    
    December 31,2005
    
    2004
    
    Change(Amounts in 000s)Loss from discontinued operations
    
    $
    (20,600
    )
    
    $
    (4,343
    )
    
    
    374
    %Loss on disposal of discontinued operations
    
    
    (878
    )
    
    
    (5,713
    )
    
    
    (85
    )%Total discontinued operations
    
    $
    (21,478
    )
    
    $
    (10,056
    )
    
    
    114
    %Percentage of Revenue
    
    
    (1.0
    )%
    
    
    (0.6
    )%
    
    
    0.4
    %pointsDiluted loss per share
    
    $
    (0.52
    )
    
    $
    (0.23
    )
    
    
    126
    %
   37




---



##### 



LIQUIDITY AND CAPITAL RESOURCES
 Consolidated Statement of Cash Flows
  Year Ended December 31,2006
        2005
    
    Change(Amounts in 000s)Net cash provided by (used in):Operating activities
    
    $
    (49,917
    )
    
    $
    68,960
    
    
    $
    (118,877
    )Investing activities
    
    
    (17,085
    )
    
    
    (15,499
    )
    
    
    (1,586
    )Financing activities
    
    
    11,908
    
    
    
    (11,168
    )
    
    
    23,076Effect of exchange rate changes on cash and cash equivalents
    
    
    3,171
    
    
    
    (8,360
    )
    
    
    11,531Net increase (decrease) in cash and cash equivalents
    
    $
    (51,923
    )
    
    $
    33,933
    
    
    $
    (85,856
    )
  
    
    $108.6 million more cash used for working capital. The increase in cash used for working
capital was due primarily to a $43.9 million increase in our Americas division resulting
from increased payments to vendors during 2006 compared to 2005. The increase in payments
to vendors was due to the timing of product receipts and related payments as well as the
mix of vendors owed with which we have different payment terms. In addition, cash used for
working capital increased $26.8 million in our Asia-Pacific division. The increase in cash
used for working capital in our Asia-Pacific division was primarily due to significant
purchases of wireless devices near the end of September and near the end of December as
part of an expanded global relationship with a major original equipment manufacturer. Cash
payments to this manufacturer were greater than cash collected from our customers during
the fourth quarter of 2006. Cash used for working capital in our Europe division increased
$26.9 million during 2006 compared to 2005. The increase in cash used for working capital
in our Europe division includes $15.7 million used to discontinue the sale of trade
receivables to third party financial institutions in Sweden and Norway during the first
quarter of 2006. In addition, cash used for working capital in our Europe division
increased compared to 2005 as a result of the addition of product offerings and sales
channels within the region.
    
    $10.2 million less cash provided by operating activities before changes in operating
assets and liabilities in 2006 compared to 2005. During 2005, cash provided by operating
activities before changes in operating assets and liabilities included $13.7 million of
cash provided by reductions in cash collateral requirements as well as $5.4 million of tax
benefits from tax deductions on stock based compensation. As a result of adopting SFAS
123(R), tax benefits from tax deductions on stock based compensation in excess of the
compensation costs recognized for those awards (excess tax benefits) are required to be
reported as a cash inflow from investing activities.
  
    
    $8.1 million more cash used for capital expenditures during 2006 compared to 2005. The
increase in capital expenditures was primarily due to investments in information technology
infrastructure and software upgrades as well as equipment and leasehold improvements for
new facilities.
    
    $5.8 million less cash provided from other long-term assets during 2006 compared to 2005.
Partially offset by:
    
    $12.2 million more cash provided by contract financing arrangements.
  
    
    $15.8 million additional net proceeds on lines of credit during 2006 compared to 2005.
    
    $8.7 million of excess tax benefits as a result of adopting SFAS 123(R).
    
    $1.0 million additional proceeds from stock option exercises during 2006 compared to 2005.
Partially offset by:
    
    $2.4 million additional purchases of treasury stock during 2006 compared to 2005.
 38




---



##### 



Cash Conversion Cycle
 Year Ended December 31,2006
    
    2005
    
    2004Days sales outstanding in accounts receivable
    
    
    28
    
    
    
    27
    
    
    
    24Days inventory on-hand
    
    
    67
    
    
    
    24
    
    
    
    24Days payable outstanding
    
    
    (70
    )
    
    
    (44
    )
    
    
    (42
    )Cash Conversion Cycle Days
    
    
    25
    
    
    
    7
    
    
    
    6
    (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.(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.
 39




---



##### 



Year Ended December 31,(Dollar amounts in thousands)
    
    2006
    
    
    2005
    
    
    2004Days sales outstanding in accounts receivable:Continuing operations revenue
    
    $
    2,425,373
    
    
    $
    2,140,177
    
    
    $
    1,772,424Value-added taxes invoiced for continuing operations
    
    
    123,916
    
    
    
    110,707
    
    
    
    110,733Total continuing operations revenue and value-added taxes
    
    $
    2,549,289
    
    
    $
    2,250,884
    
    
    $
    1,883,157Daily sales including value-added taxes
    
    
    7,081
    
    
    
    6,252
    
    
    
    5,231Continuing operations ending accounts receivable
    
    $
    228,186
    
    
    $
    168,004
    
    
    $
    126,274Agency accounts receivable
    
    
    (29,507
    )
    
    
    
    
    
    
    Accounts receivable excluding agency receivables
    
    $
    198,679
    
    
    $
    168,004
    
    
    $
    126,274Days sales outstanding in accounts receivable(A)
    
    
    28
    
    
    
    27
    
    
    
    24Days inventory on-hand:Continuing operations cost of revenue
    
    $
    2,274,467
    
    
    $
    2,008,165
    
    
    $
    1,667,660Indirect product and service costs
    
    
    (169,520
    )
    
    
    (126,700
    )
    
    
    (99,053
    )Total continuing operations cost of products sold
    
    $
    2,104,947
    
    
    $
    1,881,465
    
    
    $
    1,568,607Daily cost of products sold
    
    
    5,847
    
    
    
    5,226
    
    
    
    4,357Continuing operations ending inventory
    
    $
    391,657
    
    
    $
    124,864
    
    
    $
    105,469Agency inventory
    
    
    (2,606
    )
    
    
    
    
    
    
    Inventory excluding agency inventory
    
    $
    389,051
    
    
    $
    124,864
    
    
    $
    105,469Days inventory on-hand(B)
    
    
    67
    
    
    
    24
    
    
    
    24Days payables outstanding in accounts payable:Daily cost of products sold
    
    $
    5,847
    
    
    $
    5,226
    
    
    $
    4,357Continuing operations ending accounts payable
    
    $
    454,546
    
    
    $
    232,249
    
    
    $
    181,634Agency accounts payable
    
    
    (46,853
    )
    
    
    
    
    
    
    Accounts payable excluding agency payables
    
    $
    407,693
    
    
    $
    232,249
    
    
    $
    181,634Days payable outstanding(C)
    
    
    70
    
    
    
    44
    
    
    
    42Cash conversion cycle days (A+B-C)
    
    
    25
    
    
    
    7
    
    
    
    6
 
 (1)
    
    Agency accounts receivable, inventory and accounts payable represent amounts on our balance
sheet that include the full value of the product for which the revenue associated with these
transactions is recorded under the net method (excluding the value of the product sold). Lines of Credit
  Letters of Credit &
    
    NetCommitment
    
    Gross Availability
    
    Outstanding
    
    Guarantees
    
    Availability(Amounts in 000s)North America
    
    $
    70,000
    
    
    $
    63,000
    
    
    $
    
    
    
    $
    25,000
    
    
    $
    38,000Australia
    
    
    39,430
    
    
    
    38,819
    
    
    
    3,750
    
    
    
    11,275
    
    
    
    23,794Norway
    
    
    2,405
    
    
    
    2,405
    
    
    
    
    
    
    
    
    
    
    
    2,405Sweden
    
    
    4,380
    
    
    
    4,380
    
    
    
    
    
    
    
    
    
    
    
    4,380Slovakia
    
    
    21,000
    
    
    
    21,000
    
    
    
    13,875
    
    
    
    
    
    
    
    7,125Total
    
    $
    137,215
    
    
    $
    129,604
    
    
    $
    17,625
    
    
    $
    36,275
    
    
    $
    75,704
 40




---



##### 



Liquidity Analysis
  December 31,2006
    
    2005
    
    % Change(Amounts in 000s)Unrestricted cash
    
    $
    54,130
    
    
    $
    106,053
    
    
    
    (49
    )%Unused borrowing availability
    
    
    75,704
    
    
    
    79,494
    
    
    
    (5
    )%Liquidity
    
    $
    129,834
    
    
    $
    185,547
    
    
    
    (30
    )%
  Capital Resources
  CONTRACTUAL OBLIGATIONS AND COMMITMENTS
  Payments due by PeriodLess than
    
    1 to 3
    
    3 to 5Total
    
    1 Year
    
    Years
    
    Years
    
    Thereafter(Amounts in 000s)Operating leases
    
    $
    78,665
    
    
    $
    11,400
    
    
    $
    18,412
    
    
    $
    14,758
    
    
    $
    34,095Third-party debt and lines of credit(1)
    
    
    17,625
    
    
    
    13,875
    
    
    
    3,750
    
    
    
    
    
    
    
    Purchase obligations(2)
    
    
    26,340
    
    
    
    26,340
    
    
    
    
    
    
    
    
    
    
    
    Letters of credit
    
    
    36,275
    
    
    
    36,275
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    158,905
    
    
    $
    87,890
    
    
    $
    22,162
    
    
    $
    14,758
    
    
    $
    34,095
 
 (1)
    
    Reflects amounts included on the Consolidated Balance Sheet
including amounts owed under our line of credit in Australia that was
replaced in February 2007.(2)
    
    Purchase obligations exclude agreements that are cancelable without penalty. 41




---



##### 



CRITICAL ACCOUNTING ESTIMATES
  
    
    The accounting estimate requires us to make assumptions about matters that were
highly uncertain at the time the estimate was made; and
    
    Changes in the estimate are reasonably likely to occur from period to period as new
information becomes available, or use of different estimates that we reasonably could
have used in the current period, would have a material impact on our financial
condition or results of operations.
  Deferred Taxes and Effective Tax Rates
   Goodwill and Long-lived Asset Impairment
   42




---



##### 



CREDIT RATING
  SEASONALITY
  Year
    
    1st Quarter
    
    2nd Quarter
    
    3rd Quarter
    
    4th Quarter2006
    
    
    22
    %
    
    
    24
    %
    
    
    25
    %
    
    
    29
    %2005
    
    
    21
    %
    
    
    23
    %
    
    
    26
    %
    
    
    30
    %2004
    
    
    23
    %
    
    
    23
    %
    
    
    25
    %
    
    
    29
    %
  Year
    
    1st Quarter
    
    2nd Quarter
    
    3rd Quarter
    
    4th Quarter2006
    
    
    23
    %
    
    
    25
    %
    
    
    24
    %
    
    
    28
    %2005
    
    
    18
    %
    
    
    22
    %
    
    
    26
    %
    
    
    34
    %2004
    
    
    21
    %
    
    
    22
    %
    
    
    25
    %
    
    
    32
    %
 43




---



##### 



FORWARD LOOKING AND CAUTIONARY STATEMENTS
  44




---



##### 



Item 7A. Quantitative and Qualitative Disclosures about Market Risk
 Concentration of Credit Risk
  Exchange Rate Risk Management
   Interest Rate Risk Management
   45




---



##### 



Item 8. Financial Statements and Supplementary Data.
 Index to Consolidated Financial Statements
 PageConsolidated Financial Statements of Brightpoint, Inc.Consolidated Statements of Operations
    
    
    47Consolidated Balance Sheets
    
    
    48Consolidated Statements of Cash Flows
    
    
    49Consolidated Statements of Shareholders Equity
    
    
    50Notes to Consolidated Financial Statements
    
    
    51Report of Independent Registered Public Accounting Firm
    
    
    73
 46




---



##### 



Brightpoint, Inc.  Consolidated Statements of Operations
 Year Ended December 31,(Amounts in thousands, except per share data)
    
    2006
    
    
    2005
    
    
    2004RevenueDistribution revenue
    
    $
    2,097,510
    
    
    $
    1,845,983
    
    
    $
    1,523,717Logistic services revenue
    
    
    327,863
    
    
    
    294,194
    
    
    
    248,707Total revenue
    
    
    2,425,373
    
    
    
    2,140,177
    
    
    
    1,772,424Cost of revenueCost of distribution revenue
    
    
    2,015,736
    
    
    
    1,774,612
    
    
    
    1,464,119Cost of logistic services revenue
    
    
    258,731
    
    
    
    233,553
    
    
    
    203,541Total cost of revenue
    
    
    2,274,467
    
    
    
    2,008,165
    
    
    
    1,667,660Gross profit
    
    
    150,906
    
    
    
    132,012
    
    
    
    104,764Selling, general and administrative expenses
    
    
    102,544
    
    
    
    86,726
    
    
    
    69,433Facility consolidation charge (benefit)
    
    
    (9
    )
    
    
    933
    
    
    
    (236
    )Operating income from continuing operations
    
    
    48,371
    
    
    
    44,353
    
    
    
    35,567Interest, net
    
    
    553
    
    
    
    (146
    )
    
    
    (37
    )Other (income) expenses
    
    
    (610
    )
    
    
    1,523
    
    
    
    1,526Income from continuing operations before income taxes
    
    
    48,428
    
    
    
    42,976
    
    
    
    34,078Income tax expense
    
    
    12,238
    
    
    
    11,058
    
    
    
    10,252Income from continuing operations
    
    
    36,190
    
    
    
    31,918
    
    
    
    23,826Discontinued operations, net of income taxes:Loss from discontinued operations
    
    
    (417
    )
    
    
    (20,600
    )
    
    
    (4,343
    )Loss on disposal of discontinued operations
    
    
    (163
    )
    
    
    (878
    )
    
    
    (5,713
    )Total discontinued operations, net of income taxes
    
    
    (580
    )
    
    
    (21,478
    )
    
    
    (10,056
    )Net income
    
    $
    35,610
    
    
    $
    10,440
    
    
    $
    13,770Earnings per share  basic:Income from continuing operations
    
    $
    0.74
    
    
    $
    0.67
    
    
    $
    0.48Discontinued operations, net of income taxes
    
    
    (0.01
    )
    
    
    (0.45
    )
    
    
    (0.20
    )Net income
    
    $
    0.73
    
    
    $
    0.22
    
    
    $
    0.28Earnings per share  diluted:Income from continuing operations
    
    $
    0.72
    
    
    $
    0.64
    
    
    $
    0.46Discontinued operations, net of income taxes
    
    
    (0.02
    )
    
    
    (0.43
    )
    
    
    (0.19
    )Net income
    
    $
    0.70
    
    
    $
    0.21
    
    
    $
    0.27Weighted average common shares outstanding:Basic
    
    
    49,104
    
    
    
    47,954
    
    
    
    50,091Diluted
    
    
    50,554
    
    
    
    49,657
    
    
    
    51,757
 See accompanying notes
 47




---



##### 



Brightpoint, Inc.  Consolidated Balance Sheets
 December 31,(Amounts in thousands, except per share data)
    
    2006
    
    
    2005ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    54,130
    
    
    $
    106,053Pledged cash
    
    
    201
    
    
    
    168Accounts receivable (less allowance for doubtful
accounts of $4,926 in 2006 and $3,621 in 2005)
    
    
    228,186
    
    
    
    168,004Inventories
    
    
    391,657
    
    
    
    124,864Contract financing receivable
    
    
    20,161
    
    
    
    15,630Contract financing inventory
    
    
    7,293
    
    
    
    13,119Other current assets
    
    
    25,870
    
    
    
    22,623Total current assets
    
    
    727,498
    
    
    
    450,461Property and equipment, net
    
    
    37,904
    
    
    
    27,989Goodwill and other intangibles, net
    
    
    8,219
    
    
    
    6,707Other assets
    
    
    4,732
    
    
    
    2,667Total assets
    
    $
    778,353
    
    
    $
    487,824LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    454,552
    
    
    $
    232,258Accrued expenses
    
    
    68,320
    
    
    
    64,494Contract financing payable
    
    
    30,991
    
    
    
    32,373Lines of credit, short-term
    
    
    13,875
    
    
    
    Total current liabilities
    
    
    567,738
    
    
    
    329,125Long-term liabilities:Lines of credit
    
    
    3,750
    
    
    
    Other long-term liabilities
    
    
    12,037
    
    
    
    9,657Total long-term liabilities
    
    
    15,787
    
    
    
    9,657Total liabilities
    
    
    583,525
    
    
    
    338,782COMMITMENTS AND CONTINGENCIESShareholders 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; 57,536 issued in 2006
and 55,875 issued in 2005
    
    
    575
    
    
    
    559Additional paid-in-capital
    
    
    266,756
    
    
    
    258,443Treasury stock, at cost, 6,891 shares in 2006 and
6,113 shares in 2005
    
    
    (58,295
    )
    
    
    (39,928
    )Unearned compensation
    
    
    
    
    
    
    (12,125
    )Retained deficit
    
    
    (17,918
    )
    
    
    (53,528
    )Accumulated other comprehensive income (loss)
    
    
    3,710
    
    
    
    (4,379
    )Total shareholders equity
    
    
    194,828
    
    
    
    149,042Total liabilities and shareholders equity
    
    $
    778,353
    
    
    $
    487,824
 See accompanying notes
 48




---



##### 



Brightpoint, Inc.  Consolidated Statements of Cash Flows
 Year Ended December 31,(Amounts in thousands)
    
    2006
    
    2005
    
    2004Operating activitiesNet income
    
    $
    35,610
    
    
    $
    10,440
    
    
    $
    13,770Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    12,234
    
    
    
    11,101
    
    
    
    10,070Discontinued operations
    
    
    580
    
    
    
    21,478
    
    
    
    10,056Net operating cash flows used in discontinued operations
    
    
    
    
    
    
    (2,085
    )
    
    
    (1,674
    )Pledged cash requirements
    
    
    (15
    )
    
    
    13,662
    
    
    
    3,212Non-cash compensation
    
    
    6,005
    
    
    
    2,837
    
    
    
    Facility consolidation charge (benefit)
    
    
    (9
    )
    
    
    933
    
    
    
    (236
    )Change in deferred taxes
    
    
    (3,020
    )
    
    
    (390
    )
    
    
    1,792Income tax benefits from exercise of stock options
    
    
    
    
    
    
    5,377
    
    
    
    5,418Other non-cash
    
    
    2,126
    
    
    
    401
    
    
    
    53,511
    
    
    
    63,754
    
    
    
    42,408Changes in operating assets and liabilities,
net of effects from acquisitions and divestitures:Accounts receivable
    
    
    (41,135
    )
    
    
    (47,778
    )
    
    
    (16,265
    )Inventories
    
    
    (258,070
    )
    
    
    (23,656
    )
    
    
    1,476Other operating assets
    
    
    (1,542
    )
    
    
    (6,183
    )
    
    
    (590
    )Accounts payable and accrued expenses
    
    
    197,319
    
    
    
    82,823
    
    
    
    (19,287
    )Net cash provided by (used in) operating activities
    
    
    (49,917
    )
    
    
    68,960
    
    
    
    7,742Investing activitiesCapital expenditures
    
    
    (20,779
    )
    
    
    (12,649
    )
    
    
    (8,029
    )Acquisitions, net of cash acquired
    
    
    (1,413
    )
    
    
    (413
    )
    
    
    (1,447
    )Net investing cash flow from discontinued operations
    
    
    
    
    
    
    (1,097
    )
    
    
    33Net cash provided by (used in) contract financing arrangements
    
    
    6,960
    
    
    
    (5,285
    )
    
    
    4,398Decrease (increase) in other assets
    
    
    (1,853
    )
    
    
    3,945
    
    
    
    (878
    )Net cash used in investing activities
    
    
    (17,085
    )
    
    
    (15,499
    )
    
    
    (5,923
    )Financing ActivitiesNet proceeds from (payments on) credit facilities
    
    
    15,825
    
    
    
    
    
    
    
    (16,462
    )Purchase of treasury stock
    
    
    (18,367
    )
    
    
    (15,918
    )
    
    
    (24,010
    )Net financing cash used in discontinued operations
    
    
    
    
    
    
    
    
    
    
    (38
    )Excess tax benefit from equity based compensation
    
    
    8,690
    
    
    
    
    
    
    
    Pledged cash requirements
    
    
    
    
    
    
    
    
    
    
    5,000Proceeds from common stock issuances under employee stock
option plans
    
    
    5,760
    
    
    
    4,750
    
    
    
    1,013Net cash provided by (used in) financing activities
    
    
    11,908
    
    
    
    (11,168
    )
    
    
    (34,497
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    3,171
    
    
    
    (8,360
    )
    
    
    5,919Net increase (decrease) in cash and cash equivalents
    
    
    (51,923
    )
    
    
    33,933
    
    
    
    (26,759
    )Cash and cash equivalents at beginning of year
    
    
    106,053
    
    
    
    72,120
    
    
    
    98,879Cash and cash equivalents at end of year
    
    $
    54,130
    
    
    $
    106,053
    
    
    $
    72,120
 See accompanying notes
 49




---



##### 



Brightpoint, Inc.  Consolidated Statements of Shareholders Equity
 Additional
    
    
    
    
    
    
    
    
    
    
    Retained
    
    
    Accumulated Other
    
    
    TotalCommon
    
    
    Paid-in
    
    
    Treasury
    
    
    Unearned
    
    
    Earnings
    
    
    Comprehensive
    
    
    Shareholders
    
    
    Comprehensive(Amounts in thousands)
    
    Stock
    
    
    Capital
    
    
    Stock
    
    
    Compensation
    
    
    (Deficit)
    
    
    Income (Loss)
    
    
    Equity
    
    
    Income (Loss)Balance at December 31, 2003
    
    $
    520
    
    
    $
    227,011
    
    
    $
    
    
    
    $
    
    
    
    $
    (77,738
    )
    
    $
    (2,209
    )
    
    $
    147,5842004 Activity:Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,770
    
    
    
    
    
    
    
    13,770
    
    
    
    13,770Other comprehensive income (loss):Currency translation of foreign investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,961
    
    
    
    6,961
    
    
    
    6,961Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    (24,010
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,010
    )
    
    
    Common stock issued in connection with
employee stock plans and related income
tax benefit
    
    
    7
    
    
    
    6,425
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,432
    
    
    
    Balance at December 31, 2004
    
    $
    527
    
    
    $
    233,436
    
    
    $
    (24,010
    )
    
    $
    
    
    
    $
    (63,968
    )
    
    $
    4,752
    
    
    $
    150,737
    
    
    $
    20,7312005 Activity:Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,440
    
    
    
    
    
    
    
    10,440
    
    
    $
    10,440Other comprehensive income (loss):Currency translation of foreign investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,131
    )
    
    
    (9,131
    )
    
    
    (9,131
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    (15,918
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,918
    )
    
    
    Unearned compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,125
    )
    
    
    
    
    
    
    
    
    
    
    (12,125
    )
    
    
    Common stock issued in connection with
employee stock plans and related income
tax benefit
    
    
    32
    
    
    
    25,007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,039
    
    
    
    Balance at December 31, 2005
    
    $
    559
    
    
    $
    258,443
    
    
    $
    (39,928
    )
    
    $
    (12,125
    )
    
    $
    (53,528
    )
    
    $
    (4,379
    )
    
    $
    149,042
    
    
    $
    1,3092006 Activity:Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,610
    
    
    
    
    
    
    
    35,610
    
    
    
    35,610Other comprehensive income (loss):Currency translation of foreign investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,548
    
    
    
    8,548
    
    
    
    8,548Adjustment
to adopt Statement of Financial Accounting Standards 158, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (459
    )
    
    
    (459
    )
    
    
    Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    (18,367
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,367
    )
    
    
    Unearned compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,125
    
    
    
    
    
    
    
    
    
    
    
    12,125
    
    
    
    Common stock issued in connection with
employee stock plans and related income
tax benefit
    
    
    16
    
    
    
    8,313
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,329
    
    
    
    Balance at December 31, 2006
    
    $
    575
    
    
    $
    266,756
    
    
    $
    (58,295
    )
    
    $
    
    
    
    $
    (17,918
    )
    
    $
    3,710
    
    
    $
    194,828
    
    
    $
    44,158
 See accompanying notes
 50




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 1. Nature of Business and Summary of Significant Accounting Policies
 Nature of Business
   Principles of Consolidation
  Use of Estimates
  Revenue Recognition
 Revenue
Recognition
  51




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 Reporting Revenue Gross as a Principal versus
Net as an Agent,
   Gross Profit
  Vendor Programs
 Accounting by a Customer (Including a Reseller) for Certain Consideration
Received from a Vendor Application of Issue No. 02-16 by Resellers to Sales
Incentives Offered to Consumers by Manufacturers,
 
    
    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 terms 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.
 52




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 
    
    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 its 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
  Concentrations of Risk
    53




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 Allowance for Doubtful Accounts
  Contract Financing Arrangements
   Contract
    
    Contract
    
    Contract
    
    
    
    
    
    RevenueFinancing
    
    Financing
    
    Financing
    
    Gross
    
    RecognizedReceivable
    
    Inventory
    
    Payables
    
    Billings
    
    (Net Margin)2006
    
    $
    20,161
    
    
    $
    7,293
    
    
    $
    30,991
    
    
    $
    200,199
    
    
    $
    5,5102005
    
    
    15,630
    
    
    
    13,119
    
    
    
    32,373
    
    
    
    175,374
    
    
    
    7,078
  Inventories
  Fair Value of Financial Instruments
  54




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 Accounting for Derivative Instruments and Hedging Activities
 Property and Equipment
  Impairment of Long-Lived Tangible and Finite-Lived Intangible Assets
  Goodwill
 Goodwill and Other Intangible Assets Disclosures about Segments of an Enterprise and Related Information
 55




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
  Americas
    
    Europe
    
    Asia-Pacific
    
    TotalBalance at December 31, 2004
    
    $
    
    
    
    $
    17,509
    
    
    $
    1,495
    
    
    $
    19,004France impairment charge
    
    
    
    
    
    
    (11,545
    )
    
    
    
    
    
    
    (11,545
    )Goodwill from acquisitions
    
    
    
    
    
    
    
    
    
    
    275
    
    
    
    275Effects of foreign currency fluctuation
    
    
    
    
    
    
    (1,988
    )
    
    
    (99
    )
    
    
    (2,087
    )Balance at December 31, 2005
    
    $
    
    
    
    $
    3,976
    
    
    $
    1,671
    
    
    $
    5,647Goodwill from acquisitions
    
    
    611
    
    
    
    
    
    
    
    
    
    
    
    611Effects of foreign currency fluctuation
    
    
    
    
    
    
    608
    
    
    
    110
    
    
    
    718Balance at December 31, 2006
    
    $
    611
    
    
    $
    4,584
    
    
    $
    1,781
    
    
    $
    6,976
 Foreign Currency Translation
  Income Taxes
  Earnings Per Share
  56




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 Year Ended December 31,2006
    
    
    2005
    
    
    2004Income from continuing operations
    
    $
    36,190
    
    
    $
    31,918
    
    
    $
    23,826Discontinued operations, net of income taxes
    
    
    (580
    )
    
    
    (21,478
    )
    
    
    (10,056
    )Net Income
    
    $
    35,610
    
    
    $
    10,440
    
    
    $
    13,770Earnings per share  basic:Income from continuing operations
    
    $
    0.74
    
    
    $
    0.67
    
    
    $
    0.48Discontinued operations, net of income taxes
    
    
    (0.01
    )
    
    
    (0.45
    )
    
    
    (0.20
    )Net income
    
    $
    0.73
    
    
    $
    0.22
    
    
    $
    0.28Earnings per share  diluted:Income from continuing operations
    
    $
    0.72
    
    
    $
    0.64
    
    
    $
    0.46Discontinued operations, net of income taxes
    
    
    (0.02
    )
    
    
    (0.43
    )
    
    
    (0.19
    )Net income
    
    $
    0.70
    
    
    $
    0.21
    
    
    $
    0.27Weighted average shares outstanding for basic earnings per share
    
    
    49,104
    
    
    
    47,954
    
    
    
    50,091Net effect of dilutive stock options, restricted stock units and restricted
stock based on the treasury stock method using average market price
    
    
    1,450
    
    
    
    1,703
    
    
    
    1,666Weighted average shares outstanding for diulted earnings per share
    
    
    50,554
    
    
    
    49,657
    
    
    
    51,757
 Recently Issued Accounting Pronouncements
 Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109
 Fair Value Measurements
 Employers Accounting for Defined Benefit Pension and
Other Postretirement Plans  An Amendment of FASB Statements No. 87, 88, 106 and 132(R)
 57




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 Operating Segments
   Corporate andAmericas
    
    Asia-Pacific
    
    Europe
    
    Reconciling Items
    
    Total2006:Distribution revenue
    
    $
    612,386
    
    
    $
    1,088,247
    
    
    $
    396,877
    
    
    $
    
    
    
    $
    2,097,510Logistic services revenue
    
    
    202,202
    
    
    
    27,487
    
    
    
    98,174
    
    
    
    
    
    
    
    327,863Total revenue from external customers
    
    $
    814,588
    
    
    $
    1,115,734
    
    
    $
    495,051
    
    
    $
    
    
    
    $
    2,425,373Operating income from continuing operations
    
    $
    41,377
    
    
    $
    17,564
    
    
    $
    11,391
    
    
    $
    (21,961
    )
    
    $
    48,371Depreciation and amortization
    
    
    8,581
    
    
    
    2,487
    
    
    
    856
    
    
    
    310
    
    
    
    12,234Capital expenditures
    
    
    16,873
    
    
    
    2,662
    
    
    
    644
    
    
    
    600
    
    
    
    20,779Total segment assets
    
    
    226,634
    
    
    
    379,129
    
    
    
    162,598
    
    
    
    9,992
    
    
    
    778,3532005:Distribution revenue
    
    $
    507,508
    
    
    $
    1,054,051
    
    
    $
    284,424
    
    
    $
    
    
    
    $
    1,845,983Logistic services revenue
    
    
    167,566
    
    
    
    27,478
    
    
    
    99,150
    
    
    
    
    
    
    
    294,194Total revenue from external customers
    
    $
    675,074
    
    
    $
    1,081,529
    
    
    $
    383,574
    
    
    $
    
    
    
    $
    2,140,177Operating income from continuing operations
    
    $
    39,921
    
    
    $
    18,939
    
    
    $
    4,634
    
    
    $
    (19,141
    )
    
    $
    44,353Depreciation and amortization
    
    
    7,961
    
    
    
    1,946
    
    
    
    923
    
    
    
    271
    
    
    
    11,101Capital expenditures
    
    
    8,366
    
    
    
    2,858
    
    
    
    893
    
    
    
    532
    
    
    
    12,649Total segment assets
    
    
    192,206
    
    
    
    172,414
    
    
    
    103,802
    
    
    
    19,402
    
    
    
    487,8242004:Distribution revenue
    
    $
    393,883
    
    
    $
    924,024
    
    
    $
    205,810
    
    
    $
    
    
    
    $
    1,523,717Logistic services revenue
    
    
    111,252
    
    
    
    44,126
    
    
    
    93,329
    
    
    
    
    
    
    
    248,707Total revenue from external customers
    
    $
    505,135
    
    
    $
    968,150
    
    
    $
    299,139
    
    
    $
    
    
    
    $
    1,772,424Operating income from continuing operations
    
    $
    25,245
    
    
    $
    18,546
    
    
    $
    4,908
    
    
    $
    (13,132
    )
    
    $
    35,567Depreciation and amortization
    
    
    7,415
    
    
    
    1,337
    
    
    
    1,002
    
    
    
    316
    
    
    
    10,070Capital expenditures
    
    
    4,136
    
    
    
    2,242
    
    
    
    1,580
    
    
    
    71
    
    
    
    8,029Total segment assets
    
    
    141,248
    
    
    
    160,578
    
    
    
    124,605
    
    
    
    11,153
    
    
    
    437,584
 58




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 2006
    
    
    2005
    
    
    2004Total Revenue (1)Information about
Geographic Areas:AmericasUnited States
    
    $
    790,137
    
    
    $
    649,154
    
    
    $
    493,243Other
    
    
    24,451
    
    
    
    25,920
    
    
    
    11,892Total Americas
    
    $
    814,588
    
    
    $
    675,074
    
    
    $
    505,135Asia-PacificUnited Arab Emirates
    
    $
    618,507
    
    
    $
    553,402
    
    
    $
    552,648Australia
    
    
    204,227
    
    
    
    299,246
    
    
    
    258,441Other
    
    
    293,000
    
    
    
    228,881
    
    
    
    157,061Total Asia-Pacific
    
    $
    1,115,734
    
    
    $
    1,081,529
    
    
    $
    968,150EuropeSweden
    
    $
    225,071
    
    
    $
    186,471
    
    
    $
    209,020Other
    
    
    269,980
    
    
    
    197,103
    
    
    
    90,119Total Europe
    
    $
    495,051
    
    
    $
    383,574
    
    
    $
    299,139Total
    
    $
    2,425,373
    
    
    $
    2,140,177
    
    
    $
    1,772,424
 
 (1)
    
    Revenues are attributable to country based on selling location. 2006
    
    
    2005Long-Lived AssetsUnited States
    
    $
    34,264
    
    
    $
    22,133Sweden
    
    
    4,312
    
    
    
    3,773Other
    
    
    12,279
    
    
    
    11,457$
    50,855
    
    
    $
    37,363
 2. Stock Based Compensation
 Share-Based
Payment Accounting for Stock Issued to Employees
 59




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
   Year Ended December 31,2005
    
    
    2004Net income as reported
    
    $
    10,440
    
    
    $
    13,770Add back; stock compensation included in net income
    
    
    1,746
    
    
    
    Stock-based employee compensation costs, net of related tax effects,
that would have been included in the determination of net income
if the fair value method had been applied
    
    
    (3,298
    )
    
    
    (2,197
    )Pro forma net income
    
    $
    8,888
    
    
    $
    11,573Earnings per share  basic:Net income as reported
    
    $
    0.22
    
    
    $
    0.28Add back; stock compensation included in net income
    
    
    0.04
    
    
    
    Stock-based employee compensation costs, net of related tax effects,
that would have been included in the determination of net income
if the fair value method had been applied
    
    
    (0.07
    )
    
    
    (0.05
    )Pro forma net income
    
    $
    0.19
    
    
    $
    0.23Earnings per share  diluted:Net income as reported
    
    $
    0.21
    
    
    $
    0.27Add back; stock compensation included in net income
    
    
    0.04
    
    
    
    Stock-based employee compensation costs, net of related tax effects,
that would have been included in the determination of net income
if the fair value method had been applied
    
    
    (0.07
    )
    
    
    (0.05
    )Pro forma net income
    
    $
    0.18
    
    
    $
    0.22
  60




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 2004 Long-Term Incentive Plan
   Amended and Restated Independent Director Stock Compensation Plan
  Stock Options
  WeightedWeighted
    
    Average
    
    AggregateAverage
    
    Remaining
    
    IntrinsicExercise
    
    Contractual
    
    Value as ofOptions
    
    Price
    
    Life
    
    December 31Outstanding at January 1
    
    
    2,699,245
    
    
    $
    5.29Granted
    
    
    
    
    
    
    Exercised
    
    
    (1,378,068
    )
    
    
    4.23Forfeited
    
    
    (96,755
    )
    
    
    6.71Expired
    
    
    (3,930
    )
    
    
    1.28Outstanding at December 31
    
    
    1,220,492
    
    
    $
    6.37
    
    
    
    2.55
    
    
    $
    8,635,623Exercisable at December 31
    
    
    358,473
    
    
    $
    4.62
    
    
    
    2.05
    
    
    $
    3,166,174
 61




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
  ExercisableWeightedNumber
    
    Average
    
    Weighted
    
    Number
    
    WeightedOutstanding at
    
    Remaining
    
    Average
    
    Outstanding at
    
    AverageRange of
    
    December 31,
    
    Contractual
    
    Exercise
    
    December 31,
    
    ExerciseExercise Prices
    
    2006
    
    Life
    
    Price
    
    2006
    
    Price$
    0.35
    
    
    
    
    $
    6.38
    
    
    
    182,771
    
    
    1.25      years
    
    $
    1.80
    
    
    
    170,171
    
    
    $
    1.57$
    6.51
    
    
    
    
    $
    6.51
    
    
    
    292,500
    
    
    2.15      years
    
    
    6.51
    
    
    
    27,000
    
    
    
    6.51$
    6.78
    
    
    
    
    $
    6.78
    
    
    
    261,020
    
    
    3.14      years
    
    
    6.78
    
    
    
    68,601
    
    
    
    6.78$
    7.08
    
    
    
    
    $
    7.08
    
    
    
    6,750
    
    
    3.42      years
    
    
    7.08
    
    
    
    2,250
    
    
    
    7.08$
    7.48
    
    
    
    
    $
    10.26
    
    
    
    477,451
    
    
    2.96      years
    
    
    7.81
    
    
    
    90,451
    
    
    
    8.081,220,492
    
    
    
    
    
    
    $
    6.37
    
    
    
    358,473
    
    
    $
    4.62
  2005
    
    2004Risk-free interest rate
    
    
    3.86
    %
    
    
    3.36
    %Dividend yield
    
    
    0.00
    %
    
    
    0.00
    %Expected volatility
    
    
    .84
    
    
    
    .85Expected life of the options (years)
    
    
    3.24
    
    
    
    3.24
  WeightedWeighted
    
    Average
    
    AggregateRestricted
    
    Average
    
    Remaining
    
    IntrinsicStock
    
    Exercise
    
    Contractual
    
    Value as ofUnits
    
    Price
    
    Life
    
    December 31Outstanding at January 1
    
    
    401,427
    
    
    $
    Granted
    
    
    301,325
    
    
    
    Released
    
    
    (51,460
    )
    
    
    Forfeited
    
    
    (39,162
    )
    
    
    Outstanding at December 31
    
    
    612,130
    
    
    $
    
    
    
    
    2.14
    
    
    $
    8,233,149
  Weighted
    
    WeightedAverage
    
    AverageRestricted
    
    Grant
    
    RemainingStock
    
    Date
    
    ContractualAwards
    
    Fair Value
    
    LifeOutstanding at January 1
    
    
    1,063,485
    
    
    $
    7.29Granted
    
    
    184,673
    
    
    
    21.06Released
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Outstanding at December 31
    
    
    1,248,158
    
    
    $
    9.33
    
    
    
    3.41
  62




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
   3. T-Mobile Agreement
 Revenue Arrangements with Multiple
Deliverables
 4. Acquisitions
    63




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
  5. Income Tax Expense
  Year ended December 31,2006
    
    2005
    
    2004United States
    
    $
    17,428
    
    
    $
    17,234
    
    
    $
    8,249Foreign
    
    
    31,000
    
    
    
    25,742
    
    
    
    25,829$
    48,428
    
    
    $
    42,976
    
    
    $
    34,078
  2006
    
    2005
    
    2004Tax at U.S. Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State and local income taxes, net of U.S. Federal benefit
    
    
    (0.2
    )
    
    
    1.6
    
    
    
    1.2Net benefit of tax on foreign operations
    
    
    (9.3
    )
    
    
    (6.6
    )
    
    
    (9.6
    )Other
    
    
    (0.2
    )
    
    
    (4.3
    )
    
    
    3.5Effective income tax rate
    
    
    25.3
    %
    
    
    25.7
    %
    
    
    30.1
    %
  Year ended December 31,2006
    
    2005
    
    2004Current:Federal
    
    $
    6,788
    
    
    $
    4,549
    
    
    $
    1,979State
    
    
    659
    
    
    
    1,206
    
    
    
    647Foreign
    
    
    7,145
    
    
    
    6,008
    
    
    
    6,932$
    14,592
    
    
    $
    11,763
    
    
    $
    9,558Deferred:Federal
    
    
    (1,255
    )
    
    $
    (751
    )
    
    $
    710State
    
    
    (313
    )
    
    
    (160
    )
    
    
    86Foreign
    
    
    (786
    )
    
    
    206
    
    
    
    (102
    )(2,354
    )
    
    
    (705
    )
    
    
    694$
    12,238
    
    
    $
    11,058
    
    
    $
    10,252
   64




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
  December 31,2006
    
    
    2005Deferred tax assets:Current:Capitalization of inventory costs
    
    $
    599
    
    
    $
    899Allowance for doubtful accounts
    
    
    1,277
    
    
    
    922Accrued liabilities and other
    
    
    7,575
    
    
    
    5,823Noncurrent:Depreciation
    
    
    38
    
    
    
    39Other long-term investments
    
    
    708
    
    
    
    Net operating losses and other carryforwards
    
    
    23,301
    
    
    
    19,15233,498
    
    
    
    26,835Valuation allowance
    
    
    (22,940
    )
    
    
    (18,218
    )Total deferred tax assets
    
    
    10,558
    
    
    
    8,617Deferred tax liabilities:Current:Other current liabilities
    
    
    (1,184
    )
    
    
    (2,539
    )Noncurrent:Depreciation
    
    
    (2,357
    )
    
    
    (3,346
    )Other assets
    
    
    (1,961
    )
    
    
    (330
    )Total deferred tax liabilities
    
    
    (5,502
    )
    
    
    (6,215
    )Net deferred assets
    
    $
    5,056
    
    
    $
    2,402
   6. Divestitures and Discontinued Operations
 Accounting for the
Impairment or Disposal of Long-Lived Assets
 65




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
  Year ended December 31,2006
    
    2005
    
    2004Revenue
    
    $
    
    
    
    $
    103,562
    
    
    $
    90,968Loss from discontinued operations before income taxes
    
    $
    (337
    )
    
    $
    (21,208
    )
    
    $
    (6,819
    )Income tax expense (benefit)
    
    
    80
    
    
    
    (608
    )
    
    
    (2,476
    )Loss from discontinued operations (1)
    
    $
    (417
    )
    
    $
    (20,600
    )
    
    $
    (4,343
    )Loss on disposal of discontinued operations (2)
    
    
    (163
    )
    
    
    (878
    )
    
    
    (5,713
    )Total discontinued operations
    
    $
    (580
    )
    
    $
    (21,478
    )
    
    $
    10,056
 
 (1)
    
    Includes $13.8 million of goodwill and intangible asset impairment charges for the year
ended December 31, 2005 related to the Companys operations in France.(2)
    
    Loss on disposal of discontinued operations for the year ended December 31, 2005
includes $2.2 million loss on sale of France operations (net of approximately $3.5 million
gains related to cumulative currency translation adjustments), which is partially offset by
approximately $1.0 million of tax benefits from previous disposals. Loss on disposal of
discontinued operations for the year ended December 31, 2004 includes $3.8 million loss on
sale of Ireland operations 2004. France Operations
  7. Property and Equipment
  December 312006
    
    2005Information systems equipment and software
    
    
    70,017
    
    
    
    74,101Furniture and equipment
    
    
    28,018
    
    
    
    18,729Leasehold improvements
    
    
    7,580
    
    
    
    5,382105,615
    
    
    
    98,212Less accumulated depreciation
    
    
    (67,711
    )
    
    
    (70,223
    )37,904
    
    
    
    27,989
  66




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 8. Lease Arrangements
   Year ending December 31,2007
    
    $
    11,4002008
    
    
    9,5072009
    
    
    8,9052010
    
    
    7,7022011
    
    
    7,056Thereafter*
    
    
    34,095$
    78,665
 
 *
    
    Includes approximately $32.8 million related to the Companys 495,000 square foot facility
located in Plainfield, Indiana, for which the initial lease term expires in 2019. The minimum
lease payments increase every three years on this lease agreement. The Company recognizes rent
expense on a straight-line basis, which results in deferred rent during the portion of the
lease term in which payments are less than the expense recognized. As a result, the Company
has a deferred rent liability of $5.6 million and $4.7 million at December 31, 2006 and 2005,
which is included as a component of Other long-term liabilities in the Consolidated Balance
Sheets. 9. Lines of Credit
   67




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
  Letters of Credit &
    
    
    NetCommitment
    
    
    Gross Availability
    
    
    Outstanding
    
    
    Guarantees
    
    
    AvailabilityNorth America
    
    $
    70,000
    
    
    $
    63,000
    
    
    $
    
    
    
    $
    25,000
    
    
    $
    38,000Australia
    
    
    39,430
    
    
    
    38,819
    
    
    
    3,750
    
    
    
    11,275
    
    
    
    23,794Norway
    
    
    2,405
    
    
    
    2,405
    
    
    
    
    
    
    
    
    
    
    
    2,405Sweden
    
    
    4,380
    
    
    
    4,380
    
    
    
    
    
    
    
    
    
    
    
    4,380Slovakia
    
    
    21,000
    
    
    
    21,000
    
    
    
    13,875
    
    
    
    
    
    
    
    7,125Total
    
    $
    137,215
    
    
    $
    129,604
    
    
    $
    17,625
    
    
    $
    36,275
    
    
    $
    75,704
 Lines of Credit -Americas Division
  Lines of Credit  Asia-Pacific
   68




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 Lines of Credit  Europe
    10. Guarantees
 Guarantors Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others,
    69




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
  Year EndedDecember 31,2006
    
    2005January 1
    
    $
    2,117
    
    
    $
    369Provision for product warranties
    
    
    4,837
    
    
    
    3,501Change in estimate
    
    
    (461
    )
    
    
    Settlements during the period
    
    
    (3,430
    )
    
    
    (1,753
    )December 31
    
    $
    3,063
    
    
    $
    2,117
 11. Shareholders Equity
   Treasury Stock
  Preferred Share Purchase Rights
  70




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 12. Employee Benefit Plans
  Employers Accounting for Pensions
 December 31,2006
    
    2005Accrued benefit liability
    
    $
    (1,754
    )
    
    $
    (1,054
    )Intangible asset
    
    
    
    
    
    
    626Deferred tax asset
    
    
    300
    
    
    
    Accumulated other comprehensive loss
    
    
    459
    
    
    
    Net periodic benefit cost
    
    
    567
    
    
    
    428
  13. Legal Proceedings and Contingencies
  14. Quarterly Results of Operations (Unaudited)
 2006
    
    First
    
    Second
    
    Third
    
    FourthRevenue
    
    $
    564,555
    
    
    $
    549,858
    
    
    $
    633,739
    
    
    $
    677,221Gross profit
    
    
    36,312
    
    
    
    35,744
    
    
    
    37,002
    
    
    
    41,848Income from continuing operations
    
    
    9,001
    
    
    
    8,212
    
    
    
    8,944
    
    
    
    10,033Net income
    
    
    8,868
    
    
    
    8,241
    
    
    
    8,764
    
    
    
    9,737Earnings per share-basic:Income from continuing operations
    
    $
    0.18
    
    
    $
    0.17
    
    
    $
    0.18
    
    
    $
    0.20Net income
    
    $
    0.18
    
    
    $
    0.17
    
    
    $
    0.18
    
    
    $
    0.19Earnings per share-diluted:Income from continuing operations
    
    $
    0.18
    
    
    $
    0.16
    
    
    $
    0.18
    
    
    $
    0.20Net income
    
    $
    0.18
    
    
    $
    0.16
    
    
    $
    0.17
    
    
    $
    0.19
 2005
    
    First
    
    Second
    
    Third
    
    FourthRevenue
    
    $
    465,074
    
    
    $
    499,494
    
    
    $
    544,975
    
    
    $
    630,634Gross profit
    
    
    27,205
    
    
    
    29,514
    
    
    
    31,678
    
    
    
    43,615Income from continuing operations
    
    
    5,141
    
    
    
    6,672
    
    
    
    8,273
    
    
    
    11,832Net income
    
    
    2,873
    
    
    
    4,899
    
    
    
    (6,182
    )
    
    
    8,850Earnings per share-basic:Income from continuing operations
    
    $
    0.11
    
    
    $
    0.14
    
    
    $
    0.17
    
    
    $
    0.24Net income
    
    $
    0.06
    
    
    $
    0.10
    
    
    $
    (0.13
    )
    
    $
    0.18Earnings per share-diluted:Income from continuing operations
    
    $
    0.10
    
    
    $
    0.14
    
    
    $
    0.17
    
    
    $
    0.23Net income
    
    $
    0.06
    
    
    $
    0.10
    
    
    $
    (0.12
    )
    
    $
    0.18
  71




---



##### 



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 15. Related Party Transactions
  16. Subsequent Events
         72




---



##### 



Report of Independent Registered Public Accounting Firm
 
      rnst oung
 
 73




---



##### 



Report of Independent Registered Public Accounting Firm
 
       rnst oung
 
 74




---



##### 



Item 9. Changes in and disagreements with Accountants on Accounting and Financial Disclosure.
  Item 9A. Controls and Procedures.
 Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  Managements Report on Internal Control Over Financial Reporting
     75




---



##### 



Audit Committee Oversight
  Item 9B. Other Information.
  PART III
 Item 10. Directors and Executive Officers of the Registrant.
  Code of Business Conduct
 www.brightpoint.com
 Item 11. Executive Compensation.
  Item 12. Security Ownership of certain Beneficial Owners and Management and Related Shareholder Matters.
  Item 13. Certain Relationships and Related Transactions.
  76




---



##### 



Item 14. Principal Accountant Fees and Services.
  PART IV
 Item 15. Exhibits and Financial Statement Schedules.
       ExhibitNumber
    

Description2.1
    
    Agreement for the Sale and Purchase of the entire issued share capital of Brightpoint (Ireland) Limited dated
February 19, 2004(11)2.2
    
    Plan and Agreement of Merger between Brightpoint, Inc. and Brightpoint Indiana Corp. dated April 23, 2004(13)2.3
    
    Agreement for the Sale and Purchase of 100% of the Securities of Brightpoint France and Transfer of Shareholder
Loan(28)2.4
    
    Stock Purchase Agreement by and between Brightpoint Holdings B.V. and John Alexander Du Plessis Currie, the sole
shareholder of Persequor Limited effective as of January 1, 2006(29)**2.5
    
    Asset Purchase Agreement dated December 18, 2006 by and among 2601 Metropolis Corp., CellStar Corporation,
National Auto Center, Inc., CellStar Ltd. and CellStar Fulfillment Ltd.(32)3.1
    
    Restated Articles of Incorporation of Brightpoint, Inc. (formerly Brightpoint Indiana Corp.)(18)3.2
    
    Amended and Restated By-Laws of Brightpoint, Inc. (formerly Brightpoint Indiana Corp.)(18)4.1
    
    Indenture between the Company and the Chase Manhattan Bank, as Trustee(2)4.2
    
    Termination Agreement effective as of January 1, 2006 terminating the Shareholders Agreement by and among
Brightpoint India Private Limited, Brightpoint Holdings B.V. and Persequor Limited dated as of November 1, 2003,
as amended(29)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(16)10.2
    
    1996 Stock Option Plan, as amended(8)*10.3
    
    Employee Stock Purchase Plan(5)10.3
    
    Brightpoint, Inc. 401(k) Plan (2001 Restatement)(9)10.5
    
    Amendment to the Brightpoint, Inc. 401(k) Plan effective January 1, 2002(9)10.6
    
    Brightpoint, Inc. 401(k) Plan, effective October 1, 2002(10)10.7
    
    2004 Long-Term Incentive Plan(14)*10.7.1
    
    Form of Stock Option Agreement pursuant to 2004 Long-Term Incentive Plan between the Company and Executive
Grantee(12)*10.7.2
    
    Form of Stock Option Agreement pursuant to 2004 Long-Term Incentive Plan between the Company and Non-executive
Grantee(12)*10.7.3
    
    Form of Restricted Stock Unit Award Agreement between the Company and Grantee(12)*10.7.4
    
    Form of Executive Option Agreement with Forfeiture Provision(22)*
 77




---



##### 



ExhibitNumber
    

Description10.7.5
    
    Form of Executive Restricted Stock Unit Agreement with Forfeiture Provision(22)*10.8
    
    Amended and Restated Independent Director Stock Compensation Plan(15)*10.8.1
    
    Summary Sheet of 2006 Director and Executive Officer Compensation(XX)*10.9
    
    Form of Indemnification Agreement between the Company and Officers(12)10.9.2
    
    Indemnification Agreement between Brightpoint and Mr. V. William Hunt dated February 11, 2004(11)10.10
    
    Amended and Restated Employment Agreement between the Company and Robert J. Laikin dated July 1, 1999(6)*10.10.1
    
    Amendment dated January 1, 2001 to the Amended and Restated Agreement between the Company and Robert J. Laikin
dated July 1, 1999(7)*10.10.2
    
    Amendment dated January 1, 2003 to Amended and Restated Employment Agreement between the Company and Robert J.
Laikin dated July 1, 1999(10)*10.10.3
    
    Amendment dated January 1, 2004 to Amended and Restated Employment Agreement between the Company and Robert J.
Laikin dated July 1, 1999(11)*10.10.4
    
    Amendment dated April 7, 2005 to Amended and restated Employment Agreement between the Company and Robert J.
Laikin dated July 1, 1999(23)*10.11
    
    Amended and Restated Employment Agreement between the Company and J. Mark Howell dated July 1, 1999(6)*10.11.1
    
    Amendment dated January 1, 2001 to the Amended and Restated Employment Agreement between the Company and J. Mark
Howell dated July 1, 1999(7)*10.11.2
    
    Amendment dated January 1, 2003 to Amended and Restated Employment Agreement between the Company and J. Mark
Howell dated July 1, 1999 (10)*10.11.3
    
    Amendment dated January 1, 2004 to Amended and Restated Employment Agreement between the Company and J. Mark
Howell dated July 1, 1999 (11)*10.11.4
    
    Amendment dated April 7, 2005 to Amended and restated Employment Agreement between the Company and J. Mark
Howell dated July 1, 1999(23)*10.12
    
    Amended and Restated Employment Agreement between the Company and Steven E. Fivel dated July 1, 1999(6)*10.12.1
    
    Amendment dated January 1, 2001 to the Amended and Restated Employment Agreement between the Company and Steven
E. Fivel dated July 1, 1999(7)*10.12.2
    
    Amendment dated January 1, 2002 to the Amended and Restated Employment Agreement between the Company and Steven
E. Fivel dated July 1, 1999(9)*10.12.3
    
    Amendment dated January 1, 2003 to Amended and Restated Employment Agreement between the Company and Steven E.
Fivel dated July 1, 1999(10)*10.12.4
    
    Amendment dated January 1, 2004 to Amended and Restated Employment Agreement between the Company and Steven E.
Fivel dated July 1, 1999(11)*10.12.5
    
    Amendment dated April 7, 2005 to Amended and restated Employment Agreement between the Company and Steven E.
Fivel dated July 1, 1999(23)*10.13
    
    Lease Agreement between the Company and Airtech Parkway Associates, LLC, dated September 18, 1998(3)10.14
    
    Lease Agreement between the Company and Harbour Properties, LLC, dated April 25, 2000(7)10.15
    
    Lease Agreement between Brightpoint North America, L.P. and DP Industrial, LLC, dated as of October 1, 2004(20)10.16
    
    Lease Agreement between the Company and Perpetual Trustee Company Limited, dated November 10, 2004(21)10.17
    
    Distributor Agreement dated October 29, 2001 between Nokia Inc. and Brightpoint North America, L.P.(9)**10.17.1
    
    Amendment dated December 19, 2002 to distribution agreement dated October 29, 2001 between Brightpoint North
America. L.P. and Nokia Inc.(10)**10.17.2
    
    Amendment No. 2 dated December 27, 2003 to Distributor Agreement between Brightpoint North America, L.P. and
Nokia, Inc.(11) **10.17.3
    
    Amendment No.3 dated January 16, 2006 to Distributor Agreement between Brightpoint North America, L.P. and Nokia
Inc.(28)**10.18
    
    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(17)**10.18.1
    
    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(19)10.18.2
    
    Amendment No. 2 and Limited waiver to Amended and Restated Credit Agreement dated September 14, 2005 between
Brightpoint North America L.P., Wireless Fulfillment Services LLC and the other lenders and the other Credit
Parties Signatory to the Amended and Restated Credit Agreement(24)10.18.3
    
    Amendment No. 3 dated October 18, 2006 to Amended and Restated Credit Agreement dated as of March 18, 2004 among
Brightpoint North America L.P., Wireless Fulfillment Services LLC and the other lenders and the other Credit
Parties Signatory to the Amended and Restated Credit Agreement(31)
 78




---



##### 



ExhibitNumber
    

Description10.19
    
    Credit Agreement dated December 24, 2002 between Brightpoint Australia Pty Limited, Advanced Portable
Technologies Limited and GE Capital Finance Pty Limited(10)10.19.1
    
    Amendment dated December 23, 2005 to Credit Agreement between Brightpoint Australia Pty Limited, Advanced
Portable Technologies Limited and GE Capital Finance Pty Limited(28)10.20
    
    Amended and Restated Agreement for Supplemental Executive Retirement Benefit dated as of January 18, 2006 by and
between Robert J. Laikin and Brightpoint, Inc.(26)*10.21
    
    Amended and Restated Agreement for Supplemental Executive Retirement Benefit dated as of January 18, 2006 by and
between J. Mark Howell and Brightpoint, Inc.(26)*10.22
    
    Amended and Restated Agreement for Supplemental Executive Retirement Benefit dated as of January 18, 2006 by and
between Steven E. Fivel and Brightpoint, Inc.(26)*10.23
    
    Restricted Stock Award Agreement Pursuant to the 2004 Long-Term Incentive Plan of Brightpoint, Inc. dated as of
April 7, 2005 between Brightpoint, Inc. and Robert J. Laikin(23)*10.24
    
    Restricted Stock Award Agreement Pursuant to the 2004 Long-Term Incentive Plan of Brightpoint, Inc. dated as of
April 7, 2005 between Brightpoint, Inc. and J. Mark Howell(23)*10.25
    
    Restricted Stock Award Agreement Pursuant to the 2004 Long-Term Incentive Plan of Brightpoint, Inc. dated as of
April 7, 2005 between Brightpoint, Inc. and Steven E. Fivel(23)*10.26
    
    Employment Agreement between Brightpoint, Inc. and Vincent Donargo dated as of November 9, 2006(33)*10.27
    
    Employment Agreement between Brightpoint, Inc. and Anthony W. Boor dated October 17, 2005(25)*10.28
    
    Lease Agreement between the Brightpoint North America L.P. and Opus North Corporation, dated February 9, 2006(27)10.29
    
    Lease Agreement between Brightpoint Services, LLC and Louisville United, LLC(30)10.30
    
    Employment Agreement dated February 23, 2006 between Brightpoint Asia Limited and John Alexander Du Plessis
Currie(29)*10.31
    
    Restricted Stock Award Agreement dated February 23, 2006 between Brightpoint, Inc. and John Alexander Du Plessis
Currie(29)*10.32
    
    Termination Agreement effective as of January 1, 2006 terminating the Management Services Agreement by and
between Brightpoint Asia Limited and Persequor Limited originally dated as of August 7, 2002, as amended and
extended on July 1, 2004(29)10.33
    
    Termination Agreement effective as of January 1, 2006 terminating the Management Services Agreement by and
between Brightpoint India Private Limited and Persequor Limited dated November 1, 2004, as amended(29)21
    
    Subsidiaries(33)23
    
    Consent of Independent Registered Public Accounting Firm(33)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(33)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(33)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(33)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(33)99.1
    
    Cautionary Statements(33)
 
  (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.(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. 79




---



##### 



(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 Form 10-K/A, Amendment No.
1 to the Companys Form 10-K for the year ended December 31, 2000.(8)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Tender Offer
Statement on Schedule TO dated August 31, 2001.(9)
    
    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.(10)
    
    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(11)
    
    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(12)
    
    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(13)
    
    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(14)
    
    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(15)
    
    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(16)
    
    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(17)
    
    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(18)
    
    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(19)
    
    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(20)
    
    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(21)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Annual
Report on Form 10-K for the year ended December 31, 2004(22)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed February 25, 2005(23)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on April 12, 2005(24)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on September 16, 2005(25)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on October 18, 2005(26)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on January 20, 2006(27)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on February 15, 2006(28)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Annual
Report on Form 10-K for the year ended December 31, 2005(29)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Quarterly
Report on Form 10-Q for the quarter ended March 31, 2006(30)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Quarterly
Report on Form 10-Q for the quarter ended September 30, 2006 80




---



##### 



(31)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on October 24, 2006(32)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on December 19, 2006(33)
    
    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. 81




---



##### 



SIGNATURES
  Brightpoint, Inc.By:
    /s/ Robert J. LaikinRobert J. LaikinChairman of the Board and
Chief Executive Officer   Signature
    
    Title
    
    Date/s/ Robert J. Laikin

Robert J. Laikin
    
    Chairman of the Board 
Chief
Executive Officer and Director
(Principal
Executive Officer)
    
    February 22, 2007/s/ Anthony W. Boor

Anthony W. Boor
    
    Executive Vice President, Chief Financial 
Officer
and Treasurer
(Principal Financial Officer)
    
    February 22, 2007/s/ Vincent Donargo

Vincent Donargo
    
    Vice President, Corporate 
Controller,
Chief Accounting Officer

(Principal Accounting Officer)
    
    February 22, 2007/s/ Eliza Hermann

Eliza Hermann
    
    Director
    
    February 22, 2007/s/ V. William Hunt

V. William Hunt
    
    Director
    
    February 22, 2007/s/ Marisa E. Pratt

Marisa E. Pratt
    
    Director
    
    February 22, 2007/s/ Richard W. Roedel

Richard W. Roedel
    
    Director
    
    February 22, 2007/s/ Stephen H. Simon

Stephen H. Simon
    
    Director
    
    February 22, 2007/s/ Jerre L. Stead

Jerre L. Stead
    
    Director
    
    February 22, 2007/s/ Robert F. Wagner

Robert F. Wagner
    
    Director
    
    February 22, 2007/s/ K.P. Wilska

K.P. Wilska
    
    Director
    
    February 22, 2007
 82




---



##### 



BRIGHTPOINT, INC.
 SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
 Col. A
    
    Col. B
    
    Col. C
    
    Col. D
    
    Col. EBalance at
    
    Charged to
    
    Charged to
    
    
    
    
    
    Balance atBeginning
    
    Costs and
    
    Other
    
    
    
    
    
    EndDescription
    
    of Period
    
    Expenses
    
    Accounts
    
    Deductions
    
    of Period(Amounts in thousands)Year ended December 31, 2006:Deducted from asset accounts:Allowance for doubtful accounts
    
    $
    3,621
    
    
    
    1,390
    
    
    $
    
    
    
    $
    (85
    )
    
    $
    4,926Inventory valuation reserve
    
    
    4,858
    
    
    
    2,344
    
    
    
    
    
    
    
    (1,555
    )
    
    
    5,647Total
    
    $
    8,479
    
    
    $
    3,734
    
    
    $
    
    
    
    $
    (1,640
    )
    
    $
    10,573Year ended December 31, 2005:Deducted from asset accounts:Allowance for doubtful accounts
    
    $
    6,215
    
    
    $
    3,280
    
    
    $
    
    
    
    $
    (5,874
    )
    
    $
    3,621Inventory valuation reserve
    
    
    5,198
    
    
    
    4,272
    
    
    
    
    
    
    
    (4,612
    )
    
    
    4,858Total
    
    $
    11,413
    
    
    $
    7,552
    
    
    $
    
    
    
    $
    (10,486
    )
    
    $
    8,479Year ended December 31, 2004:Deducted from asset accounts:Allowance for doubtful accounts
    
    $
    7,683
    
    
    $
    4,420
    
    
    $
    
    
    
    $
    (5,888
    )
    
    $
    6,215Inventory valuation reserve
    
    
    5,043
    
    
    
    5,205
    
    
    
    
    
    
    
    (5,050
    )
    
    
    5,198Total
    
    $
    12,726
    
    
    $
    9,625
    
    
    $
    
    
    
    $
    (10,938
    )
    
    $
    11,413
 83