##### Table of Contents



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, 2007
 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 or organization)
    
    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
    
    The NASDAQ Stock Market LLC (NASDAQ Global Select Market)Preferred Share Purchase Rights
 Securities registered pursuant to Section 12(g) of the Act: NONE
 þ o
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
  o þ
   DOCUMENTS INCORPORATED BY REFERENCE:




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TABLE OF CONTENTS  PART IItem 1. BusinessItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesItem 6. | Selected Financial DataItem 7. | Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosures about Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPART IIIItem 10. Directors and Executive Officers of the RegistrantItem 11. Executive CompensationItem 12. Security Ownership of certain Beneficial Owners and Management and Related Shareholder MattersItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESAmended and Restated By-LawsSubsidiariesConsent of Independent Registered Public Accounting FirmSection 302 Certification of CEOSection 302 Certification of CFOSection 906 Certification of CEOSection 906 Certification of CFOCautionary Statements    Table of Contents  
 PART I
 
 Item 1. Business.
 General
      Financial Overview and Recent Developments
 
    
    Dangaard Telecom Acquisition.On July 31, 2007, we completed the acquisition of all of
the issued and outstanding capital stock of Dangaard Telecom A/S, a Danish company
(Dangaard Telecom) from Dangaard Holding A/S, a Danish company for a purchase price of (i)
$100,000 in cash and (ii) 30,000,000 shares of the Companys unregistered Common Stock,
$0.01 par value (including 3,000,000 shares held in escrow). In addition, we assumed
approximately $348.7 million of Dangaard Telecoms indebtedness. The acquisition of
Dangaard Telecom expands our existing European operations. Dangaard Telecom was the leading
distributor of wireless devices and accessories in Europe. Results of operations for
Dangaard Telecom are included in our consolidated results of operations beginning on August
1, 2007.
    
    Significant Industry Developments.In November, AT&T Inc. acquired Dobson Communications
Corporation (Dobson). Dobson is a significant product distribution and logistic services
customer of our North America operations. On July 30, 2007, Verizon Wireless announced that
it will acquire Rural Cellular Corporation (RCC). RCC is a distribution customer of our
North America operations. The Verizon/RCC acquisition is expected to be completed in the
first half of 2008. On September 17, 2007, T-Mobile USA, Inc. announced that it will
acquire SunCom Wireless Holdings, Inc. (SunCom). SunCom is a significant product
distribution and logistic services customer of our North America operations. This
acquisition is expected to close in the first quarter of 2008. These customers were also
customers of the operations acquired from CellStar. The acquisition of Dobson by AT&T and
the potential acquisitions of RCC by Verizon and of SunCom by T-Mobile may negatively
impact our operating results. Our North America operations are undertaking significant cost
cutting efforts which included consolidating the CellStar operations previously performed
in the Coppell, Texas facility into our other North America operations.
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Savings associated
with this facility consolidation and other cost cutting efforts are intended to help
mitigate some
of the negative impact from AT&Ts acquisition of Dobson, Verizons pending acquisition of
RCC and T-Mobiles pending acquisition of SunCom. However, there can be no assurance that we
will be successful in achieving sufficient cost savings to mitigate any negative impacts.
    
    CellStar Corporation Acquisition.On March 30, 2007, we completed the acquisition of
certain assets and the assumption of certain liabilities related to the U.S. operations and
the Miami-based Latin America business of CellStar Corporation for $67.5 million (including
direct acquisition costs). Results of operations related to this acquisition are included
in our Consolidated Statement of Operations beginning April 1, 2007.
    
    New Global Credit Facility.On February 16, 2007, we entered into a credit agreement
(the Credit Agreement), by and among us, 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 established a five year senior secured revolving credit facility with a
line of credit in the initial amount of $165.0 million. The Credit Agreement contained an
uncommitted accordion facility pursuant to which we were able to increase the total
commitment under the revolving credit facility to $240.0 million. On March 30, 2007, we
entered into a Commitment Increase Agreement with the Guarantors, the Administrative Agent
and the Lenders to increase the total commitment under the revolving credit facility to
$240.0 million. The Credit Agreement replaced 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.
    
    Amendment to Credit Facility.On July 31, 2007, we entered into the First Amendment to
the Credit Agreement, which, among other things, resulted in: (i) an increase in the amount
available for borrowing under the secured revolving credit facility from $240.0 million to
$300.0 million, (ii) the extension to the domestic borrowers of a term loan in an original
principal amount of $125.0 million, (iii) the extension to the foreign borrowers, including
one of the Dangaard companies, of a term loan in an original principal amount equivalent to
$125.0 million (denominated in Euros), (iv) the addition to the Credit Agreement of two
Dangaard companies as foreign borrowers and five other Dangaard companies as foreign
guarantors, and (v) increased commitments, in certain cases, from existing members of the
bank group, and new commitments from other lenders who became new members of the bank group
upon the closing of the First Amendment.
 Global Wireless Industry
  
    
    Mobile network operators:build and operate wireless networks and provide voice and data
access services to subscribers. MVNOs resell voice and data access services, or airtime,
from other mobile operators and do not directly build and operate their own wireless
networks.
    
    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.
    
    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.
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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.
 Next Generation Systems.
 4




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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:
 Dealers and Agents:
 7




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Mass Retailers:
 Other Distributors:
 Significant Industry Developments.
   Purchasing and Suppliers
    8




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Sales and Marketing
   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.
  9




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Competition
     Product Distribution.
  Logistic Services.
   Activation Services.
 10




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Prepaid Airtime.
  Information Systems
  Employees
  Segment and Geographic Financial Information
  Item 1A. Risk Factors.
  11




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General risks related to our operations
 We buy a significant amount of our products from a limited number of suppliers, and they may not
provide us with competitive products at reasonable prices when we need them in the future.
 We rely on our suppliers to provide trade credit facilities to adequately fund our on-going
operations and product purchases.
 
    
    pledged cash requirements;
    
    our payment history with the supplier;
    
    the suppliers credit granting policies, contractual provisions;
    
    our overall credit rating as determined by various credit rating agencies;
    
    industry conditions;
    
    our recent operating results, financial position and cash flows; and
    
    the suppliers ability to obtain credit insurance on amounts that we owe them.
  The loss or reduction in orders from principal customers or a reduction in the prices we are able
to charge these customers could cause our revenues to decline and impair our cash flows.
 Our business could be harmed by consolidation of mobile operators.
 We make significant investments in the technology used in our business and rely on that technology
to function effectively without interruptions.
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A substantial number of shares will be eligible for future sale by Dangaard Holding and the sale of
those shares could adversely affect our stock price.
 We have debt facilities that could prevent us from borrowing additional funds, if needed.
 We may have difficulty collecting our accounts receivable.
 
    
    our credit granting policies,
    
    contractual provisions,
    
    our customers and our overall credit rating as determined by various credit rating agencies,
    
    industry and economic conditions,
    
    the ability of the customer to provide security, collateral or guarantees relative to credit granted by us,
    
    the customers and our recent operating results, financial position and cash flows; and
    
    our ability to obtain credit insurance on amounts that we are owed.
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Our future operating results will depend on our ability to continue to increase volumes and
maintain margins.
 Our business growth strategy includes acquisitions.
 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 could be harmed by fluctuations in regional demand patterns and economic factors.
 Rapid technological changes in the global wireless industry could render our services or the
products we handle obsolete or less marketable.
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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.
 
    
    increased credit risks, customs duties, import quotas and other trade restrictions;
    
    potentially greater inflationary pressures;
    
    shipping delays;
    
    the risk of failure or material interruption of wireless systems and services;
    
    possible wireless product supply interruption; and
    
    potentially significant increases in wireless product prices.
  Natural disasters, epidemics, hostilities and terrorist acts could disrupt our operations.
 The global wireless industry is intensely competitive and we may not be able to continue to compete
successfully in this industry.
 We may not be able to manage and sustain future growth at our historical or current rates. In prior
years we have experienced domestic and international growth.
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Our business strategy includes entering into relationships and financing that 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.
 
    
    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.
  We are subject to certain personnel related issues.
  16




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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 depend on our computer and communications systems.
 The market price of our common stock may continue to be volatile .
 17




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
    
    actual or anticipated variations in our quarterly operating results or financial position;
    
    repurchases of common stock;
    
    commencement of litigation;
    
    the introduction of new services, products or technologies by us, our suppliers or our competitors;
 
    
    changes in other conditions or trends in the wireless voice and data industry;
    
    changes in governmental regulation and the enforcement of such regulation;
    
    changes in the assessment of our credit rating as determined by various credit rating agencies; and
    
    changes in securities analysts estimates of our future performance or that of our competitors or
our industry in general.
  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 and earnings per share in future periods and
reduce the market price of our common stock.
 We have instituted measures to protect us against a takeover.
 Our operating results may be negatively impacted in the event any or all of three recently
announced acquisitions of distribution customers of our North America operations are completed.
 We incurred additional financial obligations as a result of the acquisitions of Dangaard Telecom
and the U.S. operations and the Miami-based Latin America business of CellStar Corporation in 2007,
and our inability to satisfy these could materially and adversely affect our operating results and
financial condition and harm our business.
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We may become subject to suits alleging medical risks associated with our wireless devices.
 Risks relating to our recent acquisition of Dangaard Telecom
 If we are not able to integrate Dangaard Telecoms operations in a timely manner, we may not
realize the anticipated benefits of the acquisition in a timely fashion, or at all, and our
business could be harmed
 
    
    the integration of administrative, financial, information technology and
operating resources and the coordination of marketing and sales efforts;
    
    the implementation of financial, human resources, legal, information technology,
and other processes and related control environments;
    
    the diversion of managements attention from other ongoing business concerns; and
    
    potential conflicts between business cultures.
  
    
    demonstrate to our vendors, suppliers and customers (including those of Dangaard
Telecom) that the acquisition has not resulted, and will not result, in adverse
changes to customer service standards or our business focus; and
    
    effectively control the progress of the integration process and the associated costs.
  We could be exposed to unknown pre-existing liabilities of Dangaard Telecom, which could cause us
to incur substantial financial obligations and harm our business.
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Acquisition-related accounting impairment and amortization charges may delay and reduce our
post-acquisition profitability.
 
 Item 1B. Unresolved Staff Comments.
  
 Item 2. Properties.
  Number of
    
    
    AggregateLocations(1)
    
    
    Square FootageAmericas
    
    
    8
    
    
    
    1,528,321Asia-Pacific
    
    
    20
    
    
    
    262,122Europe
    
    
    28
    
    
    
    823,76456
    
    
    
    2,614,207
 
 (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.
  20




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PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
  2007
    
    High
    
    LowFirst Quarter
    
    $
    14.02
    
    
    $
    10.17Second Quarter
    
    
    14.65
    
    
    
    11.73Third Quarter
    
    
    15.01
    
    
    
    11.17Fourth Quarter
    
    
    18.18
    
    
    
    14.57
 2006
    
    High
    
    LowFirst Quarter
    
    $
    25.88
    
    
    $
    15.94Second Quarter
    
    
    27.90
    
    
    
    13.25Third Quarter
    
    
    17.10
    
    
    
    10.96Fourth Quarter
    
    
    14.65
    
    
    
    11.35
  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
     21




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COMPARISON
OF 5-YEAR COMULATIVE TOTAL RETURN
 
 
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Item 6.  Selected Financial Data.
 Year Ended December 31,(Amounts in thousands, except per share data)
    
    2007(1)
    
    2006(1)
    
    2005
    
    2004(1)
    
    2003(1)Revenue
    
    $
    4,300,275
    
    
    $
    2,425,373
    
    
    $
    2,140,177
    
    
    $
    1,772,424
    
    
    $
    1,692,580Gross profit
    
    
    270,586
    
    
    
    150,906
    
    
    
    132,012
    
    
    
    104,764
    
    
    
    86,324Operating income from continuing
operations
    
    
    65,913
    
    
    
    48,371
    
    
    
    44,353
    
    
    
    35,567
    
    
    
    20,355Income from continuing operations
    
    
    46,719
    
    
    
    36,190
    
    
    
    31,918
    
    
    
    23,826
    
    
    
    13,861Total gain (loss) from discontinued operations, net
of income taxes
    
    
    675
    
    
    
    (580
    )
    
    
    (21,478
    )
    
    
    (10,056
    )
    
    
    (2,132
    )Net income
    
    
    47,394
    
    
    
    35,610
    
    
    
    10,440
    
    
    
    13,770
    
    
    
    11,729Earnings per share  basic:(2)Income from continuing operations
    
    $
    0.76
    
    
    $
    0.74
    
    
    $
    0.67
    
    
    $
    0.48
    
    
    $
    0.28Discontinued operations
    
    
    0.01
    
    
    
    (0.01
    )
    
    
    (0.45
    )
    
    
    (0.20
    )
    
    
    (0.04
    )Net income
    
    $
    0.77
    
    
    $
    0.73
    
    
    $
    0.22
    
    
    $
    0.28
    
    
    $
    0.24Earnings per share  diluted:(2)Income from continuing operations
    
    $
    0.73
    
    
    $
    0.72
    
    
    $
    0.64
    
    
    $
    0.46
    
    
    $
    0.27Discontinued operations
    
    
    0.01
    
    
    
    (0.02
    )
    
    
    (0.43
    )
    
    
    (0.19
    )
    
    
    (0.04
    )Net income
    
    $
    0.74
    
    
    $
    0.70
    
    
    $
    0.21
    
    
    $
    0.27
    
    
    $
    0.23
 2007
    
    2006
    
    2005
    
    2004
    
    2003Working capital
    
    $
    525,778
    
    
    $
    159,760
    
    
    $
    121,336
    
    
    $
    103,525
    
    
    $
    96,839Total assets
    
    
    1,972,361
    
    
    
    778,353
    
    
    
    487,824
    
    
    
    437,584
    
    
    
    444,690Long-term obligations
    
    
    441,521
    
    
    
    3,750
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities
    
    
    1,370,778
    
    
    
    583,525
    
    
    
    338,782
    
    
    
    286,847
    
    
    
    297,106Shareholders equity
    
    
    600,765
    
    
    
    194,828
    
    
    
    149,042
    
    
    
    150,737
    
    
    
    147,584
 
 (1)
    
    Operating data includes certain items that were recorded in the years presented as follows:
restructuring charges in 2007, 2006, 2005 and 2003; and $16.1 million of tax benefits in 2007. 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, and 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. 23




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Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
 OVERVIEW AND RECENT DEVELOPMENTS
      
    
    Dangaard Telecom Acquisition.On July 31, 2007, we completed the acquisition of all of
the issued and outstanding capital stock of Dangaard Telecom A/S, a Danish company
(Dangaard Telecom) from Dangaard Holding A/S, a Danish company for a purchase price of (i)
$100,000 in cash and (ii) 30,000,000 shares of the Companys unregistered Common Stock,
$0.01 par value (including 3,000,000 shares held in escrow). In addition, we assumed
approximately $348.7 million of Dangaard Telecoms indebtedness. The acquisition of
Dangaard Telecom expands our existing European operations. Dangaard Telecom was the leading
distributor of wireless devices and accessories in Europe. Results of operations for
Dangaard Telecom are included in our consolidated results of operations beginning on August
1, 2007.
    
    Significant Industry Developments.In November, AT&T Inc. acquired Dobson Communications
Corporation (Dobson). Dobson is a significant product distribution and logistic services
customer of our North America operations. On July 30, 2007, Verizon Wireless announced that
it will acquire Rural Cellular Corporation (RCC). RCC is a distribution customer of our
North America operations. The Verizon/RCC acquisition is expected to be completed in the
first half of 2008. On September 17, 2007, T-Mobile USA, Inc. announced that it will
acquire SunCom Wireless Holdings, Inc. (SunCom). SunCom is a significant product
distribution and logistic services customer of our North America operations. This
acquisition is expected to close in the first quarter of 2008. These customers were also
customers of the operations acquired from CellStar. The acquisition of Dobson by AT&T and
the potential acquisitions of RCC by Verizon and of SunCom by T-Mobile may negatively
impact our operating results. Our North America operations are undertaking significant cost
cutting efforts which included consolidating the CellStar operations previously performed
in the Coppell, Texas facility into our other North America operations. Savings associated
with this facility consolidation and other cost cutting efforts are intended to help
mitigate some
 24




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of the negative impact from AT&Ts acquisition of Dobson, Verizons pending acquisition of
RCC and T-Mobiles pending acquisition of SunCom. However, there can be no assurance that we
will be successful in achieving sufficient cost savings to mitigate any negative impacts.
    
    CellStar Corporation Acquisition.On March 30, 2007, we completed the acquisition of
certain assets and the assumption of certain liabilities related to the U.S. operations and
the Miami-based Latin America business of CellStar Corporation for $67.5 million (including
direct acquisition costs). Results of operations related to this acquisition are included
in our Consolidated Statement of Operations beginning April 1, 2007.
    
    New Global Credit Facility.On February 16, 2007, we entered into a credit agreement
(the Credit Agreement), by and among us, 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 established a five year senior secured revolving credit facility with a
line of credit in the initial amount of $165.0 million. The Credit Agreement contained an
uncommitted accordion facility pursuant to which we were able to increase the total
commitment under the revolving credit facility to $240.0 million. On March 30, 2007, we
entered into a Commitment Increase Agreement with the Guarantors, the Administrative Agent
and the Lenders to increase the total commitment under the revolving credit facility to
$240.0 million. The Credit Agreement replaced 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.
    
    Amendment to Credit Facility.On July 31, 2007, we entered into the First Amendment to
the Credit Agreement, which, among other things, resulted in: (i) an increase in the amount
available for borrowing under the secured revolving credit facility from $240.0 million to
$300.0 million, (ii) the extension to the domestic borrowers of a term loan in an original
principal amount of $125.0 million, (iii) the extension to the foreign borrowers, including
one of the Dangaard companies, of a term loan in an original principal amount equivalent to
$125.0 million (denominated in Euros), (iv) the addition to the Credit Agreement of two
Dangaard companies as foreign borrowers and five other Dangaard companies as foreign
guarantors, and (v) increased commitments, in certain cases, from existing members of the
bank group, and new commitments from other lenders who became new members of the bank group
upon the closing of the First Amendment.
 2007 RESULTS OF OPERATIONS
 Revenue and units handled by division and service line
 Year Ended December 31,% of
    
    
    
    
    
    % of2007
    
    Total
    
    2006
    
    Total
    
    Change(Amounts in 000s)Distribution revenueAmericas
    
    $
    960,405
    
    
    
    24
    %
    
    $
    612,386
    
    
    
    29
    %
    
    
    57
    %Asia-Pacific
    
    
    1,521,684
    
    
    
    39
    %
    
    
    1,088,247
    
    
    
    52
    %
    
    
    40
    %Europe
    
    
    1,460,006
    
    
    
    37
    %
    
    
    396,877
    
    
    
    19
    %
    
    
    268
    %Total
    
    $
    3,942,095
    
    
    
    100
    %
    
    $
    2,097,510
    
    
    
    100
    %
    
    
    88
    %Logistic services revenueAmericas
    
    $
    195,028
    
    
    
    55
    %
    
    $
    202,202
    
    
    
    62
    %
    
    
    (4
    )%Asia-Pacific
    
    
    36,445
    
    
    
    10
    %
    
    
    27,487
    
    
    
    8
    %
    
    
    33
    %Europe
    
    
    126,707
    
    
    
    35
    %
    
    
    98,174
    
    
    
    30
    %
    
    
    29
    %Total
    
    $
    358,180
    
    
    
    100
    %
    
    $
    327,863
    
    
    
    100
    %
    
    
    9
    %Total revenueAmericas
    
    $
    1,155,433
    
    
    
    27
    %
    
    $
    814,588
    
    
    
    34
    %
    
    
    42
    %Asia-Pacific
    
    
    1,558,129
    
    
    
    36
    %
    
    
    1,115,734
    
    
    
    46
    %
    
    
    40
    %Europe
    
    
    1,586,713
    
    
    
    37
    %
    
    
    495,051
    
    
    
    20
    %
    
    
    221
    %Total
    
    $
    4,300,275
    
    
    
    100
    %
    
    $
    2,425,373
    
    
    
    100
    %
    
    
    77
    %
 25




---



##### Table of Contents



Year Ended December 31,% of
    
    
    
    
    
    % of2007
    
    Total
    
    2006
    
    Total
    
    Change(Amounts in 000s)Wireless devices sold through distributionAmericas
    
    
    7,117
    
    
    
    28
    %
    
    
    4,294
    
    
    
    34
    %
    
    
    66
    %Asia-Pacific
    
    
    13,160
    
    
    
    51
    %
    
    
    7,347
    
    
    
    57
    %
    
    
    79
    %Europe
    
    
    5,458
    
    
    
    21
    %
    
    
    1,200
    
    
    
    9
    %
    
    
    355
    %Total
    
    
    25,735
    
    
    
    100
    %
    
    
    12,841
    
    
    
    100
    %
    
    
    100
    %Wireless devices handled through logistic servicesAmericas
    
    
    52,492
    
    
    
    92
    %
    
    
    38,446
    
    
    
    95
    %
    
    
    37
    %Asia-Pacific
    
    
    1,756
    
    
    
    3
    %
    
    
    1,688
    
    
    
    4
    %
    
    
    4
    %Europe
    
    
    2,959
    
    
    
    5
    %
    
    
    564
    
    
    
    1
    %
    
    
    425
    %Total
    
    
    57,207
    
    
    
    100
    %
    
    
    40,698
    
    
    
    100
    %
    
    
    41
    %Total wireless devices handledAmericas
    
    
    59,609
    
    
    
    72
    %
    
    
    42,740
    
    
    
    80
    %
    
    
    39
    %Asia-Pacific
    
    
    14,916
    
    
    
    18
    %
    
    
    9,035
    
    
    
    17
    %
    
    
    65
    %Europe
    
    
    8,417
    
    
    
    10
    %
    
    
    1,764
    
    
    
    3
    %
    
    
    377
    %Total
    
    
    82,942
    
    
    
    100
    %
    
    
    53,539
    
    
    
    100
    %
    
    
    55
    %
  2007 Percentage Change in Revenue vs. 2006Handset-
    
    Non-handset
    
    Averagebased
    
    based
    
    Selling
    
    Foreignvolume (1)
    
    revenue (2)
    
    Price
    
    Currency
    
    Subtotal (3)
    
    Acquisitions
    
    TotalDistribution
    
    
    42
    %
    
    
    3
    %
    
    
    (11
    %)
    
    
    3
    %
    
    
    37
    %
    
    
    51
    %
    
    
    88
    %Logistic services
    
    
    9
    %
    
    
    (4
    %)
    
    
    (4
    %)
    
    
    1
    %
    
    
    2
    %
    
    
    7
    %
    
    
    9
    %
 
 (1)
    
    Handset based revenue includes revenue from wireless devices sold through our distribution
business and revenue from wireless devices handled through our logistic services business.(2)
    
    Non-handset distribution revenue includes revenue from accessories sold, freight, non-voice
navigation devices and PCs and PC accessories sold through our distribution business. Non-handset
based logistic services revenue includes revenue from the sale of prepaid airtime, freight billed,
and fee based services other than fees earned from wireless devices handled.(3)
    
    The subtotal represents the percent change in distribution revenue and logistic services
revenue excluding the impact the acquisitions of the North America and Latin America operations of
CellStar on March 31, 2007 and the acqusition of Dangaard Telecom on July 31, 2007. 26




---



##### Table of Contents



Revenue and wireless devices handled by division
 Year Ended December 31,Americas
    
    
    
    
    
    % of
    
    
    
    
    
    % of(Amounts in 000s)
    
    2007
    
    Total
    
    2006
    
    Total
    
    ChangeREVENUE:Distribution
    
    $
    960,405
    
    
    
    83
    %
    
    $
    612,386
    
    
    
    75
    %
    
    
    57
    %Logistic services
    
    
    195,028
    
    
    
    17
    %
    
    
    202,202
    
    
    
    25
    %
    
    
    (4
    )%Total
    
    $
    1,155,433
    
    
    
    100
    %
    
    $
    814,588
    
    
    
    100
    %
    
    
    42
    %WIRELESS DEVICES HANDLED :Distribution
    
    
    7,117
    
    
    
    12
    %
    
    
    4,294
    
    
    
    10
    %
    
    
    66
    %Logistic services
    
    
    52,492
    
    
    
    88
    %
    
    
    38,446
    
    
    
    90
    %
    
    
    37
    %Total
    
    
    59,609
    
    
    
    100
    %
    
    
    42,740
    
    
    
    100
    %
    
    
    39
    %
  2007 Percentage Change in Revenue vs. 2006Handset-
    
    Non-handset
    
    Averagebased
    
    based
    
    Selling
    
    Foreign
    
    
    
    
    
    CellStarvolume
    
    revenue
    
    Price
    
    Currency
    
    Subtotal
    
    Acquisition
    
    TotalDistribution
    
    
    (2
    %)
    
    
    1
    %
    
    
    39
    %
    
    
    0
    %
    
    
    38
    %
    
    
    19
    %
    
    
    57
    %Logistic services
    
    
    14
    %
    
    
    (7
    %)
    
    
    (11
    %)
    
    
    0
    %
    
    
    (4
    %)
    
    
    0
    %
    
    
    (4
    %)
  Year Ended December 31,Asia-Pacific
    
    
    
    
    
    % of
    
    
    
    
    
    % of(Amounts in 000s)
    
    2007
    
    Total
    
    2006
    
    Total
    
    ChangeREVENUE:Distribution
    
    $
    1,521,684
    
    
    
    98
    %
    
    $
    1,088,247
    
    
    
    98
    %
    
    
    40
    %Logistic services
    
    
    36,445
    
    
    
    2
    %
    
    
    27,487
    
    
    
    2
    %
    
    
    33
    %Total
    
    $
    1,558,129
    
    
    
    100
    %
    
    $
    1,115,734
    
    
    
    100
    %
    
    
    40
    %WIRELESS DEVICES HANDLED :Distribution
    
    
    13,160
    
    
    
    88
    %
    
    
    7,347
    
    
    
    81
    %
    
    
    79
    %Logistic services
    
    
    1,756
    
    
    
    12
    %
    
    
    1,688
    
    
    
    19
    %
    
    
    4
    %Total
    
    
    14,916
    
    
    
    100
    %
    
    
    9,035
    
    
    
    100
    %
    
    
    65
    %
  27




---



##### Table of Contents



2007 Percentage Change in Revenue vs. 2006Handset-
    
    Non-handset
    
    Averagebased
    
    based
    
    Selling
    
    Foreignvolume
    
    revenue
    
    Price
    
    Currency
    
    TotalDistribution
    
    
    74
    %
    
    
    3
    %
    
    
    (40
    %)
    
    
    3
    %
    
    
    40
    %Logistic services
    
    
    1
    %
    
    
    25
    %
    
    
    3
    %
    
    
    4
    %
    
    
    33
    %
  Year Ended December 31,Europe
    
    
    
    
    
    % of
    
    
    
    
    
    % of(Amounts in 000s)
    
    2007
    
    Total
    
    2006
    
    Total
    
    ChangeREVENUE:Distribution
    
    $
    1,460,006
    
    
    
    92
    %
    
    $
    396,877
    
    
    
    80
    %
    
    
    268
    %Logistic services
    
    
    126,707
    
    
    
    8
    %
    
    
    98,174
    
    
    
    20
    %
    
    
    29
    %Total
    
    $
    1,586,713
    
    
    
    100
    %
    
    $
    495,051
    
    
    
    100
    %
    
    
    221
    %WIRELESS DEVICES HANDLED :Distribution
    
    
    5,458
    
    
    
    65
    %
    
    
    1,200
    
    
    
    68
    %
    
    
    355
    %Logistic services
    
    
    2,959
    
    
    
    35
    %
    
    
    564
    
    
    
    32
    %
    
    
    425
    %Total
    
    
    8,417
    
    
    
    100
    %
    
    
    1,764
    
    
    
    100
    %
    
    
    377
    %
  2007 Percentage Change in Revenue vs. 2006Handset-
    
    Non-handset
    
    Averagebased
    
    based
    
    Selling
    
    Foreign
    
    
    
    
    
    Dangaardvolume
    
    revenue
    
    Price
    
    Currency
    
    Subtotal
    
    Acquisition
    
    TotalDistribution
    
    
    23
    %
    
    
    10
    %
    
    
    (8
    %)
    
    
    6
    %
    
    
    31
    %
    
    
    237
    %
    
    
    268
    %Logistic services
    
    
    1
    %
    
    
    2
    %
    
    
    (1
    %)
    
    
    4
    %
    
    
    6
    %
    
    
    23
    %
    
    
    29
    %
   28




---



##### Table of Contents



Gross Profit and Gross Margin
 Year EndedDecember 31,% of
    
    
    
    
    
    % of2007
    
    Total
    
    2006
    
    Total
    
    Change(Amounts in 000s)Distribution
    
    $
    166,930
    
    
    
    62
    %
    
    $
    81,774
    
    
    
    54
    %
    
    
    104
    %Logistic services
    
    
    103,656
    
    
    
    38
    %
    
    
    69,132
    
    
    
    46
    %
    
    
    50
    %Gross profit
    
    $
    270,586
    
    
    
    100
    %
    
    $
    150,906
    
    
    
    100
    %
    
    
    79
    %Distribution
    
    
    4.2
    %
    
    
    
    
    
    
    3.9
    %
    
    
    0.3
    %
    pointsLogistic services
    
    
    28.9
    %
    
    
    
    
    
    
    21.1
    %
    
    
    7.8
    %
    pointsGross margin
    
    
    6.3
    %
    
    
    
    
    
    
    6.2
    %
    
    
    0.1
    %
    points
   Selling General and Administrative (SG&A) Expenses
 Year EndedDecember 31,2007
    
    2006
    
    Change(Amounts in 000s)SG&A expenses
    
    $
    185,484
    
    
    $
    102,253
    
    
    
    81
    %Percent of revenue
    
    
    4.3
    %
    
    
    4.2
    %

    
    
    0.1
    %      points
  Amortization
  29




---



##### Table of Contents



Restructuring charge
  Operating Income from Continuing Operations
 Year EndedDecember 31,% of
    
    
    
    
    
    % of2007
    
    Total
    
    2006
    
    Total
    
    Change(Amounts in 000s)Americas
    
    $
    43,710
    
    
    
    66
    %
    
    $
    41,377
    
    
    
    85
    %
    
    
    6
    %Asia-Pacific
    
    
    27,960
    
    
    
    43
    %
    
    
    17,564
    
    
    
    36
    %
    
    
    59
    %Europe
    
    
    21,257
    
    
    
    32
    %
    
    
    11,391
    
    
    
    24
    %
    
    
    87
    %Corporate
    
    
    (27,014
    )
    
    
    (41
    %)
    
    
    (21,961
    )
    
    
    (45
    %)
    
    
    23
    %Total
    
    $
    65,913
    
    
    
    100
    %
    
    $
    48,371
    
    
    
    100
    %
    
    
    36
    %
  Year EndedDecember 31,2007
    
    2006
    
    ChangeAmericas
    
    
    3.8
    %
    
    
    5.1
    %
    
    (1.3)%      pointsAsia-Pacific
    
    
    1.8
    %
    
    
    1.6
    %
    
    0.2%       pointsEurope
    
    
    1.3
    %
    
    
    2.3
    %
    
    (1.0)%      pointsTotal
    
    
    1.5
    %
    
    
    2.0
    %
    
    (0.5)%      points
   30




---



##### Table of Contents



Interest
  Year EndedDecember 31,2007
    
    
    2006
    
    
    Change(Amounts in 000s)Interest expense
    
    $
    20,072
    
    
    $
    2,278
    
    
    
    781
    %Interest income
    
    
    (2,055
    )
    
    
    (1,725
    )
    
    
    19
    %Interest, net
    
    $
    18,017
    
    
    $
    553
    
    
    
    3158
    %
  Income Tax Expense
 Year EndedDecember 31,2007
    
    2006
    
    Change(Amounts in 000s)Income tax expense
    
    $
    440
    
    
    $
    12,238
    
    
    
    (96
    )%Effective tax rate
    
    
    0.9
    %
    
    
    25.3
    %
    
    (24.4)% points
  Return on Invested Capital from Operations (ROIC)
  31




---



##### Table of Contents



Year Ended December 31,2007
    
    
    2006
    
    
    2005(Amounts in 000s)Operating income after taxes:Operating income from continuing operations
    
    
    65,913
    
    
    
    48,371
    
    
    
    44,353Plus: Restructuring charge (benefit)
    
    
    8,661
    
    
    
    (9
    )
    
    
    933Less: estimated income taxes (1)
    
    
    (2,844
    )
    
    
    (12,254
    )
    
    
    (11,728
    )Operating income after taxes
    
    $
    71,730
    
    
    $
    36,108
    
    
    $
    33,558Invested Capital:Debt
    
    $
    460,853
    
    
    $
    17,625
    
    
    $
    Shareholders equity
    
    
    600,765
    
    
    
    194,828
    
    
    
    149,042Invested capital
    
    $
    1,061,618
    
    
    $
    212,453
    
    
    $
    149,042Average invested capital (2)
    
    $
    573,913
    
    
    $
    170,480
    
    
    $
    149,578ROIC (3)
    
    
    12
    %
    
    
    21
    %
    
    
    22
    %
 
 (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.    32




---



##### Table of Contents



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
    %
  2006 Percentage Change in Revenue vs. 2005Handset-
    
    Non-handset
    
    Averagebased
    
    based
    
    Selling
    
    Foreignvolume (1)
    
    revenue (2)
    
    Price
    
    Currency
    
    TotalDistribution
    
    
    9
    %
    
    
    1
    %
    
    
    4
    %
    
    
    0
    %
    
    
    14
    %Logistic services
    
    
    12
    %
    
    
    1
    %
    
    
    (2
    %)
    
    
    0
    %
    
    
    11
    %
 
 (1)
    
    Handset based revenue includes revenue from wireless devices sold through our
distribution business and revenue from wireless devices handled through our logistic
services business.(2)
    
    Non-handset distribution revenue includes revenue from accessories sold, freight
billed, non-voice navigation devices and PCs and PC accessories sold through our
distribution business. Non-handset based logistic services revenue includes revenue
from the sale of prepaid airtime, freight, and fee based services other than fees
earned from wireless devices handled. 33




---



##### Table of Contents



Revenue and wireless devices handled by division
 Year Ended December 31,Americas
    

    
    

    
    
% of
    

    
    
% of(Amounts in 000s)
    
    2006
    
    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
    %
  2006 Percentage Change in Revenue vs. 2005Handset-
    
    Non-handset
    
    Averagebased
    
    based
    
    Selling
    
    Foreignvolume
    
    revenue
    
    Price
    
    Currency
    
    TotalDistribution
    
    
    20
    %
    
    
    2
    %
    
    
    (1
    %)
    
    
    0
    %
    
    
    21
    %Logistic services
    
    
    18
    %
    
    
    6
    %
    
    
    (3
    %)
    
    
    0
    %
    
    
    21
    %
   34




---



##### Table of Contents



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
    %
  2006 Percentage Change in Revenue vs. 2005Handset-
    
    Non-handset
    
    Averagebased
    
    based
    
    Selling
    
    Foreignvolume
    
    revenue
    
    Price
    
    Currency
    
    TotalDistribution
    
    
    0
    %
    
    
    1
    %
    
    
    2
    %
    
    
    0
    %
    
    
    3
    %Logistic services
    
    
    24
    %
    
    
    (17
    %)
    
    
    (7
    %)
    
    
    0
    %
    
    
    0
    %
   35




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##### Table of Contents



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
    %
  2006 Percentage Change in Revenue vs. 2005Handset-
    
    Non-handset
    
    Averagebased
    
    based
    
    Selling
    
    Foreignvolume
    
    revenue
    
    Price
    
    Currency
    
    TotalDistribution
    
    
    32
    %
    
    
    (2
    %)
    
    
    6
    %
    
    
    4
    %
    
    
    40
    %Logistic services
    
    
    0
    %
    
    
    (1
    %)
    
    
    0
    %
    
    
    0
    %
    
    
    (1
    %)
   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
   36




---



##### Table of Contents



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
    %
 37




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##### Table of Contents



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
      38




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##### Table of Contents



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
    )%
  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
  39




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
 Consolidated Statement of Cash Flows
  Year Ended December 31,2007
    
    2006
    
    Change(Amounts in 000s)Net cash provided by (used in):Operating activities
    
    $
    73,301
    
    
    $
    (49,917
    )
    
    $
    123,218Investing activities
    
    
    (99,034
    )
    
    
    (17,085
    )
    
    
    (81,949
    )Financing activities
    
    
    65,765
    
    
    
    11,908
    
    
    
    53,857Effect of exchange rate changes on cash and cash equivalents
    
    
    7,420
    
    
    
    3,171
    
    
    
    4,249Net increase (decrease) in cash and cash equivalents
    
    $
    47,452
    
    
    $
    (51,923
    )
    
    $
    99,375
  
    
    $109.7 million less cash used for working capital in 2007 compared to the prior year.
Cash provided by working capital was $6.3 million for year ended December 31, 2007
primarily due to cash provided by working capital in our Asia-Pacific division.
    
    $13.5 million more cash provided by operating activities before changes in operating
assets and liabilities in 2007 compared to the prior year.
   
    
    $67.5 million more cash used for acquisitions during 2007 compared to 2006 due primarily
to the acquisition of certain assets and assumption of certain liabilities related to the
U.S. operations and the Miami-based Latin America business of CellStar Corporation.
  
    
    $152.7 million additional proceeds from credit facilities in 2007 compared to the prior
year.
    
    $250.0 million proceeds from the Global Term Loans
    
    $18.0 million less cash used for the purchase of treasury stock in 2007 compared to the
prior year.
  
    
    $353.5 million cash used for repayments of long-term debt compared to the prior year
including $348.7 million of cash used for repayments of debt acquired through the
acquisition of Dangaard Telecom and $4.8 million of cash used for repayments of the Global
Term Loans.
 40




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##### Table of Contents



Cash Conversion Cycle
 Year Ended December 31,2007
    
    2006
    
    2005Days sales outstanding in accounts receivable
    
    
    51
    
    
    
    28
    
    
    
    27Days inventory on-hand
    
    
    41
    
    
    
    67
    
    
    
    24Days payable outstanding
    
    
    (50
    )
    
    
    (70
    )
    
    
    (44
    )Cash Conversion Cycle Days (1)
    
    
    42
    
    
    
    25
    
    
    
    7
 
 (1)
    
    Our calculation of the cash conversion cycle has not been adjusted to include pro-forma
results of operations for the U.S. operations and the Miami-based Latin America business of
CellStar Corporation and pro-forma results of operations for Dangaard Telecom as described in
Note 3 in the Notes to the Consolidated Financial Statements. As a result, our cash conversion
cycle days are higher primarily due to the fact that daily sales and cost of products sold do
not include a full year of sales and cost of products sold for these acquisitions.       41




---



##### Table of Contents



Year Ended December 31,(Dollar amounts in thousands)
    
    2007
    
    
    2006
    
    
    2005Days sales outstanding in accounts receivable:Continuing operations revenue
    
    $
    4,300,275
    
    
    $
    2,425,373
    
    
    $
    2,140,177Value-added taxes invoiced for continuing operations
    
    
    217,749
    
    
    
    123,916
    
    
    
    110,707Total continuing operations revenue and value-added taxes
    
    $
    4,518,024
    
    
    $
    2,549,289
    
    
    $
    2,250,884Daily sales including value-added taxes
    
    
    12,550
    
    
    
    7,081
    
    
    
    6,252Continuing operations ending accounts receivable
    
    $
    751,146
    
    
    $
    228,186
    
    
    $
    168,004Agency accounts receivable
    
    
    (111,409
    )
    
    
    (29,507
    )
    
    
    Accounts receivable excluding agency receivables
    
    $
    639,737
    
    
    $
    198,679
    
    
    $
    168,004Days sales outstanding in accounts receivable(A)
    
    
    51
    
    
    
    28
    
    
    
    27Days inventory on-hand:Continuing operations cost of revenue
    
    $
    4,029,689
    
    
    $
    2,274,467
    
    
    $
    2,008,165Indirect product and service costs
    
    
    (212,902
    )
    
    
    (169,520
    )
    
    
    (126,700
    )Total continuing operations cost of products sold
    
    $
    3,816,787
    
    
    $
    2,104,947
    
    
    $
    1,881,465Daily cost of products sold
    
    
    10,602
    
    
    
    5,847
    
    
    
    5,226Continuing operations ending inventory
    
    $
    474,951
    
    
    $
    391,657
    
    
    $
    124,864Agency inventory
    
    
    (36,514
    )
    
    
    (2,606
    )
    
    
    Inventory excluding agency inventory
    
    $
    438,437
    
    
    $
    389,051
    
    
    $
    124,864Days inventory on-hand(B)
    
    
    41
    
    
    
    67
    
    
    
    24Days payables outstanding in accounts payable:Daily cost of products sold
    
    $
    10,602
    
    
    $
    5,847
    
    
    $
    5,226Continuing operations ending accounts payable
    
    $
    664,484
    
    
    $
    454,546
    
    
    $
    232,249Agency accounts payable
    
    
    (136,117
    )
    
    
    (46,853
    )
    
    
    Accounts payable excluding agency payables
    
    $
    528,367
    
    
    $
    407,693
    
    
    $
    232,249Days payable outstanding(C)
    
    
    50
    
    
    
    70
    
    
    
    44Cash conversion cycle days (A+B-C)
    
    
    42
    
    
    
    25
    
    
    
    7
 
 (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). Borrowings
  Gross
    
    
    
    
    
    
    Letters of Credit &
    
    
    NetAvailability
    
    
    Outstanding
    
    
    Guarantees
    
    
    AvailabilityGlobal Term Loans
    
    $
    252,454
    
    
    $
    252,454
    
    
    $
    
    
    
    $
    Global Credit Facility
    
    
    300,000
    
    
    
    208,399
    
    
    
    23,288
    
    
    
    68,313Other
    
    
    62,122
    
    
    
    
    
    
    
    
    
    
    
    62,122Total
    
    $
    614,576
    
    
    $
    460,853
    
    
    $
    23,288
    
    
    $
    130,435
  42




---



##### Table of Contents



Liquidity analysis
  December 31,2007
    
    2006
    
    % Change(Amounts in 000s)Unrestricted cash
    
    $
    101,582
    
    
    $
    54,130
    
    
    
    88
    %Unused borrowing availability
    
    
    130,435
    
    
    
    75,704
    
    
    
    72
    %Liquidity
    
    $
    232,017
    
    
    $
    129,834
    
    
    
    79
    %
    OFF-BALANCE SHEET ARRANGEMENTS
 , Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities
   43




---



##### Table of Contents



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
    
    $
    116,894
    
    
    $
    20,783
    
    
    $
    32,286
    
    
    $
    22,526
    
    
    $
    41,299Total borrowings
    
    
    460,853
    
    
    
    19,332
    
    
    
    77,715
    
    
    
    363,806
    
    
    
    Interest on third party debt and lines of credit (1)
    
    
    123,262
    
    
    
    30,796
    
    
    
    55,426
    
    
    
    37,040
    
    
    
    Purchase obligations(2)
    
    
    15,840
    
    
    
    15,840
    
    
    
    
    
    
    
    
    
    
    
    Pension obligation
    
    
    2,304
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,304Letters of credit
    
    
    23,288
    
    
    
    23,288
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    742,441
    
    
    $
    110,039
    
    
    $
    165,427
    
    
    $
    423,372
    
    
    $
    43,603
 
 (1)
    
    Interest on third party debt is calculated based on the interest rate as of December 31, 2007
and repayments of outstanding debt in accordance with our credit agreement. Interest does not
include the effects of any prepayments of borrowings permitted under the credit agreement.
Prepayments could significantly decrease interest obligations in future years.(2)
    
    Purchase obligations exclude agreements that are cancelable without penalty.  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
  44




---



##### Table of Contents



Goodwill and Long-lived Asset Impairment
 Goodwill and Other Intangible
Assets
   CREDIT RATING
  45




---



##### Table of Contents



SEASONALITY
  Year
    
    1st Quarter
    
    2nd Quarter
    
    3rd Quarter
    
    4th Quarter2007
    
    23%
    
    23%
    
    25%
    
    29%2006
    
    22%
    
    24%
    
    25%
    
    29%2005
    
    21%
    
    23%
    
    26%
    
    30%
  Year
    
    1st Quarter
    
    2nd Quarter (1)
    
    3rd Quarter (1)
    
    4th Quarter (1)2007
    
    18%
    
    23%
    
    27%
    
    32%2006
    
    23%
    
    25%
    
    24%
    
    28%2005
    
    18%
    
    22%
    
    26%
    
    34%
 
 (1)
    
    Our calculation of seasonality has not been adjusted to include pro-forma results of
operations for the U.S. operations and the Miami-based Latin America business of CellStar
Corporation and pro-forma results of operations for Dangaard Telecom as described in Note 3 in
the Notes to the Consolidated Financial Statements. 46




---



##### Table of Contents



FORWARD LOOKING AND CAUTIONARY STATEMENTS
  47




---



##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures about Market Risk
 Concentration of Credit Risk
  Exchange Rate Risk Management
   Interest Rate Risk Management
   48




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data.
 Index to Consolidated Financial Statements
 PageConsolidated Financial Statements of Brightpoint, Inc.Consolidated Statements of Operations
    
    
    50Consolidated Balance Sheets
    
    
    51Consolidated Statements of Cash Flows
    
    
    52Consolidated Statements of Shareholders Equity
    
    
    53Notes to Consolidated Financial Statements
    
    
    54Report of Independent Registered Public Accounting Firm
    
    
    79
 49




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##### Table of Contents



Brightpoint, Inc.
Consolidated Statements of Operations
 Year Ended December 31,2007
    
    
    2006
    
    
    2005RevenueDistribution revenue
    
    $
    3,942,095
    
    
    $
    2,097,510
    
    
    $
    1,845,983Logistic services revenue
    
    
    358,180
    
    
    
    327,863
    
    
    
    294,194Total revenue
    
    
    4,300,275
    
    
    
    2,425,373
    
    
    
    2,140,177Cost of revenueCost of distribution revenue
    
    
    3,775,165
    
    
    
    2,015,736
    
    
    
    1,774,612Cost of logistic services revenue
    
    
    254,524
    
    
    
    258,731
    
    
    
    233,553Total cost of revenue
    
    
    4,029,689
    
    
    
    2,274,467
    
    
    
    2,008,165Gross profit
    
    
    270,586
    
    
    
    150,906
    
    
    
    132,012Selling, general and administrative expenses
    
    
    185,484
    
    
    
    102,253
    
    
    
    86,455Amortization expense
    
    
    10,528
    
    
    
    291
    
    
    
    271Restructuring charge (benefit)
    
    
    8,661
    
    
    
    (9
    )
    
    
    933Operating income from continuing operations
    
    
    65,913
    
    
    
    48,371
    
    
    
    44,353Interest, net
    
    
    18,017
    
    
    
    553
    
    
    
    (146
    )Other (income) expenses
    
    
    390
    
    
    
    (610
    )
    
    
    1,523Income from continuing operations before income taxes
    
    
    47,506
    
    
    
    48,428
    
    
    
    42,976Income tax expense
    
    
    440
    
    
    
    12,238
    
    
    
    11,058Income from continuing operations before minority interest
    
    
    47,066
    
    
    
    36,190
    
    
    
    31,918Minority interest, net of taxes
    
    
    347
    
    
    
    
    
    
    
    Income from continuing operations
    
    
    46,719
    
    
    
    36,190
    
    
    
    31,918Discontinued operations, net of income taxes:Loss from discontinued operations
    
    
    (68
    )
    
    
    (417
    )
    
    
    (20,600
    )Gain (loss) on disposal of discontinued operations
    
    
    743
    
    
    
    (163
    )
    
    
    (878
    )Total discontinued operations, net of income taxes
    
    
    675
    
    
    
    (580
    )
    
    
    (21,478
    )Net income
    
    $
    47,394
    
    
    $
    35,610
    
    
    $
    10,440Earnings per share  basic:Income from continuing operations
    
    $
    0.76
    
    
    $
    0.74
    
    
    $
    0.67Discontinued operations, net of income taxes
    
    
    0.01
    
    
    
    (0.01
    )
    
    
    (0.45
    )Net income
    
    $
    0.77
    
    
    $
    0.73
    
    
    $
    0.22Earnings per share  diluted:Income from continuing operations
    
    $
    0.73
    
    
    $
    0.72
    
    
    $
    0.64Discontinued operations, net of income taxes
    
    
    0.01
    
    
    
    (0.02
    )
    
    
    (0.43
    )Net income
    
    $
    0.74
    
    
    $
    0.70
    
    
    $
    0.21Weighted average common shares outstanding:Basic
    
    
    61,174
    
    
    
    49,104
    
    
    
    47,954Diluted
    
    
    63,571
    
    
    
    50,554
    
    
    
    49,657
 See accompanying notes
 50




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##### Table of Contents



Brightpoint, Inc.
Consolidated Balance Sheets
 December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    101,582
    
    
    $
    54,130Pledged cash
    
    
    578
    
    
    
    201Accounts receivable (less allowance for doubtful
accounts of $17,157 in 2007 and $4,926 in 2006)
    
    
    751,146
    
    
    
    228,186Inventories
    
    
    474,951
    
    
    
    391,657Contract financing receivable
    
    
    3,092
    
    
    
    20,161Contract financing inventory
    
    
    
    
    
    
    7,293Other current assets
    
    
    69,261
    
    
    
    25,870Total current assets
    
    
    1,400,610
    
    
    
    727,498Property and equipment, net
    
    
    55,732
    
    
    
    37,904Goodwill
    
    
    349,646
    
    
    
    6,976Other intangibles, net
    
    
    135,431
    
    
    
    1,243Other assets
    
    
    30,942
    
    
    
    4,732Total assets
    
    $
    1,972,361
    
    
    $
    778,353LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    664,484
    
    
    $
    454,552Accrued expenses
    
    
    189,415
    
    
    
    68,320Contract financing payable
    
    
    1,601
    
    
    
    30,991Current portion of long-term debt
    
    
    19,332
    
    
    
    Lines of credit and other short-term borrowings
    
    
    
    
    
    
    13,875Total current liabilities
    
    
    874,832
    
    
    
    567,738Long-term liabilities:Lines of credit, long-term
    
    
    208,399
    
    
    
    3,750Long-term debt
    
    
    233,122
    
    
    
    Other long-term liabilities
    
    
    54,425
    
    
    
    12,037Total long-term liabilities
    
    
    495,946
    
    
    
    15,787Total liabilities
    
    
    1,370,778
    
    
    
    583,525COMMITMENTS AND CONTINGENCIESMinority interest
    
    
    818
    
    
    
    Shareholders equity:Preferred stock, $0.01 par value: 1,000 shares
authorized; no shares issued or outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value: 100,000 shares
authorized; 88,418 issued in 2007
and 57,536 issued in 2006
    
    
    884
    
    
    
    575Additional paid-in-capital
    
    
    584,806
    
    
    
    266,756Treasury stock, at cost, 6,930 shares in 2007 and
6,891 shares in 2006
    
    
    (58,695
    )
    
    
    (58,295
    )Retained earnings (deficit)
    
    
    29,467
    
    
    
    (17,918
    )Accumulated other comprehensive income
    
    
    44,303
    
    
    
    3,710Total shareholders equity
    
    
    600,765
    
    
    
    194,828Total liabilities and shareholders equity
    
    $
    1,972,361
    
    
    $
    778,353
 See accompanying notes
 51




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##### Table of Contents



Brightpoint, Inc.
Consolidated Statements of Cash Flows
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Operating activitiesNet income
    
    $
    47,394
    
    
    $
    35,610
    
    
    $
    10,440Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    24,747
    
    
    
    12,234
    
    
    
    11,101Discontinued operations
    
    
    (675
    )
    
    
    580
    
    
    
    21,478Net operating cash flows used in discontinued operations
    
    
    
    
    
    
    
    
    
    
    (2,085
    )Pledged cash requirements
    
    
    (371
    )
    
    
    (15
    )
    
    
    13,662Non-cash compensation
    
    
    6,104
    
    
    
    6,005
    
    
    
    2,837Restructuring charge (benefit)
    
    
    8,661
    
    
    
    (9
    )
    
    
    933Change in deferred taxes
    
    
    (25,625
    )
    
    
    (3,020
    )
    
    
    (390
    )Income tax benefits from exercise of stock options
    
    
    
    
    
    
    
    
    
    
    5,377Minority interest
    
    
    347
    
    
    
    
    
    
    
    Other non-cash
    
    
    6,459
    
    
    
    2,126
    
    
    
    40167,041
    
    
    
    53,511
    
    
    
    63,754Changes in operating assets and liabilities,
net of effects from acquisitions and divestitures:Accounts receivable
    
    
    (123,195
    )
    
    
    (41,135
    )
    
    
    (47,778
    )Inventories
    
    
    160,596
    
    
    
    (258,070
    )
    
    
    (23,656
    )Other operating assets
    
    
    (7,156
    )
    
    
    (1,542
    )
    
    
    (6,183
    )Accounts payable and accrued expenses
    
    
    (23,985
    )
    
    
    197,319
    
    
    
    82,823Net cash provided by (used in) operating activities
    
    
    73,301
    
    
    
    (49,917
    )
    
    
    68,960Investing activitiesCapital expenditures
    
    
    (20,247
    )
    
    
    (20,779
    )
    
    
    (12,649
    )Acquisitions, net of cash acquired
    
    
    (68,902
    )
    
    
    (1,413
    )
    
    
    (413
    )Net investing cash flow from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (1,097
    )Net cash provided by (used in) contract financing arrangements
    
    
    (4,838
    )
    
    
    6,960
    
    
    
    (5,285
    )Decrease (increase) in other assets
    
    
    (5,047
    )
    
    
    (1,853
    )
    
    
    3,945Net cash used in investing activities
    
    
    (99,034
    )
    
    
    (17,085
    )
    
    
    (15,499
    )Financing activitiesNet proceeds from credit facilities
    
    
    168,493
    
    
    
    15,825
    
    
    
    Repayments on debt assumed from Dangaard Telecom
    
    
    (348,736
    )
    
    
    
    
    
    
    Proceeds from Global Term Loans
    
    
    250,000
    
    
    
    
    
    
    
    Repayments on Global Term Loans
    
    
    (4,726
    )
    
    
    
    
    
    
    Deferred financing costs paid
    
    
    (4,597
    )
    
    
    
    
    
    
    Purchase of treasury stock
    
    
    (400
    )
    
    
    (18,367
    )
    
    
    (15,918
    )Excess tax benefit from equity based compensation
    
    
    1,602
    
    
    
    8,690
    
    
    
    Proceeds from common stock issuances under employee stock
option plans
    
    
    4,129
    
    
    
    5,760
    
    
    
    4,750Net cash provided by (used in) financing activities
    
    
    65,765
    
    
    
    11,908
    
    
    
    (11,168
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    7,420
    
    
    
    3,171
    
    
    
    (8,360
    )Net increase (decrease) in cash and cash equivalents
    
    
    47,452
    
    
    
    (51,923
    )
    
    
    33,933Cash and cash equivalents at beginning of year
    
    
    54,130
    
    
    
    106,053
    
    
    
    72,120Cash and cash equivalents at end of year
    
    $
    101,582
    
    
    $
    54,130
    
    
    $
    106,053
 See accompanying notes
 52




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##### Table of Contents



Brightpoint, Inc.
Consolidated Statements of Shareholders Equity
 Years ended December 31,2007
    
    
    2006
    
    
    2005Common stock:Balance at beginning of year
    
    $
    575
    
    
    
    
    
    
    $
    559
    
    
    
    
    
    
    $
    527Issued in connection with employee stock plans
and related income tax benefit
    
    
    9
    
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    32Issued for purchase of Dangaard Telecom
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at end of year
    
    
    884
    
    
    
    
    
    
    
    575
    
    
    
    
    
    
    
    559Additional paid-in capital:Balance at beginning of year
    
    
    266,756
    
    
    
    
    
    
    
    258,443
    
    
    
    
    
    
    
    233,436Issued in connection with employee stock plans
and related income tax benefit
    
    
    14,600
    
    
    
    
    
    
    
    8,313
    
    
    
    
    
    
    
    25,007Issued for purchase of Dangaard Telecom
    
    
    303,450
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at end of year
    
    
    584,806
    
    
    
    
    
    
    
    266,756
    
    
    
    
    
    
    
    258,443Retained earnings (deficit):Balance at beginning of year
    
    
    (17,918
    )
    
    
    
    
    
    
    (53,528
    )
    
    
    
    
    
    
    (63,968
    )Net income
    
    
    47,394
    
    
    $
    47,394
    
    
    
    35,610
    
    
    $
    35,610
    
    
    
    10,440
    
    
    $
    10,440Adjustment to adopt FASB Interpretation 48,
net of tax
    
    
    (9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at end of year
    
    
    29,467
    
    
    
    
    
    
    
    (17,918
    )
    
    
    
    
    
    
    (53,528
    )Accumulated other comprehensive income (loss):Balance at beginning of year
    
    
    3,710
    
    
    
    
    
    
    
    (4,379
    )
    
    
    
    
    
    
    4,752Currency translation of foreign investments
    
    
    
    
    
    
    41,001
    
    
    
    
    
    
    
    8,548
    
    
    
    
    
    
    
    (9,131
    )Unrealized gain on marketable securities
classified as available for sale
    
    
    
    
    
    
    1,159
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized loss on derivative instruments
    
    
    
    
    
    
    (1,598
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Adjustment to adopt Statement of Financial
Accounting Standards 158, net of tax
    
    
    
    
    
    
    
    
    
    
    (459
    )
    
    
    
    
    
    
    Pension benefit obligation
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other comprehensive income (loss)
    
    
    40,593
    
    
    
    40,593
    
    
    
    8,548
    
    
    
    8,548
    
    
    
    (9,131
    )
    
    
    (9,131
    )Total Comprehensive income (loss)
    
    
    
    
    
    $
    87,987
    
    
    
    
    
    
    $
    44,158
    
    
    
    
    
    
    $
    1,309Balance at end of year
    
    
    44,303
    
    
    
    
    
    
    
    3,710
    
    
    
    
    
    
    
    (4,379
    )Treasury stock:Balance at beginning of year
    
    
    (58,295
    )
    
    
    
    
    
    
    (39,928
    )
    
    
    
    
    
    
    (24,010
    )Purchase of treasury stock
    
    
    (400
    )
    
    
    
    
    
    
    (18,367
    )
    
    
    
    
    
    
    (15,918
    )Balance at end of year
    
    
    (58,695
    )
    
    
    
    
    
    
    (58,295
    )
    
    
    
    
    
    
    (39,928
    )Unearned compensation:Balance at beginning of year
    
    
    
    
    
    
    
    
    
    
    (12,125
    )
    
    
    
    
    
    
    Change in restricted stock unearned
compensation, net
    
    
    
    
    
    
    
    
    
    
    12,125
    
    
    
    
    
    
    
    (12,125
    )Balance at end of year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,125
    )Total shareholders equity
    
    $
    600,765
    
    
    
    
    
    
    $
    194,828
    
    
    
    
    
    
    $
    149,042
 See accompanying notes
 53




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##### Table of Contents



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
  54




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##### Table of Contents



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
 55




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##### Table of Contents



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 reduce 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
    56




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
  Allowance for Doubtful Accounts
  Inventories
  Fair Value of Financial Instruments
   Accounting for Derivative Instruments and Hedging Activities
  57




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
  Property and Equipment
  Impairment of Long-Lived Tangible and Finite-Lived Intangible Assets
 Accounting for the Impairment or Disposal of
Long-Lived Assets
 2008
    
    $
    17,6172009
    
    
    16,1692010
    
    
    15,8982011
    
    
    14,9932012
    
    
    11,712
   Goodwill
 Goodwill and Other Intangible Assets Disclosures about Segments of an Enterprise and Related Information
 58




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
  Americas
    
    Europe
    
    Asia-Pacific
    
    TotalBalance at December 31, 2005
    
    $
    
    
    
    $
    3,796
    
    
    $
    1,671
    
    
    $
    5,647Goodwill from acquisitions
    
    
    611
    
    
    
    
    
    
    
    
    
    
    
    611Effects of foreign currency fluctuation
    
    
    
    
    
    
    608
    
    
    
    110
    
    
    
    718Balance at December 31, 2006
    
    $
    611
    
    
    $
    4,584
    
    
    $
    1,781
    
    
    $
    6,976Goodwill from acquisitions
    
    
    48,522
    
    
    
    269,459
    
    
    
    3,394
    
    
    
    321,375Effects of foreign currency fluctuation
    
    
    
    
    
    
    21,101
    
    
    
    194
    
    
    
    21,295Balance at December 31, 2007
    
    $
    49,133
    
    
    $
    295,144
    
    
    $
    5,369
    
    
    $
    349,646
 Foreign Currency Translation
  Income Taxes
  Earnings Per Share
  59




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Income from continuing operations
    
    $
    46,719
    
    
    $
    36,190
    
    
    $
    31,918Discontinued operations, net of income taxes
    
    
    675
    
    
    
    (580
    )
    
    
    (21,478
    )Net Income
    
    $
    47,394
    
    
    $
    35,610
    
    
    $
    10,440Earnings per share  basic:Income from continuing operations
    
    $
    0.76
    
    
    $
    0.74
    
    
    $
    0.67Discontinued operations, net of income taxes
    
    
    0.01
    
    
    
    (0.01
    )
    
    
    (0.45
    )Net income
    
    $
    0.77
    
    
    $
    0.73
    
    
    $
    0.22Earnings per share  diluted:Income from continuing operations
    
    $
    0.73
    
    
    $
    0.72
    
    
    $
    0.64Discontinued operations, net of income taxes
    
    
    0.01
    
    
    
    (0.02
    )
    
    
    (0.43
    )Net income
    
    $
    0.74
    
    
    $
    0.70
    
    
    $
    0.21Weighted average shares outstanding for basic earnings per share
    
    
    61,174
    
    
    
    49,104
    
    
    
    47,954Net effect of dilutive stock options, restricted stock units, shares held in
escrow, and restricted stock based on the treasury stock method using
average market price
    
    
    2,397
    
    
    
    1,450
    
    
    
    1,703Weighted average shares outstanding for diluted earnings per share
    
    
    63,571
    
    
    
    50,554
    
    
    
    49,657
   Recently Issued Accounting Pronouncements
 Business
Combinations
 Noncontrolling Interests in Consolidated Financial
Statements  An Amendment of ARB No. 51
 the Fair Value Option for Financial Assets and Financial
Liabilities
 60




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
  Fair Value
Measurements
 Accounting for Uncertainty in
Income Taxesan interpretation of FASB Statement No. 109
 Operating Segments
   61




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
 Corporate andAmericas
    
    Asia-Pacific
    
    Europe
    
    Reconciling Items
    
    Total2007:Distribution revenue
    
    $
    960,405
    
    
    $
    1,521,684
    
    
    $
    1,460,006
    
    
    $
    
    
    
    $
    3,942,095Logistic services revenue
    
    
    195,028
    
    
    
    36,445
    
    
    
    126,707
    
    
    
    
    
    
    
    358,180Total revenue from external customers
    
    $
    1,155,433
    
    
    $
    1,558,129
    
    
    $
    1,586,713
    
    
    $
    
    
    
    $
    4,300,275Operating income from continuing operations
    
    $
    43,710
    
    
    $
    27,960
    
    
    $
    21,257
    
    
    $
    (27,014
    )
    
    $
    65,913Depreciation and amortization
    
    
    10,236
    
    
    
    3,071
    
    
    
    10,936
    
    
    
    504
    
    
    
    24,747Capital expenditures
    
    
    10,937
    
    
    
    2,736
    
    
    
    6,132
    
    
    
    442
    
    
    
    20,247Total segment assets
    
    
    354,910
    
    
    
    243,084
    
    
    
    1,343,621
    
    
    
    30,746
    
    
    
    1,972,3612006: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
    
    
    
    487,824
 Information about Geographic Areas:
 2007
    
    
    2006
    
    
    2005Total Revenue (1)AmericasUnited States
    
    $
    1,114,040
    
    
    $
    790,137
    
    
    $
    649,154Other (2)
    
    
    41,393
    
    
    
    24,451
    
    
    
    25,920Total Americas
    
    $
    1,155,433
    
    
    $
    814,588
    
    
    $
    675,074Asia-PacificUnited Arab Emirates
    
    $
    26,866
    
    
    $
    618,507
    
    
    $
    553,402Singapore
    
    
    939,450
    
    
    
    
    
    
    
    Other (2)
    
    
    591,813
    
    
    
    497,227
    
    
    
    528,127Total Asia-Pacific
    
    $
    1,558,129
    
    
    $
    1,115,734
    
    
    $
    1,081,529EuropeTotal Europe
    
    $
    1,586,713
    
    
    $
    495,051
    
    
    $
    383,574Total
    
    $
    4,300,275
    
    
    $
    2,425,373
    
    
    $
    2,140,177
 
 (1)
    
    Revenues are attributable to country based on selling location.(2)
    
    Other represents geographic areas that are individually less than 10% of the total
revenue for a reportable segment. 62




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Brightpoint, Inc.
Notes to Consolidated Financial Statements
 2007
    
    
    2006Long-Lived Assets (1)United States
    
    $
    31,868
    
    
    $
    29,657Other
    
    
    23,864
    
    
    
    8,247$
    55,732
    
    
    $
    37,904
 
 (1)
    
    Includes property and equipment, net of accumulated depreciation. 2. Stock Based Compensation
 Share-Based
Payment Accounting for Stock Issued to Employees
 December 31,2005Net income as reported
    
    $
    10,440Add back; stock compensation included in net income
    
    
    1,746Stock-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
    )Pro forma net income
    
    $
    8,888Earnings per share  basic:Net income as reported
    
    $
    0.22Add back; stock compensation included in net income
    
    
    0.04Stock-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
    )Pro forma net income
    
    $
    0.19Earnings per share  diluted:Net income as reported
    
    $
    0.21Add back; stock compensation included in net income
    
    
    0.04Stock-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
    )Pro forma net income
    
    $
    0.18
  Amended 2004 Long-Term Incentive Plan
  63




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Brightpoint, Inc.
Notes to Consolidated Financial Statements
   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
    
    
    1,220,492
    
    
    $
    6.38Granted
    
    
    73,745
    
    
    
    11.76Exercised
    
    
    (706,902
    )
    
    
    5.84Forfeited
    
    
    (3,150
    )
    
    
    7.48Expired
    
    
    (635
    )
    
    
    0.78Outstanding at December 31
    
    
    583,550
    
    
    $
    7.70
    
    
    
    2.28
    
    
    $
    4,468,289Exercisable at December 31
    
    
    250,249
    
    
    $
    6.87
    
    
    
    1.84
    
    
    $
    2,125,295
 64




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##### Table of Contents



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
    
    
    
    2007
    
    Life
    
    Price
    
    2007
    
    Price$
    2.07
    
    
    
    
    
    
    $
    6.51
    
    
    
    
    
    48,136
    
    
    
    0.98
    
    
    years
    
    $
    4.87
    
    
    
    48,136
    
    
    $
    4.87$
    6.78
    
    
    
    
    
    
    $
    6.78
    
    
    
    
    
    198,118
    
    
    
    2.13
    
    
    years
    
    
    6.78
    
    
    
    101,912
    
    
    
    6.78$
    7.08
    
    
    
    
    
    
    $
    7.08
    
    
    
    
    
    5,250
    
    
    
    2.42
    
    
    years
    
    
    7.08
    
    
    
    3,000
    
    
    
    7.08$
    7.48
    
    
    
    
    
    
    $
    7.48
    
    
    
    
    
    212,400
    
    
    
    2.10
    
    
    years
    
    
    7.48
    
    
    
    63,900
    
    
    
    7.48$
    8.03
    
    
    
    
    
    
    $
    14.43
    
    
    
    
    
    119,646
    
    
    
    3.34
    
    
    years
    
    
    10.78
    
    
    
    33,301
    
    
    
    8.82583,550
    
    
    
    
    
    
    
    
    
    
    $
    7.70
    
    
    
    250,249
    
    
    $
    6.87
  2007
    
    2006
    
    2005Risk-free interest rate
    
    
    4.88
    %
    
    
    n/a
    
    
    
    3.86
    %Dividend yield
    
    
    0.00
    %
    
    
    n/a
    
    
    
    0.00
    %Expected volatility
    
    
    0.51
    
    
    
    n/a
    
    
    
    0.84Expected life of the options (years)
    
    
    3.26
    
    
    
    n/a
    
    
    
    3.24
  WeightedWeighted
    
    Average
    
    AggregateRestricted
    
    Average
    
    Remaining
    
    IntrinsicStock
    
    Exercise
    
    Contractual
    
    Value as ofUnits
    
    Price
    
    Life
    
    December 31Outstanding at January 1
    
    
    612,130
    
    
    $
    Granted
    
    
    416,496
    
    
    
    Released
    
    
    (127,202
    )
    
    
    Forfeited
    
    
    
    
    
    
    Outstanding
at December 31
    
    
    901,424
    
    
    $
    
    
    
    
    1.43
    
    
    $
    13,845,843
  Weighted
    
    WeightedAverage
    
    AverageRestricted
    
    Grant
    
    RemainingStock
    
    Date
    
    ContractualAwards
    
    Fair Value
    
    LifeOutstanding at January 1
    
    
    1,248,158
    
    
    $
    9.33Granted
    
    
    51,513
    
    
    
    13.73Released
    
    
    (15,000
    )
    
    
    23.92Forfeited
    
    
    (5,577
    )
    
    
    13.45Outstanding at December 31
    
    
    1,279,094
    
    
    $
    9.31
    
    
    
    5.19
    65




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
   3. Acquisitions
   Determination of the Measurement Date for the Market Price of Acquirer Securities
Issued in a Purchase Business Combination
 Recognition of Liabilities in Connection with a Purchased Business Combination.
  66




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Brightpoint, Inc.
Notes to Consolidated Financial Statements
   DangaardTelecom
    
    
CellStarCurrent assets:Cash
    
    $
    7,104
    
    
    $
    Accounts Receivable
    
    
    288,158
    
    
    
    66,191Inventory
    
    
    183,391
    
    
    
    32,974Other current assets
    
    
    21,671
    
    
    
    100Total current assets:
    
    
    500,324
    
    
    
    99,265Property and equipment, net
    
    
    8,526
    
    
    
    1,128Goodwill
    
    
    269,983
    
    
    
    48,199Intangible
assets subject to amortization
    
    
    123,148
    
    
    
    11,620Other assets
    
    
    9,247
    
    
    
    191Total assets acquired
    
    $
    911,227
    
    
    $
    160,403Liabilities:Accounts payable
    
    $
    142,409
    
    
    $
    80,909Accrued expenses
    
    
    68,218
    
    
    
    12,015Debt
    
    
    348,736
    
    
    
    Deferred taxes
    
    
    39,323
    
    
    
    Other
    
    
    1,014
    
    
    
    Minority interest
    
    
    427
    
    
    
    Total liabilties assumed
    
    $
    600,127
    
    
    $
    92,924Net assets acquired
    
    $
    311,100
    
    
    $
    67,479
   Year EndedDecember 312007
    
    2006Revenue
    
    $
    5,540,632
    
    
    $
    4,988,983Income from
continuing operations
    
    
    31,327
    
    
    
    51,995Net income
    
    
    32,002
    
    
    
    51,415Earnings per share  diluted
    
    $
    0.40
    
    
    $
    0.64
 67




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
 Year ended:
    
    
    
    
    
    
    
    
    
    Dangaard(amounts in 000s)
    
    CellStar
    
    Note
    
    Telecom
    
    Brightpoint
    
    Adjustments
    
    Note
    
    ConsolidatedDecember 31, 2007Revenue
    
    $
    126,991
    
    
    
    (1
    )
    
    $
    1,268,373
    
    
    $
    4,300,275
    
    
    $
    (155,007
    )
    
    
    (3
    )
    
    $
    5,540,632Income from continuing
operations
    
    
    (73
    )
    
    
    (1
    )
    
    
    (8,722)
    (2)
    
    
    46,719
    
    
    
    (6,597
    )
    
    
    (4
    )
    
    
    31,327Net income
    
    
    (73
    )
    
    
    (1
    )
    
    
    (8,722
    )
    
    
    47,394
    
    
    
    (6,597
    )
    
    
    
    
    
    
    32,002Weighted average shares outstanding  diluted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,571
    
    
    
    17,342
    
    
    
    (5
    )
    
    
    80,913Income from continuing operations per share  diluted
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.73
    
    
    
    
    
    
    
    
    
    
    $
    0.40December 31, 2006Revenue
    
    $
    599,592
    
    
    
    
    
    
    $
    2,182,373
    
    
    $
    2,425,373
    
    
    $
    (218,355
    )
    
    
    (3
    )
    
    $
    4,988,983Income from continuing
operations
    
    
    3,411
    
    
    
    
    
    
    
    24,388
    
    
    
    36,190
    
    
    
    (11,994
    )
    
    
    (4
    )
    
    
    51,995Net income
    
    
    3,411
    
    
    
    
    
    
    
    24,388
    
    
    
    35,610
    
    
    
    (11,994
    )
    
    
    
    
    
    
    51,415Weighted average shares outstanding  diluted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,554
    
    
    
    30,000
    
    
    
    (5
    )
    
    
    80,554Income from continuing operations per share  diluted
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.72
    
    
    
    
    
    
    
    
    
    
    $
    0.64
 Pro-forma adjustments
 (1)
    
    Results for CellStar are included in the financial results of Brightpoint for the
period April 1, 2007  December 31, 2007.(2)
    
    Results for Dangaard Telecom are included in the financial results of Brightpoint for
the period August 1, 2007  December 31, 2007. Dangaard Telecom results for the seven
months ended July 31, 2007 include a charge of $2.1 million to write-off unamortized
deferred financing costs, $1.0 million of integration costs and charges of approximately
$11.0 million to $13.0 million of adjustments related to obsolescence, warranty and other
reserves.(3)
    
    To reclassify the cost of revenue that was historically presented by Dangaard Telecom
on a gross basis to a net basis to conform with EITF 99-19, Reporting Revenue Gross as a
Principal versus Net as an Agentand Brightpoint accounting policy.(4)
    
    To record the following: 
    
    amortization of the finite-lived intangible assets recorded as a result of the
acquisitions of CellStar and Dangaard Telecom,
    
    reversal of the write-off of unamortized deferred financing costs recorded in
July 2007,
    
    interest expense on borrowings used to finance the CellStar acquisition, and
    
    income tax provision for the effect of the pro forma adjustments above based on
statutory tax rates.
 
 (5)
    
    To adjust the weighted average number of shares outstanding used to determine diluted
pro forma earnings per share assuming the 30,000,000 shares of the Companys unregistered
Common Stock (including escrow shares) used to acquire Dangaard Telecom were issued at the
beginning of the period presented. 68




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Brightpoint, Inc.
Notes to Consolidated Financial Statements
 4. Income Tax Expense
  Year ended December 31,2007
    
    2006
    
    2005United States
    
    $
    11,944
    
    
    $
    17,428
    
    
    $
    17,234Foreign
    
    
    35,562
    
    
    
    31,000
    
    
    
    25,742$
    47,506
    
    
    $
    48,428
    
    
    $
    42,976
  2007
    
    2006
    
    2005Tax at U.S. Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State and local income taxes, net of U.S. Federal benefit
    
    
    1.8
    
    
    
    (0.2
    )
    
    
    1.6Net benefit of tax on foreign operations
    
    
    (9.2
    )
    
    
    (9.3
    )
    
    
    (6.6
    )Release of valuation allowance
    
    
    (29.2
    )
    
    
    
    
    
    
    Other
    
    
    2.5
    
    
    
    (0.2
    )
    
    
    (4.3
    )Effective income tax rate
    
    
    0.9
    %
    
    
    25.3
    %
    
    
    25.7
    %
   Year ended December 31,2007
    
    2006
    
    2005Current:Federal
    
    $
    5,693
    
    
    $
    6,788
    
    
    $
    4,549State
    
    
    1,642
    
    
    
    659
    
    
    
    1,206Foreign
    
    
    16,477
    
    
    
    7,145
    
    
    
    6,008$
    23,812
    
    
    $
    14,592
    
    
    $
    11,763Deferred:Federal
    
    
    (14,664
    )
    
    
    (1,255
    )
    
    $
    (751
    )State
    
    
    (315
    )
    
    
    (313
    )
    
    
    (160
    )Foreign
    
    
    (8,393
    )
    
    
    (786
    )
    
    
    206(23,372
    )
    
    
    (2,354
    )
    
    
    (705
    )$
    440
    
    
    $
    12,238
    
    
    $
    11,058
   69




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
 December 31,2007
    
    2006Deferred tax assets:Current:Allowance for doubtful accounts
    
    $
    2,334
    
    
    $
    1,277Accrued liabilities and other
    
    
    12,631
    
    
    
    8,174Noncurrent:Depreciation and other long-term assets
    
    
    1,363
    
    
    
    746Net operating losses and other carryforwards
    
    
    30,079
    
    
    
    23,30146,407
    
    
    
    33,498Valuation allowance
    
    
    (8,713
    )
    
    
    (22,940
    )Total deferred tax assets
    
    
    37,694
    
    
    
    10,558Deferred tax liabilities:Current:Other current liabilities
    
    
    (204
    )
    
    
    (1,184
    )Noncurrent:Depreciation
    
    
    (1,745
    )
    
    
    (2,357
    )Other assets and long-term liabilities
    
    
    (34,376
    )
    
    
    (1,961
    )Total deferred tax liabilities
    
    
    (36,325
    )
    
    
    (5,502
    )Net deferred assets
    
    $
    1,369
    
    
    $
    5,056
   Accounting for Uncertainty in Income Taxes  an interpretation
of FASB Statement No. 109
 Balance at January 1, 2007
    
    $
    2,119Additions based on tax positions related to the current year
    
    
    659Additions for tax positions of prior years
    
    
    Reductions for tax positions of prior years
    
    
    (510
    )Lapse of statute of limitations
    
    
    (91
    )Settlements
    
    
    Balance at December 31, 2007
    
    $
    2,177
  70




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
 5. Divestitures and Discontinued Operations
 Accounting for the
Impairment or Disposal of Long-Lived Assets
  Year ended December 31,2007
    
    2006
    
    2005Revenue
    
    $
    
    
    
    $
    
    
    
    $
    103,562Loss from discontinued operations before income taxes
    
    $
    (68
    )
    
    $
    (337
    )
    
    $
    (21,208
    )Income tax expense (benefit)
    
    
    
    
    
    
    80
    
    
    
    (608
    )Loss from discontinued operations (1)
    
    $
    (68
    )
    
    $
    (417
    )
    
    $
    (20,600
    )Gain (loss) on disposal of discontinued operations (2)
    
    
    743
    
    
    
    (163
    )
    
    
    (878
    )Total discontinued operations
    
    $
    675
    
    
    $
    (580
    )
    
    $
    (21,478
    )
 
 (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. France Operations
  6. Property and Equipment
  December 31,2007
    
    
    2006Information systems equipment and software
    
    $
    96,060
    
    
    $
    70,017Furniture and equipment
    
    
    31,669
    
    
    
    28,018Leasehold improvements
    
    
    14,387
    
    
    
    7,580142,116
    
    
    
    105,615Less accumulated depreciation
    
    
    (86,384
    )
    
    
    (67,711
    )$
    55,732
    
    
    $
    37,904
  71




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
 7. Lease Arrangements
   Year ending December 31,2008
    
    $
    20,7832009
    
    
    17,8032010
    
    
    14,4832011
    
    
    12,5462012
    
    
    9,980Thereafter*
    
    
    41,299$
    116,894
 
 *
    
    Includes approximately $29.1 million related to the Companys 495,000 square foot facility
located in Plainfield, Indiana, for which the initial lease term expires in 2019 and
approximately $9.3 million related to the Companys 150,000 square foot Europe headquarters
located in Denmark for which the initial lease term expires in 2018. The minimum lease
payments increase every three years on the Plainfield 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 for the Plainfield lease of $5.7 million and $5.6
million at December 31, 2007 and 2006 which is included as a component of Other long-term
liabilities in the Consolidated Balance Sheets. 8. Borrowings
  Gross
    
    
    
    
    
    Letters of Credit &
    
    NetAvailability
    
    Outstanding
    
    Guarantees
    
    AvailabilityGlobal Term Loans
    
    $
    252,454
    
    
    $
    252,454
    
    
    $
    
    
    
    $
    Global Credit Facility
    
    
    300,000
    
    
    
    208,399
    
    
    
    23,288
    
    
    
    68,313Other
    
    
    62,122
    
    
    
    
    
    
    
    
    
    
    
    62,122Total
    
    $
    614,576
    
    
    $
    460,853
    
    
    $
    23,288
    
    
    $
    130,435
   72




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
     Year ending December 31,2008
    
    $
    19,3322009
    
    
    32,3812010
    
    
    45,3342011
    
    
    90,6672012
    
    
    273,139$
    460,853
 9. Guarantees
 Guarantors Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others,
    73




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Brightpoint, Inc.
Notes to Consolidated Financial Statements
  Year EndedDecember 31,2007
    
    2006January 1
    
    $
    3,063
    
    
    
    2,117Warranty liability assumed from Dangaard
    
    
    3,308
    
    
    
    Provision for product warranties
    
    
    3,386
    
    
    
    4,837Change in estimate
    
    
    2,225
    
    
    
    (461
    )Settlements during the period
    
    
    (8,038
    )
    
    
    (3,430
    )December 31
    
    $
    3,944
    
    
    
    3,063
 10. Shareholders Equity
   Treasury Stock
  Preferred Share Purchase Rights
  11. Employee Benefit Plans
  74




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##### Table of Contents



Brightpoint, Inc.
Notes to Consolidated Financial Statements
  Employers Accounting for Pensions
 December 31,2007
    
    2006Accrued benefit liability
    
    $
    (2,304
    )
    
    $
    (1,754
    )Deferred tax asset
    
    
    280
    
    
    
    300Accumulated other comprehensive loss
    
    
    428
    
    
    
    459Net periodic benefit cost
    
    
    616
    
    
    
    567
  12. Legal Proceedings and Contingencies
  German value-added tax authorities  Finanzamt Flensburg,
 1.
    
    Dangaard Telecoms subsidiary, Dangaard Telecom Denmark A/S, received an assessment
from the Finanzamt claiming that local German VAT should be applied on sales made by
Dangaard Telecom Denmark A/S to two specific German customers in 1997 and 1998. Finanzamt
claimed approximately $2.9 million. The case is currently in abeyance waiting for a
principal decision or settlement involving similar cases pending in Germany. Dangaard
Telecom Denmark A/S continues to dispute this claim and intends to defend this matter
vigorously. The former shareholders of Dangaard Telecom agreed to indemnify Dangaard
Holding with respect to this dispute when Dangaard Holding acquired Dangaard Telecom, and
Dangaard Holding has agreed in the purchase agreement to transfer and assign these
indemnification rights to us (or enforce them on our behalf if such transfer or assignment
is not permitted).2.
    
    Dangaard Telecoms subsidiary, Dangaard Telecom Denmark A/S, received a notice from the
Finanzamt claiming that local German VAT should be applied on all sales made by Dangaard
Telecom Denmark A/S to German customers during the years 1999 to 2004. Finanzamt claimed
approximately $8.1 million. The case is currently in abeyance waiting for a principal
decision or settlement involving similar cases pending in Germany. Dangaard Telecom Denmark
A/S continues to dispute this claim and intends to defend this matter vigorously. The
former shareholders of Dangaard Telecom agreed to indemnify Dangaard Holding with respect
to 80% of this claim when Dangaard Holding acquired Dangaard Telecom, and Dangaard Holding
has agreed in the purchase agreement to transfer and assign these indemnification rights to
us (or enforce them on our behalf if such transfer or assignment is not permitted).
 Fleggaard group of companies
  Norwegian tax authorities
  75




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##### Table of Contents



Brightpoint, Inc.  Notes to Consolidated Financial Statements
  German tax authorities
  13. Quarterly Results of Operations (Unaudited)
 2007
    
    First
    
    Second
    
    Third
    
    FourthRevenue
    
    $
    641,629
    
    
    $
    850,995
    
    
    $
    1,177,986
    
    
    $
    1,629,665Gross profit
    
    
    32,715
    
    
    
    41,583
    
    
    
    78,041
    
    
    
    118,247Income from continuing operations
    
    
    1,842
    
    
    
    17,721
    
    
    
    12,984
    
    
    
    14,172Net income
    
    
    1,850
    
    
    
    17,688
    
    
    
    12,962
    
    
    
    14,894Earnings per share-basic:Income from continuing operations
    
    $
    0.04
    
    
    $
    0.36
    
    
    $
    0.18
    
    
    $
    0.18Net income
    
    $
    0.04
    
    
    $
    0.36
    
    
    $
    0.18
    
    
    $
    0.19Earnings per share-diluted:Income from continuing operations
    
    $
    0.04
    
    
    $
    0.35
    
    
    $
    0.18
    
    
    $
    0.17Net income
    
    $
    0.04
    
    
    $
    0.35
    
    
    $
    0.18
    
    
    $
    0.18
 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
  
    
    the effects of the 6 for 5 common stock split effected on May 31, 2006;
    
    the effects of acquisitions as more fully described in Note 3 to the Consolidated
Financial Statements;
    
    the effects of a $14.1 million benefit related to the reversal of valuation
allowances on certain foreign tax credit carryforwards in the second quarter of
2007;
    
    the effects of a $2.1 million benefit resulting from a reduction in the statutory
tax rate in Germany in the second quarter of 2007;
    
    and the effects of an $8.5 million restructuring charge in the fourth quarter of
2007.
 76




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##### Table of Contents



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 14. Accounts Receivable Factoring
 , Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities
   15. Restructuring
  Recognition of Liabilities in Connection with a Purchased Business Combination.
  AssetImpairment
    
    
    EmployeeCharges
    
    
    Terminations
    
    
    TotalRestructuring charge
    
    $
    7,096
    
    
    $
    1,565
    
    
    $
    8,661Dangaard Telecom goodwill adjustment
    
    
    16,698
    
    
    
    2,663
    
    
    
    19,361Total activity:
    
    
    23,794
    
    
    
    4,228
    
    
    
    28,022Less:Cash usage
    
    
    
    
    
    
    (164
    )
    
    
    (164
    )Non-cash usage
    
    
    (23,794
    )
    
    
    
    
    
    
    (23,794
    )Balance at December 31, 2007
    
    $
    
    
    
    $
    4,064
    
    
    $
    4,064
 77




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##### Table of Contents



Brightpoint, Inc.  Notes to Consolidated Financial Statements
 16. Accumulated Other Comprehensive Income (loss)
  2007
    
    
    2006
    
    
    2005Currency translation of foreign investments
    
    $
    45,170
    
    
    $
    4,169
    
    
    $
    (4,379
    )Unrealized gain on marketable securities
classified as available for sale
    
    
    1,159
    
    
    
    
    
    
    
    Unrealized loss on derivative instruments
    
    
    (1,598
    )
    
    
    
    
    
    
    Pension benefit obligation
    
    
    (428
    )
    
    
    (459
    )
    
    
    Total accumulated other comprehensive income:
    
    $
    44,303
    
    
    $
    3,710
    
    
    $
    (4,379
    )
 78




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
      /s/ Ernst & Young LLP
 
 79




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
        80




---



##### Table of Contents



/s/ Ernst & Young LLP
 
 81




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##### Table of Contents



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
   82




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##### Table of Contents



Audit Committee Oversight
  
 Item 9B. Other Information.
  83




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##### Table of Contents



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.
  84




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##### Table of Contents



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(25)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(26)**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.(28)2.6
    
    Stock Purchase Agreement dated February 19, 2007 as amended on April 19, 2007, May 17, 2007 and June 15, 2007 by and
among Brightpoint, Inc., Dangaard Holding A/S, Dangaard Telecom A/S and Nordic Capital Fund VI (for purposes of
Sections 6.16 and 12.14 only), consisting of: Nordic Capital VI Alpha, L.P., Nordic Capital Beta, L.P., NC VI
Limited and Nordic Industries Limited and First, Second and Third Amendments thereto. (33)3.1
    
    Restated Articles of Incorporation of Brightpoint, Inc. (formerly Brightpoint Indiana Corp.)(17)3.2
    
    Amended and Restated By-Laws of
Brightpoint, Inc. as amended (formerly Brightpoint Indiana Corp.)(36)4.1
    
    Indenture between the Company and the Chase Manhattan Bank, as Trustee dated as of March 11, 1998 (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(26)4.1
    
    Shareholder Agreement dated as of July 31, 2007 by and among Brightpoint, Inc. and Dangaard Holding A/S. (34)4.3
    
    Registration Rights Agreement dated as of July 31, 2007 by and among Brightpoint, Inc. and Dangaard Holding A/S. (34)10.1
    
    Rights Agreement, dated as of February 20, 1997, between Brightpoint, Inc. and Continental Stock Transfer and Trust
Company, as Rights Agent(1)10.1.1
    
    Amendment Number 1 to the Rights Agreement by and between Brightpoint, Inc. 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 by and between Brightpoint, Inc. 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)10.4
    
    Brightpoint, Inc. 401(k) Plan (2001 Restatement)(9)10.5
    
    First 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)*
 85




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##### Table of Contents



ExhibitNumber
    
    Description10.7.3
    
    Form of Restricted Stock Unit Award Agreement between the Company and Grantee(12)*10.7.4
    
    Form of Executive Stock Option Agreement with Forfeiture Provision(20)*10.7.5
    
    Form of Executive Restricted Stock Unit Award Agreement with Forfeiture Provision(20)*10.8
    
    Amended and Restated Independent Director Stock Compensation Plan(15)*10.8.1
    
    Summary Sheet of 2007 Director Fees and Named Executive Officer Compensation(31)*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 No. 1 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 No. 2 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 No. 3 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 No. 4 dated April 7, 2005 to Amended and restated Employment Agreement between the Company and Robert J.
Laikin dated July 1, 1999(21)*10.11
    
    Amended and Restated Employment Agreement between the Company and J. Mark Howell dated July 1, 1999(6)*10.11.1
    
    Amendment No. 1 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 No. 2 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 No. 3 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 No. 4 dated April 7, 2005 to Amended and restated Employment Agreement between the Company and J. Mark
Howell dated July 1, 1999(21)*10.12
    
    Amended and Restated Employment Agreement between the Company and Steven E. Fivel dated July 1, 1999(6)*10.12.1
    
    Amendment No. 1 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 No. 2 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 No. 3 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 No. 4 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 No. 5 dated April 7, 2005 to Amended and restated Employment Agreement between the Company and Steven E.
Fivel dated July 1, 1999(21)*10.13
    
    Lease Agreement between the Company and Airtech Parkway Associates, LLC, dated September 18, 1998(3)10.14
    
    Lease Agreement between Wireless Fulfillment Services, LLC 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(18)10.16
    
    Lease Agreement between Wireless Fulfillment Services, LLC and Perpetual Trustee Company Limited, dated November 10,
2004(19)10.17
    
    Credit Agreement dated February 16, 2007 by and among Brightpoint, Inc. (and certain of its 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, Bank of America, N.A., as
administration agent, and the other lenders party thereto(29)*10.17.1
    
    Commitment Increase Agreement dated as of March 30, 2007 among Brightpoint, Inc. (and certain of its subsidiaries
identified therein), the guarantors identified therein, the lenders identified therein, and Bank of America, N.A.,
as administrative agent(31)10.17.2
    
    First Amendment dated July 31, 2007 to Credit Agreement dated February 16, 2007 by and among the Brightpoint, Inc.
(and certain of its subsidiaries identified therein), Banc of America Securities LLC, as sole lead arranger and book
manager,
 86




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##### Table of Contents



ExhibitNumber
    
    DescriptionGeneral 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. (34)10.18
    
    Amended and Restated Agreement for Supplemental Executive Retirement Benefit dated as of January 18, 2006 by and
between Robert J. Laikin and Brightpoint, Inc.(23)*10.19
    
    Amended and Restated Agreement for Supplemental Executive Retirement Benefit dated as of January 18, 2006 by and
between J. Mark Howell and Brightpoint, Inc.(23)*10.20
    
    Amended and Restated Agreement for Supplemental Executive Retirement Benefit dated as of January 18, 2006 by and
between Steven E. Fivel and Brightpoint, Inc.(23)*10.21
    
    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(21)*10.22
    
    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(21)*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 Steven E. Fivel(21)*10.24
    
    Employment Agreement between Brightpoint, Inc. and Vincent Donargo dated as of November 9, 2006(30)*10.25
    
    Employment Agreement between Brightpoint, Inc. and Anthony W. Boor dated October 17, 2005(22)*10.26
    
    Lease Agreement between the Brightpoint North America L.P. and Opus North Corporation, dated February 9, 2006(24)10.27
    
    Lease Agreement between Brightpoint Services, LLC and Louisville United, LLC(27)10.28
    
    Employment Agreement dated February 23, 2006 between Brightpoint Asia Limited and John Alexander Du Plessis
Currie(26)*10.29
    
    Restricted Stock Award Agreement dated February 23, 2006 between Brightpoint, Inc. and John Alexander Du Plessis
Currie(26)*10.30
    
    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(26)10.31
    
    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, 2003, as amended(26)10.32
    
    Escrow Agreement dated as of July 31, 2007 by and among Brightpoint, Inc., Dangaard Holding A/S and American Stock
Transfer and Trust Company, as escrow agent(34)10.33
    
    Amended and Restated Employment Agreement between Brightpoint, Inc. and Michael K. Milland, effective as of October
1, 2007. (35)10.34
    
    Relocation Agreement between Brightpoint, Inc. and Michael K. Milland, effective as of October 1, 2007. (35)21
    
    Subsidiaries(36)23
    
    Consent of Independent Registered Public Accounting Firm(36)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(36)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(36)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(36)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(36)99.1
    
    Cautionary Statements(36)
 
 (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. 87




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##### Table of Contents



(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 of Form 8-K filed June 3, 2004 for the event dated June 3, 2004(18)
    
    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(19)
    
    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(20)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed February 25, 2005(21)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on April 12, 2005(22)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on October 18, 2005(23)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on January 20, 2006(24)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on February 15, 2006(25)
    
    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(26)
    
    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(27)
    
    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(28)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on December 19, 2006(29)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on February 21, 2007(30)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Annual
Report on Form 10-K filed on February 22, 2007(31)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on April 5, 2007(32)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Quarterly
Report on Form 10-Q filed on May 8, 2007 88




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##### Table of Contents



(33)
    
    Incorporated by reference to the applicable exhibit filed as Annex A to the
Companys Definitive Proxy Statement on Schedule 14A dated June 20, 2007(34)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on August 2, 2007(35)
    
    Incorporated by reference to the applicable exhibit filed with the Companys Current
Report on Form 8-K filed on November 6, 2007(36)
    
    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. 89




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##### Table of Contents



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

February
28, 2008Robert J. Laikin
    
    Chief
Executive Officer and Director (PrincipalExecutive Officer)/s/ Anthony W. Boor
    
    Executive Vice President, Chief Financial
    
    February 28, 2008Anthony W. Boor
    
    Officer
and Treasurer(Principal Financial Officer)/s/ Vincent Donargo
    
    Vice President, Corporate
    
    February 28, 2008Vincent Donargo
    
    Controller,
Chief Accounting Officer(Principal Accounting Officer)/s/ JAN GESMAR-LARSEN

Jan Gesmar-Larsen
    
    Director
    
    February 28, 2008/s/ Eliza Hermann

Eliza Hermann
    
    Director
    
    February 28, 2008/s/ JORN P. JENSEN

Jorn P. Jensen
    
    Director
    
    February 28, 2008/s/ THORLEIF KRARUP

Thorleif Krarup
    
    Director
    
    February 28, 2008/s/ Marisa E. Pratt

Marisa E. Pratt
    
    Director
    
    February 28, 2008/s/ Richard W. Roedel

Richard W. Roedel
    
    Director
    
    February 28, 2008/s/ Jerre L. Stead

Jerre L. Stead
    
    Director
    
    February 28, 2008/s/ K.P. Wilska

K.P. Wilska
    
    Director
    
    February 28, 2008
 90




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##### Table of Contents



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(1)
    
    Deductions
    
    of Period(Amounts in thousands)Year ended December 31, 2007:Deducted from asset accounts:Allowance for doubtful accounts
    
    $
    4,926
    
    
    $
    2,992
    
    
    $
    9,424
    
    
    $
    (185
    )
    
    $
    17,157Restructuring reserves
    
    
    
    
    
    
    8,661
    
    
    
    19,361
    
    
    
    (23,958
    )(2)
    
    
    4,064Total
    
    $
    4,926
    
    
    $
    11,653
    
    
    $
    28,785
    
    
    $
    (24,143
    )
    
    $
    21,221Year ended December 31, 2006:Deducted from asset accounts:Allowance for doubtful accounts
    
    $
    3,621
    
    
    $
    1,390
    
    
    $
    
    
    
    $
    (85
    )
    
    $
    4,926Year ended December 31, 2005:Deducted from asset accounts:Allowance for doubtful accounts
    
    $
    6,215
    
    
    $
    3,280
    
    
    $
    
    
    
    $
    (5,874
    )
    
    $
    3,621
 
 (1)
    
    Includes allowance for doubtful accounts assumed in the acquisition of Dangaard Telecom
and additional liabilities recognized as liabilities assumed in the business combination
and included in the allocation of the acquisition costs in accordance with EITF 95-3,
Recognition of Liabilities in Connection with a Purchased BusinessCombination, as more
fully described in Note 3 to the Consolidated Financial Statements.(2)
    
    Includes $23.8 million of non-cash charges associated with the Companys decision to
terminate Dangaard Telecoms implementation of SAP enterprise resource planning (ERP) and
related software as more fully described in Notes 3 and 15 to the Consolidated Financial
Statements. 91