Summary of BRIGHTPOINT INC

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
OVERVIEW AND RECENT DEVELOPMENTS
This discussion and analysis should be read in conjunction with the accompanying Consolidated Financial Statements and related notes. Our discussion and analysis of the financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review our estimates and assumptions. Our estimates were based on our historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates but we do not believe such differences will materially affect our financial position or results of operations. Our critical accounting estimates, the estimates we believe are most important to the presentation of our financial statements and require the most difficult, subjective and complex judgments are outlined in our Annual Report for the year ended December 31, 2008 included in Exhibit 99.1 to the Company's Current Report on Form 8-K filed on June 1, 2009, and have not changed significantly. Certain statements made in this report may contain forward-looking statements. For a description of risks and uncertainties relating to such forward-looking statements, see the cautionary statements contained in Exhibit 99.1 to this report and our Annual Report for the year ended December 31, 2008 included in Exhibit 99.1 to the Company's Current Report on Form 8-K filed on June 1, 2009.
Brightpoint, Inc. is a global leader in the distribution of wireless devices and accessories and provision of customized logistic services to the wireless industry. We have operations centers and/or sales offices in various countries including Australia, Austria, Belgium, Colombia, Denmark, Finland, Germany, Guatemala, India, Italy, the Netherlands, New Zealand, Norway, Portugal, Singapore, Slovakia, South Africa, Spain, Sweden, Switzerland, the United Arab Emirates, the United Kingdom and the United States. We provide customized integrated logistic services including procurement, inventory management, software loading, kitting and customized packaging, fulfillment, credit services and receivables management, call center and activation services, website hosting, e-fulfillment solutions and other services within the global wireless industry. Our customers include mobile network operators, mobile virtual network operators (MVNOs), resellers, retailers and wireless equipment manufacturers. We distribute wireless communication devices and we provide value-added distribution and logistic services for wireless products manufactured by companies such as High Tech Computer Corp., Kyocera, LG Electronics, Motorola, Nokia, Samsung, Siemens, Sony Ericsson and UTStarcom.
On February 9, 2009, we announced a plan to reduce forecasted spending for the year by approximately $40 to $45 million. This plan is comprised of $12 to $14 million of cost avoidance and $28 to $31 million of spending reductions. The spending reduction measures included, among other things, a workforce reduction of at least 220 positions, or approximately 7% of our workforce.
In the third quarter of 2009, we achieved our global workforce reduction goal. Through the first nine months of 2009, we have reduced our global workforce by approximately 220 positions.
Based on our progress through the nine months ended September 30, 2009, we believe that we are on track to realize the previously stated forecasted spending reduction and cost avoidance targets. For the third quarter of 2009 SG&A expenses were $55.7 million, which represents an increase of $6.0 million (12%) from the second quarter of 2009. SG&A expense for the three months ended September 30, 2009 includes $2.7 million of incremental bad debt expense related to various issues in Europe including losses from uncollectible customer accounts and disputed accounts in excess of insured credit limits. Included in the $2.7 million of incremental bad debt expense for the three and nine months ended September 30, 2009 is a $0.7 million charge due to an isolated incident of transactional fraud in Italy. Total charges in the results of operations for the three and nine months ended September 30, 2009 related this fraudulent activity in Italy were $1.2 million, comprised of $0.7 million in SG&A and $0.5 million in other (income) expense. We will continue to pursue collection on these receivables, however we can give no assurances that we will be successful in our efforts. SG&A expense for the three months ended September 30, 2009 also includes $1.6 million of incremental expense for non-executive staff bonuses compared to the second quarter of

2009. Fluctuations in foreign currency negatively impacted SG&A by approximately $1.9 million compared to the second quarter of 2009.
On May 7, 2009 we announced a revised debt reduction target of having less than $100 million of average daily debt outstanding during the fourth quarter of 2009. Average daily debt outstanding for the third quarter of 2009 was $150.7 million compared to average compared to average daily debt outstanding of $165.9 million for the second quarter of 2009 and $333.0 million for the fourth quarter of 2008. However, in October 2009 we entered into a settlement agreement with NC Telecom Holding A/S ("NC Holding"), which provided for us to purchase 3 million Brightpoint shares from NC Holding for $15.5 million under a previously announced share repurchase program. In addition, we entered into an agreement to purchase our primary North America distribution facility for $31.0 million plus closing costs and commissions. These transactions were financed using availability on our Global Credit Facility and will result in an increase of our average daily debt outstanding in the fourth quarter of 2009. Accordingly, we are revising our debt reduction target for the fourth quarter of 2009. We now expect to have average daily debt of $150.0 million to $175.0 million for the fourth quarter of 2009.
We continue to focus on optimizing our European operating and financial structure. We expect to exit certain programs, channels and/or countries that are not expected to meet our profitability targets included return on investment. As a result of exiting underperforming programs, channels and/or countries in our European region, we would expect to incur additional restructuring charges. We continue to evaluate the "right size" of our on-going operations in relation to desired profitability targets. We may determine that additional reductions in spending, including further reductions in workforce, may be necessary. Additional reductions in workforce and other spending could result in additional restructuring charges.
In the third quarter of 2009, we abandoned our operation in France. The consolidated statements of operations reflect the reclassification of the results of operations for this business to discontinued operations for all periods presented in accordance with U.S. generally accounting principles. This business was previously reported in our EMEA reporting segment. The consolidated statements of operations also reflect the reclassification of the results of operations for our Poland and Turkey operations discontinued operations for all periods presented in accordance with U.S. generally accepted accounting principles. These businesses were previously reported in our EMEA reporting segment.

RESULTS OF OPERATIONS
Revenue and wireless devices handled by division and service line

                                          Three Months Ended September 30,
                                                  % of                      % of
                                      2009        Total        2008         Total     Change
                                                       (Amounts in 000s)
       Distribution revenue
       Americas                    $ 114,341        15 %   $   169,345        16 %     (32 %)
       Asia-Pacific                  254,030        33 %       320,807        30 %     (21 %)
       EMEA                          404,444        52 %       565,776        54 %     (29 %)

       Total                       $ 772,815       100 %   $ 1,055,928       100 %     (27 %)


       Logistic services revenue
       Americas                    $  47,794        50 %   $    45,615        41 %       5 %
       Asia-Pacific                    8,016         8 %        13,425        12 %     (40 %)
       EMEA                           39,290        42 %        51,942        47 %     (24 %)

       Total                       $  95,100       100 %   $   110,982       100 %     (14 %)


       Total revenue
       Americas                    $ 162,135        19 %   $   214,960        18 %     (25 %)
       Asia-Pacific                  262,046        30 %       334,232        29 %     (22 %)
       EMEA                          443,734        51 %       617,718        53 %     (28 %)

       Total                       $ 867,915       100 %   $ 1,166,910       100 %     (26 %)




                                                    Three Months Ended September 30,
                                                           % of                             % of
                                          2009             Total            2008            Total         Change
                                                                   (Amounts in 000s)
Wireless devices sold through
distribution
Americas                                     730             13 %           1,360             22 %          (46 %)
Asia-Pacific                               2,021             36 %           2,810             45 %          (28 %)
EMEA                                       2,876             51 %           2,132             33 %           35 %

Total                                      5,627            100 %           6,302            100 %          (11 %)


Wireless devices handled through
logistic services
Americas                                  14,059             88 %          12,051             87 %           17 %
Asia-Pacific                                 726              5 %             495              4 %           47 %
EMEA                                       1,225              7 %           1,230              9 %            0 %

Total                                     16,010            100 %          13,776            100 %           16 %


Total wireless devices handled
Americas                                  14,789             68 %          13,411             67 %           10 %
Asia-Pacific                               2,747             13 %           3,305             16 %          (17 %)
EMEA                                       4,101             19 %           3,362             17 %           22 %

Total                                     21,637            100 %          20,078            100 %            8 %

                                           Nine Months Ended September 30,
                                                   % of                      % of
                                      2009         Total        2008         Total     Change
                                                       (Amounts in 000s)
      Distribution revenue
      Americas                    $   328,180        16 %   $   542,007        17 %     (39 %)
      Asia-Pacific                    617,665        31 %       941,477        30 %     (34 %)
      EMEA                          1,059,596        53 %     1,665,343        53 %     (36 %)

      Total                       $ 2,005,441       100 %   $ 3,148,827       100 %     (36 %)


      Logistic services revenue
      Americas                    $   138,759        51 %   $   136,420        43 %       2 %
      Asia-Pacific                     23,862         9 %        35,811        11 %     (33 %)
      EMEA                            111,611        40 %       146,340        46 %     (24 %)

      Total                       $   274,232       100 %   $   318,571       100 %     (14 %)


      Total revenue
      Americas                    $   466,939        20 %   $   678,427        20 %     (31 %)
      Asia-Pacific                    641,527        28 %       977,288        28 %     (34 %)
      EMEA                          1,171,207        52 %     1,811,683        52 %     (35 %)

      Total                       $ 2,279,673       100 %   $ 3,467,398       100 %     (34 %)




                                                     Nine Months Ended September 30,
                                                           % of                             % of
                                          2009             Total            2008            Total         Change
                                                                   (Amounts in 000s)
Wireless devices sold through
distribution
Americas                                   2,235             16 %           4,273             23 %          (48 %)
Asia-Pacific                               5,050             36 %           8,295             45 %          (39 %)
EMEA                                       6,675             48 %           5,967             32 %           12 %

Total                                     13,960            100 %          18,535            100 %          (25 %)


Wireless devices handled through
logistic services
Americas                                  39,933             88 %          37,840             89 %            6 %
Asia-Pacific                               1,764              4 %           1,378              3 %           28 %
EMEA                                       3,741              8 %           3,265              8 %           15 %

Total                                     45,438            100 %          42,483            100 %            7 %


Total wireless devices handled
Americas                                  42,168             71 %          42,113             69 %            0 %
Asia-Pacific                               6,814             11 %           9,673             16 %          (30 %)
EMEA                                      10,416             18 %           9,232             15 %           13 %

Total                                     59,398            100 %          61,018            100 %           (3 %)

The following table presents the percentage changes in revenue for the three and nine months ended September 30, 2009 by service line compared to the same period in the prior year, including the impact to revenue from changes in wireless devices handled, average selling price and foreign currency.

                                                           2009 Percentage Change in Revenue vs. 2008
                                                                              Non-                               Total
                                        Wireless           Average           handset                          Percentage
                                         devices           Selling            based           Foreign          Change in
                                       handled (1)        Price (2)        revenue (3)        Currency          Revenue


Three months ended September 30,
2009:
Distribution                                (14 %)            (5 %)               (5 %)           (3 %)           (27 %)
Logistic services                             6 %             (2 %)              (17 %)           (1 %)           (14 %)
Total                                       (12 %)            (5 %)               (7 %)           (2 %)           (26 %)

Nine months ended September 30,
2009:
Distribution                                (19 %)            (6 %)               (6 %)           (5 %)           (36 %)
Logistic services                             4 %             (3 %)              (14 %)           (2 %)           (14 %)
Total                                       (16 %)            (6 %)               (7 %)           (5 %)           (34 %)

(1) Handset-based volume represents the percentage change in revenue due to the change in quantity of wireless devices sold through our distribution business and the change in quantity of wireless devices handled through our logistic services business.

(2) Average selling price represents the percentage change in revenue due to the change in the average selling price of wireless devices sold through our distribution business and the change in the average fee per wireless device handled through our logistic services business.

(3) Non-handset distribution revenue represents the percentage change in revenue from accessories sold, freight and non-voice navigation devices sold through our distribution business. Non-handset based logistic services revenue represents the percentage change in revenue from the sale of prepaid airtime, freight billed, and fee based services other than fees earned from wireless devices handled. Changes in non-handset based revenue do not include changes in reported wireless devices.

Revenue and wireless devices handled by division:

                                      Three Months Ended                                              Nine Months Ended
                                        September 30,                                                   September 30,
Americas                               % of                      % of                                  % of                      % of
(Amounts in 000s)         2009         Total        2008         Total      Change        2009         Total        2008         Total      Change

REVENUE:
Distribution           $ 114,341         71 %    $ 169,345         79 %      (32 %)    $ 328,180         70 %    $ 542,007         80 %      (39 %)
Logistic services         47,794         29 %       45,615         21 %        5 %       138,759         30 %      136,420         20 %        2 %

Total                  $ 162,135        100 %    $ 214,960        100 %      (25 %)    $ 466,939        100 %    $ 678,427        100 %      (31 %)

WIRELESS DEVICES
HANDLED :
Distribution                 730          5 %        1,360         10 %      (46 %)        2,235          5 %        4,273         10 %      (48 %)
Logistic services         14,059         95 %       12,051         90 %       17 %        39,933         95 %       37,840         90 %        6 %

Total                     14,789        100 %       13,411        100 %       10 %        42,168        100 %       42,113        100 %        0 %

The following table presents the percentage changes in revenue for our Americas division by service line for the three and nine months ended September 30, 2009 compared to the same period in the prior year, including the impact to revenue from changes in wireless devices handled, average selling price and foreign currency.

                                                        2009 Percentage Change in Revenue vs. 2008
                                                                          Non-                             Total
                                        Wireless         Average         handset                        Percentage
                                        devices          Selling          based         Foreign          Change in
                                        handled           Price          revenue        Currency          Revenue


Three months ended September 30,
2009:
Distribution                               (40 %)            6 %             2 %             0 %            (32 %)
Logistic services                            8 %            (2 %)           (1 %)            0 %              5 %
Total                                      (30 %)            5 %             0 %             0 %            (25 %)

Nine months ended September 30,
2009:
Distribution                               (39 %)            2 %             0 %            (2 %)           (39 %)
Logistic services                            3 %             2 %            (3 %)            0 %              2 %
Total                                      (30 %)            2 %            (1 %)           (2 %)           (31 %)

The decrease in wireless devices sold through distribution for the three and nine months ended September 30, 2009 was driven by weaker market conditions in North America and Latin America as well as the loss of key customers in North America due to industry consolidation. The increase in distribution average selling price for the three and nine months ended September 30, 2009 was driven by a shift in mix to smartphones compared to the same period in the prior year. The increase in wireless devices handled through logistic services for the three and nine months ended September 30, 2009 was primarily driven by an expanded service offering; the addition of new logistic services customers; and the growth, through increased market share and new market entry, of incumbent customers. Current economic conditions are increasing demand for prepaid and fixed fee wireless subscriptions, which are the primary product offering of certain Brightpoint logistics customers.

                                      Three Months Ended                                              Nine Months Ended
                                        September 30,                                                   September 30,
Asia-Pacific                           % of                      % of                                  % of                      % of
(Amounts in 000s)         2009         Total        2008         Total      Change        2009         Total        2008         Total      Change

REVENUE:
Distribution           $ 254,030         97 %    $ 320,807         96 %      (21 %)    $ 617,665         96 %    $ 941,477         96 %      (34 %)
Logistic services          8,016          3 %       13,425          4 %      (40 %)       23,862          4 %       35,811          4 %      (33 %)

Total                  $ 262,046        100 %    $ 334,232        100 %      (22 %)    $ 641,527        100 %    $ 977,288        100 %      (34 %)

WIRELESS DEVICES
HANDLED :
Distribution               2,021         74 %        2,810         85 %      (28 %)        5,050         74 %        8,295         86 %      (39 %)
Logistic services            726         26 %          495         15 %       47 %         1,764         26 %        1,378         14 %       28 %

Total                      2,747        100 %        3,305        100 %      (17 %)        6,814        100 %        9,673        100 %      (30 %)

The following table presents the percentage changes in revenue for our Asia-Pacific division by service line for the three and nine months ended September 30, 2009 compared to the same period in the prior year, including the impact to revenue from changes in wireless devices handled, average selling price and foreign currency.

                                                        2009 Percentage Change in Revenue vs. 2008
                                                                          Non-                             Total
                                       Wireless          Average         handset                        Percentage
                                        devices          Selling          based         Foreign          Change in
                                        handled           Price          revenue        Currency          Revenue


Three months ended September 30,
2009:
Distribution                              (28 %)             8 %             0 %            (1 %)           (21 %)
Logistic services                          21 %            (23 %)          (36 %)           (2 %)           (40 %)
Total                                     (26 %)             7 %            (2 %)           (1 %)           (22 %)

Nine months ended September 30,
2009:
Distribution                              (34 %)             5 %            (2 %)           (3 %)           (34 %)
Logistic services                          14 %            (12 %)          (31 %)           (4 %)           (33 %)
Total                                     (32 %)             5 %            (4 %)           (3 %)           (34 %)

The decrease in wireless devices sold through distribution in our Asia-Pacific division for the three and nine months ended September 30, 2009 was driven by a decrease in market demand for lower priced handsets in Singapore as well as overall weaker market conditions. The increase in distribution average selling price for the three and six months ended September 30, 2009 was driven by shift in mix to smartphones and better availability for these devices compared to the same period in the prior year. The decrease in non-handset based distribution revenue for the nine months ended September 30, 2009 was driven by a decline in the sale of non-handset based navigation devices and memory cards in Australia. The increase in wireless devices handled through logistic services for the three and nine months ended September 30, 2009 was primarily driven by an increase in wireless devices handled for our largest customer in Australia and New Zealand. Our customer in New Zealand was previously served under a distribution agreement. The decrease in average fulfillment fee per unit was primarily due to an unfavorable mix of services provided compared to the same period in the prior year. The decrease in non-handset based logistic services revenue was primarily due to a decrease in repair services in India compared to the same period in the prior year.
Our results of operations for the Asia-Pacific region could be materially impacted in future periods as a result of a recently announced consolidation of network operators in the Asia-Pacific region. However, we are currently unable to quantify at this time what, if any, impact this consolidation would have on our future results of operations.

                                      Three Months Ended                                                Nine Months Ended
                                        September 30,                                                     September 30,
EMEA                                   % of                      % of                                    % of                        % of
(Amounts in 000s)         2009         Total        2008         Total      Change         2009          Total         2008          Total      Change

REVENUE:
Distribution           $ 404,444         91 %    $ 565,776         92 %      (29 %)    $ 1,059,596         90 %    $ 1,665,343         92 %      (36 %)
Logistic services         39,290          9 %       51,942          8 %      (24 %)        111,611         10 %        146,340          8 %      (24 %)
. . .