As filed with the Securities and Exchange Commission on April 14, 2011

Registration No. 333-

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

Form S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

BRIGHTSTAR CORP.

(Exact Name of Registrant as Specified in Its Charter)


Delaware	5065	33-0774267
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

9725 N.W. 117th Ave.
Miami, Florida 33178
(305) 421-6000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

R. Marcelo Claure
Chairman and
Chief Executive Officer
Brightstar Corp.
9725 N.W. 117th Ave.
Miami, Florida 33178
(305) 421-6000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

Copies to:


Michael Kaplan Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 (212) 450-4000		Clayton E. Parker K&L Gates LLP 200 South Biscayne Boulevard Suite 3900 Miami, Florida 33131 (305) 539-3300		Kris F. Heinzelman William J. Whelan, III Cravath, Swaine & Moore LLP Worldwide Plaza 825 Eighth Avenue New York, New York 10019 (212) 474-1000

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o	Accelerated filer o	Non-accelerated filer þ	Smaller reporting company o

(Do not check if a smaller reporting company)


	Proposed Maximum
Title of Each Class	Aggregate Offering		Amount of
of Securities to be Registered	Price(1)		Registration Fee
Class A Common Stock, par value $0.0001 per share	$	300,000,000	$	34,830


(1)		Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We and the selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and we and the selling stockholders are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, Dated April 14, 2011

PRELIMINARY PROSPECTUS

Class A Common Stock

This is an initial public offering of Class A common stock by Brightstar Corp. We are selling shares of our Class A common stock. The selling stockholders identified in this prospectus, which include R. Marcelo Claure, our Chairman and Chief Executive Officer, and Lindsay Goldberg LLC (“Lindsay Goldberg”), our sponsor, are selling an additional shares of our Class A common stock. We will not receive any proceeds from the sale of shares by the selling stockholders. This is our initial public offering and no public market currently exists for our shares. The estimated initial public offering price is between $ and $ per share.

Following this offering, we will have two classes of authorized common stock, Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock will be identical, except with respect to voting and conversion. Each share of Class A common stock will be entitled to one vote per share. Each share of Class B common stock will be entitled to 5 votes per share, except in limited circumstances. Following the completion of this offering, Mr. Claure will beneficially own 100% of our outstanding Class B common stock, representing approximately % of the combined voting power of our outstanding common stock and approximately % of our total equity ownership assuming the underwriters’ option to purchase additional shares is not exercised.

We intend to apply to have our Class A common stock listed on The Nasdaq Stock Market under the symbol “STAR.”

Investing in our Class A common stock involves risks. See “Risk Factors” beginning on page 15.


	Per Share	Total

Initial public offering price	$	$
Underwriting discounts	$	$
Proceeds, before expenses, to Brightstar Corp.	$	$
Proceeds, before expenses, to selling stockholders	$	$

To the extent that the underwriters sell more than shares of Class A common stock, the underwriters have the option to purchase up to an additional shares from Brightstar Corp. and shares from the selling stockholders at the initial public offering price less the underwriting discounts.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares against payment in New York, New York on , 2011.

Joint Book-Running Managers


Goldman, Sachs & Co.	J.P. Morgan


Barclays Capital	Credit Suisse	Jefferies

Co-Managers


RBC Capital Markets	Stifel Nicolaus Weisel

, 2011

TABLE OF CONTENTS


	Page

Prospectus Summary		1
Risk Factors		15
Cautionary Statement Concerning Forward-Looking Statements		34
Use of Proceeds		35
Dividend Policy		36
Capitalization		37
Dilution		39
Selected Consolidated Financial and Other Data		41
Management’s Discussion and Analysis of Financial Condition and Results of Operations		43
Business		83
Management		102
Compensation Discussion and Analysis		108
Certain Relationships and Related Transactions		130
Principal and Selling Stockholders		132
Description of Capital Stock		134
Material U.S. Federal Tax Consequences for Non-U.S. Holders		137
Shares Eligible for Future Sale		139
Underwriting		142
Legal Matters		147
Experts		147
Where You Can Find Additional Information		147
Index to Consolidated Financial Statements		F-1
EX-23.1

Unless the context indicates otherwise, “Brightstar,” the “company,” “we,” “us” and “our” in this prospectus refer to Brightstar Corp. and its subsidiaries. We have not authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the selling stockholders have not authorized anyone to provide you with additional or different information. We and the selling stockholders are offering to sell, and seeking offers to buy, shares of Class A common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the Class A common stock.

Until , 2011 (25 days after the commencement of the offering), all dealers that buy, sell or trade in our Class A common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that you should consider before deciding to invest in our Class A common stock. You should read this entire prospectus carefully, including our consolidated financial statements and related notes thereto and the information set forth under the sections “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, in each case included elsewhere in this prospectus.

Overview

We are a leading global services company focused on enhancing the performance and profitability of the key participants in the wireless device value chain: manufacturers, operators, retailers and enterprises. We provide a comprehensive range of customized services consisting of value-added distribution, supply chain, retail and enterprise and consumer services. Our services help our customers manage the growing complexity of the wireless device value chain and allow them to increase product availability, extend and expand their channel reach and drive supply chain efficiencies by getting the right products to the right place at the right time for a lower cost. In addition, our services help our customers increase their wireless device sales and drive velocity at the point of sale. The rapid growth of the approximately $200 billion global wireless industry and increasing number and type of wireless activatable devices have resulted in a complex ecosystem where manufacturers, operators, retailers and enterprises have differing priorities and are burdened with tasks that are critical, but not core, to their businesses. We believe that our global presence, scale and strategic position at the center of the wireless ecosystem provide us with unique insight into the entire wireless device value chain and enhance our ability to offer differentiated, value-added services to our customers. We currently offer over 100 individual services in 50 countries across six continents, and we intend to continue innovating and adding services that deliver value to our customers.

We offer the following service categories:


	•	Value-Added Distribution Services are provided to manufacturers of wireless devices and related accessories. Our services include product distribution, transportation and delivery, order management, light manufacturing and assembly, and marketing and demand generation.

	•	Supply Chain Services are provided to manufacturers, operators and retailers. Our services include wireless device management, strategic sourcing, and business intelligence and supply chain optimization services, such as forward and reverse logistics.

	•	Retail Services are provided to manufacturers, operators, retailers and enterprises. Our services include retail outsourcing, portfolio management with virtual inventory, and sales force training and management.

	•	Enterprise and Consumer Services are provided to manufacturers, operators, retailers and enterprises. Our services include device activation, customized billing and wireless administration software, and handset protection insurance.

We are a global organization supporting manufacturers, operators, retailers and enterprises and enabling over 90,000 points of sale worldwide. Our customers are some of the leading companies in the wireless device value chain. Among others, our customers include manufacturers such as Apple, HTC, Huawei, LG, Motorola, Nokia, RIM and Samsung; operators such as America Movil, AT&T, Orange, Telecom New Zealand, Telefonica, Telstra, TIM, Verizon Wireless and Vodafone; retailers such as Best Buy, Radio Shack, Target, Tesco and Walmart; and enterprises such as Dell, PC Connection and Tech Data.

added resellers. Our customers also choose us because of our track record of quality service and execution, proprietary tools and systems, the strength and capability of our supply chain professionals and our ability to tailor our solutions or innovate new ones to meet their particular needs.

Our business is conducted in four geographic regions: (i) U.S./Canada; (ii) Latin America; (iii) Asia Pacific, Middle East and Africa (“Asia Pacific”); and (iv) Europe, through Brightstar Europe, our 50% owned joint venture with Tech Data. The first three regions are reported as geographic operating segments in our consolidated financial statements, and we include our share of income from Brightstar Europe in other income (expenses), net. See note 17 to our audited consolidated financial statements included elsewhere in this prospectus.

For the year ended December 31, 2010, our revenue grew 70% to $4.6 billion relative to the year ended December 31, 2009, and we generated Adjusted EBITDA (as defined below) of $141.2 million, net income of $39.8 million and Adjusted net income (as defined below) of $60.6 million.

Wireless Industry Overview

The wireless industry is large and growing, and encompasses an increasingly broad and complex array of wireless devices, including feature phones, smartphones, e-readers and tablets, and their related accessories. The primary drivers of growth and increasing complexity are higher global wireless device penetration rates, a larger number of wireless ecosystem participants, greater levels of demand for data applications and mobile Internet access, and the emergence of a wide range of feature-rich wireless and other activatable devices with a broad mix of voice and data service plans and shortening product lifecycles. There are more than 700 operators globally, multiple network standards, various wireless device distribution channels and an increasing number of wireless device models with tailored application functionalities.

In recent years, a substantial portion of global subscriber growth has been driven by the prepaid wireless segment, which has become increasingly popular as customers are able to enjoy the benefits of a regular mobile handset without needing to commit to long-term network service contracts. Subscriber growth is particularly strong in developing markets where penetration rates of wireless devices have been accelerating given the emergence of more cost-effective means for ownership, such as prepaid wireless devices, which is making the purchase of wireless devices more affordable to consumers in these developing markets.

According to Gartner Inc. (“Gartner”), approximately 1.2 billion wireless phones were shipped in 2009, a number which is expected to increase to approximately 2.4 billion in 2015, representing a 11.9% compounded annual growth rate (“CAGR”). The largest growth area is smartphones which, according to Gartner, is expected to grow from 172.4 million devices sold in 2009 to 1,104.9 million devices sold in 2015, representing a 36.3% CAGR. In addition, tablets and e-readers are also becoming increasingly popular with consumers. According to Gartner, tablet computer shipments are expected to grow from 17.6 million units in 2010, the first year for which Gartner industry data is available for tablet computer shipments, to 294.1 million units in 2015, representing a 75.6% CAGR.

The proliferation of new technologies and connected devices and the increasing velocity of these new product introductions are resulting in the following key trends:


	•	Manufacturers needing to achieve faster time-to-market with new wireless devices;

	•	Operators needing to meet customers’ demands for increased choice;

	•	Retailers needing to navigate through an increasingly large and rapidly changing set of available devices; and

	•	Enterprises needing to reduce the cost of and simplify the management of their wireless devices and rate plan deployments.

We believe each participant in the wireless ecosystem faces differing challenges and priorities.


	•	Manufacturers are focused on selling devices to end users through operators and retailers. They are faced with challenges such as pricing pressure, forecasting accuracy, and the lack of local importation and manufacturing expertise in certain markets.

	•	Operators are focused on maximizing their average revenue per user (“ARPU”), minimizing churn and growing their subscriber base. They are faced with challenges including the growing complexity and rapid evolution of handset and activatable device offerings, demand forecasting for particular devices across markets and geographies, and inventory management.

	•	Retailers are focused on selling devices and plans to consumers. They are faced with challenges such as the ability to efficiently manage working capital, mitigate inventory obsolescence and drive strong sales and profit per square foot.

	•	Enterprises are focused on getting the best device on the best plan for their end users. They are faced with challenges such as the ability to manage the activation of devices and selection of plans and the ability to access a broad portfolio of wireless devices at competitive rates.

We believe that these differing challenges and priorities will become more prominent given the accelerating pace of technological innovation, the number of new market participants and continued growth of the wireless ecosystem and that they will translate into growing opportunities for specialized providers of outsourced services who are positioned at the center of the wireless device value chain.

Our Value Proposition for the Key Participants in the Wireless Ecosystem

We provide a broad portfolio of innovative services that help our customers around the world optimize their wireless supply chains and better manage the ongoing complexity in the wireless ecosystem. Our ability to leverage our proprietary market knowledge gives our customers valuable insight into their own wireless supply chains as well as real-time trends throughout the broader wireless device value chain. We believe that our portfolio of services, which are designed to meet the needs of wireless industry participants, coupled with our global infrastructure and scale position us to successfully serve all participants in the wireless ecosystem.


	•	*Manufacturers.* We offer manufacturers a suite of services to help them move their products to market faster and to more locations around the world. We primarily act as a demand-generating distributor for manufacturers. Our global infrastructure, scale, local expertise, wireless expertise and business intelligence, channel and business relationships allow us to develop customized end-to-end solutions for our manufacturer customers. Our services enable them to focus on their core competencies and help extend their channel reach, optimize their inventory levels and further drive increased profitability and market share.

	•	*Operators.* We provide operators with a comprehensive set of services to improve their ability to select the right product, source it for the right price and deliver it to the right place at the right time. Our tools and services help operators improve the execution of their core business strategy, which is centered on managing the wireless customer’s experience and maximizing ARPU. Our solutions also allow for greater pricing visibility and improved demand forecasting, which help operators reduce the cost of device acquisition, improve inventory supply planning and product lifecycle management and ultimately enhance both profitability and end-user satisfaction.

	•	*Retailers.* We provide retailers with services that improve the profitability and performance of their wireless category, both in-store and online. The wireless device category is complex to manage, with high working capital requirements, and increasingly short product lifecycles as new devices are entering the space at an unprecedented rate. Our services help retailers simplify management of this category, analyze consumer habits and trends and ensure that the right products are available at the right locations at the right price, to maximize sales and


		profitability. We provide retail-centric demand planning, inventory management and collaborative planning, forecasting and replenishment processes that allow retailers to maintain low inventory levels with high fill rates at the point of sale. We also offer services that increase the velocity of sales for wireless products.


	•	*Enterprises.* As master agent for operators, we provide small and medium businesses, enterprises, government organizations and each of their end users with cost-effective wireless voice and data communication devices through their preferred retailer or IT reseller. Our tools and services assist enterprises (through their IT reseller service providers) and consumers (through their retail environments) by simplifying the procurement, activation and administration of their wireless devices. Our tools allow organizations to view and administer their bills in a consolidated multi-operator portal to gain better insight into employee spend and behavior. Our automated activation portals enable organizations and consumers to seamlessly activate their devices quickly and without hassle. Our enterprise and consumer services simplify the mobile experience for end users by enabling small and medium businesses, enterprises and government organizations to outsource many critical, but non-core, functions to us.

Our Competitive Strengths


	•	*Large, Global Services Provider for the Wireless Ecosystem.* We are present in 50 countries on six continents and believe we have a leading global distribution infrastructure platform to support the wireless device value chain. Our extensive experience, infrastructure, scale and local reach create a significant competitive advantage over regional competitors because we are able to decrease time-to-market of wireless devices and provide our customers with increased visibility into their supply chain. Our significant scale and geographic reach, together with our extensive customer relationships, would be difficult and costly to replicate.

	•	*Strong Relationships with Manufacturers, Operators, Retailers and Enterprises.* We have relationships with over 150 manufacturers, 180 network operators, 15,000 mass retailers and 4,800 technology value-added resellers, including some of the leading names in the wireless ecosystem. Our position at the center of the wireless device value chain and our extensive customer relationships, coupled with our wireless expertise, global footprint and scale, enable us to drive significant value for our customers.

	•	*Differentiated Services Offerings.* We have been successful at leveraging our unique position at the center of the wireless device value chain, our global infrastructure and our wireless industry knowledge and data to provide customers with innovative, differentiated and targeted solutions. By consistently delivering additional high-value service offerings to our customers, we become part of our customers’ supply chains, creating stronger customer relationships. We work closely with our customers to create differentiated value-added service offerings, which are tailored to meet their particular needs. We believe this collaborative approach and our track record of quality service and execution creates loyal customer relationships.

	•	*Innovative Technology-Based Service Platform.* Our innovative technology-based service platform provides us with extensive real-time data across the wireless device value chain and enables us to provide consulting services and tools to our customers for better decision making. Our technology has been developed in-house over time and is designed to layer onto our customers’ own technology infrastructure. Our information technology tools allow us to initiate a relationship with a customer on a targeted basis, with selected solutions, and enable us to expand our services to the customer over time.

	•	*Strategically Positioned to Anticipate Wireless Ecosystem Opportunities.* Our visibility into the wireless device value chain allows us to anticipate and capitalize on profitable growth opportunities. Our global business model enables us to leverage our learning and observations


		from one region to another to anticipate customer needs and associated business opportunities.


	•	*Innovative Culture and Management Team with a Successful Track Record.* Our management team, led by our Chairman, Chief Executive Officer and largest stockholder, R. Marcelo Claure, has extensive industry experience. Our management team has developed a culture of innovation that has enabled us to grow and diversify our business and enhance the value proposition for our customers.

Our Strategy

We intend to be the leading global services provider for the wireless device value chain. Key elements of our strategy include:


	•	Continue to leverage our global infrastructure, scale and strong customer relationships to expand our offering with higher value services;

	•	Expand into additional high growth geographies;

	•	Increase the number of services we provide our existing customers and enter into new customer relationships; and

	•	Continue to pursue strategic partnerships, investments and acquisitions to expand our services offering as well as our geographic footprint.

Recent Development

On April 11, 2011, we acquired eSecuritel, a leading provider of cell phone and wireless products insurance services. The acquisition will combine eSecuritel’s suite of cell phone protection and replacement programs, proprietary IT systems and processes with our global logistics, device sourcing and IT customization capabilities. We expect eSecuritel’s offerings will further enhance our robust platform of services and drive growth in our business.

Risks Related to Our Business

Please read the section entitled “Risk Factors” for a discussion of some of the factors you should carefully consider before deciding to invest in our Class A common stock. Some of the important risks include:


	•	we depend on a limited number of manufacturer customers to provide us with competitive products at reasonable prices and of good quality,

	•	we may experience a loss of or reduction in orders from principal customers or a reduction in the prices we are able to charge these customers,

	•	our business depends on the continued tendency of manufacturers, operators, retailers and enterprises to outsource aspects of their business to us in the future,

	•	our business could be harmed by fluctuations in regional demand patterns and economic factors,

	•	an economic downturn could negatively impact our business,

	•	we may have difficulty collecting our accounts receivable,

	•	we rely on our manufacturer customers to provide trade credit terms to adequately fund our ongoing operations and product purchases,

	•	we operate a global business that exposes us to risks associated with international activities,

	•	we conduct a substantial amount of business in Venezuela,


	•	our operating results vary frequently and significantly in response to seasonal purchasing pattern fluctuations,

	•	we are highly dependent on our Chairman and Chief Executive Officer and management team and the loss of our executive officers and key personnel could impede our ability to implement our strategy,

	•	we have identified material weaknesses in our internal controls over financial reporting which, if not successfully remediated, could cause us to fail to timely report our financial results, prevent fraud and avoid material misstatements in our financial statements, and

	•	the voting power of our capital stock will be concentrated in our Chairman and Chief Executive Officer, which will limit your ability to influence corporate matters.

Corporate Information

Brightstar Corp. was founded by our Chairman and Chief Executive Officer, R. Marcelo Claure, and David Peterson in October 1997. In June 2007, Lindsay Goldberg acquired an interest in us by purchasing shares of our Series D Redeemable Convertible Preferred Stock.

Our principal executive offices are located at 9725 N.W. 117th Ave., Miami, Florida 33178, and our telephone number is (305) 421-6000. Our website is www.brightstarcorp.com. The information contained on our website or that can be accessed through our website will not be deemed to be incorporated into this prospectus or the registration statement of which this prospectus forms a part, and investors should not rely on any such information in deciding whether to purchase our Class A common stock.

Industry and Market Data

We obtained the industry, market and competitive position data throughout this prospectus from our own internal estimates and research as well as from industry and general publications and research, surveys and studies conducted by third parties. Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these studies, surveys and publications is reliable, we have not independently verified market and industry data from third-party sources. While we believe our internal company estimates and research are reliable and the market definitions are appropriate, neither such research nor these definitions have been verified by any independent source.

Some of the independent industry publications referred to in this prospectus are copyrighted and, in such circumstances, we have obtained permission from the copyright owners to refer to such information in this prospectus. In particular, the reports issued by Gartner described in this prospectus represent data, research, opinions or viewpoints published by Gartner as part of a syndicated subscription service available only to its clients and are not representations of fact. We have been advised by Gartner that each Gartner report speaks as of its original publication date (and not as of the date of this prospectus) and the opinions expressed in the Gartner reports are subject to change without notice.

The Offering


Class A common stock offered by us		shares

Class A common stock offered by the selling stockholders		shares

Total Class A common stock offered		shares

Class A common stock to be outstanding after this offering		shares

Option to purchase additional shares of Class A common stock		shares by us and shares by the selling stockholders

Class B common stock to be outstanding after this offering		shares

Total common stock to be outstanding after this offering		shares

Voting rights		Following this offering, the holders of Class A common stock will be entitled to one vote per share, and the holder of Class B common stock will be entitled to 5 votes per share, except with respect to the election of any director that is intended by our board of directors to be designated as “independent.” With respect to the election of such independent directors, holders of Class A and Class B common stock will be entitled to one vote per share and will vote together as a single class. Upon the consummation of this offering, we intend to have at least three independent directors. In addition, in the event of (a) the merger or sale of the company or all or substantially all of the assets of the company, (b) the liquidation, dissolution or winding up of the company or (c) any amendment to our certificate of incorporation that would increase the authorized capital stock of the company, Class B common stock will be entitled to one vote per share.

		Shares of Class B common stock are convertible at any time on a share-for-share basis into shares of Class A common stock. In the event that (1) Mr. Claure beneficially owns shares of our common stock representing less than 20% of the total number of shares outstanding or (2) the company is no longer certified as a minority business enterprise, the Class B common stock will automatically convert to Class A common stock. In addition, in the event Mr. Claure sells, disposes or otherwise transfers his shares of Class B common stock to a third party, such Class B common stock will automatically convert to Class A common stock.

		Holders of our Class A common stock and our Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders.

		Following this offering, assuming no exercise of the underwriters’ option to purchase additional shares, (1) holders of Class A common stock will control approximately % of the combined voting power of our outstanding common stock and approximately % of our total equity ownership


		and (2) Mr. Claure, through his holding of 100% of our outstanding Class B common stock, will control approximately % of the combined voting power of our outstanding common stock and approximately % of our total equity ownership.

		If the underwriters exercise their option to purchase additional shares in full, (1) holders of Class A common stock will control approximately % of the combined voting power of our outstanding common stock and approximately % of our total equity ownership and (2) Mr. Claure, through his holding of 100% of our outstanding Class B common stock, will control approximately % of the combined voting power of our outstanding common stock and approximately % of our total equity ownership. See “Description of Capital Stock — Voting Rights.”

		With the exception of voting rights and the conversion features of the Class B common stock, holders of Class A and Class B common stock have identical rights. See “Description of Capital Stock — Common Stock” for a description of the material terms of our common stock.

Use of proceeds		Our net proceeds from this offering will be approximately $ million, or approximately $ million if the underwriters exercise their option to purchase additional shares in full, assuming an initial offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus. We intend to use $ million of the net proceeds from this offering to pay accrued dividends on our redeemable convertible preferred stock and will use the remainder for general corporate purposes. We will not receive any proceeds from the shares of Class A common stock being sold by the selling stockholders identified in this prospectus, which include Mr. Claure and Lindsay Goldberg.

Dividend policy		We do not intend to pay dividends on our Class A or Class B common stock. We plan to retain any earnings for use in the operation of our business and to fund future growth.

Risk factors		See “Risk Factors” for a discussion of factors you should consider before investing in our Class A common stock.

Proposed Nasdaq Stock Market symbol		“STAR”

Unless we specifically state otherwise, the share information in this prospectus is as of December 31, 2010, and reflects or assumes:


	•	the conversion of shares of our common stock owned by Mr. Claure into shares of Class A common stock and shares of Class B common stock, and the conversion of shares of our common stock owned by other shareholders into shares of Class A common stock;

	•	the conversion of all our redeemable convertible preferred stock (at the conversion ratio of one to one) into shares of Class A common stock upon the completion of this offering;

	•	the shares of Class A common stock issuable upon exercise of outstanding options, at a weighted average exercise price of $ per share, and an additional shares of Class A common stock received for issuance pursuant to our compensation plans, are excluded; and


	•	the underwriters’ option to purchase up to an additional shares of Class A common stock from us and up to an additional shares of Class A common stock from the selling stockholders is not exercised.

Summary Consolidated Financial and Other Data

The following is our summary consolidated financial and other data, which should be read in conjunction with, and is qualified by reference to, “Use of Proceeds,” “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. The consolidated statements of operations data for the years ended December 31, 2008, 2009 and 2010 and the consolidated balance sheet data as of December 31, 2010 are derived from, and qualified by reference to, our audited consolidated financial statements and notes thereto included elsewhere in this prospectus and should be read in conjunction with those consolidated financial statements and notes thereto.


	Year Ended December 31,
	2008			2009			2010
	(In thousands, except share and per share data)

Consolidated Statements of Operations Data:
Revenue	$	3,550,165		$	2,718,652		$	4,612,863
Cost of revenue		3,254,167			2,354,016			4,218,979

Gross profit		295,998			364,636			393,884

Operating expenses:
Selling, general and administrative		174,287			161,806			235,239
Provision for bad debts		2,736			6,435			8,785
Depreciation and amortization		9,917			13,457			11,913
Public offering expenses		—			—			7,333

Total operating expenses		186,940			181,698			263,270

Operating income		109,058			182,938			130,614

Other income (expenses):
Interest income		14,206			21,278			7,139
Interest expense		(34,746	)		(17,102	)		(29,025	)
Other income (expenses), net		(923	)		(3,459	)		2,159
Foreign exchange losses, net		(25,117	)		(80,915	)		(33,263	)

Total other expenses		(46,580	)		(80,198	)		(52,990	)

Income from continuing operations before provision for income taxes		62,478			102,740			77,624
Provision for income taxes		35,402			46,999			36,938

Income from continuing operations		27,076			55,741			40,686
(Loss) income from discontinued operations, net of taxes		(14,304	)		2,595			(921	)

Net income		12,772			58,336			39,765
Less: Net income attributable to non-controlling interest		18,107			4,095			2,385

Net (loss) income attributable to Brightstar Corp.	$	(5,335	)	$	54,241		$	37,380

Basic earnings per share for common stock(1):
Income from continuing operations attributable to Brightstar Corp. common stockholders	$	0.50		$	0.83		$	0.35
(Loss) income from discontinued operations attributable to Brightstar Corp. common stockholders		(0.79	)		0.07			(0.03	)

Net (loss) income attributable to Brightstar Corp. common stockholders	$	(0.29	)	$	0.90		$	0.32

Pro forma net (loss) income attributable to Brightstar Corp. common stockholders(2)							$


	Year Ended December 31,
	2008			2009		2010
	(In thousands, except share and per share data)

Diluted earnings per share for common stock(1):
Income from continuing operations attributable to Brightstar Corp. common stockholders	$	0.20		$	0.78	$	0.35
(Loss) income from discontinued operations attributable to Brightstar Corp. common stockholders		(0.41	)		0.06		(0.03	)

Net (loss) income attributable to Brightstar Corp. common stockholders	$	(0.21	)	$	0.84	$	0.32

Pro forma net (loss) income attributable to Brightstar Corp. common stockholders(2)						$

Weighted average number of common shares outstanding:
Basic		18,134,166			18,163,037		18,181,347

Diluted		35,046,068			20,863,930		18,586,404

Other Financial Data(3):
Adjusted gross profit	$	295,998		$	279,040	$	382,680
Adjusted EBITDA		118,247			111,424		141,192
Adjusted net income		12,299			58,742		60,561


	As of December 31, 2010
				Pro Forma,
	Actual		Pro Forma(4)	As Adjusted(5)
	(In thousands)
			(Unaudited)

Balance Sheet Data
Cash and cash equivalents	$	159,161	$	$
Accounts receivable, net		1,376,445
Inventory		612,396
Total assets		2,496,570
Total debt (including current portions)(6)		453,805
Total liabilities		1,929,758
Total redeemable convertible preferred stock		409,090
Total stockholders’ equity		157,722


(1)		We calculate basic earnings per share using the two-class method in accordance with ASC 260 Earnings Per Share. This requires the income per share for common stock and participating securities to be calculated assuming 100% of our earnings are distributed as dividends to holders of common stock and participating securities based on their respective dividend rights, even though we do not anticipate distributing 100% of our earnings as dividends. For the basic earnings per share calculation, income from continuing operations available to Brightstar common stockholders, discontinued operations and net income attributable to Brightstar common stockholders are allocated pro rata between our weighted outstanding common stock and our weighted outstanding participating securities. Net losses are allocated completely to common stock since there is no legal obligation for the participating securities to fund losses.

		Basic earnings per share attributable to common stockholders is computed by dividing earnings applicable to income from continuing operations available to Brightstar common stockholders, discontinued operations and net income attributable to Brightstar common stockholders by the weighted-average number of common shares. Income attributable to common stockholders is net


		of the dividends relating to redeemable convertible preferred stock. See Note 2 to our consolidated financial statements included elsewhere in this prospectus.

(2)		“Pro forma” reflects (i) the conversion of shares of our common stock into shares of Class A common stock and shares of Class B common stock, (ii) the conversion of our redeemable convertible preferred stock into shares of Class A common stock and (iii) the issuance and sale of shares of Class A common stock by us in this offering at an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, and the application of the net proceeds of the offering, after deducting estimated underwriting discounts and offering expenses payable by us, as set forth under “Use of Proceeds.”

(3)		Adjusted gross profit is not a U.S. GAAP measurement. The Adjusted gross profit measure presented consists of gross profit adjusted for the impairment of upfront fee and the effect of foreign exchange losses from Venezuela. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Significant Issues Affecting Comparability from Period to Period — Venezuela Business.”

		The following table presents a reconciliation of gross profit to Adjusted gross profit:


	Year Ended December 31,
	2008		2009			2010
	(In thousands)

Gross profit	$	295,998	$	364,636		$	393,884
Impairment of upfront fee(a)		—		—			11,005
Effect of foreign exchange loss from Venezuela(b)		—		(85,596	)		(22,209	)

Adjusted gross profit	$	295,998	$	279,040		$	382,680


		Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) is not a U.S. GAAP measurement. The Adjusted EBITDA measure presented consists of net income before provision for income taxes, interest income and expense, depreciation and amortization, impairment of upfront fee, public offering expenses, share-based compensation expense, loss (income) from discontinued operations, net of taxes, other (income) expenses, net and foreign exchange losses (gains), net.


		The following table presents a reconciliation of net income to Adjusted EBITDA:


	Year Ended December 31,
	2008			2009			2010
	(In thousands)

Net income	$	12,772		$	58,336		$	39,765
Provision for income taxes		35,402			46,999			36,938
Interest income		(14,206	)		(21,278	)		(7,139	)
Interest expense		34,746			17,102			29,025
Depreciation and amortization		9,917			13,457			11,913

EBITDA		78,631			114,616			110,502
Impairment of upfront fee(a)		—			—			11,005
Public offering expenses(c)		—			—			7,333
Share-based compensation expense(d)		(728	)		625			2,536
Loss (income) from discontinued operations, net of taxes(e)		14,304			(2,595	)		921
Other income (expenses), net(f)		923			3,459			(2,159	)
Foreign exchange losses (gains), net(g)		25,117			(4,681	)		11,054

Adjusted EBITDA	$	118,247		$	111,424		$	141,192


		Adjusted net income is not a U.S. GAAP measurement. The Adjusted net income measure presented consists of net income adjusted for the impairment of upfront fee, public offering expenses, share-based compensation expense, income tax consequences of the foregoing adjustments and impact of the devaluation of the Venezuelan currency.

		The following table presents a reconciliation of net income to Adjusted net income:


	Year Ended December 31,
	2008			2009			2010
	(In thousands)

Net income	$	12,772		$	58,336		$	39,765
Impairment of upfront fee(a)		—			—			11,005
Public offering expenses(c)		—			—			7,333
Share-based compensation expense(d)		(728	)		625			2,536
Income tax benefit (expense) of net income adjustments of the line items above at statutory federal rate of 35%		255			(219	)		(7,306	)
Venezuela devaluation(h)		—			—			7,228

Adjusted net income	$	12,299		$	58,742		$	60,561


		We believe Adjusted gross profit, Adjusted EBITDA and Adjusted net income are useful in evaluating our operating performance compared to that of other companies because the calculation adjusts for items which we believe are not indicative of operating performance. We use these measures to evaluate the operating performance of our business and aid in period-to-period comparability. We also use these measures for planning and forecasting, measuring results against our forecast, and in certain cases, for bonus targets for certain employees. Using several measures to evaluate the business allows us and investors to assess our performance and ultimately monitor our ability to generate returns for our stockholders.

		We believe Adjusted gross profit, Adjusted EBITDA and Adjusted net income are also useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies. Our Adjusted gross profit, Adjusted EBITDA and Adjusted


		net income may not provide information that is directly comparable to that provided by other companies, as other companies may calculate these measures differently.

		Adjusted gross profit, Adjusted EBITDA and Adjusted net income are not measures of financial performance under GAAP and should not be considered as an alternative to gross profit, operating income (loss) or net income (loss) or as an indication of operating performance derived in accordance with GAAP. Adjusted gross profit, Adjusted EBITDA and Adjusted net income have limitations as analytical tools. These measures can exclude a number of items, some of which are cash expenditures and some of which may be recurring. Some of the limitations of these measurements are:

		• Adjusted gross profit, Adjusted EBITDA and Adjusted net income do not reflect the non-cash upfront fee impairment in 2010;

		• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

		• Adjusted EBITDA does not reflect significant interest expense or the cash requirements necessary to service interest or principal payments on our debts; and

		• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

		Because of these limitations, Adjusted gross profit, Adjusted EBITDA and Adjusted net income should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted gross profit, Adjusted EBITDA and Adjusted net income supplementally.


(a)		In 2010, revenue was affected by an $11.0 million impairment charge. See Note 14 to our consolidated financial statements included elsewhere in this prospectus.

(b)		Represents losses from foreign exchange associated with parallel market transactions in Venezuela. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Significant Issues Affecting Comparability from Period to Period — Venezuela Business.”

(c)		During 2010, we incurred certain expenses in preparation for our initial public offering.

(d)		Share-based compensation expense is composed of the fair value of each of our incentive awards under our stock option plans. See Note 15 to our consolidated financial statements included elsewhere in this prospectus.

(e)		Represents the results of our discontinued operations for the periods presented. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Metrics.”

(f)		Includes non-cash charges related to impairment of certain investments, a loss on sale of subsidiary and a loss on sale of property and equipment. Further, other (income) expenses, net includes earnings and losses attributable to our 50% ownership interest in Brightstar Europe, which we recognize using the equity method of accounting. In 2008, we recognized $4.7 million in losses from Brightstar Europe, including a $2.1 million other than temporary impairment. In 2009 and 2010, we recognized $1.8 million and $2.4 million, respectively, of income from Brightstar Europe. Since 2010, other (income) expenses, net has included rental income and depreciation related to investment properties acquired in Venezuela during 2009 and 2010. See Note 13 to our consolidated financial statements included elsewhere in this prospectus.


(g)		Represents gain and loss from foreign exchange, but excludes foreign exchange losses associated with parallel market transactions in Venezuela. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Significant Issues Affecting Comparability from Period to Period — Venezuela Business.”

(h)		Represents the net income effect in 2010 related to currency devaluation in Venezuela. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Significant Issues Affecting Comparability from Period to Period — Venezuela Business.”


(4)		“Pro forma” reflects (i) the conversion of shares of our common stock into shares of Class A common stock and shares of Class B common stock and (ii) the conversion of our redeemable convertible preferred stock into shares of Class A common stock upon the consummation of this offering. See “Use of Proceeds” and “Capitalization.”

(5)		“Pro Forma As Adjusted” reflects the adjustments described above in footnote (4) and further reflects the issuance and sale of shares of Class A common stock by us in this offering at an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, and the application of the net proceeds of the offering, after deducting estimated underwriting discounts and offering expenses payable by us, as set forth under “Use of Proceeds.”

(6)		Total debt is defined as lines of credit, trade financing facilities and the current portion of term debt, long-term debt and convertible senior subordinated notes.

RISK FACTORS

Investing in our Class A common stock involves a high degree of risk. You should carefully consider the following risks and all of the other information set forth in this prospectus before deciding to invest in shares of our Class A common stock. If any of the following risks actually occurs, our business, financial condition or results of operations would likely suffer. In such case, the trading price of our Class A common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Business

We depend on a limited number of manufacturer customers to provide us with competitive products at reasonable prices and of good quality.

As part of our value-added distribution services, we purchase wireless devices and accessories from a limited number of manufacturer customers. During the year ended December 31, 2010, sales of our top three manufacturer customers’ products accounted for 38%, 19% and 12% of our revenue. Our top five manufacturer customers are LG, Motorola, Nokia, RIM and Samsung, which together represented 82% of our revenue in 2010. We depend on our manufacturer customers to provide us with adequate inventories of popular brand name products on a timely basis and on favorable pricing and other terms.

Our agreements with our manufacturer customers are generally non-exclusive, can be terminated on short notice and provide for certain territorial restrictions, as is common in our industry. We generally purchase products pursuant to purchase orders placed from time to time in the ordinary course of business. In the future, our manufacturer customers may not offer us competitive products on favorable terms. From time to time we have been unable to obtain sufficient product supplies from manufacturers and operators in many markets in which we operate. Any future failure or delay by our manufacturer customers in supplying us with products on favorable terms would severely diminish our ability to obtain and deliver products to our customers on a timely and competitive basis. If we lose any of our principal manufacturers, if these manufacturers consolidate, if these manufacturers are unable to fulfill our product needs or if any principal supplier imposes substantial price increases and alternative sources of supply are not readily available, our business would be materially adversely affected.

Even if our manufacturer customers provide us with wireless devices on a timely basis, our manufacturer customers may not produce the most popular products. For example, certain of our manufacturer customers have suffered significant market share losses in the past several years due to the popularity of other manufacturers’ products. To the extent we do not have access to the most popular products, our business would be adversely affected.

In addition, manufacturers typically provide limited warranties directly to the end consumer or to us. If a line of products we distribute for a manufacturer has quality or performance problems, our ability to provide products to our customers could be disrupted, causing a delay or reduction in our revenue.

We may experience a loss of or reduction in orders from principal customers or a reduction in the prices we are able to charge these customers.

As part of our value-added distribution services, our customers include retailers and operators. For example, in the United States, a large portion of our value-added distribution services is for devices that are used on the Verizon Wireless network. If an operator such as Verizon Wireless decided not to permit us to distribute devices for use on its network, our business would be materially adversely affected. The loss of any of our principal customers, a reduction in the amount of product or services our principal customers order from us or our inability to maintain current terms, including prices, with these or other customers, could harm our results of operations and cash flows. During the year ended December 31, 2010, sales to our top three customers accounted for 38% of our

consolidated revenue, of which a group of companies affiliated with America Movil in the aggregate accounted for 23% of our consolidated revenue.

Although we have entered into contracts with certain of our largest customers, we previously have experienced losses of business with certain of these customers through expiration or cancellation of our contracts with them. For example, between 2008 and 2009, we lost value-added distribution business with an operator in Latin America that represented $340.3 million of annual sales. There can be no assurance that any of our customers will continue to purchase products or services from us or that their purchases will be at the same or greater levels than in prior periods. Many of our customers in the markets we serve have experienced severe price competition and, for this and other reasons, may seek to obtain products or services from us at lower prices than we have historically charged.

Our business depends on the continued tendency of manufacturers, operators, retailers and enterprises to outsource aspects of their business to us in the future.

We provide certain outsourced functions such as inventory management, fulfillment, customized packaging, prepaid and e-commerce solutions, activation management, assembly, distribution and other services for many manufacturers, operators, retailers and enterprises. Certain participants in the wireless ecosystem have elected, and others may elect, to undertake these services internally. Additionally, our customer service levels, industry consolidation, competition, deregulation, technological changes or other developments could reduce the degree to which members of the global wireless device industry rely on outsourced services such as the services that we provide. Any significant change in the market for our outsourced services could harm our business. Although our outsourced services are generally provided under multi-year renewable contractual arrangements, these contracts can be terminated for a variety of reasons or expire without renewal. See “Business — Suppliers and Customers”. Although we will actively pursue the renegotiation, extension or replacement of our contracts, there can be no assurance that we will be able to extend or replace our contracts when they may be terminated or may expire without renewal or that the terms of any renegotiated contracts will be as favorable as our existing contracts. If we are unable to renew, extend or replace these contracts, or if we renew them on less favorable terms, our business could be adversely impacted.

Our business could be harmed by fluctuations in regional demand patterns and economic factors.

The demand for our products and services has fluctuated and may continue to vary substantially within the regions served by us. Economic slowdowns in regions served by us or changes in consumer demand could result in lower than anticipated demand for the products and services that we offer and lead to higher levels of inventory in our distribution channels and could decrease our profitability. In addition, consumer demand could fluctuate as a result of changes in foreign currency rates against the U.S. dollar. A prolonged economic slowdown in any region in which we have significant operations could negatively impact our business. For example, in 2009, demand for wireless devices decreased, which negatively impacted our revenue.

An economic downturn could negatively impact our business.

Our business was negatively impacted by the global economic downturn that began in late 2007, and would be harmed by any future global or regional economic downturn. An economic downturn generally has negative implications on our business, which may exacerbate many of the risks associated with our business, including, but not limited to, the following:

Liquidity. Economic downturns and credit crises could reduce access to capital and liquidity and this could have a negative impact on financial institutions and the financial system, which would, in turn, have a negative impact on us and our creditors. Reduced liquidity could cause credit insurers to decrease coverage on our customers and increase premiums, deductibles and co-insurance levels on our remaining or prospective coverage. Our manufacturer customers could tighten trade credit (in

certain cases, as a result of our inability to obtain credit insurance), which could negatively impact our liquidity. We may not be able to borrow additional funds under our existing credit agreements if lenders become insolvent or their liquidity is limited or impaired.

Prices and Demand. Economic downturns may reduce demand for wireless devices and would negatively impact the demand for our services. The recent economic downturn resulted in severe job losses and lower consumer confidence, and as a result, in 2009, worldwide wireless handset unit shipments declined by 1%. In addition, certain markets could experience deflation, which negatively impacts our average selling price and revenue and can lead to inventory obsolescence.

Counterparty Risk. In an economic downturn, our manufacturers, customers and their suppliers (e.g., component manufacturers) may become insolvent, file for bankruptcy or go out of business, which could negatively impact our business. A perception of counterparty risk may also negatively impact our ability to secure contracts with existing and new customers.

We experienced these negative effects on the demand for our services and on our revenue during 2008 and particularly in 2009. These negative effects or the negative effects of any future economic downturn may adversely affect our business.

We may have difficulty collecting our accounts receivable.

We currently offer and will continue to offer open account terms to certain of our customers, which may subject us to credit risks, particularly in the event that any receivables represent sales to a limited number of customers or are concentrated in particular geographic markets. The collection of our accounts receivable and our ability to accelerate our collection cycle through the sale of accounts receivable is affected by several factors, including, but not limited to:


	•	our credit granting policies;

	•	contractual provisions;

	•	geographic exposure;

	•	our customers’ and our overall credit rating as determined by various credit rating agencies;

	•	industry and economic conditions;

	•	the ability of our customers to provide security, collateral or guarantees relative to credit granted by us;

	•	our customers’ recent operating results, financial position and cash flows; and

	•	in certain cases, our ability to obtain credit insurance on amounts that we are owed.

Adverse changes in any of these factors, certain of which are not within our control, could create delays in collecting or an inability to collect our accounts receivable, which in turn could impair our cash flows and our financial position and cause a reduction in our results of operations.

We rely on our manufacturer customers to provide trade credit terms to adequately fund our ongoing operations and product purchases.

Our business is dependent on our ability to obtain adequate supplies of popular products on favorable terms, including payment terms. Our ability to fund our product purchases is dependent on our principal manufacturer customers providing favorable payment terms that allow us to maximize the efficiency of our use of capital. The payment terms we receive from our suppliers are dependent on several factors, including, but not limited to:


	•	our payment history with the manufacturer;

	•	the manufacturer’s credit granting policies and contractual provisions;


	•	our overall credit rating as determined by various credit rating agencies;

	•	industry and economic conditions;

	•	our recent operating results, financial position and cash flows; and

	•	the manufacturer’s ability to obtain credit insurance on certain amounts that we owe them.

Adverse changes in any of these factors, some of which are not within our control, could harm our operations and limit our growth.

We operate a global business that exposes us to risks associated with international activities.

We maintain significant operations centers and sales offices in territories and countries outside of the United States. As of December 31, 2009 and 2010, 81% and 66%, respectively, of our accounts receivable were from non-U.S. customers. In particular, as of December 31, 2009 and 2010, 73% and 57%, respectively, of our accounts receivable were from Latin America. The fact that our business operations are conducted in many countries exposes us to several additional risks, including, but not limited to:


	•	difficulty converting currency and delays in repatriating profits and investments;

	•	potentially significant increases in wireless device prices;

	•	increased credit risks, customs duties, import quotas and other trade restrictions;

	•	potentially greater inflationary pressures;

	•	shipping delays;

	•	devaluation of foreign currencies;

	•	possible nationalization of our customers in certain markets; and

	•	possible wireless device supply interruption.

As a result, our operating results and financial condition could be significantly affected by these risks and other risks associated with international activities, including environmental and trade protection laws, policies and measures; tariffs; export license requirements; enforcement of the Foreign Corrupt Practices Act or similar laws of other jurisdictions on our business activities outside the United States; other regulatory requirements; economic and labor conditions; political or social unrest; economic instability or natural disasters in a specific country or region, such as hurricanes, earthquakes and tsunamis; health or similar issues; tax laws in various jurisdictions around the world; and difficulties in staffing and managing international operations. In particular, we are in and may in the future enter into certain developing markets where the legal systems and infrastructures are not fully developed. We have in the past entered into certain local markets at significant cost only to subsequently withdraw from such markets because our performance did not achieve the level that we had anticipated. In the past, as a result of ineffective internal controls, some of our subsidiaries made disbursements to vendors that lacked adequate documentation. While we are not aware of any Foreign Corrupt Practices Act or similar violations, we cannot be certain that we have not or will not violate such laws.

Although we generally negotiate our agreements with customers in U.S. dollars, local legal restrictions may necessitate that our agreements be denominated in foreign currencies. Where so required, we are exposed to market risk primarily related to foreign currencies and interest rates. In particular, we are exposed to changes, over which we have no control, in the value of the U.S. dollar versus the local currency in which the products are sold and goods and services are purchased, including devaluation and revaluation of local currencies. We manage our exposure to fluctuations in the value of currencies and interest rates using a variety of financial instruments. Although we believe that our exposures are appropriately diversified across counterparties and that these counterparties

are creditworthy financial institutions and although we monitor the creditworthiness of our counterparties, we are exposed to credit loss in the event of non-performance by our counterparties in relation to foreign exchange contracts and we may not be able to adequately mitigate all foreign currency related risks. In addition, we may not execute our hedging strategy successfully which may lead to future foreign exchange losses.

We conduct a substantial amount of business in Venezuela.

In the years ended December 31, 2008, 2009 and 2010, we generated $654.8 million, $527.6 million and $486.6 million of our sales to customers in Venezuela, respectively. In addition, as of December 31, 2009 and December 31, 2010, we had accounts receivable relating to customers in Venezuela totaling $254.9 million and $129.4 million, respectively. In recent years Venezuela has experienced political challenges, difficult economic conditions, relatively high levels of inflation and foreign exchange and price controls. The president of Venezuela has the authority to legislate certain areas by decree, and the government has nationalized or announced plans to nationalize certain industries and to expropriate certain companies and property. These factors, however, none of which are within our control, could affect our ability to conduct business in Venezuela, collect our receivables or repatriate funds and may have a negative impact on our business.

In 2003, Venezuela imposed currency controls and created the Commission of Administration of Foreign Currency (“CADIVI”) with the task of establishing detailed rules and regulations and generally administering the exchange control regime. These controls fix the exchange rate between the Bolivar and the U.S. dollar and restrict the exchange of Bolivars for U.S. dollars and vice versa. As a result, our customers in Venezuela were required to obtain CADIVI approval prior to the acquisition and importation of the goods that we help distribute for them and CADIVI authorization for the release of U.S. dollars for payment to us. Foreign currency payments for invoices paid through the CADIVI process are typically received between 90 to 240 days from the invoice date; however, in some cases, the process has taken longer. CADIVI has recently pronounced that certain commodities will have priority to foreign currencies, which resulted in temporary delays to our customers in obtaining CADIVI approval as the CADIVI announcement was unclear. CADIVI clarified that the telecommunications industry would have priority, which relieved the delays. Any delays in receiving CADIVI approval and payment from our Venezuela customers could have an adverse effect on our business.

As of July 1, 2009, we determined that Venezuela’s economy met the definition of highly inflationary and changed the functional currency of our Venezuelan subsidiary to our reporting currency (U.S. dollars). As a consequence of this change in functional currency, the effect of all Venezuelan currency fluctuations are classified as foreign exchange gains and losses and included in the determination of earnings, beginning July 1, 2009. On January 8, 2010, the Venezuelan government announced its intention to devalue its currency and move to a two-tier exchange structure, effective January 11, 2010: a 2.30 BsF rate to the USD for transactions deemed priorities by the government and a 4.60 BsF rate to the USD for other transactions. The latter rate is applicable to our operations in Venezuela. In May 2010, the Venezuelan government enacted reforms to its exchange regulations to close the parallel market. In early June 2010, the Venezuelan government introduced additional regulations under a newly regulated system (the Sistema de Transacciones con Titulos en Moneda Extranjera, or “SITME”), which is controlled by the Central Bank of Venezuela (“BCV”). The SITME imposes volume restrictions on an entity’s trading activity. Foreign exchange transactions occurring after SITME began in June 2010 and which are not conducted through CADIVI or SITME may not comply with the amended exchange regulations. As a result, we curtailed our parallel market activity in the first half of 2010 and no longer conduct transactions through a parallel market in Venezuela. In December 2010, the Venezuelan government announced a currency devaluation, effective January 2011, wherein the Bolivar would have one set government rate. For the years ended December 31, 2009 and 2010, we incurred a foreign exchange loss of $85.6 million and $22.2 million, respectively, due to foreign currency transactions we executed in the parallel market in Venezuela, primarily in the second and third quarters of 2009. See “Management’s Discussion and Analysis of

Financial Condition and Results of Operations — Significant Issues Affecting Comparability from Period to Period — Venezuela Business.”

Our operating results vary frequently and significantly in response to seasonal purchasing pattern fluctuations.

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


	•	promotions and subsidies by operators;

	•	rebates or price reductions offered by manufacturer customers;

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

	•	the timing of the introduction of new products and services by our manufacturer customers and their competitors;

	•	purchasing patterns of consumers in different markets;

	•	general and regional, economic, monetary and political conditions;

	•	product availability and pricing; and

	•	increases in net working capital and resulting funding requirements.

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

Our business could be harmed by consolidation of operators.

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

We are dependent on a variety of information systems to process transactions, summarize results and manage our business.

Given the large number of individual transactions we conduct each year, it is critical that we maintain uninterrupted operation of our business critical information systems. Disruptions in both our primary and secondary (back-up) systems could harm our ability to run our business. Although we have independent and physically separate primary and secondary data centers, we cannot be certain that our information systems will not experience a significant interruption or failure.

We depend on a variety of information systems for our operations, which support many of our operational functions such as inventory management, order processing, shipping, receiving and

accounting. Our information systems, including our back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, catastrophic events such as fires, tornadoes, hurricanes, earthquakes and tsunamis, and usage errors by our employees. If our primary and back-up systems are damaged or cease to function properly, we may have to make a significant investment to fix or replace them, and we may suffer interruptions in our operations in the interim. We have not recently experienced material system-wide failures or downtime for any of our information systems used around the world; however, we cannot assure that such failures will not occur in the future. Any material interruption in either or both of our primary or back-up systems may have a material adverse effect on our business. Failures or significant downtime for any of our information systems could prevent us from placing product orders with vendors or recording inventory received, taking customer orders, printing product pick-lists, or shipping and invoicing for products sold, or recording transactions. It could also prevent customers from accessing our product information.

In order to support our future growth, we continue to review our business needs and are making continuous improvements, including standardization, where appropriate, of establishing common business processes and controls across our lines of business, and technology upgrades to our information systems, including software applications and electronic interfaces with our business partners. This can be a lengthy and expensive process that may result in a significant diversion of resources from other operations. The risk of system disruption is increased when significant system changes are undertaken. In implementing these enhancements, we may experience greater-than-expected difficulty or costs; and we may also experience significant disruptions in our business, which could have a material adverse effect on our business, particularly if we were to replace a substantial portion of our current information systems and processes. In addition, competitors may develop superior information systems or we may not be able to meet evolving market requirements by upgrading our current information systems at a reasonable cost, or at all.

Finally, we also rely on the Internet for a significant percentage of our orders and information exchanges with our customers. The Internet and individual websites in general have experienced a number of disruptions and slowdowns, some of which were caused by organized attacks. In addition, some websites associated with other companies have experienced security breakdowns or breaches of confidential information. Although our website has not experienced any material breakdowns, disruptions or breaches in security, we cannot be assured that this will not occur in the future. If we were to experience a security breakdown, disruption or breach that compromised sensitive information, our relationship with our customers could be adversely affected. Disruption of our website or of the Internet in general could impair our order processing or more generally prevent our customers from accessing critical information. This disruption could cause us to lose business.

Our future operating results will depend on our ability to continue to increase volumes and maintain margins as well as on the relative mix of our services provided.

The majority of our revenue is derived from sales of wireless devices, a part of our value-added distribution services that operates on a high-volume, low-margin basis. Our ability to generate these sales is based upon continued demand for wireless devices and our having an adequate supply of these devices. The gross margins that we realize on sales of wireless devices could be reduced over time due to increased competition, which in turn would lead to a decline in our overall margins. This margin pressure may, however, be offset to some extent if we are able to continue to increase the relative contribution of our higher margin, fee-based supply chain, retail and enterprise services to our overall business, a shift in product and services mix which would have a positive impact on our margins. However, an increased contribution of supply chain, retail and enterprise services relative to our value-added distribution services may lower the pace of revenue growth while having a positive impact on our gross margins. Our future growth and margin profile will depend on, among other things, our mix of value-added distribution and other services.

The natural lifecycle of certain of our supply chain, retail and enterprise services arrangements where we are paid a percentage of the savings we achieve for our customers, especially in the case of strategic sourcing, will decline over time as savings are fully realized, unless replaced by new contracts for additional services. If we are unable to enter into new supply chain, retail and enterprise services contracts, our revenue and gross margin may decline and our operating results could be adversely affected.

Our business growth strategy includes strategic partnerships, investments and acquisitions.

As part of our business strategy, we intend to pursue selected strategic partnerships, investments and acquisitions in complementary businesses. Our strategic partnership, investment and acquisition strategy involves a number of risks, including:


	•	difficulty in identifying attractive strategic partnership, investment or acquisition opportunities;

	•	difficulty in successfully integrating acquired operations, information technology systems, customers, manufacturer relationships, products and businesses with our operations;

	•	loss of key employees of acquired operations or inability to hire key employees necessary for our expansion;

	•	diversion of our capital and management attention away from other business issues;

	•	entering new markets or offering new products we are not familiar with and competing with incumbents that have greater expertise (such as our recent acquisition of eSecuritel through which we plan to commence offering wireless handset insurance, an area that is new to us);

	•	increase in our expenses and working capital requirements;

	•	in the case of acquisitions that we may make outside of the United States, difficulty in operating in foreign countries and over significant geographical distances; and

	•	other financial risks, such as potential liabilities of the businesses we acquire.

Our growth may be limited and our competitive position may be harmed if we are unable to identify, finance, consummate and integrate future acquisitions and investments. Future acquisitions and investments may result in dilutive issuances of equity securities, the incurrence of additional debt or large write-offs. The incurrence of debt in connection with any future acquisitions and investments could restrict our ability to obtain working capital or other financing necessary to operate our business. Our future acquisitions and investments may not be successful, and if we fail to realize the anticipated benefits of these acquisitions and investments, we may experience a decrease in future profitability or increase in future losses and our business could be adversely affected.

Our future operating results may suffer if we do not effectively manage our product inventories or are required to write down our inventories due to rapid technological changes in the global wireless device industry or changing market demands.

The technology relating to wireless devices changes rapidly, resulting in product obsolescence or short product lifecycles. As a result, we need to manage our inventory effectively to meet changing consumer demand and retailer volume requirements. Some of the products we distribute have in the past and may in the future become obsolete while in our inventory due to changing consumer demands or slowdowns in demand for existing products ahead of new product rollouts by our manufacturer customers or their competitors. If we are not able to manage our inventory effectively, we may need to write off unsaleable or obsolete inventory, which would adversely affect our business.

Our success depends on accurately anticipating future technological changes in our industry and on continually identifying, obtaining and marketing new products in order to satisfy evolving industry and customer requirements. Competitors or manufacturers of wireless devices may market products that have perceived or actual advantages over the products that we handle or render those products

obsolete or less marketable. We have made and continue to make significant working capital investments in accordance with evolving industry and customer requirements, including maintaining levels of inventories of currently popular products that we believe are necessary based on current market conditions. These concentrations of working capital increase our risk of loss due to product obsolescence.

The global wireless device industry is intensely competitive, and we may not be able to continue to compete successfully in this industry.

For our value-added distribution services, we compete for sales of wireless devices, and expect that we will continue to compete, with numerous well-established manufacturers, including our own manufacturer customers. Furthermore, certain manufacturers may choose to develop the capabilities to go direct to customers and also implement extensive advertising and promotional programs, minimizing the need for distributors. We also compete with other distributors. The global wireless device industry has generally had low barriers to entry for companies with sufficient capital. As a result, additional competitors may choose to enter our industry in the future. The markets for wireless handsets and accessories are characterized by intense price competition and significant price erosion over the life of a product. Our ability to continue to compete successfully will depend largely on our ability to maintain our current and enter into new customer relationships, continuing to innovate our service portfolio and establishing business relationships with new entrants. We may not be successful in anticipating and responding to competitive factors affecting our industry, including new products which may be introduced, changes in consumer preferences, demographic trends, international, national, regional and local economic conditions and competitors’ discount pricing and promotion strategies. As the wireless communications industry matures and as we seek to enter into new markets and offer new products in the future, the competition that we face may change and grow more intense.

We collaborate with manufacturers, operators, retailers and enterprises to optimize their supply chains and, therefore, rely on our customers to outsource or agree to collaborate with us for parts of, or the entirety of, their supply chains. As such, we compete with various parties, including our customers who may choose to in-source, other supply chain solutions companies, software companies, business process outsourcers, management and information technology consultants and electronic manufacturing services companies. Many of our competitors possess greater financial and other resources than we do and may market similar products or services directly to our customers. Furthermore, we may not be successful in anticipating and responding to competitive factors affecting our industry, including new or changing outsourcing requirements or the introduction of new technologies and services that can change the competitive landscape.

We may have higher than anticipated tax liabilities.

We conduct business globally and file income tax returns in multiple jurisdictions. Our effective tax rate could be adversely affected by several factors, including:


	•	changes in income before taxes in various jurisdictions in which we operate that have differing statutory tax rates;

	•	changing tax laws, regulations and interpretations of such tax laws in multiple jurisdictions; and

	•	the resolution of issues arising from tax audits or examinations (including our ongoing U.S. federal income tax audit) and any related interest or penalties.

We report our results of operations based on our determination of the amount of taxes owed in the various jurisdictions in which we operate. The determination of our worldwide provision for income taxes and other tax liabilities requires estimation, judgment and calculations where the ultimate tax determination may not be certain. Our determination of tax liability is always subject to review or examination by authorities in various jurisdictions. Any adverse outcome of such a review or

examination and any proposed adjustments resulting therefrom could have a negative impact on our business. The results from tax examinations and audits (including our ongoing U.S. federal income tax audit) may differ from the liabilities recorded in our financial statements and may adversely affect our business.

The Internal Revenue Service (the “IRS”) and other taxing authorities regularly examine our income tax returns. In connection with these examinations, we have received notices from various taxing authorities alleging that we are liable for underpayment of tax of $17.9 million, inclusive of penalties and interest. We believe certain of the adjustments proposed by the IRS are inconsistent with applicable tax laws, and we intend to challenge the adjustments vigorously. We expect to prevail in administrative or court proceedings and that any resulting tax liabilities will not exceed amounts accrued for income taxes in our financial statements. However, the final outcome regarding these proceedings cannot be estimated with certainty, and we cannot guarantee that the outcome will not have a material effect on our operations.

We have provided indemnities to Motorola Mobility and we may have increased liabilities as a result of these indemnities.

In connection with our operations in Tierra del Fuego, Argentina, we entered into an agreement in July 2008 to indemnify Motorola Mobility for up to $10.0 million for reimbursement payments it may be obligated to make to a common customer arising from the customer’s non-compliance with the applicable Argentinean tax regime. We evaluate this indemnification in accordance with ASC 460 Guarantees, which requires immediate recognition of a liability for obligations under guarantees that impose an ongoing obligation to stand ready to perform, even if it is not probable that the specified triggering events or conditions will occur. As a consequence of entering into this indemnity, we recorded a liability of $2.0 million. A tax assessment for 2005 was filed against the common customer, and we are assisting Motorola Mobility’s defense of the case in the Argentina Tax Court. In addition, we have provided additional indemnities to Motorola Mobility under our distribution and financing agreements with Motorola Mobility. All of our obligations to Motorola Mobility are secured by a second lien on assets securing our credit agreement.

We may not be able to grow at our historical rate or effectively manage future growth.

We have experienced significant growth, both domestically and internationally; however, we may not be able to continue to grow at a similar rate in the future because our international operations present significant management and organizational challenges to future growth. We will need to execute our strategy successfully, manage our expanding operations efficiently and effectively integrate into our operations any new businesses which we may acquire in order to continue our desired growth. If we are unable to do so, particularly for operations or transactions in which we have made significant capital investments, it could materially harm our business. Our inability to absorb the increasing operating costs that we have incurred, and expect to continue to incur, in anticipation of the growth we hope to achieve could cause our future earnings to decline if we are not able to generate the growth we expect to balance the increased operating costs. In addition, our growth prospects could be harmed by circumstances outside our control such as a decline in the demand for wireless devices globally or in one of the regions we serve, either of which could result in reduction or deferral of expenditures by existing or prospective customers.

In addition, growth of our operations will place a significant strain on our management, administrative and operational infrastructure, and we may not be able to hire and train additional personnel to manage such growth effectively. Furthermore, it takes time for our newer employees to develop the knowledge, skills and managerial and operational experience that our business model requires. If we fail to successfully manage our growth, we may be unable to successfully execute our business plan.

We are highly dependent on our Chairman and Chief Executive Officer and management team and the loss of our executive officers and key personnel could impede our ability to implement our strategy.

Our success depends in large part on the abilities and continued service of our executive officers and other key employees. In particular, we are highly dependent on the continued service of our co-founder, Chairman and Chief Executive Officer, who has developed extensive relationships with certain manufacturers, operators and retailers throughout the world. If for any reason our Chairman and Chief Executive Officer was no longer working for us, his knowledge and relationships would be very difficult to replace. We do not maintain “key man” life insurance for our Chairman and Chief Executive Officer.

The loss of any of our executive officers or other key personnel could impede our ability to fully and timely implement our business plan and future growth strategy. Although we have employment agreements with certain of our executive officers and non-competition agreements with our executive officers and certain key employees, our executive officers and key employees can always terminate their employment with us and our non-competition agreements are of limited scope and duration and are not easily enforced.

In order to support our continued growth, we need to effectively recruit, train and retain additional qualified employees, including sales personnel. Competition for qualified personnel is intense, and there can be no assurance that we will be able to successfully attract, train or retain sufficiently qualified personnel.

If we are unable to manage the organizational challenges associated with our size, we might be unable to achieve our business objectives.

We have operations in 50 countries and approximately 3,600 employees worldwide. Our decentralized international operations present management and organizational challenges, which will only increase as we continue to grow and expand. It is difficult to maintain common standards across a large enterprise and effectively communicate our institutional knowledge. In addition, it can be difficult to maintain our culture, effectively manage our personnel and operations and effectively communicate to our personnel worldwide our core values, strategies and goals. Finally, the size and scope of our operations increase the possibility that an employee will engage in unlawful, unethical or fraudulent activity or otherwise expose us to unacceptable business risks, despite our efforts to properly train and educate our people and maintain appropriate internal controls to prevent such instances. If we do not continue to develop and implement the right processes, tools and ethical behaviors to manage our enterprise, our ability to compete successfully and achieve our business objectives could be impaired.

We could have liability or our reputation could be damaged if we do not protect customer data or information systems or if our information systems are breached.

We are dependent on information technology networks and systems to process, transmit and store electronic information and to communicate among our locations around the world and with our customers. Security breaches of this infrastructure could lead to shutdowns or disruptions of our systems and potential unauthorized disclosure of confidential information. We are required at times to manage, utilize and store sensitive or confidential customer or employee data. We are subject to numerous U.S. and foreign jurisdiction laws and regulations designed to protect this information, such as the European Union Directive on Data Protection and various U.S. federal and state laws governing the protection of health or other individually identifiable information. If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to such data or otherwise mismanages or misappropriates that data, we could be subject to monetary damages, fines or criminal prosecution. Unauthorized disclosure of sensitive or confidential customer or employee data, whether through systems failure, employee negligence, fraud or misappropriation,

could damage our reputation and cause us to lose customers. Similarly, unauthorized access to or through our information systems or those we develop for our customers, whether by our employees or third parties, could result in negative publicity, legal liability and damage to our reputation.

We are dependent on third parties for the delivery of our products and services.

We rely almost entirely on arrangements with third-party shipping and freight-forwarding companies for the delivery of our products and services. The termination of our arrangements with one or more of these third-party shipping companies, or the failure or inability of one or more of these third-party shipping companies to deliver products from our manufacturer customers to us or products from us to our customers, could disrupt our business and harm our reputation and operating results.

We rely to a great extent on our intellectual property and agreements with our key employees and other third parties to protect our proprietary rights.

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

We have identified material weaknesses in our internal controls over financial reporting which, if not successfully remediated, could cause us to fail to timely report our financial results, prevent fraud and avoid material misstatements in our financial statements.

In connection with the preparation of our financial statements for the years ended December 31, 2009 and 2010, we identified several material weaknesses in our internal controls over financial reporting, some of which were not properly remedied from prior years. A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses that existed as of December 31, 2010 were identified in 2009 and were not properly remediated. These material weaknesses included the following:


	•	At one of our foreign subsidiaries, we identified a lack of controls over (i) the review and approval of journal entries, (ii) the approval of and payments to vendors and (iii) the issuance of vendor credits.

	•	At one of our U.S. subsidiaries, we identified (i) a lack of segregation of duties and formal evidence of review and approval of payments to vendors and account reconciliations and (ii) a lack of sufficient and appropriate evidence supporting vendor credits, and, at our corporate headquarters, we identified a lack of approval of contracts.

A remediation process designed to eliminate the identified deficiencies is underway. See “Management’s Discussion of Financial Condition and Results of Operations — Material Weaknesses and Remediation Efforts.” However, we do not expect the remediation plan to be completed until later in 2011. Even though we have initiated and in some instances implemented a number of remedial actions, there can be no assurance that the measures we have taken, or will take, will be on schedule or effective to address the issues identified or that similar weaknesses or deficiencies will not recur in the future. As a result of these and similar activities, management’s attention may be diverted from other business concerns, which could have a material adverse effect on our business.

If the remedial policies, procedures and systems we implement, resources we add or personnel we hire are insufficient to address the identified material weaknesses, or if additional material weaknesses or significant deficiencies in our internal controls are discovered in the future, we may be unable to report our financial results on a timely basis or to prevent fraud, our consolidated financial statements may contain material misstatements or we may not be able to comply with applicable financial reporting requirements and the requirements of our various financing agreements. If any of these events occur, our business and reputation may be significantly harmed and investors may not want to own our securities. Failure to comply with reporting requirements under our various financial agreements could result in defaults thereunder and acceleration of outstanding indebtedness.

We may not have adequate liquidity or capital resources.

We require cash or committed liquidity facilities for general corporate purposes, such as funding ongoing working capital, acquisition and capital expenditure needs. For the twelve months ended December 31, 2010, we used cash for operating activities of $159.3 million. As of December 31, 2010, we had cash and cash equivalents of $159.2 million. In addition, we have access to credit lines of approximately $1.1 billion, with a gross availability of approximately $0.5 billion as of December 31, 2010. In November 2010, we raised $250.0 million through the sale of senior unsecured notes (the “2016 Notes”). In December 2010, we increased our revolving credit facility to a total facility size of $500.0 million, with an option for an additional uncommitted $100.0 million financing. Our ability to satisfy our cash needs will depend on our ability to generate cash from operations and to access the financial markets, both of which will be subject to general economic, financial, competitive, legislative, regulatory and other factors beyond our control. We may, in the future, need to access the financial markets to satisfy our cash needs. Our ability to obtain external financing will be affected by general financial market conditions and our future debt ratings. Further, any increase in our level of debt, change in status of our debt from unsecured to secured debt, or deterioration of our operating results may cause a reduction in our future debt ratings. Any downgrade in our debt rating or tightening of credit availability could impair our ability to obtain additional financing or renew existing credit facilities on acceptable terms. Under the terms of any future external financing, we may incur higher than expected financing expenses. A lack of access to adequate capital resources could have a material adverse effect on our liquidity and our business.

We have a substantial amount of indebtedness which may adversely affect our cash flow and our ability to operate our business and to fulfill our obligations under our indebtedness.

In the fourth quarter of 2010, we issued the 2016 Notes and entered into an amended and restated $500.0 million asset-based revolving credit facility (the “ABL Revolver”). As of December 31, 2010, our total indebtedness was $453.8 million. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

Our substantial indebtedness could have important consequences, including the following:


	•	Increased difficulty for us in satisfying our obligations with respect to our existing 2016 Notes, including any repurchase obligations that may arise thereunder;

	•	Increased vulnerability to economic downturns and adverse developments in our business;


	•	A requirement that a substantial portion of cash flow from operations be allocated to the payment of principal and interest on the 2016 Notes and, to the extent incurred, indebtedness under the ABL Revolver and any other indebtedness, therefore reducing our ability to use our cash flow to fund our operations and capital expenditures and to invest in future business opportunities;

	•	Exposure to the risk of increased interest rates as borrowings under our ABL Revolver carry variable rates of interest;

	•	Restrictions on our ability to take advantage of strategic opportunities or our ability to make non-strategic divestitures;

	•	Limitations on our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, restructuring, acquisitions or general corporate or other purposes, which could be exacerbated by further volatility in the credit markets;

	•	Disadvantages compared to our competitors who have proportionately less debt;

	•	Limited flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

	•	Failure to satisfy our obligations under the 2016 Notes or our other indebtedness or failure to comply with the restrictive covenants contained in the indenture that governs the 2016 Notes and the credit agreement that governs our ABL Revolver or our other indebtedness could result in an event of default which could result in all of our indebtedness becoming immediately due and payable and could permit the holders of the notes and our other secured lenders to foreclosure on our assets securing such indebtedness.

Despite our current level of indebtedness, we and our subsidiaries may incur significant additional indebtedness, including secured indebtedness, in the future.

The terms of our debt covenants could limit our flexibility in operating our business and our ability to raise additional funds.

The agreements that govern the terms of our debt, including the indenture that governs the 2016 Notes and the credit agreement that governs our ABL Revolver, contain, and the agreements that govern our future indebtedness may contain, covenants that restrict our ability and the ability of our subsidiaries to:


	•	incur additional debt;

	•	make certain payments, including dividends or other distributions, with respect to our capital stock, or prepayments of subordinated debt;

	•	make certain investments or sell assets;

	•	create certain liens or engage in sale and leaseback transactions;

	•	provide guarantees for certain debt;

	•	enter into restrictions on the payment of dividends and other amounts by subsidiaries;

	•	engage in certain transactions with affiliates;

	•	consolidate, merge or transfer all or substantially all our assets; and

	•	enter into other lines of business.

A breach of the covenants or restrictions under the indenture that governs the 2016 Notes, the credit agreement that governs the ABL Revolver or any agreement that governs any other indebtedness could result in a default under the applicable indebtedness. Such default or any payment default may allow the creditors to accelerate the related debt and may result in the acceleration of any other

debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under our ABL Revolver would permit the lenders under our ABL Revolver to terminate all commitments to extend further credit under that facility. Furthermore, if we were unable to repay the amounts due and payable under our ABL Revolver, those lenders could proceed against the collateral granted to them to secure that indebtedness. In the event our lenders and holders of the 2016 Notes accelerate the repayment of our borrowings, we cannot assure that we and our subsidiaries would have sufficient assets to repay such indebtedness.

In the past, we have obtained waivers from our lenders for non-compliance with certain of the covenants related to our indebtedness. Although no waiver for non-compliance with any covenant related to our indebtedness is currently required, we cannot predict whether we will need future waivers or whether we will be able to obtain them.

These restrictions may restrict our financial flexibility, limit any strategic initiatives, restrict our ability to grow or limit our ability to respond to competitive changes. As a result of these covenants, we will be limited in the manner in which we can conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs. Accordingly, these restrictions may limit our ability to successfully execute our strategy and operate our business. In addition, as a result of a default of any covenant and any actions the lenders may take in response thereto, we could be forced into bankruptcy or liquidation.

Risks Related to This Offering

The voting power of our capital stock will be concentrated in our Chairman and Chief Executive Officer, which will limit your ability to influence corporate matters.

Following the completion of this offering, our Class B common stock will have 5 votes per share except in limited circumstances, and our Class A common stock, which is the stock we are selling in this offering, will have one vote per share. Following the completion of this offering, Mr. Claure will beneficially own 100% of our Class B common stock, representing approximately % of the combined voting power of our outstanding common stock and % of our total equity ownership assuming the underwriters’ option to purchase additional shares is not exercised. Mr. Claure will have the ability to take stockholder action with respect to certain matters without the vote of any other stockholder and without having to call a stockholder meeting, and investors in this offering will not be able to affect the outcome of those stockholder votes during this period. Mr. Claure will continue to control most matters submitted to our stockholders for approval even though he will beneficially own less than 50% of the outstanding shares of our common stock due to the fact that each share of Class B common stock will entitle him to 5 votes, except in limited circumstances. As a result, Mr. Claure may, through our board of directors, influence all matters affecting us, including:


	•	any determination with respect to our business plans and policies (except for fundamental changes to our business);

	•	our financing activities; and

	•	other significant corporate transactions.

This concentration of voting control will limit your ability to influence corporate matters and, as a result, we may take actions that our Class A common stockholders may not view as beneficial. See “Description of Capital Stock — Common Stock” and “Description of Capital Stock — Voting Rights” for a more detailed discussion of the relative rights of the Class A and Class B common stock.

We will be a “controlled company” within the meaning of the Nasdaq Stock Market rules, and, as a result, will rely on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies.

After the completion of this offering, Mr. Claure will beneficially own more than 50% of the combined voting power of our outstanding common stock, and we will be a “controlled company” under the Nasdaq Stock Market corporate governance standards. As a controlled company, certain exemptions under the Nasdaq Stock Market corporate governance standards free us from the obligation to comply with certain Nasdaq Stock Market corporate governance standards, including that a majority of our board of directors consist of independent directors.

As a result of our use of the “controlled company” exemptions, you will not have the same protection afforded to stockholders of companies that are subject to all of the Nasdaq Stock Market corporate governance standards.

Lindsay Goldberg’s interests may conflict with those of other stockholders.

Our stockholders’ agreement provides that Lindsay Goldberg is not prohibited from investing or participating in competing businesses. Lindsay Goldberg is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. Lindsay Goldberg may also pursue acquisition opportunities that are complementary to our business and, as a result, those acquisition opportunities may not be available to us. To the extent they invest in such other businesses, Lindsay Goldberg may have differing interests than our other stockholders.

There has been no public market for our Class A common stock; our stock price could be volatile and could decline following this offering, resulting in a substantial loss on your investment.

Prior to this offering, there has been no public market for our Class A common stock. We cannot predict the extent, if any, to which an active trading market for our Class A common stock will develop or be sustained. The absence of any active trading market could adversely affect your ability to sell shares that you own and could depress the market price of those shares. The initial public offering price will be determined through negotiations among us, the selling stockholders and the representatives of the underwriters and may bear no relationship to the price at which our Class A common stock will trade following the completion of this offering. In general, the stock market has been highly volatile and the market price of our Class A common stock may also be volatile. Investors may incur substantial losses as a result of decreases in the market price of our Class A common stock, including decreases unrelated to our financial condition, operating performance or prospects. The market price of our Class A common stock could fluctuate widely or decline as a result of a number of factors, including those under “— Risks Related to Our Business” and the following:


	•	our short- and long-term operating performance and the operating performance of other companies within the wireless device industry;

	•	changes in our net sales or net income or in estimates of or recommendations by securities analysts;

	•	speculation in the media or investment community;

	•	political, monetary, social and economic events and conditions in our geographic markets, including in particular Latin America;

	•	currency fluctuations and devaluations;

	•	acts of God, hostilities and terrorist acts; and


	•	general financial and economic conditions, including factors not directly related to our performance.

In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock trading price. Any such litigation against us could involve substantial costs and liability and significantly divert our management’s time, attention and resources regardless of the merits of such litigation.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our Class A common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage, the trading price for our Class A common stock could be negatively impacted. If we obtain securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our Class A common stock could decrease, which could cause our stock price and trading volume to decline.

Some provisions of our certificate of incorporation and by-laws could delay or prevent transactions that many stockholders may favor.

Some provisions of our certificate of incorporation and by-laws, to be effective upon completion of this offering, could have the effect of delaying or preventing a tender offer or other takeover attempt of our company that many of our stockholders might consider favorable, including attempts that might result in a premium over the prevailing market price of our Class A common stock. These provisions are intended by us to enhance the likelihood of stability in the composition of our board of directors and in the policies of the board and to discourage or delay certain transactions that involve a potential change in control of our company. They are designed also to reduce our vulnerability to an unsolicited acquisition proposal and to discourage some tactics often used in proxy contests. These provisions, however, could have the effect of discouraging others from making tender offers for shares of our Class A common stock. These provisions may also have the effect of preventing or delaying changes in our management. See “Description of Capital Stock” for a more detailed discussion of these provisions.

The change in control provisions of certain of our agreements with our principal manufacturer customers, our amended and restated credit facility and the indenture governing the 2016 Notes could impede or prevent transactions that many of our stockholders might favor.

Certain of our agreements with Motorola and our distribution agreement with Samsung contain provisions that allow for the immediate termination of such agreements in the event of a change of control of our company (other than in connection with this offering). Additionally, under the terms of our amended and restated credit facility with PNC Bank (and other lenders), a change in control of our company (other than in connection with this offering) would constitute an event of default and our obligations under such amended and restated credit facility could be accelerated and under our indenture governing the 2016 Notes, upon a change of control, holders of the notes have the right to require us to repurchase the notes. Such provisions could have the effect of delaying or preventing a tender offer or other takeover attempt of our company that many of our stockholders might consider favorable, including offers or attempts that might result in a premium over the prevailing market price of our Class A common stock. They may also have the effect of preventing or delaying changes in our management.

Our management may fail to effectively use the net proceeds of this offering.

As described in “Use of Proceeds,” we intend to use the net proceeds of this offering for general corporate purposes. Our management will have discretion in applying the net proceeds. Allocation of the net proceeds will be subject to future economic conditions, changes in our business plan and our responses to competitive pressures. Accordingly, our management may ineffectively apply a portion of the net proceeds, or may apply the net proceeds in ways that investors did not expect.

A substantial number of shares will be eligible for resale in the near future, which could cause our Class A common stock price to decline.

Sales of our Class A common stock in the public market after the completion of this offering, or even the perception that such sales may occur, could cause the market price of our Class A common stock to decline. Upon the completion of this offering, we will have shares of Class A common stock outstanding, assuming no exercise of the underwriters’ option to purchase additional shares or any outstanding stock options. The shares to be sold in this offering will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended (the “Securities Act”). In addition, there will be shares of our Class B common stock outstanding at the completion of this offering held by Mr. Claure, which may be converted into shares of Class A common stock at any time and, under certain circumstances, will automatically be converted to shares of Class A common stock. Substantially all of the shares of the outstanding Class A common stock and the outstanding Class B common stock owned by our existing stockholders will be subject to lock-up agreements with the underwriters that restrict their ability to transfer capital stock for a period of at least 180 days from the date of this prospectus (or, as long as the company remains certified as a minority business enterprise, at least 365 days in the case of Mr. Claure). For a more detailed description of these agreements, see “Shares Eligible for Future Sale — Lock-up Agreements” and “Underwriting.” After the lock-up agreements expire, an aggregate of shares of Class A common stock (excluding the shares to be redeemed by us or sold upon any exercise of the underwriters’ option to purchase additional shares) and Class B common stock will be eligible for resale in the public market, subject to the applicable limitations of either Rule 144 or Rule 701 under the Securities Act. For a more detailed discussion of the shares eligible for future sale, see “Shares Eligible for Future Sale.”

Goldman, Sachs & Co. and J.P. Morgan Securities LLC, on behalf of all the underwriters, may in their discretion, at any time and without notice, release all or any portion of the shares subject to the lock-up agreements, which would result in shares being available for sale in the public market at an earlier date. Conversion of Class B common stock into Class A common stock and sales of Class A common stock by existing stockholders in the public market, the availability of these shares for resale or our future issuance of additional securities could cause the market price of our Class A common stock to decline, perhaps significantly.

Following the completion of this offering and the expiration of the lock-up period, assuming the conversion of our redeemable convertible preferred stock, the holders of an aggregate of shares of our Class A common stock (excluding the shares to be sold upon any exercise of the underwriters’ option to purchase additional shares) will be entitled to register their shares of common stock under the Securities Act. We have also granted demand and piggyback registration rights to the holders of shares of our Class A common stock. For a more detailed discussion of these registration rights, see “Certain Relationships and Related Transactions—Stockholders’ Agreement” and “Shares Eligible for Future Sale.”

Fulfilling our public company financial reporting and other regulatory obligations will be expensive and time consuming and may strain our resources.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will be required to implement specific corporate

governance practices and adhere to a variety of reporting requirements under the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the related rules and regulations of the Securities and Exchange Commission (the “SEC”), as well as the rules of The Nasdaq Stock Market.

In accordance with Section 404 of Sarbanes-Oxley, our management will be required to conduct an annual assessment of the effectiveness of our internal control over financial reporting and include a report on these internal controls in the annual reports we will file with the SEC on Form 10-K as required. In addition, we will be required to have our independent registered public accounting firm provide an opinion regarding the effectiveness of our internal controls. We are in the process of reviewing our internal control over financial reporting and are establishing formal policies, processes and practices related to financial reporting and to the identification of key financial reporting risks, assessment of their potential impact and linkage of those risks to specific areas and controls within our organization. If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, we may be subject to adverse regulatory consequences and there could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. This could have a material adverse effect on our business and lead to a decline in the price of our Class A common stock.

The Exchange Act will require us to file annual, quarterly and current reports with respect to our business and financial condition. Compliance with these requirements will place significant additional demands on our legal, accounting and finance staff and on our accounting, financial and information systems and will increase our legal and accounting compliance costs as well as our compensation expense as we will be required to hire additional accounting, finance, legal and internal audit staff with the requisite technical knowledge.

As a public company we will also need to enhance our investor relations, marketing and corporate communications functions. These additional efforts may strain our resources and divert management’s attention from other business concerns, which could have a material adverse effect on our business.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

We have made statements under the captions “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and in other sections of this prospectus that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are predictions based on our current expectations and projections about future events which we believe are reasonable. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under the caption entitled “Risk Factors.” You should specifically consider the numerous risks outlined under “Risk Factors.”

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Except as required by law, we assume no duty to update any of these forward-looking statements after the date of this prospectus to conform our prior statements to actual results or revised expectations.

USE OF PROCEEDS

We will receive net proceeds from this offering of approximately $ million, or approximately $ million if the underwriters exercise their option to purchase additional shares in full, assuming an initial offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus. We intend to use $ million of the net proceeds from this offering to pay accrued dividends on our redeemable convertible preferred stock and will use the remainder for general corporate purposes. We will not receive any proceeds from the shares of Class A common stock being sold by the selling stockholders identified in this prospectus, which include Mr. Claure and Lindsay Goldberg.

Assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, a $1.00 change in the assumed initial public offering price of $ per share of Class A common stock (the midpoint of the range set forth on the cover page of this prospectus) would increase or decrease the net proceeds to us by $ million, or approximately $ million if the underwriters exercise their option to purchase additional shares in full.

DIVIDEND POLICY

We have a limited history of paying dividends to our common stockholders. We currently anticipate that we will retain all available funds for use in the operation and expansion of our business and do not anticipate paying any dividends on our Class A or Class B common stock in the foreseeable future. During 2008, we paid a dividend of $0.30 per share to our common stockholders. We will pay accrued dividends on our redeemable convertible preferred stock in connection with this offering. Our ability to pay dividends on our common stock is limited by the covenants of our ABL Revolver and the indenture governing the 2016 Notes.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2010:


	•	on an actual basis;

	•	on a pro forma basis to reflect (1) the conversion of shares of our common stock owned by Mr. Claure into shares of Class A common stock and shares of Class B common stock, and the conversion of shares of our common stock owned by other shareholders into shares of Class A common stock; and (2) the conversion of our redeemable convertible preferred stock into shares of Class A common stock in connection with this offering; and

	•	on a pro forma, as adjusted, basis to reflect the adjustments described in the immediately preceding bullet point and to further reflect the issuance and sale of shares of Class A common stock by us in this offering at an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, and the application of the net proceeds of the offering, after deducting estimated underwriting discounts and offering expenses payable by us, as set forth under “Use of Proceeds.”

This table should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes thereto included elsewhere in this prospectus.


	As of December 31, 2010
					Pro Forma, as
	Actual		Pro Forma		Adjusted
	(In thousands, except per share data)

Cash and cash equivalents(1)	$	159,161	$		$

Debt:
Revolving credit facility(2)	$	—	$		$
Senior notes		250,000
Trade facilities(3)		64,200
All other bank facilities		139,605

Total debt		453,805

Redeemable convertible preferred stock		409,090		—		—

Stockholders’ equity:
Common Stock, $0.0001 par value per share, 50,000,000 shares authorized, 18,182,267 shares issued and outstanding, actual; no shares authorized, issued and outstanding, on a pro forma and pro forma as adjusted basis		2		—		—
Class A common stock, $0.0001 par value per share, no shares authorized, issued and outstanding, actual; shares authorized, shares issued and outstanding on a pro forma basis; shares authorized, shares issued and outstanding on a pro forma, as adjusted basis		—
Class B common stock, $0.0001 par value per share, no shares authorized, issued and outstanding, actual; shares authorized, shares issued and outstanding, on a pro forma and pro forma as adjusted basis		—
Additional paid-in capital(1)		50,535
Retained earnings		85,521
Accumulated other comprehensive income		13,799
Non-controlling interest		7,865

Total stockholders’ equity(1)		157,722

Total capitalization(1)	$	1,020,617	$		$


(1)		Assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, a $1.00 increase or decrease in the assumed initial public offering price of $ per share of Class A common stock (the midpoint of the range set forth on the cover page of this prospectus) would increase or decrease the amount of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $ million.

(2)		We have $416.0 million available under our revolving credit facility.

(3)		We have $36.3 million available in trade financing facilities.

DILUTION

Our pro forma net tangible book value as of December 31, 2010 was $ , or $ per share of Class A and Class B common stock. Pro forma net tangible book value per share is determined by dividing our tangible net worth, total assets less total liabilities, by the aggregate number of shares of Class A and Class B common stock outstanding upon the completion of this offering and reflecting conversion of our redeemable convertible preferred stock into shares of Class A common stock. After giving effect to the sale by us of the shares of Class A common stock in this offering, at an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, and the receipt and application of the net proceeds, our pro forma net tangible book value as of December 31, 2010 would have been $ , or $ per share of Class A and Class B common stock. This represents an immediate increase in pro forma net tangible book value to existing stockholders of $ per share and an immediate dilution to new investors of $ per share. The following table illustrates this per share dilution:


Assumed initial public offering price		$

Pro forma net tangible book value per share as of December 31, 2010	$
Increase in pro forma net tangible book value per share attributable to new investors

Pro forma net tangible book value per share after this offering

Dilution per share to new investors		$

Dilution is determined by subtracting pro forma net tangible book value per share after this offering from the initial public offering price per share.

Assuming the number of shares of Class A common stock offered by us as set forth on the cover page of this prospectus remains the same, a $1.00 increase (decrease) in the assumed initial public offering price of $ per share of Class A common stock (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) the pro forma net tangible book value per share attributable to new investors by $ million, the pro forma net tangible book value (deficit) per share after this offering by $ per share and decrease (increase) the dilution per share to new investors in this offering by $ per share.

The following table sets forth, on a pro forma basis, as of December 31, 2010, the number of shares of Class A common stock purchased from us, the total consideration paid, or to be paid, and the average price per share paid, or to be paid, by existing stockholders and by the new investors, at an assumed initial public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and offering expenses payable by us:


	Shares Purchased				Total Consideration				Average Price
	Number	Percent			Amount	Percent			per Share

Existing common stockholders				%	$			%	$
Existing redeemable convertible preferred stockholders (as converted)									$
New investors									$

Total			100	%	$		100	%

Sales by the selling stockholders in this offering will reduce the number of shares held by existing stockholders to or approximately %, shares or approximately % if the option to purchase additional shares is exercised in full, and will increase the number of shares to be purchased by new investors to or approximately %, shares or approximately % if the option to purchase additional shares is exercised in full, of the total number of shares of common stock outstanding after the offering.

The foregoing tables assume no exercise of the underwriters’ option to purchase additional shares or of outstanding stock options after December 31, 2010. As of December 31, 2010, shares of common stock were subject to outstanding options, which will automatically become options to purchase shares of our Class A common stock upon the completion of this offering, at a weighted average exercise price of $ . To the extent these options are exercised there will be further dilution to new investors.

Assuming the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, a $1.00 increase (decrease) in the assumed initial public offering price of $ per share of Class A common stock (the midpoint of the price range set forth on the cover of this prospectus), would increase (decrease) total consideration paid by new investors in this offering and by all investors by $ million, and would increase (decrease) the average price per share paid by new investors by $1.00, and would increase (decrease) pro forma net tangible book value per share by $ .

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following is our selected consolidated financial and other data, which should be read in conjunction with, and is qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. The consolidated statement of operations data for the years ended December 31, 2008, 2009 and 2010 and the consolidated balance sheet data as of December 31, 2009 and 2010 are derived from, and qualified by reference to, our audited consolidated financial statements and notes thereto included elsewhere in this prospectus and should be read in conjunction with those consolidated financial statements and notes thereto. The consolidated balance sheet data as of December 31, 2008 is derived from our audited consolidated financial statements not included in this prospectus. The consolidated statement of operations data for the years ended December 31, 2006 and 2007 and the consolidated balance sheet data as of December 31, 2006 and 2007 are derived from our unaudited consolidated financial statements not included in this prospectus.


	Year Ended December 31,
	2006			2007			2008			2009			2010
	(In thousands, except share and per share data)

Consolidated Statement of Operations Data:
Revenue	$	3,555,674		$	3,492,476		$	3,550,165		$	2,718,652		$	4,612,863
Cost of revenue		3,257,352			3,189,935			3,254,167			2,354,016			4,218,979

Gross profit		298,322			302,541			295,998			364,636			393,884

Operating expenses:
Selling, general and administrative		135,192			197,530			174,287			161,806			235,239
Provision for bad debts		7,776			1,956			2,736			6,435			8,785
Depreciation and amortization		4,800			6,820			9,917			13,457			11,913
Public offering expenses		—			—			—			—			7,333

Total operating expenses		147,768			206,306			186,940			181,698			263,270

Operating income		150,554			96,235			109,058			182,938			130,614

Other income (expenses):
Interest income		1,794			9,746			14,206			21,278			7,139
Interest expense		(40,971	)		(46,366	)		(34,746	)		(17,102	)		(29,025	)
Other income (expenses), net(1)		(10,696	)		(4,543	)		(923	)		(3,459	)		2,159
Foreign exchange gains (losses), net		900			2,648			(25,117	)		(80,915	)		(33,263	)
Loss on early extinguishment of debt		—			(38,903	)		—			—			—

Total other expenses		(48,973	)		(77,418	)		(46,580	)		(80,198	)		(52,990	)

Income from continuing operations before provision for income taxes		101,581			18,817			62,478			102,740			77,624
Provision for income taxes		33,862			19,515			35,402			46,999			36,938

Income (loss) from continuing operations		67,719			(698	)		27,076			55,741			40,686
(Loss) income from discontinued operations, net of taxes		(2,840	)		(16,771	)		(14,304	)		2,595			(921	)

Net income (loss)		64,879			(17,469	)		12,772			58,336			39,765
Less: Net income attributable to non-controlling interest		13,749			18,753			18,107			4,095			2,385

Net income (loss) attributable to Brightstar Corp.	$	51,130		$	(36,222	)	$	(5,335	)	$	54,241		$	37,380


	Year Ended December 31,
	2006			2007			2008			2009		2010
	(In thousands, except share and per share data)

Basic earnings per share for common stock:
Income (loss) from continuing operations attributable to Brightstar Corp. common stockholders	$	1.85		$	(3.36	)	$	0.50		$	0.83	$	0.35
(Loss) income from discontinued operations attributable to Brightstar Corp. common stockholders		(0.11	)		(0.85	)		(0.79	)		0.07		(0.03	)

Net income (loss) attributable to Brightstar Corp. common stockholders	$	1.74		$	(4.21	)	$	(0.29	)	$	0.90	$	0.32

Diluted earnings per share for common stock:
Income (loss) from continuing operations attributable to Brightstar Corp. common stockholders	$	1.65		$	(3.36	)	$	0.20		$	0.78	$	0.35
(Loss) income from discontinued operations attributable to Brightstar Corp. common stockholders		(0.09	)		(0.85	)		(0.41	)		0.06		(0.03	)

Net income (loss) attributable to Brightstar Corp. common stockholders	$	1.56		$	(4.21	)	$	(0.21	)	$	0.84	$	0.32

Weighted average number of common shares outstanding:
Basic		21,454,431			19,714,092			18,134,166			18,163,037		18,181,347

Diluted		25,589,280			19,714,092			35,046,068			20,863,930		18,586,404


	As of December 31,
	2006		2007		2008		2009		2010
	(In thousands)

Consolidated Balance Sheet Data:
Cash and cash equivalents	$	64,803	$	89,491	$	122,057	$	239,859	$	159,161
Accounts receivable, net		810,219		972,062		864,222		969,184		1,376,445
Inventory		702,638		393,637		316,472		239,988		612,396
Total assets		1,695,728		1,651,517		1,574,140		1,813,839		2,496,570
Total debt(2)		542,937		569,950		445,408		401,848		453,805
Total liabilities		1,415,180		1,175,222		1,116,347		1,319,326		1,929,758
Total redeemable convertible preferred stock		76,292		329,742		329,742		362,377		409,090
Total stockholders’ equity		204,256		146,553		128,051		132,136		157,722


(1)		The table below presents the consolidated other income (expenses), net attributable to Brightstar Europe:


	Year Ended December 31,
	2006		2007			2008			2009		2010
	(In thousands)

Other income (expenses), net attributable to Brightstar Europe	$	—	$	(2,806	)	$	(4,744	)	$	1,781	$	2,413


(2)		Total debt is defined as lines of credit, trade financing facilities and current portion of term debt, long-term debt and convertible senior subordinated notes.

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve various risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements. For additional information regarding some of the risks and uncertainties that affect our business and the industry in which we operate, please read “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”

Overview

For our value-added distribution services, and under the terms of certain arrangements, we procure and take title to wireless devices and re-sell them to our customers around the world; the revenue we generate for these value-added distribution services is transaction-based and includes the cost of the devices we sell. For our other services, we primarily charge a contractual fee for services provided or enter into gain-sharing arrangements, whereby we earn a percentage of the savings we generate for the customer.

Regional Highlights and Outlook


	•	*U.S./Canada.* For the year ended December 31, 2010, revenue in our U.S./Canada region was approximately $1.5 billion, which accounted for 31.9% of our total revenue in 2010, compared to 26.6% in 2009 and 18.3% in 2008. The growth in this region has been driven primarily by the addition of new retailer customers and the rapid expansion of our business in


		the retail and dealer agent channels. We have over 700 customers in this region, including over 600 retailers. Our core services in the region include value-added distribution, returns management, category management, channel and supply chain management, customization, expanded portfolio management, activation services, in-store marketing, virtual inventory and handset protection and replacement. In October 2010, we acquired OTBT, Inc., a provider of enterprise services for small and medium business and large enterprises in the U.S. and a core component of our enterprise services offering. We operate over 450,000 square feet of facilities and serve over 60,000 points of sale throughout the region. Following a period of rapid expansion in this region, we intend to increasingly focus on improving the margin profile, which we expect will result in lower revenue over the short term but higher profitability.


	•	*Latin America.* For the year ended December 31, 2010, revenue in our Latin America region was approximately $2.7 billion, which accounted for 60.1% of our total revenue in 2010, compared to 66.9% in 2009 and 76.1% in 2008. Historically, our Latin America region contributed the majority of our total revenue, but, in recent years, the region’s overall contribution to total revenue has been decreasing due to the higher relative growth of our other regions. We operate in 19 countries across this region, including Argentina, Brazil, Colombia, Mexico and Venezuela. Our core services in Latin America include value-added distribution, product management, such as demand planning and forecasting, and fulfillment and logistics, which includes freight management and customs clearance. We operate over 600,000 square feet of warehouse facilities serving this region, including our Miami distribution center. We have 43 sales, distribution and assembly facilities that together serve more than 90 operators and 25,000 customers in this region. Our assembly facility in Tierra del Fuego, Argentina allows us to provide local production capability for our customers. We expect our revenue to increase in this region driven by continued growth in our services and increased penetration of smartphones.

	•	*Asia Pacific.* For the year ended December 31, 2010, revenue in our Asia Pacific region was $367.2 million, which accounted for 8.0% of our total revenue in 2010, compared to 6.5% in 2009 and 5.6% in 2008. The growth in this region has been driven primarily by our efforts to expand our service offerings and enter new markets. We operate in 14 countries across this region, including Australia, Hong Kong, Malaysia, New Zealand, Singapore, South Africa, Thailand, Turkey and Vietnam. We have six distribution facilities that together serve more than 24 manufacturers, 13 operators and 3,100 retailers at approximately 10,000 points of sale. Our core services in the region include supply chain planning, such as demand forecasting and inventory management, and device management, which includes product lifecycle management. We also offer a full range of strategic sourcing services, channel management and value-added distribution services. We operate more than 350,000 square feet of warehouse facilities in the region. We expect our revenue to increase and gross margins to decrease in this region as we expand our value-added distribution services business at a faster rate than our other services and as we expand into new markets.

	•	*Europe.* We own a 50% interest in Brightstar Europe, a joint venture company formed in 2007, which is owned equally and controlled jointly by Tech Data and us. The growth in this region has been driven primarily by market penetration, geographic expansion and, to a lesser extent, impact from our recent acquisitions. Our income attributable to Brightstar Europe operations increased from $1.8 million in 2009 to $2.4 million in 2010. We operate in 15 countries across this region, including Spain, Germany and United Kingdom. Brightstar Europe utilizes the distribution facilities maintained by Tech Data. Brightstar Europe’s core services in the region include value-added distribution and enterprise services. In August 2010, Brightstar Europe acquired AKL Telecommunications GmbH (“AKL”). AKL is one of Austria’s leading suppliers of mobile telephony devices and fixed network telephony solutions to the wireless channels including telecommunications dealers and consumer electronics stores. In addition, in October 2010, Brightstar Europe acquired Mobile Communication Company (“MCC”), a major


		supplier of mobile telephony and personal navigation devices in the Netherlands and Belgium. Brightstar Europe has been growing rapidly since its formation, as the joint venture increases its presence in the region. We expect Brightstar Europe’s revenue and gross profit to continue to grow organically and from the full-year impact of its 2010 acquisitions of AKL and MCC.

We expect our business to grow in both revenue and profitability as we expand into new markets, continue to leverage the scale of our global infrastructure and grow our value-added distribution, supply chain, retail and enterprise services.

Key Metrics

We monitor key financial metrics, as set forth below, to help us evaluate trends in our business, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational efficiencies. See “Prospectus Summary — Summary Consolidated Financial and Other Data” for definitions and calculations related to Adjusted gross profit, Adjusted EBITDA and Adjusted net income.


	Year Ended December 31,
	2008			2009			2010
	(In thousands, except percentages)

Revenue	$	3,550,165		$	2,718,652		$	4,612,863
Other Financial Data:
Adjusted gross profit(1)		295,998			279,040			382,680
Adjusted gross margin(2)		8.3	%		10.3	%		8.3	%
Adjusted EBITDA(1)		118,247			111,424			141,192
Adjusted EBITDA %(2)		3.3	%		4.1	%		3.1	%
Adjusted net income(1)		12,299			58,742			60,561
Adjusted net income %(2)		0.3	%		2.2	%		1.3	%
Net working capital(3)		460,007			392,844			607,976
Net working capital %(2)		13.0	%		14.4	%		13.2	%


(1)		See Note (3) in “Prospectus Summary — Summary Consolidated Financial and Other Data” for reconciliations of gross profit to Adjusted gross profit, net income to Adjusted EBITDA and net income to Adjusted net income.

(2)		Expressed as a percentage of revenue.

(3)		Net working capital is calculated as total current assets minus total current liabilities.

We use the following financial metrics in monitoring our business:


	•	*Adjusted Gross Profit.* While Adjusted gross profit is not a U.S. GAAP measurement, we believe it is useful in comparing our performance with our results in prior periods, as well as with the performance of other companies, as the items excluded to arrive at Adjusted gross profit are not indicative of operating performance and therefore limit comparability of our historical and current financial statements.

	•	*Adjusted EBITDA.* While Adjusted EBITDA is not a U.S. GAAP measurement, we believe it is useful in evaluating our operating performance compared to that of other companies because the calculation of Adjusted EBITDA generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and other discrete items, which we believe are not indicative of overall operating performance. We use Adjusted EBITDA to evaluate the operating performance of our business and aid in the period-to-period comparability.

	•	*Adjusted Net Income.* While Adjusted net income is not a U.S. GAAP measurement, we believe it is useful in evaluating our operating performance compared to that of other


		companies because its calculation adjusts for items which we believe are not indicative of overall operating performance. We use Adjusted net income to evaluate the operating performance of our business and aid in period-to-period comparability.


	•	*Net Working Capital.* Net working capital is a measure calculated as total current assets minus total current liabilities. We believe it is useful in evaluating our operating performance compared to that of other companies because it is indicative of our ability to pay off our short-term liabilities without having to raise additional capital.

The following items are excluded from the computation of Adjusted EBITDA:


	•	*Provision for Income Taxes.* Our U.S. GAAP financial results include a provision for income taxes. Although we are subject to various federal, state and foreign taxes and the payment of such taxes is a necessary element of our operations, we exclude our provision for income taxes from our Adjusted EBITDA financial measure to provide period-to-period comparability of our operating results unassociated with the varying effective tax rates and uncertain tax position reserves to which we are subject.

	•	*Interest Income.* Our U.S. GAAP financial results include interest income. Although our investing activities are elements of our cost structure and provide us with the ability to generate returns for our owners, we exclude interest income from our Adjusted EBITDA financial measure to provide period-to-period comparability of our operating results unassociated with our investing activities.

	•	*Interest Expense.* Our U.S. GAAP financial results include interest expense. Although our borrowing activities are key elements of our cost structure and provide us with the ability to generate revenue and returns for our stockholders, we exclude interest expense from our Adjusted EBITDA financial measure to provide period-to-period comparability of our operating results unassociated with our capital structure or borrowing activities.

	•	*Depreciation and Amortization.* Our U.S. GAAP financial results include depreciation and amortization expense associated with capital expenditures and intangible assets acquired in transactions accounted for as business combinations. While the use of the capital equipment and intangible assets enable us to generate revenue for our business, we exclude depreciation and amortization expense from our Adjusted EBITDA financial measure to evaluate our operating results and to enable us to compare our financial results with other companies in our industry without regard to the historical acquisition costs of our assets.

	•	*Impairment of Upfront Fee.* Our U.S. GAAP financial results include an impairment of an upfront fee. Since the impairment of an upfront fee is not a normal, recurring part of our business, we exclude it from our Adjusted EBITDA financial measure to provide period-to-period comparability of our operating results. See Note 14 to our consolidated financial statements included elsewhere in this prospectus.

	•	*Public Offering Expenses.* Our U.S. GAAP financial results include public offering expenses. Since public offering expenses are not a normal, recurring part of our business, we exclude them from our Adjusted EBITDA financial measure to provide period-to-period comparability of our operating results.

	•	*Share-Based Compensation Expense.* Our U.S. GAAP financial results include share-based compensation expense which is composed of the fair value of each of our incentive awards under our stock option plans. While share-based compensation expense is required under the provisions of ASC 718, we exclude share-based compensation expense from our Adjusted EBITDA financial measure to enable us to compare our financial results with other companies in our industry.

	•	*Loss (income) from Discontinued Operations, Net of Taxes.* Our U.S. GAAP financial results include a loss from discontinued operations associated with businesses we no longer


		own and operate. While discontinued operations may arise in future periods, we exclude our gain or loss from discontinued operations from our Adjusted EBITDA financial measure to provide period-to-period comparability of our operating results unassociated with discontinued operations.


	•	*Other Income (Expenses), Net.* Our U.S. GAAP financial results include other income (expenses), net. Although we earn other income and incur other expenses in each period, we exclude other income (expenses), net from our Adjusted EBITDA financial measure, as we believe they are not indicative of our operating performance.

	•	*Foreign Exchange Gains (Losses), Net.* Our U.S. GAAP financial results include foreign exchange gains (losses), net. We exclude these from our Adjusted EBITDA financial measure, with the exception of our foreign currency losses incurred in Venezuela in 2009 and early 2010 related to specific transactions executed through the parallel market. These are reflected as a reduction of revenue in our Adjusted EBITDA as we believe this presentation is more indicative of our operating performance. See “ — Significant Issues Affecting Comparability from Period to Period — Venezuela Business” for further discussion of foreign currency losses and parallel market transactions in Venezuela.

Key Components of Operating Results

Revenue

Revenue is derived primarily from the following models:


	•	value-added distribution services revenue from sales of wireless devices to operators and retailers, net of returns, allowances and early payment discounts, and generally including the cost of devices we resell;

	•	fixed or variable fee arrangements that contain contingent incentive compensation based on performance, designed to link a portion of our revenue to our performance relative to both qualitative and quantitative goals;

	•	a “cost plus margin” arrangement for specific services performed under a contract; and

	•	a “gain-sharing” arrangement, under which we typically earn a percentage of savings we generate for our customers.

Our value-added distribution services revenue from sales of wireless devices is subject to product availability and seasonal fluctuations as a result of holidays, manufacturer and operator promotions and other events affecting customer demand, including the introduction of new products and general economic conditions, and represents the majority of our revenue, including the cost of devices we resell. As a result, we generally experience higher revenue in the second half of the year, particularly in the fourth quarter due to the holiday season, and weaker sales in the first half of the year.

Our revenue generated by fixed or variable fee or cost plus margin arrangements is dependent on our ability to perform and maintain service contracts and less dependent on seasonality fluctuations or other cost savings cycles. The fees earned under gain-sharing arrangements depend on the level of savings we achieve for our customers and typically decrease over the term of the contract as cost savings opportunities are identified and remaining opportunities for cost savings diminish.

Cost of Revenue

Cost of revenue for sales of wireless devices consists of direct costs incurred for services rendered. Our cost of revenue also includes the cost of the wireless devices and accessories that we sell, net of any discounts that we receive from our manufacturer customers, commissions to direct

sales agents, freight, insurance, import duties, warranty costs, royalties, provisions for excess and obsolete inventories.

Gross Profit

Gross profit is driven by revenue and the margins we earn on that revenue. Margins fluctuate based on the mix of products sold and services rendered, variations in other costs of revenue and fluctuations in gain-sharing revenue. Our overall gross profits may vary from period to period depending largely on mix of services provided and products distributed, seasonality and the lifecycle of our various contracts with our customers. Our value-added distribution services are lower margin relative to our other services and vary with the type of device that we distribute, with higher value devices such as smartphones generating higher margins for us relative to basic phones.

In certain distribution contracts for large customers, the prices of the wireless devices that we sell are generally negotiated directly between the manufacturers and our operator customers. In such cases, we earn an agreed-upon margin, and, in some instances, we are guaranteed minimum payments from our manufacturer customers (even where the purchase price payable by the customer is subsequently reduced). In other cases, we play an active role in negotiating the sales prices or fees that determine our margins. In our other, non-distribution services, the margins we earn on these services vary depending on the nature of the service and the fee arrangement in place which are negotiated directly between us and our customers. With the exception of services under gain sharing arrangements where the gross margins decline over the lifecycle of the contract, our gross margins for our other services are typically relatively stable over the term of the contract.

As discussed further in “—Significant Issues Affecting Comparability from Period to Period — Venezuela Business,” our gross profits and gross margins were affected in 2009 and early 2010 by the highly inflationary economy in Venezuela.

Selling, General and Administrative

Our selling, general and administrative expenses consist primarily of personnel costs, benefits, facility expenses, administrative costs, information technology costs, professional fees and selling and marketing costs. Selling, general and administrative expenses also include share-based compensation expense. The selling, general and administrative expenses that are directly attributable to a region’s operations are recorded by that region, and corporate selling, general and administrative expenses relating to our corporate headquarters are allocated to our regions based on a combination of factors, including revenue and earnings.

We expect selling, general and administrative expenses to increase as we expand our business and hire additional personnel. To the extent that our revenue grows, we expect our selling, general and administrative expenses as a percentage of our revenue to decrease as we continue to leverage our fixed and discretionary selling, general and administrative expenses. As with most of our operations, we can adjust our cost structure related to our business based on the actual amount of services contracted.

Provision for Bad Debts

Historically, our bad debt provision has been low, at less than 0.25% of our revenue in each of the last three years.

Depreciation and Amortization

Depreciation and amortization expense relates primarily to leasehold improvements, computer equipment and software, furniture, fixtures, equipment and warehouse handling and storage equipment. We also record amortization expense related to intangible assets.

Public Offering Expenses

Public offering expenses are comprised of certain expenses incurred in preparation for our initial public offering.

Interest Income

Interest income is comprised of interest earned on bank deposits and interest we collect from customers for past due payments on accounts receivable.

Interest Expense

Interest expense consists primarily of the costs of our borrowings under our ABL Revolver and other credit facilities, the costs associated with letters of credit and the amortization of loan costs. In addition, starting in December 2010, we had a fixed interest expense related to our 2016 Notes.

Other Income (Expenses), Net

Other income (expenses), net includes non-operating gains and losses, including our share of income (loss) from Brightstar Europe and investment gains, losses and other than temporary impairments. Since 2010, other income (expenses), net has also included rental income and depreciation related to investment property acquired in Venezuela during 2009 and 2010.

Foreign Exchange Gains (Losses), Net

We operate in many countries where the exchange rates of local currencies for U.S. dollars fluctuate. In countries where our foreign subsidiaries use the local currency as their functional currency, foreign exchange gains and losses arise in connection with transactions denominated in a currency other than that functional currency. Additionally, in countries where our foreign subsidiaries use the U.S. dollar as their functional currency, foreign exchange gains and losses arise when monetary assets and liabilities denominated in foreign currencies are re-measured into U.S. dollars for consolidated financial reporting purposes. Foreign exchange gains and losses are included in our consolidated statement of operations, net of gains (losses) from forward contracts used to hedge currency risks. See “—Significant Issues Affecting Comparability from Period to Period — Worldwide Currency Fluctuations” for a discussion regarding the effect of currency devaluations in 2008 on our business.

Provision for Income Taxes

The provision for income taxes includes federal, state, local and foreign taxes. Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying values and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We evaluate the realizability of our deferred tax assets and establish a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized.

Non-Controlling Interest

Non-controlling interest reflects the portion of our consolidated earnings attributable to investors that hold non-controlling ownership interests in certain of our consolidated subsidiaries.

Prior to March 31, 2009, a third party held a 40.0% interest in our Australian operations and a 30.0% interest in our Singapore operations. On March 31, 2009, pursuant to a conversion agreement,

this investor elected to convert the non-controlling interest in our Singapore operations into shares of our Series C Redeemable Convertible Preferred Stock and concurrently we repurchased the investor’s 40.0% interest in our Australian operations for $40.0 million in cash. Also, on March 31, 2009, we acquired an additional 9.8% interest in one of our subsidiaries, decreasing the holdings of the non-controlling stockholder in that subsidiary to 39.2%.

Significant Issues Affecting Comparability from Period to Period

Certain significant items or events should be considered to better understand differences in our results of operations from period to period. We believe that the following items or events have significantly affected our financial results for prior periods and the results we may achieve in the future:

Venezuela Business

We have a significant presence in Venezuela. While Venezuela’s political and economic environment has been challenging, our operations in Venezuela have been profitable to date, and we have not been required to record any asset impairments for our Venezuela operations. However, the economic situation in Venezuela and related accounting treatment has caused significant variability in our reported results, as described below.

Venezuela’s economy was deemed to meet the definition of highly inflationary as of July 1, 2009. As a result of this determination, we changed the functional currency of our Venezuelan subsidiary to the U.S. dollar, the reporting currency of the parent, Brightstar Corp., effective July 1, 2009. As a consequence of this change in functional currency, the effect of all Venezuelan currency fluctuations are classified as foreign exchange gains and losses and included in the determination of earnings, beginning July 1, 2009.

Pursuant to certain foreign currency exchange control regulations in Venezuela, BCV centralizes the purchase and sale of foreign currency within the country. Under these regulations, the purchase and sale of foreign currency were required to be made at an official rate of exchange that is fixed from time to time by the Executive Branch and the BCV (the “Official Rate”). As of December 31, 2009, the exchange rate was BsF 2.150 per U.S. dollar. Prior to June 2010, we utilized an exemption from the Venezuelan legal prohibition against exchanging Venezuelan currency with other foreign currency that permitted certain transactions under an indirect “parallel” market of foreign currency exchange. The average rate of exchange in the parallel market was variable and at times differed significantly from the Official Rate.

We are required to measure all transactions in Venezuela using the Official Rate, including those actually settled using the parallel market, as we expect future dividends remitted from our Venezuelan subsidiary will be settled using the Official Rate. Accordingly, if we sold a handset for BsF 2.150, and had costs of BsF 1.075 on December 31, 2009, we accounted for such sale as $1 of revenue and $0.50 of gross profit (based on the Official Rate), even though our actual realization in U.S. dollars under the parallel market would reflect much lower revenue and lower gross profits in U.S. dollars. The higher reported revenue and gross profit in this example would be partially offset by foreign exchange losses resulting from execution of the trades in the parallel market. In 2009 and 2010, our reported gross profit and gross margin benefited significantly from the impact of recording Venezuelan sales at the Official Rate as opposed to the realized rate in the parallel market, primarily in the second and third quarters of 2009. The impact of this was a $85.6 million and $22.2 million increase in revenue in 2009 and 2010, respectively, offset by a corresponding foreign exchange loss. For management and region reporting purposes, we classify these losses as reductions in revenue in our Latin America region because we believe doing so provides a more meaningful measure of actual performance in Venezuela.

In the fourth quarter of 2009, we curtailed the use of the parallel market and began to require letters of credit from the customers’ banks confirmed by banks in the United States as guarantee of

payment for our product sales to our Venezuelan customers. In addition to this form of sales transaction, we continued to occasionally execute transactions through the parallel market through early 2010.

On January 8, 2010, the Venezuelan government announced its intention to devalue its currency and move to a two-tier exchange structure, effective January 11, 2010: a 4.30 BsF rate to the USD for transactions deemed priorities by the government and a 2.60 BsF rate to the USD for other transactions. The latter rate was applicable to our operations in Venezuela. In May 2010, the Venezuelan government enacted reforms to its exchange regulations to close the parallel market. In early June 2010, the Venezuelan government introduced additional foreign exchange regulations under SITME, a newly regulated system, which is controlled by the BCV. The SITME imposes volume restrictions on an entity’s foreign trading activity. Foreign exchange transactions occurring after SITME began in June 2010 and which are not conducted through CADIVI or SITME may not comply with the amended exchange regulations. As a result, we further curtailed our parallel market activity in the first half of 2010 and no longer conduct transactions through a parallel market in Venezuela.

In December 2010, the Venezuelan government announced a currency devaluation, effective January 2011, wherein the Bolivar would have one set government rate, eliminating the previously existing BsF 2.60 rate to the USD for transactions deemed priorities by the government. This announcement resulted in one official rate of BsF 4.30 to the USD for all transactions. This change had no impact on our operations as the BsF 4.30 rate to the USD was the existing rate applicable to our operations in Venezuela. As a result of such change, we expect that our revenue and gross profits in Venezuela on a reported basis (prior to any offset for foreign currency gains and losses) will more accurately reflect our actual results.

In 2010, our sales to customers in Venezuela represented 10.5% of our consolidated revenue compared to 19.4% in 2009 and 18.4% in 2008. The decrease in revenue share in 2010 relative to 2009 was primarily attributable to higher growth in our other geographic regions and, to a lesser extent, to the Venezuelan government revising its foreign exchange laws to prohibit private trading of foreign currency. The increase in revenue in 2009 relative to 2008 was mainly attributable to the pricing effect of the highly inflationary economy in Venezuela, as further discussed above.

Worldwide Currency Fluctuations

In 2008, when the major currencies around the world devalued in relation to the U.S. dollar, our operations were exposed and we suffered realized and unrealized foreign exchange losses, which were reflected in 2008, principally as a result of transactions denominated in U.S. dollars. We recognized net foreign exchange losses of $25.1 million in 2008 in connection with these currency fluctuations. The major losses were reflected in the Brazilian real, Mexican peso and Chilean peso.

We now use a hedging strategy to protect against an increase in the cost of forecasted foreign currency denominated transactions where markets exist for hedging instruments. Our objective is to minimize our exposure to these risks through a combination of normal operating activities, or natural hedges, and the utilization of foreign currency contracts to manage our exposure on the transactions denominated in currencies other than the applicable functional currency. Contracts are executed with creditworthy banks and other institutions and are denominated in currencies of major industrial countries. In certain cases, including Venezuela, derivative hedging instruments are not available. In those circumstances, we use a combination of strategies to the extent feasible, including but not limited to, natural hedges and adjustments to our business model, in order to partially mitigate our exposure to currency fluctuations.

Change in Non-Controlling Interest

On March 31, 2009, pursuant to a conversion agreement, an investor elected to convert a 30.0% interest in our Singapore operations into 493,828 shares of our Series C Redeemable Convertible Preferred Stock. Concurrently, we repurchased the same investor’s 40.0% interest in our Australia

operations for $40.0 million in cash. In addition, on March 31, 2009, we acquired an additional 9.8% interest in one of our subsidiaries, decreasing the holdings of the non-controlling stockholder in that subsidiary to 39.2%.

Results of Operations

The following tables set forth our consolidated statements of operations and regional data for the years ended December 31, 2008, 2009 and 2010:


	Year Ended December 31,									2008 Compared to 2009						2009 Compared to 2010
	2008			2009			2010			Variance			%			Variance			%
	(In thousands, except percentages)

Consolidated Statement of Operations Data:
Revenue	$	3,550,165		$	2,718,652		$	4,612,863		$	(831,513	)		(23.4	)%	$	1,894,211			69.7	%
Cost of revenue		3,254,167			2,354,016			4,218,979			(900,151	)		(27.7	)%		1,864,963			79.2	%

Gross profit		295,998			364,636			393,884			68,638			23.2	%		29,248			8.0	%

Operating expenses:
Selling, general and administrative		174,287			161,806			235,239			(12,481	)		(7.2	)%		73,433			45.4	%
Provision for bad debts		2,736			6,435			8,785			3,699			135.2	%		2,350			36.5	%
Depreciation and amortization		9,917			13,457			11,913			3,540			35.7	%		(1,544	)		(11.5	)%
Public offering expenses		—			—			7,333			—			*			7,333			*

Total operating expenses		186,940			181,698			263,270			(5,242	)		(2.8	)%		81,572			44.9	%

Operating income		109,058			182,938			130,614			73,880			67.7	%		(52,324	)		(28.6	)%

Other income (expenses):
Interest income		14,206			21,278			7,139			7,072			49.8	%		(14,139	)		(66.5	)%
Interest expense		(34,746	)		(17,102	)		(29,025	)		17,644			(50.8	)%		(11,923	)		69.7	%
Other income (expenses), net		(923	)		(3,459	)		2,159			(2,536	)		274.8	%		5,618			(162.4	)%
Foreign exchange losses, net		(25,117	)		(80,915	)		(33,263	)		(55,798	)		222.2	%		47,652			(58.9	)%

Total other expenses		(46,580	)		(80,198	)		(52,990	)		(33,618	)		72.2	%		27,208			(33.9	)%

Income from continuing operations before provision for income taxes		62,478			102,740			77,624			40,262			64.4	%		(25,116	)		(24.4	)%
Provision for income taxes		35,402			46,999			36,938			11,597			32.8	%		(10,061	)		(21.4	)%

Income from continuing operations		27,076			55,741			40,686			28,665			105.9	%		(15,055	)		(27.0	)%
(Loss) income from discontinued operations, net of taxes		(14,304	)		2,595			(921	)		16,899			(118.1	)%		(3,516	)		(135.5	)%

Net income		12,772			58,336			39,765			45,564			356.8	%		(18,571	)		(31.8	)%
Less: Net income attributable to non-controlling interest		18,107			4,095			2,385			(14,012	)		(77.4	)%		(1,710	)		(41.8	)%

Net (loss) income attributable to Brightstar Corp.	$	(5,335	)	$	54,241		$	37,380		$	59,576			*		$	(16,861	)		(31.1	)%


*		Percentage change not meaningful.

Regional Highlights


	Year Ended December 31,
	2008			2009			2010
	(In thousands, except percentages)

U.S./Canada:
Revenue	$	650,611		$	724,161		$	1,472,593
Gross profit		44,752			58,769			85,350
Gross margin		6.9	%		8.1	%		5.8	%
Operating income		16,050			26,504			31,438
Latin America(1):
Revenue	$	2,700,279		$	1,733,522		$	2,749,695
Gross profit		174,284			140,014			197,635
Gross margin		6.5	%		8.1	%		7.2	%
Operating income		56,486			38,383			63,665
Asia Pacific:
Revenue	$	199,275		$	175,373		$	367,185
Gross profit		76,962			80,257			92,360
Gross margin		38.6	%		45.8	%		25.2	%
Operating income		37,083			35,455			39,662
Unallocated Corporate & Other:
Revenue	$	—		$	—		$	1,181
Gross profit		—			—			(3,670	)
Operating income		(561	)		(3,000	)		(26,360	)
Consolidated Total(2):
Revenue	$	3,550,165		$	2,718,652		$	4,612,863
Gross profit		295,998			364,636			393,884
Gross margin		8.3	%		13.4	%		8.5	%
Operating income		109,058			182,938			130,614


(1)		Excludes the effect of the Venezuela increase in revenue in 2009 and early 2010 related to specific transactions executed through the parallel market. See — Significant Issues Affecting Comparability from Period to Period—Venezuela Business.”

(2)		Includes the effect of the Venezuela increase in revenue related to specific transactions executed through the parallel market.

Segment Reporting Reconciliation

As discussed in Note 17, “Segment Reporting,” to our consolidated financial statements located elsewhere in this prospectus and “ — Significant Issues Affecting Comparability from Period to Period — Venezuela Business,” we entered into transactions that were settled in a parallel market active in 2009 and early 2010 in Venezuela, all of which were translated into U.S. dollars using the Official Rate of Venezuela. As a result, our consolidated results of operations reflect higher gross margins in 2009 and early 2010 than comparable periods, the effect of which was partially offset by foreign exchange losses. For management and segment reporting purposes, we classify the foreign exchange loss on these transactions as a reduction in revenue, which we believe provides a more comparable measure of revenue, gross profit, gross margins and operating income on a segment basis. We believe this approach is the most consistent with the underlying economics of these transactions and provides the most meaningful measures to assess the results of operations and business trends in our Latin America region. As a result of the foregoing, our revenue, gross profit, gross margin and operating income included in our consolidated results of operations will differ from the aggregate revenue, gross profit and operating income for our regions, as follows.


	Year Ended December 31,
	2008		2009		2010
	(In thousands)

U.S./Canada region	$	650,611	$	724,161	$	1,472,593
Latin America region		2,700,279		1,733,522		2,749,695
Asia Pacific region		199,275		175,373		367,185
Corporate and other		—		—		1,181

Region total		3,550,165		2,633,056		4,590,654
Effect of foreign exchange loss from Venezuela(1)		—		85,596		22,209

Consolidated total	$	3,550,165	$	2,718,652	$	4,612,863


(1)		See “ — Significant Issues Affecting Comparability from Period to Period — Venezuela Business.”

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

Revenue

Consolidated revenue increased 69.7% from $2.7 billion in 2009 to $4.6 billion in 2010 driven by strong revenue growth in all regions.

Revenue by Region


	Year Ended
	December 31,
	2009		2010		Variance			%
	(In thousands, except percentages)

U.S./Canada region	$	724,161	$	1,472,593	$	748,432			103.4	%
Latin America region		1,733,522		2,749,695		1,016,173			58.6	%
Asia Pacific region		175,373		367,185		191,812			109.4	%
Corporate and other		—		1,181		1,181			*

Region total		2,633,056		4,590,654		1,957,598			74.4	%
Effect of foreign exchange loss from Venezuela(1)		85,596		22,209		(63,387	)		(74.1	)%

Consolidated total	$	2,718,652	$	4,612,863	$	1,894,211			69.7	%


*		Percentage change not meaningful.

(1)		See “—Significant Issues Affecting Comparability from Period to Period — Venezuela Business.”

Revenue in our U.S./Canada region increased 103.4% from $724.2 million in 2009 to $1.5 billion in 2010, primarily as a result of the growth of our value-added distribution services with new and existing customers and in particular by further penetration into the retail channel with significant sales to a new retailer.

Revenue in our Latin America region increased by 58.6% from $1.7 billion in 2009 to $2.7 billion in 2010, driven by increased demand generated as a result of the overall economic recovery, including increased demand driven by the recovery of local currencies relative to the U.S. dollar which makes wireless devices more affordable. Growth in our sales through our assembly facility in Tierra Del Fuego, Argentina, was particularly strong, as was the revenue growth in Mexico. Revenue in this region for the year ended December 31, 2010 was affected by an $11.0 million impairment charge of upfront fees related to the sale of information technology devices to one of our customers in Latin America, offset by $10.4 million in revenue related to a sale of software licenses to an unrelated party

under a distribution and referral agreement with a supplier in Latin America. See Note 14 to our consolidated financial statements included elsewhere in this prospectus.

Revenue in our Asia Pacific region increased 109.4% from $175.4 million in 2009 to $367.2 million in 2010, primarily as a result of our expansion into new countries in this region and the high growth of our value-added distribution services, which was particularly strong in Turkey, Malaysia and Hong Kong.

Gross Profit

Consolidated gross profit increased 8.0% from $364.6 million in 2009 to $393.9 million in 2010, driven by an increase in consolidated revenue which included the effect of the Venezuela foreign currency related increase in revenue. The impact was significantly lower in 2010 compared to 2009 due to the decrease in the volume of our parallel market transactions in Venezuela in 2010. See “ — Significant Issues Affecting Comparability from Period to Period — Venezuela Business.” The increase in consolidated revenue was offset by a decrease in consolidated gross margin. Consolidated Adjusted gross profit increased by 37.1% from $279.0 million in 2009 to $382.7 million in 2010, driven by increase in consolidated revenue, offset by lower margins as a result of the relative higher growth of our value-added distribution services compared to our other services in this period. For a reconciliation of Adjusted gross profit to gross profit, see Note (3) in “Prospectus Summary — Summary Consolidated Financial and Other Data.” Our Adjusted consolidated gross margin was 10.3% in 2009 and 8.3% in 2010.

Gross Profit by Region


	Year Ended December 31,
	2009 Gross			2009 Gross			2010 Gross			2010 Gross
	Profit			Margin			Profit			Margin			Variance			%
				(In thousands, except percentages)

U.S./Canada region		58,769			8.1	%		85,350			5.8	%		26,581			45.2	%
Latin America region		140,014			8.1	%		197,635			7.2	%		57,621			41.2	%
Asia Pacific region		80,257			45.8	%		92,360			25.2	%		12,103			15.1	%
Corporate and other		—			*			(3,670	)		*			(3,670	)		*

Region total		279,040			10.6	%		371,675			8.1	%		92,635			33.2	%
Effect of foreign exchange loss from Venezuela		85,596			*			22,209			*			(63,387	)		*

Consolidated total		364,636			13.4	%		393,884			8.5	%		29,248			8.0	%
Effect of foreign exchange loss from Venezuela		(85,596	)		*			(22,209	)		*			63,387			*
Impairment of upfront fee		—			*			11,005			*			11,005			*

Adjusted gross profit	$	279,040			10.3	%	$	382,680			8.3	%	$	103,640			37.1	%


*		Percentage change not meaningful.

U.S./Canada region gross profit increased 45.2% from $58.8 million in 2009 to $85.4 million in 2010, primarily as a result of increased revenue, partially offset by decreased gross margin. U.S./Canada gross margin decreased from 8.1% in 2009 to 5.8% in 2010 as a result of increased business with a retailer that yielded significant revenue but lower margins as compared to business with other customers. Additionally, gross margin was impacted by certain reserves booked in 2010, part of which we expect to recover in 2011.

Latin America region gross profit increased 41.2% from $140.0 million in 2009 to $197.6 million in 2010, primarily as a result of strong revenue growth. Latin America gross margin decreased from 8.1% in 2009 to 7.2% in 2010, primarily as a result of our value-added distribution services growing

faster than our other services, as well as due to the effect of the $11.0 million impairment charge of upfront fees in 2010. Our 2010 Adjusted gross margin in Latin America, which excludes the impact of the impairment charge of upfront fees, was 7.6%.

Asia Pacific region gross profit increased 15.1% from $80.3 million in 2009 to $92.4 million in 2010, driven primarily by increased revenue, partially offset by decreased gross margin. Asia Pacific gross margin decreased from 45.8% in 2009 to 25.2% in 2010, driven primarily by a significant increase in revenue derived from value-added distribution services, which carries a lower margin relative to the average margin derived from other services in the Asia Pacific region. The gross margin decline was also driven by the normal lifecycle of certain revenue derived under gain sharing arrangements where gross margins decline over the life of the contract as the savings realized for our customers are achieved. We expect the gross margin for the Asia Pacific region will decrease as revenue from our value-added distribution services continues to grow faster than revenue from our other services throughout the region.

Selling, General and Administrative

Consolidated selling, general and administrative expenses increased 45.4% from $161.8 million in 2009 to $235.2 million in 2010, primarily as a result of the costs of increased staffing to support our growth, including payroll, benefits and training. This increase was primarily due to the growth of certain subsidiaries, particularly the U.S., Tierra del Fuego and Mexico subsidiaries, all of which experienced significant year-over-year growth. Additionally, we invested in our global supply chain services organization headquartered in Cambridge, Massachusetts which was formed in late 2009.

Consolidated selling, general and administrative expenses as a percent of revenue decreased from 6.0% of consolidated revenue in 2009 to 5.1% in 2010. This decrease was driven by our improved leverage of fixed and discretionary selling, general and administrative expenses over a higher revenue base.

We expect selling, general and administrative expenses to increase as we expand our business. However, to the extent that our revenue grows, we expect our selling, general and administrative as a percentage of revenue to decrease as we continue to leverage our fixed and discretionary selling, general and administrative expenses over a higher revenue base.

Selling, General and Administrative by Region


	Year Ended December 31,
	2009		2010		Variance		%
	(In thousands, except percentages)

U.S./Canada region	$	23,268	$	38,885	$	15,617		67.1	%
Latin America region		69,551		99,696		30,145		43.3	%
Asia Pacific region		31,118		38,100		6,982		22.4	%
Corporate and other		37,869		58,558		20,689		54.6	%

Consolidated total	$	161,806	$	235,239	$	73,433		45.4	%

Selling, general and administrative expenses in our U.S./Canada region increased 67.1% from $23.3 million in 2009 to $38.9 million in 2010, primarily as a result of increased staffing to support business growth. U.S./Canada region selling, general and administrative expenses as a percentage of revenue decreased from 3.2% of region revenue in 2009 to 2.6% in 2010, primarily due to our increased sales and resulting operating leverage as we started to benefit from our investment in selling, general and administrative expenses which are being used to support higher revenues.

Selling, general and administrative expenses in our Latin America region increased 43.3% from $69.6 million in 2009 to $99.7 million in 2010, primarily as a result of increased staffing to support

business growth, particularly in our Tierra del Fuego and Mexico subsidiaries. As a percentage of region revenue, Latin America region selling, general and administrative expenses as a percentage of revenue decreased from 4.0% in 2009 to 3.6% in 2010.

Selling, general and administrative expenses in our Asia Pacific region increased 22.4% from $31.1 million in 2009 to $38.1 million in 2010, primarily as a result of increased staffing to support business growth, particularly in Turkey. Asia Pacific region selling, general and administrative expenses as a percentage of revenue decreased from 17.7% of region revenue in 2009 to 10.4% in 2010, due to improved leveraging of fixed and discretionary selling, general and administrative expenses, but also as a result of the effect of our value-added distribution services growing faster than our other services.

Corporate and other general and administrative expenses increased 54.6% from $37.9 million in 2009 to $58.6 million in 2010. The increase in 2010 was driven primarily by costs of increased staffing, professional fees and travel to support business growth, as well as the investment in our global supply chain services organization headquartered in Cambridge, Massachusetts. Corporate and other selling, general and administrative expenses were allocated to our regions, based on a combination of factors, including revenue and earnings, as follows:


	Year Ended December 31,
	2009		2010		Variance		%
	(In thousands, except percentages)

U.S./Canada region	$	5,528	$	10,753	$	5,225		94.5	%
Latin America region		18,485		21,342		2,857		15.5	%
Asia Pacific region		10,856		11,390		534		4.9	%
Unallocated Corporate and other(a)		3,000		15,073		12,073		*

Corporate and other	$	37,869	$	58,558	$	20,689		54.6	%


*		Percentage change not meaningful.

(a)		Unallocated Corporate and other expenses in 2010 consisted primarily of investments in our global supply chain services organization, including payroll, consulting and travel costs.

Provision for Bad Debts

Our consolidated provision for bad debts increased from $6.4 million in 2009 to $8.8 million in 2010. This increase is attributable to a $7.5 million provision recorded against sales made to a distributor in Mexico in 2010 due to the distributor’s financial condition. No additional sales have been made to the distributor since April 2010, and we continue to pursue recoverability of these receivables based on guarantees and collateral pledges that we hold. There is no guarantee, however, that we will recover on all of our claims.

As a percentage of consolidated revenue, our consolidated provision for bad debts was less than 0.25% in 2009 and 2010.

Provision for Bad Debts by Region


	Year Ended December 31,
	2009		2010		Variance			%
	(In thousands, except percentages)

U.S./Canada region	$	964	$	1,298	$	334			34.7	%
Latin America region		5,281		7,338		2,057			39.0	%
Asia Pacific region		190		19		(171	)		*
Corporate and other		—		130		130			*

Consolidated total	$	6,435	$	8,785	$	2,350			36.5	%


*		Percentage change not meaningful.

Depreciation and Amortization

Consolidated depreciation and amortization expense decreased 11.5% from $13.5 million in 2009 to $11.9 million in 2010, principally as a result of certain adjustments made to the depreciation lives resulting in accelerated depreciation recorded in Mexico in 2009, which did not recur in 2010. Depreciation and amortization expense is consistent as a percentage of revenue at less than 0.5% for both periods.

Depreciation and Amortization by Region


	Year Ended December 31,
	2009		2010		Variance			%
	(In thousands, except percentages)

U.S./Canada region	$	2,505	$	2,976	$	471			18.8	%
Latin America region		8,314		5,594		(2,720	)		(32.7	)%
Asia Pacific region		2,638		3,189		551			20.9	%
Corporate and other		—		154		154			*

Consolidated total	$	13,457	$	11,913	$	(1,544	)		(11.5	)%


*		Percentage change not meaningful.

Public Offering Expenses

During 2010, we incurred certain expenses in preparation for our initial public offering.

Operating Income

For the reasons described above, and including the impact of parallel market transactions in Venezuela, which increase our revenue, consolidated operating income decreased 28.6% from $182.9 million in 2009 to $130.6 million in 2010. Excluding these effects amounting to $85.6 million in 2009 and $22.2 million in 2010, operating income was $97.3 million and $108.4 million in 2009 and 2010, respectively.

Operating Income by Region


	Year Ended December 31,
	2009			2010			Variance			%
	(In thousands, except percentages)

U.S./Canada region	$	26,504		$	31,438		$	4,934			18.6	%
Latin America region		38,383			63,665			25,282			65.9	%
Asia Pacific region		35,455			39,662			4,207			11.9	%
Corporate and other		(3,000	)		(26,360	)		(23,360	)		*

Region total		97,342			108,405			11,063			11.4	%
Effect of foreign currency loss from Venezuela		85,596			22,209			(63,387	)		(74.1	)%

Consolidated total	$	182,938		$	130,614		$	(52,324	)		(28.6	)%


*		Percentage change not meaningful.

Operating income in all regions increased primarily as a result of increased gross profit driven by increased revenue offset by lower gross margins and higher selling, general and administrative expenses.

Operating income for our U.S./Canada region increased 18.6% from $26.5 million in 2009 to $31.4 million in 2010.

Operating income for our Latin America region increased 65.9% from $38.4 million in 2009 to $63.7 million in 2010. In addition to the revenue, gross margin and selling, general and administrative expense drivers, operating income was affected by an increase in the region’s provision for bad debts, offset by the decrease in depreciation and amortization.

Operating income for our Asia Pacific region increased 11.9% from $35.5 million in 2009 to $39.7 million in 2010.

Interest Income

Consolidated interest income is generated primarily from cash deposits, principally located outside of the United States, and decreased from $21.3 million in 2009 to $7.1 million in 2010. This decrease was attributable primarily to a decrease of interest bearing deposits in Venezuela from cash provided by several major customers as guarantee. Such deposits were returned as accounts receivable were collected.

Interest Expense

Interest expense increased from $17.1 million in 2009 to $29.0 million in 2010, primarily as a result of increased borrowings to fund working capital and investing requirements.

Other Income (Expenses), Net

Other income (expenses), net increased from $(3.5) million in 2009 to $2.1 million in 2010, primarily as a result of a $3.7 million write-off of equity and cost method investments in 2009 and a $1.1 million write-off of certain equipment in connection with a contract termination in 2009, which did not recur in 2010. Additionally, increased other income resulted from higher earnings in 2010 for Brightstar Europe, which we account for under the equity method, with our share of income increasing from $1.8 million in 2009 to $2.4 million in 2010.

Foreign Exchange Losses, Net

Our net foreign exchange loss decreased from $80.9 million in 2009 to $33.3 million in 2010, primarily as a result of the decrease in parallel market transactions in Venezuela.

Provision for Income Taxes

Our provision for income taxes decreased from $47.0 million in 2009 to $36.9 million in 2010, representing effective tax rates of 45.7% for 2009 and 47.6% for 2010. The effective income tax rate differed from the statutory federal tax rate of 35% primarily due to (a) a discrete item related to a non-tax deductible book hyperinflationary currency deduction, (b) an increase in the valuation allowance recorded for additional deferred tax assets and (c) a discrete item related to changes in the foreign exchange rates used in the calculation of the underlying foreign tax credits’ effective rate, which related to a deemed foreign dividend of our Australian subsidiary that arose pursuant to a U.S. income tax election we made. We are currently reviewing different strategies which we believe could result in our effective tax rate approximating the statutory federal tax rate.

Income taxes are provided based upon our anticipated underlying annual effective federal, state and foreign income tax rates, adjusted, as necessary, for any other tax matters occurring during the period. As we operate in various tax jurisdictions, our effective tax rate is also dependent upon our geographic earnings mix. See Note 12, “Income Taxes,” to our consolidated financial statements included elsewhere in this prospectus.

Income from Continuing Operations

For the reasons described above, income from continuing operations decreased 27.0% from $55.7 million in 2009 to $40.7 million in 2010.

(Loss) Income from Discontinued Operations, Net of Taxes

(Loss) income from discontinued operations decreased from $2.6 million in 2009 to $(0.9) million in 2010.

Non-Controlling Interest

Consolidated earnings attributable to non-controlling interests decreased from $4.1 million in 2009 to $2.4 million in 2010, primarily as a result of the redemption of non-controlling interests in our Australian and Singapore operations on March 31, 2009.

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008

Revenue

Consolidated revenue decreased 23.4% from $3.6 billion in 2008 to $2.7 billion in 2009, driven by adverse effects from global economic conditions in 2009 which impacted the demand for wireless devices globally. The decline was due to the market share decline of one of our manufacturer customers, which formerly made up a large portion of our revenue, particularly in Latin America. Partially offsetting these factors were the expansion of our business into new countries, such as Turkey, the addition of a significant new retail customer in the United States and new service contracts with customers in New Zealand and Hong Kong.

Revenue by Region


	Year Ended December 31,
	2008		2009		Variance			%
	(In thousands, except percentages)

U.S./Canada region	$	650,611	$	724,161	$	73,550			11.3	%
Latin America region		2,700,279		1,733,521		(966,758	)		(35.8	)%
Asia Pacific region		199,275		175,373		(23,902	)		(12.0	)%

Region total		3,550,165		2,633,055		(917,110	)		(25.8	)%
Effect of foreign exchange loss from Venezuela		—		85,597		85,597			*

Consolidated total	$	3,550,165	$	2,718,652	$	(831,513	)		(23.4	)%


*		Percentage change not meaningful.

Revenue in our U.S./Canada region increased 11.3% from $650.6 million in 2008 to $724.2 million in 2009, primarily as a result of the addition of new retailer customers and the expansion of our business in the retail and dealer agent channels.

Revenue in our Latin America region decreased 35.8% from $2.7 billion in 2008 to $1.7 billion in 2009, driven primarily by the effects of global economic conditions and the market share decline of one of our manufacturer customers. We also lost value-added distribution services business with an operator that reduced our sales by $340.3 million year over year. In addition, the weakening of certain currencies in this region relative to the U.S. dollar further contributed to the decline in revenue as it made wireless devices less affordable to end users in this region. The increased sales of smartphones and other devices we added to our distribution portfolio partially mitigated these adverse effects.

Revenue in our Asia Pacific region decreased 12.0% from $199.3 million in 2008 to $175.4 million in 2009, primarily as a result of a decline in our value-added distribution services revenue in the region as we exited certain geographies which did not meet our return requirements, partially offset by our expansion into Turkey and the implementation of new service contracts with customers in New Zealand and Hong Kong.

Gross Profit

Consolidated gross profit increased 23.2% from $296.0 million in 2008 to $364.6 million in 2009, as the revenue from parallel market transactions in Venezuela in 2009 substantially increased margins offsetting the effect of a 23.4% decrease in consolidated revenue. See “ — Significant Issues Affecting Comparability from Period to Period — Venezuela Business.” Consolidated Adjusted gross profit decreased by 5.7% from $296.0 million in 2008 to $279.0 million in 2009, primarily due to the decrease in our consolidated revenue, partially offset by increasing margins as a result of our value-added distribution services decreasing at a much higher rate relative to our other services during this period. For a reconciliation of Adjusted gross profit to gross profit, see Note (3) in “Prospectus Summary — Summary Consolidated Financial and Other Data.”

Gross Profit by Region


	Year Ended December 31,
	2008 Gross		2008 Gross			2009 Gross		2009 Gross			Gross Profit
	Profit		Margin			Profit		Margin			Variance			%
	(In thousands, except percentages)

U.S./Canada region	$	44,752		6.9	%	$	58,769		8.1	%	$	14,017			31.3	%
Latin America region		174,284		6.5	%		140,014		8.1	%		(34,270	)		(19.7	)%
Asia Pacific region		76,962		38.6	%		80,257		45.8	%		3,295			4.3	%

Region total		295,998		8.3	%		279,040		10.6	%		(16,958	)		(5.7	)%
Effect of foreign exchange loss from Venezuela		—					85,596					85,596			*

Consolidated total	$	295,998		8.3	%	$	364,636		13.4	%	$	68,638			23.2	%


*		Percentage change not meaningful.

U.S./Canada region gross profit increased 31.3% from $44.8 million in 2008 to $58.8 million in 2009, primarily as a result of an increase in region revenue and an increase in region gross margin from 6.9% in 2008 to 8.1% in 2009. U.S./Canada region gross margin increased primarily as a result of a higher product mix of smartphones sales via certain retailers as well as growth of prepaid phones.

Latin America region gross profit decreased 19.7% from $174.3 million in 2008 to $140.0 million in 2009, primarily as a result of the decrease in Latin America region revenue. Latin America region gross margin increased from 6.5% in 2008 to 8.1% in 2009, driven primarily by a shift in sales from lower margin cell phones to higher margin smartphones, as well as a result of the decrease in the contribution of our value-added distribution services relative to our other services during this period.

Asia Pacific region gross profit increased 4.3% from $77.0 million in 2008 to $80.3 million in 2009, driven primarily by an increase in region gross margin from 38.6% in 2008 to 45.8% in 2009, partially offset by a decrease in region revenue. Asia Pacific gross margin increased in 2009 primarily due to the mix of services provided in the region.

Selling, General and Administrative

Consolidated selling, general and administrative expenses decreased 7.2% from $174.3 million in 2008 to $161.8 million in 2009, primarily as a result of decreases in variable expenses related to our response to decreased revenue resulting from the global economic conditions.

Consolidated selling, general and administrative expenses as a percent of revenue increased from 4.9% of consolidated revenue in 2008 to 6.0% in 2009, primarily as a result of the magnitude of the decrease in revenue being greater than the reduction in selling, general and administrative expenses.

Selling, General and Administrative by Region


	Year Ended December 31,
	2008		2009		Variance			%
	(In thousands, except percentages)

U.S./Canada region	$	22,141	$	23,268	$	1,127			5.1	%
Latin America region		90,629		69,551		(21,078	)		(23.3	)%
Asia Pacific region		28,334		31,118		2,784			9.8	%
Corporate and other		33,183		37,869		4,686			14.1	%

Consolidated total	$	174,287	$	161,806	$	(12,481	)		(7.2	)%

Selling, general and administrative expenses in our U.S./Canada region increased 5.1% from $22.1 million in 2008 to $23.3 million in 2009, primarily as a result of increased selling, general and administrative expenses to support the growth in this region. U.S./Canada region selling, general and administrative expenses as a percent of revenue decreased from 3.4% of region revenue in 2008 to 3.2% in 2009, primarily due to greater leveraging of fixed and discretionary region selling, general and administrative expenses.

Selling, general and administrative expenses in our Latin America region decreased 23.3% from $90.6 million in 2008 to $69.6 million in 2009, primarily as a result of our efforts to adjust to the overall economic conditions and the resulting revenue reduction experienced in this region. Latin America region selling, general and administrative expenses as a percent of revenue increased from 3.4% of region revenue in 2008 to 4.0% in 2009, primarily as a result of the de-leveraging of the Latin America region selling, general and administrative cost structure in 2009 due to considerable decreased region revenue.

Selling, general and administrative expenses in our Asia Pacific region increased 9.8% from $28.3 million in 2008 to $31.1 million in 2009, primarily as a result of administrative costs associated with the implementation of new service contracts and geographic expansion in the region. Asia Pacific region selling, general and administrative expenses as a percent of revenue increased from 14.2% of region revenue in 2008 to 17.7% in 2009 in anticipation of continued expansion in this region.

Corporate and other selling, general and administrative expenses increased 14.1% from $33.2 million in 2008 to $37.9 million in 2009. The increase in 2009 was driven primarily by professional fees related to public company readiness activities. Corporate and other selling, general and administrative expenses were allocated to our regions based on a combination of factors, including revenue and earnings, as follows:


	Year Ended December 31,
	2008		2009		Variance			%
	(In thousands, except percentages)

U.S./Canada region	$	4,659	$	5,528	$	869			18.7	%
Latin America region		19,176		18,485		(691	)		(3.6	)%
Asia Pacific region		9,348		10,856		1,508			16.1	%
Unallocated Corporate and other(a)		—		3,000		3,000			*

Corporate and other	$	33,183	$	37,869	$	4,686			14.1	%


*		Percentage change not meaningful.

(a)		Unallocated Corporate and other expenses in 2009 consisted of expenses incurred with our initiative of public company readiness, which are not allocated to our regions.

Provision for Bad Debts

Our consolidated provision for bad debts increased 135.2% from $2.7 million in 2008 to $6.4 million in 2009. As a percentage of consolidated revenue, our consolidated provision for bad debt was less than 0.25% in 2008 and 2009.

Provision for Bad Debts by Region


	Year Ended December 31,
	2008		2009		Variance		%
	(In thousands, except percentages)

U.S./Canada region	$	652	$	964	$	312		47.9	%
Latin America region		1,934		5,281		3,347		173.1	%
Asia Pacific region		150		190		40		26.7	%

Consolidated total	$	2,736	$	6,435	$	3,699		135.2	%

Depreciation and Amortization

Consolidated depreciation and amortization expense increased 35.7% from $9.9 million in 2008 to $13.5 million in 2009, driven primarily by leasehold improvements, computer equipment, software and furniture and fixtures placed in service for our new Miami headquarters location, which we commenced occupying in the second half of 2008, as well as certain adjustments made to the depreciation lives resulting in accelerated depreciation in Mexico.

Depreciation and Amortization by Region


	Year Ended December 31,
	2008		2009		Variance			%
	(In thousands, except percentages)

U.S./Canada region	$	1,251	$	2,505	$	1,254			100.2	%
Latin America region		6,058		8,314		2,256			37.2	%
Asia Pacific region		2,047		2,638		591			28.9	%
Corporate and other		561		—		(561	)		(100.0	)%

Consolidated total	$	9,917	$	13,457	$	3,540			35.7	%

Operating Income

For the reasons described above, and including the impact of parallel market transactions in Venezuela, which increased our revenue, consolidated operating income increased 67.7% from $109.1 million in 2008 to $182.9 million in 2009. Excluding these effects amounting to $85.6 million in 2009, operating income was $109.1 million and $97.3 million in 2008 and 2009, respectively.

Operating Income by Region


	Year Ended December 31,
	2008			2009			Variance			%
	(In thousands, except percentages)

U.S./Canada region	$	16,049		$	26,504		$	10,455			65.1	%
Latin America region		56,487			38,383			(18,104	)		(32.1	)%
Asia Pacific region		37,083			35,455			(1,628	)		(4.4	)%
Corporate and other		(561	)		(3,000	)		(2,439	)		434.8	%

Region total		109,058			97,342			(11,716	)		(10.7	)%
Effect of foreign currency loss from Venezuela		—			85,596			85,596			*

Consolidated total	$	109,058		$	182,938		$	73,880			67.7	%


*		Percentage change not meaningful.

Operating income for our U.S./Canada region increased 65.1% from $16.1 million in 2008 to $26.5 million in 2009, primarily as a result of increased gross profit, driven by revenue increases and gross margin improvements, slightly offset by increased selling, general and administrative expenses to support growth in the region.

Operating income for our Latin America region decreased 32.1% from $56.5 million in 2008 to $38.4 million in 2009, driven by the decrease in the region’s revenue, partially offset by increased margins and decreased selling, general and administrative expenses.

Operating income for our Asia Pacific region decreased 4.4% from $37.1 million in 2008 to $35.5 million in 2009, driven primarily by a decrease in revenue, increases in selling, general and administration expense and depreciation expense, offset by an increase in gross margin.

Interest Income

Consolidated interest income is generated primarily from cash deposits and increased 49.8% from $14.2 million in 2008 to $21.3 million in 2009. This increase was attributable primarily to interest bearing deposits in Venezuela from cash provided by several major customers as guarantee for future accounts receivable collections, partially offset by a decrease in interest bearing time deposits following the use of cash to complete the redemption of non-controlling interests in Australia in March 2009.

Interest Expense

Interest expense decreased 50.8% from $34.7 million in 2008 to $17.1 million in 2009, primarily as a result of a reduction in total outstanding debt and a decrease in LIBOR.

Other Income (Expenses), Net

Other income (expenses), net decreased from $(0.9) million in 2008 to $(3.5) million in 2009, principally as a result of a $4.0 million gain realized on the sale of investments in 2008, which did not recur in 2009, a $3.7 million write-off of equity and cost method investments in 2009 and a $1.1 million write-off of certain equipment in connection with a contract termination in 2009. Partially offsetting these factors were improved earnings in 2009 for Brightstar Europe, which we account for under the equity method, and a $2.1 million impairment of our investment in Brightstar Europe recognized in 2008, which did not recur in 2009.

Foreign Exchange Losses, Net

Our net foreign exchange loss increased $55.8 million from $25.1 million in 2008 to $80.9 million in 2009, primarily as a result of the effect of the highly inflationary economy in Venezuela in 2009,

partially offset by net gains generated in 2009 by transactions denominated in other currencies, mainly in Brazil which experienced a recovery of the Brazilian real during 2009. See “— Significant Issues Affecting Comparability from Period to Period — Venezuela Business.”

Provision for Income Taxes

Our provision for income taxes increased from $35.4 million in 2008 to $47.0 million in 2009, representing effective tax rates of 56.7% in 2008 and 45.7% in 2009. The primary reason our effective tax rate exceeded the U.S. federal statutory rate in 2009 was the partial modification of our non-distribution policy in 2009, which we expect will be repatriated to the U.S. in the future. The 2009 provision for taxes includes a $6.2 million deferred tax charge relating to undistributed earnings in Australia. The primary reason our effective tax rate exceeded the U.S. federal statutory rate in 2008 was foreign operating losses that did not benefit our effective tax rate due to the establishment of valuation reserves against them. As we operate in various tax jurisdictions, our effective tax rate is also dependent upon our geographic earnings mix.

Income from Continuing Operations

For the reasons described above, income from continuing operations increased 105.9% from $27.1 million in 2008 to $55.7 million in 2009.

(Loss) Income from Discontinued Operations, Net of Taxes

Income from discontinued operations increased from a loss of ($14.3) million in 2008 to income of $2.6 million in 2009, driven primarily by a subsidiary that was disposed of in 2009 following large operating losses in 2008 and the benefit of a $7.3 million insurance recovery in 2009 related to a disposed operation.

Non-Controlling Interest

Consolidated earnings attributable to non-controlling interests decreased from $18.1 million in 2008 to $4.1 million in 2009, primarily as a result of the redemption of non-controlling interests in our Australian and Singapore operations on March 31, 2009.

Quarterly Financial Data

The following table presents our unaudited condensed consolidated quarterly results of operations for the eight quarters ended December 31, 2010. The quarterly results of operations for each of the quarters in the years ended December 31, 2009 and 2010 have not been subjected to a SAS 100 review by our independent registered public accounting firm in accordance with Statement of Auditing Standards No. 100, “Interim Financial Information.” This table includes all adjustments, consisting only of normal recurring adjustments that we consider necessary for fair presentations of our financial position and operating results for the quarters presented:


	Mar 31,			Jun 30,		Sep 30,			Dec 31,		Mar 31,			Jun 30,			Sep 30,			Dec 31,
	2009			2009		2009			2009		2010			2010			2010			2010
	(In thousands, except per share data)
									(Unaudited)

Revenue(1)	$	625,132		$	598,505	$	646,122		$	848,893	$	767,377		$	1,049,794		$	1,136,315		$	1,659,377
Gross profit		60,316			87,624		120,976			95,720		84,699			94,424			97,207			117,554
Net income (loss) from continuing operations		6,130			25,265		18,442			5,904		(4,100	)		19,440			13,273			12,073
(Loss) income from discontinued operations, net of income taxes		(1,109	)		3,998		(294	)		—		(9	)		(532	)		(380	)		—

Net income (loss)	$	5,021		$	29,263	$	18,148		$	5,904	$	(4,109	)	$	18,908		$	12,893		$	12,073


(1)		Sales of wireless devices are seasonal with demand normally being highest in the fourth quarter.

Liquidity and Capital Resources

Comparative Cash Flows


	Year Ended December 31,
	2008			2009			2010
	(In thousands)

Cash and cash equivalents at end of period	$	122,057		$	239,859		$	159,161
Net cash provided by (used in) operating activities		229,866			248,201			(159,307	)
Net cash used in investing activities		(7,530	)		(84,338	)		(37,747	)
Net cash (used in) provided by financing activities		(194,583	)		(41,927	)		109,484

Net Cash Provided by (Used in) Operating Activities

During the year ended December 31, 2010, we used $159.3 million in net cash for operating activities, compared to $248.2 million of net cash provided by operating activities in 2009, primarily to fund working capital requirements to support business growth.

During the year ended December 31, 2009, we had $248.2 million in net cash provided by operating activities, compared to $229.9 million provided during the year ended December 31, 2008. The increase in cash provided by operating activities was primarily due to decreased working capital requirements as a result of decreased revenue in light of adverse economic conditions and our initiatives to reduce working capital requirements.

Historically, we have used cash as a result of increased working capital requirements driven by revenue growth. In the future, we will continue to adjust our growth and expansion plans based on our available working capital and market opportunities.

Net Cash Used in Investing Activities

Investing activities primarily reflect our equity and cost method investments, capital expenditures and proceeds from (or purchases of) short-term investments.

During the year ended December 31, 2010, we used $37.7 million in net cash in investing activities, compared to net cash used in investing activities of $84.3 million during the year ended December 31, 2009, reflecting equity and cost method investments in 2009 and 2010 of $26.1 million and $32.8 million, respectively, and an investment in office properties in Venezuela in 2009 and 2010 of $13.8 million and $27.8 million, respectively.

During the year ended December 31, 2009, we used net cash of $84.3 million in our investing activities compared to $7.5 million in 2008.

Capital expenditures, typically required for leasehold improvements, computer equipment and software and furniture, fixtures and warehouse equipment used in our operations, were $9.3 million during 2008 compared to $6.4 million during 2009 and $15.5 million during 2010. The increase in 2010 was driven primarily by investments in the U.S. and at our assembly facility in Tierra del Fuego, Argentina, to support our business growth. Capital expenditures are expected to range from $25 million to $30 million in 2011, principally to fund investments in infrastructure and applications. Additional capital expenditures include information technology upgrades or other special initiatives.

Net Cash (Used in) Provided by Financing Activities

During the year ended December 31, 2010, we generated $109.5 million in net cash from financing activities, compared to net cash used in financing activities of $41.9 million during 2009, reflecting net borrowings of $72.7 million in 2010 to fund working capital and investment requirements, including the issuance of our $250.0 million senior subordinated notes in November 2010 and net repayments of $176.0 million under our revolving credit facility.

During the year ended December 31, 2009, net cash used in financing activities was $41.9 million, including $49.9 million, net used to repay outstanding indebtedness under our existing revolving lines of credit and term loan, and $40.0 million used for the redemption of non-controlling interests in a subsidiary in the Asia Pacific region, partially offset by a decrease in restricted cash of $50.0 million.

During the year ended December 31, 2008, net cash used in financing activities was $194.6 million, including $127.9 million, net used to repay outstanding indebtedness under our then existing revolving lines of credit and term loan, an increase in restricted cash of $58.4 million and dividends of $5.4 million to our common stockholders.

Liquidity Overview

As of December 31, 2009, we had $239.9 million in unrestricted cash and cash equivalents. As of December 31, 2010, we had $159.2 million in unrestricted cash and cash equivalents.

Additionally, as of December 31, 2010, we had a gross borrowing capacity of $559.8 million under various credit facilities, based on facility credit lines less usage and reserves for letters of credit.

On November 30, 2010, we issued an aggregate of $250.0 million of 9.50% senior notes due December 1, 2016.

On December 23, 2010, we amended and restated our revolving credit facility and increased the facility size by $100.0 million to a total facility size of $500.0 million with an option to increase it to $600.0 million on an uncommitted basis.

Indebtedness

The following table sets forth our existing debt as of December 31, 2010:


						Gross
Debt	Country	Total Size		Outstanding		Availability(a)
		(In millions)

Revolving credit facility	United States	$	500.0	$	—	$	416.1
Senior notes	United States		250.0		250.0		—
Trade facilities	United States		100.0		64.2		36.3
Bank facilities — U.S. operations	United States		5.1		5.1		—
Bank facilities — foreign operations(b)	Various		254.4		134.5		107.4

Total		$	1,109.5	$	453.8	$	559.8


(a)		Gross availability is calculated based on total facility size less outstanding balance and reserves for letters of credit.

(b)		Includes Argentina, Australia, Brazil, Dominican Republic, Malaysia, Mexico, Peru, Singapore and Turkey bank facilities, but excludes United States bank facilities.

Revolving Credit Facility

As of December 31, 2010, we had a $500.0 million senior secured asset-based revolving credit facility with a syndicate of financial institutions as lenders, and PNC Bank, National Association (“PNC Bank”), as administrative agent. The borrowers are Brightstar Corp. and Brightstar US, Inc. and the ABL Revolver is guaranteed, jointly and severally, by our wholly owned existing and future domestic subsidiaries. The revolving facility funds working capital advances, letters of credit and general corporate purposes and is collateralized by the receivables, inventories, fixed assets and general intangibles of our U.S. subsidiaries and operations. The borrowing base consists primarily of 85% to 90% of eligible receivables plus 60% to 75% of eligible inventories. The facility was amended and restated on December 23, 2010, when we incorporated all executed amendments and included newly negotiated terms into one credit facility. The amendment increased the revolving credit facility to

$500.0 million and included an option to increase it to $600.0 million on an uncommitted basis. The ABL Revolver was further amended on April 8, 2011 to provide flexibility in respect of certain covenants relating to loans and investments and also included a waiver to raise additional capital through a future potential notes offering.

The ABL Revolver bears interest at the domestic rate plus 1.00% to 1.50% or Eurodollar Rate/LIBOR plus 2.00% to 2.50% (as defined in the ABL Revolver), depending on the average availability. We are also required to pay an unused facility fee ranging from 0.375% to 0.50% per annum, depending on the average undrawn availability. As of December 31, 2010, the ABL Revolver’s weighted average interest rate was 2.70%, there was $83.7 million in outstanding letters of credit, the balance of the ABL Revolver was $0.0 million.

The ABL Revolver contains customary events of default and covenants that restrict, among other things, making investments, incurring additional indebtedness or making capital expenditures in excess of specified amounts, creating liens and engaging in certain mergers or combinations without the prior written consent of the lenders. Many of the negative covenants, including dividend payments and loans and investments to foreign subsidiaries, are subject to a Fixed Charge Coverage Ratio incurrence test and minimum undrawn availability target. The ABL Revolver does not contain financial maintenance covenants, as long as we exceed a minimum average undrawn availability ratio for the reporting period.

Senior Notes due 2016

In November 2010, we issued and sold $250.0 million aggregate principal amount of 9.5% Senior Notes due December 1, 2016. Interest is payable in cash on each of June 1 and December 1, beginning on June 1, 2011. Prior to December 1, 2014, we may redeem all or a portion of the notes, plus accrued and unpaid interest, if any, to the redemption date, at a price of 100% of the principal amount of the notes redeemed plus an applicable “make-whole” premium. On or after December 1, 2014 we may redeem all or a portion of the notes, plus accrued and unpaid interest, if any, to the redemption date, at the prices set forth in the notes. In addition, prior to December 1, 2014, we may redeem up to 35% of the aggregate principal amount of the notes at a redemption price of 109.5% of the principal amount of the notes, plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds of one or more equity offerings. As of December 31, 2010, $250.0 million was outstanding.

The indenture contains certain covenants that, among other things, limit our ability to:


	•	incur additional debt;

	•	make certain payments, including dividends or other distributions, with respect to our capital stock, or prepayments of subordinated debt;

	•	make certain investments or sell assets;

	•	create certain liens or engage in sale and leaseback transactions;

	•	provide guarantees for certain debt;

	•	enter into restrictions on the payment of dividends and other amounts by subsidiaries;

	•	engage in certain transactions with affiliates;

	•	consolidate, merge or transfer all or substantially all our assets; and

	•	enter into other lines of business.

These covenants are subject to a number of important limitations and exceptions.

The notes include customary events of default, including failure to pay principal and interest on the notes, a failure to comply with covenants, a failure to pay material judgments or indebtedness and bankruptcy and insolvency events.

Trade Financing Facilities

Our U.S. trade financing facilities consist of a U.S. Bank facility, Export Development Canada facility, Sabadell Bank facility and Bank Promissory Notes.

U.S. Bank

In October 2009, we renewed two trade facilities with U.S. Bank and decreased our borrowing limit from $30.0 million to $20.0 million. This facility bears an interest rate of LIBOR plus 1.0% to 2.0% per annum with a maturity date of October 2010. The payment terms are up to 120 days from the disbursement date. The lines are secured by credit insurance policies and the cost of the credit insurance is paid by us. We also pay a quarterly undrawn facility fee of 0.25% per annum. As of December 31, 2009, the outstanding balance was $25.3 million and the interest rate ranged from 1.28% to 2.32%. In June 2010, we increased our borrowing limit from $20.0 million to $30.0 million. In October 2010, we renewed the facilities, extending the maturity date to October 2011. As of December 31, 2010, there was no outstanding balance.

Export Development Canada

In October 2008, we entered into a loan agreement with Export Development Canada which finances purchase of goods with a borrowing limit of $50.0 million. The loan is unsecured and matures annually and is automatically renewed unless either party notifies within 60 days of the maturity date. We most recently renewed in October 2010. We also pay a quarterly unused commitment fee of 0.50% per annum and an annual administration fee of 0.35% per annum at the maturity date and every anniversary thereafter. This agreement generally has payment terms of no more than 120 days from the date of disbursement and with a borrowing rate of LIBOR plus 1.5% per annum. As of December 31, 2009 and 2010, the outstanding balance was $50.0 million and $43.7 million, respectively, and the interest rate under this facility ranged from 1.75% to 1.80% and 1.75% to 2.03%, respectively. In December 2010, we notified the lender of our intent to terminate the facility upon maturity in March 2011.

Sabadell Bank

In June 2010, we entered into a $5.0 million factoring agreement with a bank to finance vendor invoices which we amended in August 2010 to $20.0 million. The line bears interest at LIBOR plus 4.4% plus fees as stated in the agreement. The outstanding balance as of December 31, 2010 for this agreement amounted to $20.5 million and the interest rate under this agreement ranged from 4.69% to 4.94%.

Bank Promissory Notes

In April and May 2009, we issued two separate promissory notes with a bank to facilitate the financing of our account receivables to customers located in Venezuela. The promissory notes have no stated maturity dates and bear interest at LIBOR plus 1.0% which is paid by the customers. The capacity of the line is up to $30.0 million. The outstanding balance as of December 31, 2009 for these promissory notes amounted to $21.5 million. These promissory notes were repaid in October 2010.

Bank Facilities

As of December 31, 2009 and 2010, we had entered into various financing arrangements with local banks at some of our subsidiaries, primarily consisting of factoring agreements, revolving lines of credit, trade facilities, term loans and capital leases. The terms of the credit facilities range from

12 months to 30 months and are guaranteed with the pledge of local Brightstar assets and/or with a corporate guarantee. As to capital leases, each individual lease is evaluated and accounted for in accordance with its merits as a capital or operating lease. Payments are made in accordance with the given bank’s amortization schedules. The term of the capital lease agreements generally range between 36 months to 60 months from the commencement date.

As of December 31, 2009 and 2010, we had foreign operations bank facilities outstanding of $41.8 million and $134.5 million, respectively. These facilities bear interest at the agreement’s stated interest rate, predominantly LIBOR, plus a margin of 0.35% to 5.50%. These interest rates ranged from 1.0% to 10.5% and 1.0% to 13.7% per annum in 2009 and 2010, respectively. Additionally, some facilities bear fees related to unused availability, commitment amounts or other basis, as stated in the agreement, these range from 0.05% to 0.50% and are generally paid annually.

Capital Leases

During 2007, we entered into a master lease agreement with a bank for the purpose of financing certain purchases of equipment and services for up to $12.0 million. At the inception, each individual lease is evaluated and accounted for in accordance with its merits as a capital or operating lease. Payments are made in accordance with the bank’s amortization schedules. The terms of the lease agreements generally range between 36 months to 60 months from the commencement date. We also have lease-financing arrangements with other third parties. As of December 31, 2009 and 2010, we had $8.7 million and $5.1 million outstanding, respectively.

Interest Rate Swap Agreements

In 2008, we entered into interest rate swap agreements for an aggregate notional amount of $100.0 million with an average fixed interest rate of 2.1%. The interest rate swap agreements serve as an economic hedge against increases in variable interest rates but have not been designated as hedges for accounting purposes. Accordingly, we account for these interest rate swap agreements on a fair value basis and adjust the carrying amounts of these instruments to fair value with changes in fair value reflected as a component of interest expenses in our consolidated statements of operations.

In November 2009, an interest rate swap with a notional amount of $20.0 million matured and was not renewed. As a result, the notional amount outstanding was $80.0 million as of December 31, 2009. In November 2010, our remaining two $40.0 million interest rate swap agreements matured and were not renewed, and, as a result, there was no notional amount outstanding as of December 31, 2010.

Convertible Subordinated Senior Notes and Redeemable Convertible Preferred Stock

In 2003, we obtained private financing of $31.8 million in convertible subordinated senior notes. During 2007, in connection with the issuance of our Series D Redeemable Convertible Preferred Stock, we repaid a portion of the convertible subordinated senior notes and concurrently extended the maturity date to December 2010 (the “Modified Notes”).

The Modified Notes were convertible into common stock at any time at the election of the holders at a conversion price of $8.00 per share. The Modified Notes accrued interest at 10.5% per annum, payable quarterly.

In October 2008, we amended the Modified Notes to modify the conversion feature so that in addition to the right to convert the Modified Notes into shares of our common stock, the Modified Notes were convertible into shares of a new series of redeemable convertible preferred stock designated as Series E Redeemable Convertible Preferred Stock (“Series E Preferred Stock”), that with respect to rights upon liquidation, winding up and dissolution, rank pari passu to our Series B Redeemable Convertible Preferred Stock, Series C Redeemable Convertible Preferred Stock and Series D Redeemable Convertible Preferred Stock. The Series E Preferred Stock has the right to vote

on an as-converted basis as a class with the holders of our common stock on matters submitted to the holders of our common stock. The Series E Preferred Stock also has participating rights and yields no stated dividends. The Series E Preferred Stock is convertible into common stock at any time at the election of the holders at an initial conversion price of $8.00 per share. The Series E Preferred Stock has no stated maturity and provides for the redemption of these securities at the election of the holders in the event of a change of control, at an offer price in cash equal to 101% of the liquidation amount. In December 2010, the holders of the Modified Notes elected to convert all of the Modified Notes to Series E Preferred Stock. See Note 10, “Redeemable Convertible Preferred Stock,” to our consolidated financial statements included elsewhere in this prospectus for additional information about our redeemable convertible preferred stock.

We have the right to require the conversion of the Series E Preferred Stock in whole, but not in part, if we complete an initial public offering, which results in gross proceeds of at least $50.0 million and the common stock sold in such offering is sold to the public at a price of at least $16.00 per share, or upon the occurrence of a liquidation event (as defined in the Series E Preferred Stock documents), as long as the cash consideration is at least 200% of the Series E Preferred Stock conversion price.

The holders of Series B Redeemable Convertible Preferred Stock are entitled to receive quarterly dividends on each share at a rate per annum equal to 6.4% of the Liquidation Amount, which is $20.00 per share, and one-half of such dividends must be paid in cash, otherwise the dividend rate increases to 10.0%. These dividends are cumulative, whether or not earned or declared, accruing on a daily basis, and unpaid dividends will compound on a quarterly basis. The holders of Series C Redeemable Convertible Preferred Stock and Series D Redeemable Convertible Preferred Stock are entitled to receive quarterly dividends on each share at a rate per annum equal to 6.4% of the Liquidation Amount, which is $20.25 per share. One-half of the Series C dividends must be paid in cash, otherwise the dividend rate increase to 10.0%. Similar to Series B Redeemable Convertible Preferred Stock, these dividends are cumulative, whether or not earned or declared, accruing on a daily basis and unpaid dividends compound on a quarterly basis. The Series B, Series C and Series D Redeemable Convertible Preferred Stock have no stated maturity and provide for the redemption of such securities at the election of the holders in the event of a change of control, at an offer price in cash equal to 101% of the liquidation amount.

We also have other conditions which apply to our outstanding redeemable convertible preferred stock. If any shares of Series B, Series C or Series D are outstanding on September 30, 2011, the dividend rate on each share of Series B, Series C or Series D Redeemable Convertible Preferred Stock (whichever is outstanding) shall increase by 1.0% per annum on such date and shall increase by an additional 1.0% per annum on September 30 of every year thereafter up to a maximum dividend rate of 15.0% per annum until such time as no shares of redeemable convertible preferred stock shall remain outstanding.

We are permitted to pay up to half of the dividends on the redeemable convertible preferred stock in kind and our ability to pay such dividends in cash is restricted by the terms of the ABL Revolver and the Indenture. See Note 9, “Debt,” to our consolidated financial statements included elsewhere in this prospectus for additional information about our debt and credit facilities

In 2009 and 2010, we obtained waivers from the holders of the Modified Notes for non-compliance with the minimum required $100.0 million EBITDA for the last twelve-month period for each of the five quarters ended March 31, 2010. Additionally, we obtained waivers in 2007, 2009 and 2010 from the redeemable convertible preferred stockholders for non-compliance with certain financial covenants.

We have the right to require the conversion of the Series B, Series C and Series D Redeemable Convertible Preferred Stock in whole, but not in part, if we complete an initial public offering which results in gross proceeds of at least $100.0 million and the common stock in such offering is sold to the public at a price of at least 130% of the Conversion Price then in effect.

Cash Requirements

Historically, we have had significant cash requirements as we organically expanded our business into new geographic and product markets. Our requirements for cash include the costs related to increased working capital, primarily accounts receivable and inventory, offset partially by accounts payable. Our working capital needs are driven by the seasonality and growth of our business with our cash requirements being greater in periods of growth. Additional cash requirements resulting from our growth include the costs of additional personnel, production and distribution facilities, enhancing our information systems and, in the future, our integration of any acquisitions and our compliance with laws and rules applicable to a public company.

We have historically relied on available lines of revolving credit (and, to a lesser degree, factoring arrangements), cash from our operations and trade credit provided by our suppliers to finance our working capital requirements and to support our growth.

Historically, our capital structure consisted of redeemable convertible preferred stock, common stock and various debt instruments, including convertible subordinated senior notes. Accordingly, our cash requirements have included the payment of preferred dividends to redeemable convertible preferred stockholders and interest on our debt.

Our cash availability is dependent in part on our foreign subsidiaries’ ability to collect their receivables on a timely basis and may be negatively affected by local currency and conversion restrictions, such as those in Venezuela, and our ability to negotiate favorable payment terms with our suppliers. As a result of our cash and cash equivalents on hand, existing credit facilities, cash generated from operations and the net proceeds from this offering, we anticipate that we will be able to meet our anticipated cash requirements for at least the next twelve months.

In the event that the sources of cash described above are not sufficient to meet our future cash requirements, we will seek additional funding or reduce certain planned expenditures. If debt financing is not available on favorable terms, we may seek to raise funds through the issuance of additional bonds or equity securities. If such actions are not sufficient, we intend to limit our growth and reduce or curtail some of our operations to levels consistent with the constraints imposed by our available cash flow. Our ability to seek additional debt or equity financing may be limited by our existing and any future financing arrangements or economic and financial conditions.

Contractual Obligations

The following table summarizes our estimated contractual cash obligations and commitments as of December 31, 2010, before giving effect to the offering and the application of proceeds therefrom, and their effect on our liquidity and cash flow in future periods:


	Payments Due by Periods
			Within One		One to Three		Three to Five		More Than
	Total		Year		Years		Years		Five Years
	(In thousands)

Revolving credit facility(1)	$	—	$	—	$	—	$	—	$	—
Trade and other bank facilities, including capital leases		203,805		201,219		2,111		180		295
Senior notes		250,000		—		—		—		250,000

Contractual debt repayment(2)		453,805		201,219		2,111		180		250,295
Upfront fees(3)		4,015		4,015		—		—		—
Non-cancelable operating lease(4)		38,907		10,685		15,905		8,135		4,182
Interest on senior notes and capital leases(5)		141,008		24,010		47,669		47,544		21,785
Uncertain tax positions(6)		—		—		—		—		—

		637,735		239,929		65,685		55,859		276,262
Redeemable convertible preferred stock(7)		409,090		—		—		—		—

Total	$	1,046,825	$	239,929	$	65,685	$	55,859	$	276,262


(1)		As of December 31, 2010, there was $83.7 million in outstanding letters of credit under our revolving credit facility.

(2)		See Note 9, “Debt,” to our consolidated financial statements includes elsewhere in this prospectus.

(3)		Represents upfront fees related to our exclusive distribution and service agreements with Telefonica International, S.A.U., and subsidiaries. The agreement gives us the exclusive rights to sell netbooks (smaller and less expensive version of laptop) and provide other logistics services throughout Latin America to Telefonica subsidiaries. Amounts are based upon the payment schedule within the distribution and services agreement.

(4)		Represents future lease payments associated with vehicles, equipment and properties under operating leases. Amounts are based upon the general assumption that the leased asset will remain on lease for the length of time specified by the respective lease agreements. No effect has been given to renewals, cancellations, contingent rentals or future rate changes.

(5)		Total debt matures at various dates through 2016 and bears interest at various interest rates. We have reflected interest that is attributable to existing capital leases and our senior notes, all of which have fixed interest rates. The interest reflected does not consider potential refinancing of expiring debt obligations, or prepayments. We have not reflected interest attributable to our revolving credit facility or other trade and bank facilities, as the amounts due under these facilities vary by period.

(6)		We have excluded liabilities related to uncertain tax positions recognized under ASC 740 Income Taxes, as we are unable to reasonably estimate the ultimate amount or timing of settlement. See Note 12 to our consolidated financial statements included elsewhere in this prospectus for further information.

(7)		The liquidation value of our Series B, C, D and E Redeemable Convertible Preferred Stock includes accrued but unpaid dividends. Our redeemable convertible preferred stock has no stated maturity and may be redeemed at the option of the holder upon change of control. As such, as of


		December 31, 2010, the redemption date was unknown and payment is not reflected in a particular period and additional dividend accruals are not reflected through the redemption date, since such date was unknown as of December 31, 2010. Dividends on our Series B, C and D Redeemable Convertible Preferred Stock are calculated based on the liquidation value of the redeemable convertible preferred stock and dividend rates, which will increase by 1.0% annually, commencing September 30, 2011, to a maximum of 15.0%.

Other Contractual Commitments

In connection with the shareholders’ agreement entered into in connection with the establishment and operation of Brightstar Europe in April 2007, we agreed to make available a loan facility to fund the operations of Brightstar Europe for $40.0 million and each of the two parties to the shareholders’ agreement also agreed to provide 50% of the future funding of the company. Through December 31, 2010, we had funded $40.0 million of the loans. Brightstar Europe became profitable in 2009. We continue to evaluate the operations of Brightstar Europe and a change in its profitability may result in further discussion with our partner that may lead to modification of the business plans, current commitments under the shareholders’ agreement, or other available remedies, if any. During 2010, Brightstar Europe acquired certain operations that were funded through cash from operations and additional funding provided by its shareholders and third-party financing.

In September 2009, we amended and restated our payment terms agreement (the “PTA”) with Motorola and its subsidiaries (collectively, “Motorola”). The PTA sets forth the terms for repayment of the credit lines established for us and our subsidiaries in our distribution agreements with Motorola and also sets forth the collateral requirements for the credit line. The credit line, and all our other obligations to Motorola, including our indemnity obligations, is collateralized by a second priority security interest on all of our domestic assets and those of our domestic subsidiaries (each of our domestic subsidiaries is a guarantor of Brightstar Corp.’s obligations under the PTA). However, equity interests in subsidiaries held by a party to the PTA are not part of the collateral. The PTA incorporates the affirmative and negative covenants from our ABL Revolver. We are subject to certain events of default under the PTA, including defaults based on bankruptcy and insolvency events, non-payment, cross-defaults on other indebtedness, a change of control in our company and any material inaccuracy of our representations and warranties. The outstanding balance under the PTA is included on our balance sheet as part of accounts payable.

Off-Balance Sheet Arrangements

As of December 31, 2009 and 2010, we had no off-balance sheet arrangements.

Impact of Inflation and Changing Prices

A portion of our business is conducted in countries in which inflation can have a material effect on the relative purchasing power of money over time. However, other than the effects of foreign currency exchange rate fluctuations that may be affected by inflation, we believe that our results of operations are not materially affected by moderate changes in the inflation rate.

Seasonality and Fluctuations in Operating Results

Our revenue is subject to product availability and seasonal fluctuations as a result of holidays, manufacturer and operator promotions and other events affecting customer demands, including the introduction of new products and general economic conditions. As a result, we generally experience higher revenue and earnings in the second half of the year, particularly in the fourth quarter due to the holiday season, and weaker sales and earnings in the first half of the year.

Material Weaknesses and Remediation Efforts

In connection with the preparation of our financial statements for the years ended December 31, 2009 and 2010, we identified several material weaknesses in our internal controls over financial reporting. However, these material weaknesses have not resulted in a qualified opinion on our audited financial statements for the years ended December 31, 2009 and 2010. Over the course of 2010, we were successful in remediating several material weaknesses indentified in 2009, and the ones that remained at December 31, 2010 were weaknesses not remediated from the prior year due to the short time cycle available to get all 2009 material weaknesses remediated. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. These material weaknesses are described in detail in “Risk Factors — Risks Related to Our Business — We have identified material weaknesses in our internal control over financial reporting which, if not successfully remediated, could cause us to fail to timely report our financial results, prevent fraud and avoid material misstatements in our financial statements.”

We are committed to remediating the deficiencies constituting material weaknesses by implementing changes to our internal control over financial reporting. Our Chief Executive Officer and our Chief Financial Officer are responsible for implementing changes and improvements to the internal controls that resulted in these material weaknesses.

Management believes we will complete our remediation plan in 2011. We cannot guarantee that we will be able to complete these actions on schedule or effectively and, even if we do successfully complete them, there is no guarantee that these measures will effectively address our material weaknesses. In addition, it is possible that we could discover additional material weaknesses in our internal control over financial reporting in the future.

Critical Accounting Policies and Estimates

The discussion of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses. On an ongoing basis, we evaluate our estimates and assumptions, which we base on third-party data, historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results of our analysis form the basis for making assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and the impact of such differences may be material to our consolidated financial statements.

Critical accounting policies are those policies that, in management’s view, are most important in the portrayal of our financial condition and results of operations. The footnotes to the consolidated financial statements also include disclosure of significant accounting policies. The methods, estimates and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our financial statements. These critical accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Our most critical accounting policies and estimates include those involved in the recognition of revenue and provision for income taxes. Those critical accounting policies and estimates that require the most significant judgment are discussed further below.

Revenue Recognition

Revenue is primarily derived from the sale of wireless communications equipment and related accessories, and to a lesser extent from our customer services and solutions. Product and service revenue is recognized in accordance with ASC 605, specifically ASC 605-10, when all of the following criteria are satisfied: (i) persuasive evidence of an arrangement exists; (ii) the price is fixed or determinable; (iii) collectability is reasonably assured; and (iv) delivery of products has occurred or services have been performed. Our arrangements for product sales with our customers do not contain customer acceptance provisions that would preclude recognition of revenue upon delivery of the product or when services are rendered. We do not have any substantial obligations after delivery of the product or after services are rendered.

Revenue derived under certain contractual arrangements may take the form of agreements that contain multiple elements, including warehouse logistic services, implementation of technology enablers, and ongoing supply chain, retail and enterprise services. These arrangements may have both fixed and variable components as well as contingent performance incentive compensation, designed to link a portion of our revenue to our performance relative to both qualitative and quantitative goals. Performance incentives are recognized as revenue for quantitative targets when the target has been achieved and for qualitative targets when confirmation of the incentive is received from the client. These arrangements may also provide for other strategic services where revenue earned is based on the achievement of cost savings to the customer. We allocate revenue between the elements based on acceptable fair value allocation methodologies, provided that each element meets the criteria for treatment as a separate unit of accounting as outlined in ASC 605-25.

In applying the allocation criteria within ASC 605-25, we must apply considerable judgment when considering a variety of factors in determining the appropriate method of revenue recognition under these arrangements, such as whether the elements are separable, whether there are determinable fair values and whether there is a unique earnings process associated with each element of a contract. The judgments we make can have a significant effect on the timing and amount of revenue we recognize.

In compliance with ASC 605-45 we assess whether we or the third-party supplier is the primary obligor in sales transactions. We evaluate the terms of our customer arrangements as part of this assessment and apply significant judgment when determining if we are the primary obligor in the arrangement. In addition, we give appropriate consideration to other key indicators such as general inventory risk, latitude in establishing price, discretion in supplier selection and credit risk to the vendor. Accordingly, we generally record revenue on a gross basis when we believe the key indicators of the business suggest we generally act as principal on behalf of our clients. Where the key indicators suggest we act as an agent, we record revenue on a net basis.

Allowance for Doubtful Accounts

We provide credit terms to nearly all of our customers in the ordinary course of business. We try to mitigate the risks associated with providing credit by performing credit evaluations and obtaining credit insurance. In determining the adequacy of the allowance for doubtful accounts, our management considers a number of highly subjective factors, including creditworthiness of our customers and general economic conditions in the countries in which we operate, the aging of our accounts receivable and customer payment trends. Although we have not historically experienced a significant level of bad debt expense, future events or changes in circumstances could result in changes to our estimates that could have a material adverse effect on our results of operations, financial position or cash flows.

Inventory Valuation

We value our inventory at the lower of cost or its estimated current market value, which requires us to make significant judgments related to current market values, expected future sales volumes and

supplier incentives earned through purchases but unrealized pending the sale of the related products. We record provisions for estimated excess and obsolete inventories that consider a number of factors, including the aging of the inventory, recent sales trends and industry, market and economic conditions. In assessing inventory write-downs, management also considers any price protection credits or other incentives that we expect to receive from our suppliers. Variations in the estimates we use could result in a material adverse effect on our results of operations, financial position or cash flow, if we determine additional provisions are required in a future period.

Value Added Tax

Our international subsidiaries may be subject to Value Added Tax (VAT), which is typically applied to goods and services purchased in countries where VAT is applied. We are required to remit the VAT we collect to tax authorities, but may deduct the VAT we have paid on eligible purchases. In certain circumstances, the collection of the VAT receivable may extend over a period of years. We review our VAT receivable for impairment whenever events or changes in circumstances indicate the carrying amount of our VAT receivable may not be recoverable.

Share Based Payments and Other Equity Transactions

Our Stock Plans are administered by a committee of our Directors (the “Committee”). The Committee generally sets stock option exercise prices at 100% or above of the estimated fair market value of the underlying common stock on the date of grant. Historically, the Committee established exercise prices based on independent third party valuations.

Prior to this offering, there has not been an established market for our shares. While we have issued new equity to unrelated parties and we use such facts in the determination of the fair value of our shares, we believe that the lack of a secondary market for our common stock and our limited history issuing stock to unrelated parties make it impracticable to estimate our common stock’s expected volatility. Therefore, it is not possible to reasonably estimate the grant-date fair value of our options using our own historical price data. Accordingly, we applied the provisions of ASC 718 in accounting for the share options under the calculated value method.

A summary of stock option activity during the years ended December 31, 2008, 2009 and 2010 follows:


						Weighted-
						Average
				Weighted-		Remaining		Aggregate
				Average		Contractual		Intrinsic
	Shares			Exercise Price		Term		Value(a)
								(In thousands)

Outstanding as of January 1, 2008		1,639,992		$	13.46
Granted		1,510,250			14.83
Exercised		—			—
Forfeited		(846,587	)		13.99

Outstanding as of December 31, 2008		2,303,655		$	14.17		8.34	$	—

Exercisable as of December 31, 2008		877,833		$	12.00		6.39	$	—

Outstanding as of January 1, 2009		2,303,655		$	14.17
Granted		975,000			15.00
Exercised		(2,000	)		8.00
Forfeited		(956,885	)		14.66

Outstanding as of December 31, 2009		2,319,770		$	14.32		7.96	$	69

Exercisable as of December 31, 2009		919,145		$	12.94		6.14	$	69

Outstanding as of January 1, 2010		2,319,770		$	14.32
Granted		852,500			30.00
Exercised		(6,100	)		12.92
Forfeited		(242,225	)		15.09

Outstanding as of December 31, 2010		2,923,945		$	18.83		7.90	$	32,660

Exercisable as of December 31, 2010		1,348,945		$	15.45		6.69	$	19,628


(a)		The aggregate intrinsic value represents the amount by which the fair value of underlying stock exceeds the option exercise price for the periods presented.

The calculated fair value of each incentive award was estimated on the date of grant using the Black-Scholes option-pricing model, using the following considerations:


	•	We have elected to calculate the average expected life based on the simplified method described in ASC 718 for all at-the-money grants, as we believe it will be a better representation of the estimated life than our actual limited historical exercise behavior. For grants where the exercise price is significantly higher than the estimated fair value of the common stock at grant date, we use the Monte Carlo Simulation method to estimate expected option life.

	•	We use an expected dividend yield of zero, since we do not intend to pay dividends on our common stock for the foreseeable future.

	•	The risk-free interest rate is based in U.S. Treasury zero-coupon issues with a remaining term equal to the expected option life assumed at the date of grant.

	•	In 2010, the expected volatility is based on the average volatility of up to 19 companies within various SIC industries as management believes that we fit the profile of the companies selected. In 2008 and 2009, the expected volatility was based on a weighting of the volatility of 10 companies within the SIC Industry 5065, Electronic Parts and Equipment, not Elsewhere Classified, as management believed we fit the profile of the companies selected. The group of companies selected was then divided in two groups, and each group was given a different


		weight based on what management believed was appropriate, using each group’s past financial history.


	•	Forfeitures are estimates using historical experience and projected employee turnover.

These estimates require a considerable degree of judgment and affect the amount of compensation expense we recognize. If we determine that another method to estimate expected volatility or expected term is more reasonable than our current methods, or if another method for calculating fair value is prescribed by authoritative guidance, the fair value calculated for future stock-based awards could change significantly from past awards, even if the principal terms of the awards are similar. Higher volatility and longer expected terms result in an increase to stock-based compensation determined at the date of grant. The expected dividend rate and expected risk-free interest rate are not as significant to the calculation of fair value. A hypothetical 10% increase or decrease to any of the above assumptions would not have had a material impact on the amount of stock-based compensation expense we recognized in any of the periods presented. However, although changes in assumptions relative to our 2010 expense would be considered immaterial to us, future years could result in a more significant difference if we were to grant additional stock options, the value of our Class A common stock increases significantly or our estimated volatility is higher.

Fair Value of Financial Instruments

We are also required to apply complex accounting principles with respect to accounting for financing transactions that we have consummated in order to finance the growth of our business. These transactions, which consist of debt and redeemable convertible preferred stock, require us to use significant judgment in order to assess the fair values of these instruments at the dates of issuance. We have historically estimated these fair values based on independent transactions with third parties and independent valuations. These fair values are critical to our determination of financing costs and presentation of how we finance our business.

Income Taxes

We utilize the asset and liability method of accounting for income taxes, which requires significant judgments in determining the consolidated provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax settlement is uncertain. Under ASC 740, we are required to evaluate the realizability of our deferred tax assets. The realization of our deferred tax assets is dependent on future earnings. ASC 740 requires that a valuation allowance be recognized when, based on available evidence, it is more likely than not that all or a portion of deferred tax assets will not be realized due to the inability to generate sufficient taxable income in future periods. In circumstances where there is significant negative evidence, establishment of a valuation allowance must be considered. A pattern of sustained profitability is considered significant positive evidence when evaluating a decision to reverse a valuation allowance. Further, in those cases where a pattern of sustained profitability exists, projected future taxable income may also represent positive evidence, to the extent that such projections are determined to be reliable given the current economic environment. Accordingly, the increase and decrease of valuation allowances requires considerable judgment and could have a significant negative or positive impact on our current and future earnings.

On January 1, 2009, we were required to adopt a provision within ASC 740, which prescribes a recognition threshold and measurement process for recording in our consolidated financial statements uncertain tax positions taken, or expected to be taken by the Company. Additionally, ASC 740 provides guidance on the derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. The standard requires us to accrue for the estimated amount of taxes for uncertain tax positions if it is more likely than not that we would be required to pay such additional taxes, which requires considerable judgment. An uncertain tax position will not be recognized if it has a less than 50% likelihood of being sustained. Although we believe we have adequately

reserved for our uncertain tax positions, the ultimate outcome of these tax matters may differ from our expectations, which could have a material effect on our provision for income taxes at the time such determination is made.

Recently Issued Accounting Pronouncements Not Yet Adopted

In September 2009, the FASB ratified Accounting Standards Update 2009-13, codified within ASC 605 which addresses criteria for separating the consideration in multiple element arrangements. ASC 605 requires companies allocate the overall consideration to each deliverable by using a best estimate of the selling price of individual deliverables in the arrangement in the absence of vendor-specific objective evidence or other third-party evidence of the selling price. ASC 605 will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010 and early adoption will be permitted. We anticipate that there will be no material impact on our consolidated financial statements upon adoption.

Quantitative and Qualitative Disclosures about Market Risk

Concentration of Credit Risk

We are exposed to market risk relating to our operations due to changes in foreign currency exchange rates and interest rates. We manage the exposure to these risks through a combination of normal operating and financing activities and derivative financial instruments such as foreign currency derivative contracts and interest rate swaps. It is our policy not to enter into derivative financial instruments for speculative purposes.

Exchange Rate Risk Management

We are exposed to foreign currency risks that arise from normal business operations. These risks include the translation of local currency balances of foreign subsidiaries, intercompany loans with foreign subsidiaries and transactions denominated in foreign currencies. Our objective is to minimize our exposure to these risks through a combination of normal operating activities and the utilization of foreign currency contracts to manage our exposure on the transactions denominated in currencies other than the applicable functional currency. Contracts are executed with creditworthy banks and other institutions and are denominated in currencies of major industrial countries. At times we also hedge our exposure to the translation of reported results of foreign subsidiaries from local currency to U.S. dollars.

We use a cash hedging strategy to protect against an increase in the cost of forecasted foreign currency denominated transactions. As of December 31, 2009 and 2010, we had outstanding forward contracts in the notional amounts of $86.6 million and $164.0 million, respectively, buying (selling) U.S. dollars to fix the future cash outflows in local currency (U.S. dollars) on certain payables denominated in U.S. dollars (local currencies). The fair values of the outstanding forward contracts in the aggregate as of December 31, 2009 and 2010 were liabilities of $1.5 million and $0.2 million, respectively.

A hypothetical 10% adverse change in all exchange rates relative to the U.S. dollar would have reduced our income from continuing operations by $15.5 million in 2010.

Interest Rate Risk Management

We are exposed to interest rate risk on certain of our short-term and long-term debt obligations used to finance our operations and acquisitions. We have LIBOR-based and prime-based floating rate borrowings, which expose us to variability in interest payments due to changes in the reference interest rates. From time to time we use derivative instruments as hedges against the impact of interest rate changes on future earnings and cash flow.

In November 2008, we entered into pay fixed/receive LIBOR-based floating interest rate swaps to manage fluctuations in cash flows resulting from interest rate risk. In November 2010, our remaining interest rate swap agreements matured and were not renewed, such that there was no notional amount outstanding as of December 31, 2010.

As of December 31, 2010, we had $198.4 million of variable rate borrowings outstanding. Holding other factors constant, a hypothetical 1% increase in our borrowing rates would result in a $2.0 million increase in our annual interest expense based on our variable rate debt as of December 31, 2010.

BUSINESS

Overview

We are a leading global services company focused on enhancing the performance and profitability of the key participants in the wireless device value chain: manufacturers, operators, retailers and enterprises. We provide a comprehensive range of customized services consisting of value-added distribution, supply chain, retail and enterprise and consumer services. Our services help our customers manage the growing complexity of the wireless device value chain and allow them to increase product availability, extend and expand their channel reach and drive supply chain efficiencies by getting the right products to the right place at the right time for a lower cost. In addition, our services help our customers increase their wireless device sales and drive velocity at the point of sale. The rapid growth of the approximately $200 billion global wireless industry (Source: Gartner)¹ and increasing number and type of wireless activatable devices have resulted in a complex ecosystem where manufacturers, operators, retailers and enterprises have differing priorities and are burdened with tasks that are critical, but not core, to their businesses. We believe that our global presence, scale and strategic position at the center of the wireless ecosystem provide us with unique insight into the entire wireless device value chain and enhance our ability to offer differentiated, value-added services to our customers. We currently offer over 100 individual services in 50 countries across six continents, and we intend to continue innovating and adding services that deliver value to our customers.

We offer the following service categories:


	•	*Value-Added Distribution Services* are provided to manufacturers of wireless devices and related accessories. Our services include product distribution, transportation and delivery, order management, light manufacturing and assembly, and marketing and demand generation. Some examples of these services include selling wireless devices to operator and retailer customers; transporting wireless devices from a manufacturing facility in Asia to wireless specialized stores in Latin America, managing the customs and importation process; kitting, packing and programming of wireless devices in different languages; and managing sales and marketing activities for wireless devices at the point of sale.

	•	*Supply Chain Services* are provided to manufacturers, operators and retailers. Our services include wireless device management, strategic sourcing, and business intelligence and supply chain optimization services, such as forward and reverse logistics. An example of these services is a network operator utilizing our tools to select its wireless portfolio and procure devices using our sourcing and business intelligence database and portal.

	•	*Retail Services* are provided to manufacturers, operators, retailers and enterprises. Our services include retail outsourcing, portfolio management with virtual inventory, and sales force training and management. Some examples of these services include operators using our services to run and staff stores and kiosks, and mass retailers outsourcing the management of the wireless device category to us.

	•	*Enterprise and Consumer Services* are provided to manufacturers, operators, retailers and enterprises. Our services include device activation, customized billing and wireless administration software, and handset protection insurance. An example of these services is a network operator who offers our handset insurance services and extended warranty products to its customers.

We are a global organization supporting manufacturers, operators, retailers and enterprises and enabling over 90,000 points of sale worldwide. Our customers are some of the leading companies in

¹ Gartner Inc.: Forecast: Mobile Devices, Worldwide, 2008-2015, 1Q11 Update. By Carolina Milanesi, Annette Zimmermann, Roberta Cozza, Anshul Gupta, Atsuro Sato, CK Lu, Tuong Nguyen and Hugues de la Vergne. 17 March 2011.

the wireless device value chain. Among others, our customers include manufacturers such as Apple, HTC, Huawei, LG, Motorola, Nokia, RIM and Samsung; operators such as America Movil, AT&T, Orange, Telecom New Zealand, Telefonica, Telstra, TIM, Verizon Wireless and Vodafone; retailers such as Best Buy, Radio Shack, Target, Tesco and Walmart; and enterprises such as Dell, PC Connection and Tech Data.

Manufacturers, operators, retailers and enterprises choose us because of our wireless expertise, global reach, scale and extensive channel consisting of more than 33,000 customers, including more than 150 manufacturers, 180 network operators, 15,000 mass retailers and 4,800 technology value-added resellers. Our customers also choose us because of our track record of quality service and execution, proprietary tools and systems, the strength and capability of our supply chain professionals and our ability to tailor our solutions or innovate new ones to meet their particular needs.

For the year ended December 31, 2010, our revenue grew 70% to $4.6 billion relative to the year ended December 31, 2009, and we generated Adjusted EBITDA of $141.2 million, net income of $39.8 million and Adjusted net income of $60.6 million.

Wireless Industry Overview

The wireless industry is large and growing, and encompasses an increasingly broad and complex array of wireless devices, including feature phones, smartphones, e-readers and tablets, and their related accessories. According to Gartner, mobile device revenue is estimated to grow from $168.1 billion in 2009 to $285.6 billion in 2015,¹ representing a 9.2% CAGR, an estimate which excludes potential incremental growth from the increasing number of wirelessly connected or “activatable” devices, such as tablets, e-readers, or gaming devices. The primary drivers of growth and increasing complexity are higher global wireless device penetration rates, a larger number of wireless ecosystem participants, greater levels of demand for data applications and mobile Internet access, and the emergence of a wide range of feature-rich wireless and other activatable devices with a broad mix of voice and data service plans and shortening product lifecycles. There are more than 700 operators globally, multiple network standards, various wireless device distribution channels and an increasing number of wireless device models with tailored application functionalities.

According to Gartner, approximately 1.2 billion wireless phones were shipped in 2009, a number which is expected to increase to approximately 2.4 billion in 2015,¹ representing a 11.9% CAGR. The largest growth area is smartphones which, according to Gartner, is expected to grow from 172.4 million devices sold in 2009 to 1,104.9 million devices sold in 2015,¹ representing a 36.3% CAGR. In addition, the number of activatable devices has increased significantly over the last few years with the introduction of tablets and e-readers. According to Gartner, tablet computer shipments are expected to grow from 17.6 million units in 2010, the first year for which Gartner industry data is available for tablet computer shipments, to 294.1 million units in 2015,² representing a 75.6% CAGR. Moreover, the number of connected devices, such as consumer electronic products, are expected to grow from 65.5 million devices in 2009 to 409.3 million devices in 2015, representing a 35.7% CAGR, according to Gartner².

² Gartner Inc.: Forecast: Connected Mobile Consumer Electronics, 2008-2015, 1Q11 Update. By Carolina Milanesi; Roberta Cozza, Annette Zimmermann, Tuong Nguyen, Hugues de la Vergne and Jon Erensen. 1 April 2011.

A substantial portion of global subscriber growth has been driven by the prepaid wireless segment, which has become increasingly popular as customers are able to enjoy the benefits of a regular mobile handset without needing to commit to long-term network service contracts. The increased size and growth of the prepaid wireless segment has led to an increased use of retailers such as Best Buy and Walmart, as a more prevalent means for distribution to consumers in the U.S./Canada and Europe. We believe that this trend is likely to accelerate since retailers view wireless devices as an attractive product category that provides them with higher margin products.

Within developing markets such as Africa, Eastern Europe, Latin America, the Middle East and Southeast Asia, growth in the wireless industry has been driven primarily by growth in new wireless subscribers. Given the emergence of more cost-effective means for ownership, such as prepaid wireless devices, consumers in developing markets are now able to purchase wireless devices more easily than before. As penetration levels of wireless devices within developing markets continue to rise, the market for value-added distribution, supply chain, retail and enterprise services will continue to increase given the challenges associated with reaching these markets.

The proliferation of new technologies and connected devices and the increasing velocity of these new product introductions are resulting in the following key trends:


	•	Manufacturers needing to achieve faster time-to-market with new wireless devices;

	•	Operators needing to meet customers’ demands for increased choice;

	•	Retailers needing to navigate through an increasingly large and rapidly changing set of available devices; and

	•	Enterprises needing to reduce the cost of and simplify the management of their wireless devices and rate plan deployments.

As new technologies are introduced, we believe manufacturers will look to companies with outsourced distribution, supply chain, retail and enterprise services for assistance with scaling their products and services globally. The market growth opportunity is therefore multifaceted and driven partly by overall industry growth and in part by the growing need of service providers within the wireless industry.

Challenges Faced by Wireless Ecosystem Participants

We believe each participant in the wireless ecosystem faces differing challenges and priorities. For example, manufacturers focus on selling devices to operators; operators focus on maximizing their ARPU, minimizing churn and growing their subscriber base; retailers focus on selling devices and plans to consumers; and enterprises focus on getting the best device on the best plan for their end users. We also believe that these differing challenges and priorities will become more prominent given the accelerating pace of technological innovation, the number of new market participants and continued growth of the wireless ecosystem. We believe these challenges include:

Challenges faced by Manufacturers


	•	Increasing need for faster product time-to-market;

	•	Increasing number of channels through which products are sold;

	•	Increasing pressure on average selling price and wireless device margins;

	•	Ability to accurately forecast demand drivers;

	•	Ability to reach a broadening set of consumers on a global basis;

	•	Difficulties and costs associated with customization for specific markets;

	•	Lack of local importation and manufacturing expertise in certain markets and geographies;


	•	Ability to manage reverse logistics and high return rates; and

	•	Ability to efficiently manage working capital.

Challenges faced by Operators


	•	Ability to increase ARPU and minimize churn;

	•	Ability to forecast demand for particular devices in different markets and geographies;

	•	Higher subscriber retention costs arising from increasing handset subsidies and declining contract prices;

	•	Complexity of distributing devices to customers in developing markets;

	•	Growing complexity and rapid evolution of handset and activatable device offerings;

	•	High degree of bargaining power of manufacturers, especially for smaller operators;

	•	Ability to manage inventory levels and availability;

	•	Ability to manage high product return rates; and

	•	Need to achieve or maintain a high degree of customer satisfaction.

Challenges faced by Retailers


	•	Ability to manage the increasingly complex wireless device category, which has not traditionally been a core segment and which includes a broad array of wireless devices and multiple operator plans;

	•	Need to efficiently manage working capital to mitigate inventory obsolescence;

	•	Ability to drive strong sales and profit per square foot;

	•	Ability to effectively manage retail in-stock rates;

	•	Capacity to have updated information technology systems that are optimized for wireless activations;

	•	Ability to accurately forecast consumer buying trends and determine the optimal overall product mix;

	•	Need to react quickly to changing consumer preferences;

	•	Need to offer differentiated products in the wireless category in a highly competitive market;

	•	Ability to hire, train and incentivize staff to sell and implement highly complex services like activation, particularly in low service retail environments; and

	•	Need to execute retail strategy for the wireless category, down to individual points of sale.

Challenges faced by Enterprises


	•	Ability to manage the increasingly complex wireless device category, which includes a broad array of wireless devices and multiple operator plans;

	•	Ability to manage activation of devices and selection of plans;

	•	Ability to reconcile commissions and oversee commission management with operators;

	•	Ability to manage subsidies;

	•	Capacity to integrate systems into operator systems; and

	•	Opportunity to access a broad portfolio of wireless devices at a competitive price.

The unmet needs and differing interests of these wireless industry participants translate into growing opportunities for specialized providers of outsourced services who are positioned at the center of the wireless device value chain.

Our Value Proposition for the Key Participants in the Wireless Ecosystem


	•	Manufacturers. We offer manufacturers a suite of services to help them move their products to market faster and to more locations around the world. We primarily act as a demand-generating distributor for manufacturers. Our global infrastructure, scale, local expertise, wireless expertise and business intelligence, channel and business relationships allow us to develop customized end-to-end solutions for our manufacturer customers. Our services enable them to focus on their core competencies and help extend their channel reach, optimize their inventory levels and further drive increased profitability and market share.

	•	Operators. We provide operators with a comprehensive set of services to improve their ability to select the right product, source it for the right price and deliver it to the right place at the right time. Our tools and services help operators improve the execution of their core business strategy, which is centered on managing the wireless customer’s experience and maximizing ARPU. This is particularly important as the driver for operator success shifts from customer acquisition to value maximization during the course of the customer relationship. For example, our tools allow operators to see contribution margin per device in real-time, and allow them to make informed decisions about which products to subsidize, which products to market and which products to discontinue. Our solutions also allow for greater pricing visibility and improved demand forecasting, which help operators reduce the cost of device acquisition, improve inventory supply planning and product lifecycle management and ultimately enhance both profitability and end-user satisfaction.

	•	Retailers. We provide retailers with services that improve the profitability and performance of their wireless category, both in-store and online. The wireless device category is complex to manage, with high working capital requirements, and increasingly short product lifecycles as new devices are entering the space at an unprecedented rate. Our services help retailers simplify management of this category, analyze consumer habits and trends and ensure that the right products are available at the right locations at the right price, to maximize sales and profitability. We provide retail-centric demand planning, inventory management and collaborative planning, forecasting and replenishment processes that allow retailers to maintain low inventory levels with high fill rates at the point of sale. We also offer services that increase the velocity of sales for wireless products. An example of the services we offer retailers is our virtual inventory program where retailers stock a small number of devices in-store but are provided access to a broad range of products through an in-store portal that facilitates orders being delivered within 24 hours to the end user or retailer.

	•	Enterprises. As master agent for operators, we provide small and medium businesses, enterprises, government organizations and each of their end users with cost-effective wireless voice and data communication devices through their preferred retailer or IT reseller. Our tools and services assist enterprises (through their IT reseller service providers) and consumers (through their retail environments) by simplifying the procurement, activation and administration of their wireless devices. Our tools allow organizations to view and administer their bills in a


		consolidated multi-operator portal to gain better insight into employee spend and behavior. Our automated activation portals enable organizations and consumers to seamlessly activate their devices quickly and without hassle. Our enterprise and consumer services simplify the mobile experience for end users by enabling small and medium businesses, enterprises and government organizations to outsource many critical, but non-core, functions to us. In addition, our recent acquisition of eSecuritel, a leading provider of wireless handset protection and replacement services, will allow Brightstar’s operator and retailer customers to offer insurance and extended warranties to their customers thereby helping them increase customer satisfaction, driving customer loyalty and reducing churn.

Our Competitive Strengths

Our key competitive strengths include:


	•	*Large, Global Services Provider for the Wireless Ecosystem.* We are present in 50 countries on six continents and believe we have a leading global distribution infrastructure platform to support the wireless device value chain. Our extensive experience, infrastructure, scale and local reach create a significant competitive advantage over regional competitors because we are able to decrease time-to-market of wireless devices and provide our customers with increased visibility into their supply chain. Our significant scale and geographic reach, together with our extensive customer relationships, would be difficult and costly to replicate.

	•	*Strong Relationships with Manufacturers, Operators, Retailers and Enterprises.* We have relationships with over 150 manufacturers, 180 network operators, 15,000 mass retailers and 4,800 technology value-added resellers, including some of the leading names in the wireless ecosystem. Some of our customers have been with us for over 10 years and we have been successful at both growing our customer base and growing the number of services we provide each of our customers. For example, we started offering value-added distribution services to one manufacturer in Latin America four years ago and now provide that manufacturer with services in the U.S., Europe and over 30 markets in the Asia Pacific region. Initially we offered only value-added distribution services to operators and retailers and now we provide a full suite of end-to-end services and solutions. Our position at the center of the wireless device value chain and our extensive customer relationships, coupled with our wireless expertise, global footprint and scale, enable us to drive significant value for our customers.

	•	*Differentiated Services Offerings.* We have been successful at leveraging our unique position at the center of the wireless device value chain, our global infrastructure and our wireless industry knowledge and data to provide customers with innovative, differentiated and targeted solutions. We launched our supply chain, retail and enterprise services based on key insight and knowledge from our distribution business. As we add additional service offerings, we gain additional data and insight, thereby further increasing the value of our services to all the participants in the wireless ecosystem. By consistently delivering additional high-value service offerings to our customers, we become part of our customers’ supply chains, creating stronger customer relationships. We work closely with our customers to create differentiated value-added service offerings, which are tailored to meet their particular needs. We believe this collaborative approach and our track record of quality service and execution creates loyal customer relationships.

	•	*Innovative Technology-Based Service Platform.* Our innovative technology-based service platform provides us with extensive real-time data across the wireless device value chain and enables us to provide consulting services and tools to our customers for better decision making. Our technology has been developed in-house over time and is designed to layer onto our customers’ own technology infrastructure. For example, our platform captures real-time supply chain data and device contribution margins, which enables our customers to make


		better marketing and production decisions. Our information technology tools allow us to initiate a relationship with a customer on a targeted basis, with selected solutions, and enable us to expand our services to the customer over time. In addition to being highly scalable, our information technology platform layers on top of our customers’ existing information technology infrastructure, which not only facilitates ease of implementation but also creates a fixture within that customer’s information technology organization.


	•	*Strategically Positioned to Anticipate Wireless Ecosystem Opportunities*. Our visibility into the wireless device value chain allows us to anticipate and capitalize on profitable growth opportunities. Since our inception, we have successfully leveraged our platform to be aligned with attractive growth opportunities. Our distribution platform enabled us to identify and execute on a services opportunity in Asia Pacific, which allowed us to provide innovative services to operators in that region and subsequently across all our regions. Furthermore, we anticipated growth in the smartphone market and aligned ourselves with key manufacturers to take advantage of this growth. Our global business model enables us to leverage our learning and observations from one region to another to anticipate customer needs and associated business opportunities. Additionally, our participation across the wireless device value chain and our diverse relationships within the wireless ecosystem, coupled with our global footprint, make us less dependent on any one wireless segment in any particular geography.

	•	*Innovative Culture and Management Team with a Successful Track Record.* Our management team, led by our Chairman, Chief Executive Officer and largest stockholder, R. Marcelo Claure, has extensive industry experience. Our management team has developed a culture of innovation that has enabled us to grow and diversify our business and enhance the value proposition for our customers.

Our Strategy

We intend to be the leading global services provider for the wireless device value chain. Key elements of our strategy include:


	•	*Continue to Expand our Services Offering.* We intend to continue to leverage our global infrastructure, scale and strong customer relationships to expand our offering with higher value services. For example, we recently acquired eSecuritel, which provides handset protection and replacement services. We intend to continue to utilize the visibility we have into the wireless device value chain to identify challenges faced by existing and new customers and provide them with solutions that address their needs. We see significant opportunity for new services which we believe will provide significant value for our customers.

	•	*Expand into New Geographies.* We intend to continue our disciplined approach to entering and penetrating new markets. We believe we are uniquely positioned to evaluate and pursue additional high growth geographies to further drive our growth and profitability. For example, we recently launched our services in Vietnam and Thailand and we are exploring opportunities in India and China.

	•	*Continue to Expand our Business with New and Existing Customers*. We intend to leverage our broad array of services and expertise to continue to grow our business by increasing the number of services we provide our existing customers. Furthermore, we believe there are many opportunities for us to develop new relationships with existing industry players whom we do not yet serve. Our industry is fragmented, which we believe presents us with many opportunities to expand our business and capture not only growth from underlying wireless industry fundamentals, but also growth from increased market share.

	•	*Pursue Strategic Partnerships, Investments and Acquisitions*. In addition to organic growth, we plan to pursue strategic partnerships, investments and acquisitions to expand our


		services offering as well as our geographic footprint. We will continue to evaluate investments and will pursue those that meet our specific criteria for size, growth and profit potential.

Our Geographic Footprint

We operate a large, global distribution infrastructure. We have operations in 50 countries on six continents, and our business is conducted in four geographic regions: (i) U.S./Canada; (ii) Latin America; (iii) Asia Pacific; and (iv) Europe, through Brightstar Europe, our 50% owned joint venture with Tech Data. The first three regions are reported as geographic operating segments in our consolidated financial statements.

U.S./Canada

Our core services in U.S./Canada include value-added distribution, returns management, category management, channel and supply chain management, customization, expanded portfolio management, activation services, in-store marketing, virtual inventory and handset protection and replacement. Our U.S./Canada operations are headquartered in Libertyville, Illinois. We also have a supply chain center of excellence in Cambridge, Massachusetts, and our newly acquired insurance services business is located in Alpharetta, Georgia. We continue to expand our capabilities and service offerings through our innovative technology, which supports automated serialized inventory management, thereby enabling web and business to business fulfillment. We operate over 450,000 square feet of facilities and serve over 60,000 points of sale throughout the region.

Latin America

We operate in 19 countries across this region, including Argentina, Brazil, Colombia, Mexico and Venezuela and we have 43 sales, distribution and assembly facilities that together serve more than 90 operators and 25,000 customers. Our core services in Latin America include value-added distribution, product management, such as demand planning and forecasting, and fulfillment and logistics, which includes freight management and customs clearance. We also provide financing, marketing, new product introduction, reverse logistics and assembly services. We operate more than 600,000 square feet of facilities across or serving Latin America, and we have an assembly facility in Tierra del Fuego, Argentina which allows us to provide local production capability for our customers.

Asia Pacific

We operate in 14 countries and six distribution centers in the Asia Pacific serving countries including Australia, Hong Kong, Malaysia, New Zealand, Singapore, South Africa, Thailand, Turkey and Vietnam. We serve operators, retailers, dealers and agents at approximately 10,000 points of sale. Our core services in the region include supply chain planning, such as demand forecasting and inventory management, and device management, which includes product lifecycle management. We also offer a full range of value-added distribution services, strategic sourcing services and channel operations services. We operate more than 350,000 square feet of facilities in the region and provide support to more than 4,000 customers, including 24 manufacturers. Our facilities are highly automated and our information technology capabilities include forecasting, supplier collaboration, procurement and supply chain planning.

Europe

We are a joint venture partner in Brightstar Europe, a joint venture company formed in 2007 and owned equally and controlled jointly by Tech Data and us. Brightstar Europe was formed for the purpose of directing and controlling the joint venture’s business, including the joint venture-related activities of Azlan Logistics Limited (“Azlan”), a wholly owned indirect subsidiary of Tech Data. Brightstar Europe directs the joint venture-related business undertaken by Azlan and compensates Azlan in respect of all costs incurred in carrying out the business of the joint venture. Brightstar

Europe bears all commercial and financial risks that arise for any Tech Data subsidiary or affiliate, to the extent that such commercial and financial risks relate to the business of the joint venture. In exchange for Brightstar Europe bearing all of the commercial and financial risks in relation to the joint venture’s business, Azlan pays Brightstar Europe an amount equal to the net profits arising from the operations of the joint venture’s business.

Brightstar Europe serves device manufacturers, operators and retailers in 15 countries, providing value-added distribution, supply chain, retail and enterprise services. In addition, Brightstar Europe has handset programming capabilities. Tech Data, on behalf of Brightstar Europe, has supply relationships with manufacturers including Acer, HP, LG and Samsung and key relationships with operators including O2, Telefonica and T-Mobile.

In addition to services for manufacturers, operators and retailers, Brightstar Europe recently launched enterprise services in Europe that enable value-added resellers to sell mobility to small and medium businesses and consumers. Brightstar Europe leverages its knowledge and relationships with key participants in the wireless ecosystem to simplify the purchase, provisioning and fulfillment of wireless devices for value-added resellers. The services that Brightstar Europe provides to value-added resellers include (i) operator management services; (ii) channel and merchandising services; and (iii) back office services.

Our Services

We are an innovative global services company offering a broad range of services to our customers. Our services are categorized into value-added distribution, supply chain, retail and enterprise and consumer services. The table below highlights the sub-categories of services included within each of these main categories.

Value-Added Distribution Services

We primarily act as a value-added distribution services provider for manufacturers, bringing their products closer to the point of sale and helping them generate demand. Our value-added distribution services fall into three main categories: (i) traditional distribution services such as product distribution, transportation and delivery services, importation management and just-in-time delivery; (ii) light manufacturing and assembly services such as consulting and guidance, planning, coordination and execution of all start-up activities, semi-knocked down manufacturing and product customization; and (iii) sales, marketing and demand generation services, such as local marketing intelligence, product

portfolio management, marketing activation, and sales and channel management. Wireless phones constitute over 90% of the products we distribute.

Traditional Distribution Services include:


	•	*Product Distribution* — We have over one million square feet of product distribution capacity, including primary facilities in Auckland, Hong Kong, Libertyville, Melbourne, Mexico City, Miami and Singapore. In addition, we have access to facilities in Europe through our joint venture with Tech Data, but we do not own or lease any of these properties. Our inventory management is centralized, we distribute inventory through our local distribution facilities and we have real-time data on product shipments and inventory worldwide.

	•	*Transportation and Delivery Services* — As a result of the large volume of business that we conduct with major transportation operators, and our established global infrastructure, we can provide a wide array of flexible and cost-effective shipping options. We are also able to customize our transportation and delivery arrangements to meet our customer needs. For example, in many emerging markets such as Latin America, we are able to mitigate their security concerns around the transportation of valuable electronic devices by arranging specialized secure transportation of products.

	•	*Importation Management* — Our experience in operating in various markets has provided us with extensive knowledge of local customs and import control requirements. As a result, we are able to manage the process of exporting and importing wireless devices, which reduces logistical challenges and expenses for our customers.

	•	*Just-In-Time Delivery* — We ship on a just-in-time basis to our customers’ warehouse locations and various points of sale throughout the regions where we operate. We are able to provide this service by generally maintaining 10 to 15 days of inventory in the local markets that we serve and approximately 20 to 30 days of inventory at our primary distribution centers in Auckland, Hong Kong, Libertyville, Melbourne, Mexico City, Miami and Singapore.

Light Manufacturing and Assembly Services include:


	•	*Contract Manufacturing* — We offer contract manufacturing capabilities to dramatically increase our customers’ competitiveness in countries offering tax advantages for local production.

	•	*Consulting and Guidance* — We offer consulting and guidance concerning local tax structures, regulations and requirements for tax advantages through local manufacturing. We provide full assistance on the preparation, submission and approval of projects for tax benefits, when applicable.

	•	*Planning, Coordination and Execution of All Startup Activities* — Our services include assistance to manufacturers on setting up their internal processes for the support of external manufacturing.

	•	*Semi-Knocked Down Manufacturing* — We provide full management of the production cycle from materials planning to final invoicing. Examples of processes are: components receiving and incoming quality control, hardware assembly, hardware functional testing and verification, in-process and outgoing quality control, supplier development and quality management, product engineering, final customization, software control and inbound and outbound logistics.

	•	*Product Customization* — We provide kitting, programming, packing and labeling for a wide variety of wireless phones and accessories. We tailor these services to meet our customers’ specific requirements. For example, we are able to program and upload software and customize the hardware on products to create unique products for operators and retailers that allow them to differentiate their offerings to end users.

Sales, Marketing and Demand Generation Services include:


	•	*Local Marketing Intelligence* — We offer market profiling, market data trends and competitor intelligence services.

	•	*Product Portfolio Management* — We provide product roadmap planning, portfolio rationalization, product introduction/product sell-ins and product management.

	•	*Marketing Activation* — Our services include agency management, consumer promotions, promotional material, point of sale support, sales promoters and channel trainings, channel incentives and loyalty programs.

	•	*Sales and Channel Management* — We provide operator sales, retail sales, dealers and agent sales, consumer retail sales, channel strategy, operator/retail account management and forecast management.

Our specialized wireless market knowledge and business relationships and global infrastructure enable our manufacturing customers to focus on their core competencies and help them extend their channel reach, optimize their inventory levels and rotations and ultimately drive increased profitability and market share by outsourcing non-core activities to us.

Supply Chain Services

We provide manufacturers, operators and retailers with a comprehensive set of supply chain services and solutions that improve their ability to get the right product to the right place at the right price. We offer these supply chain services on an integrated basis or through targeted modules that address specific needs of our operator and retail customers. Examples of our supply chain services include:

Device Management Services consist of a comprehensive suite of solutions across the entire device lifecycle to simplify and optimize device management for operators and retailers. The objective of device lifecycle management is to maximize device contribution margin by minimizing costs and determining where further investments will generate higher profit. For example, our lifecycle management services allow operators to identify what devices generate high ARPU for the operator and therefore allow them to adjust their pricing, promotions and /or order levels and hence maximize profitability. These services also allow retailers to identify what devices are in high demand in order to maximize profits. This type of service requires extensive information technology systems that generate the data needed to facilitate rapid decision making. For operators, we believe we increase device profitability by advising on the positioning of the right devices, with the right plan, at the right price and at the right place. For retailers, we believe we improve profitability by increasing sales velocity. We offer three modules in the device management area:


	•	*Device Strategy and Ranging* — We provided a structured process and business intelligence to support operators and retailers in selecting a range that aligns with their core strategic objectives and has an explicit business case for each device.

	•	*Product Lifecycle Management* — Our product lifecycle management tool provides contribution margin per device in real time, enabling fast, accurate marketing decisions that maximize the profitability of the portfolio.

	•	*New Product Introduction* — Our new product introduction process and tool align manufacturer, operator, and channel stakeholders to drive the fastest possible speed to market for new devices.

Strategic Sourcing and Business Intelligence leverages our global scale, strong relationships with leading manufacturers and extensive global market intelligence on device commercialization to provide our customers with valuable insight into the global wireless device value chain. As a global leader in the distribution of mobile devices, we believe we have a deep understanding of the wireless

ecosystem, supplier base and market dynamics which we leverage to customize information technology tools when acting as the procurement agent for our supply chain, retail and enterprise services customers. We offer three modules in the sourcing and business intelligence area:


	•	*Strategic Procurement* — We leverage our global pricing benchmarks and product business intelligence to procure devices competitively on behalf of our customers.

	•	*Vendor Management* — We manage vendors to drive optimal performance for our customers’ supply chain. Our teams organize and lead collaborative planning and forecasting meetings and manufacturer performance reviews and use our proprietary supplier collaboration portal to track manufacturer performance on supply metrics (e.g., delivery to commit).

	•	*New Vendor Introduction* — We manage new relationships with vendors including product roadmap, marketing, packaging, and other activities and also serve as an original design manufacturer for new products.

Supply Chain Optimization Services provide tools and processes which we believe help our customers reduce product obsolescence, working capital consumption and stock outs, while increasing the customers’ ability to respond quickly to changing market conditions. We offer three modules in the supply chain optimization area:


	•	*Distribution and Logistics* — Using our proprietary serialized inventory management technology, we assemble, warehouse, pack, kit and ship wireless devices on behalf of our customers.

	•	*Supply Chain Management* — Our supply chain management services provide inventory forecast and management solutions, including vendor performance management, supplier collaboration, reporting and analytics, forecasting and demand planning and sales and operations planning.

	•	*Reverse Logistics* — Our reverse logistics services enable the efficient management of device returns. Reverse logistics solutions can be designed for asset recovery, exchange management, refurbishment and repair or disposal, all of which help our customers to reduce their costs.

Channel Management Services ensure that sales channels and agents are well positioned and well educated to sell the right devices to customers and optimize the service experience. We offer three modules in the channel management area:


	•	*Channel Relationship Management* — Dedicated account representatives that actively promote and drive sales through store visitation, online support, and product commercialization.

	•	*Order Management* — Our unified order management portal provides real-time information on stock orders, availability and estimated arrival times, credit limits, payables, and tracking/tracing of back orders to stores and stakeholders.

	•	*Vendor Managed Inventory* — Our system provides automatic replenishment functionality that drives availability to optimize point-of-sale inventory.

Our supply chain services allow for greater pricing visibility and improved demand forecasting, which we believe help operators, retailers and manufacturers reduce their cost of device acquisition and improve their inventory supply planning and lifecycle management, and ultimately enhance both profitability and end-user satisfaction.

Retail Services

The increasing interest by retailers to expand and enhance their wireless category has simultaneously increased the services that manufacturers, operators and retailers need to support the

marketing, sales and differentiation of their products and services at the point of sale. Our retail services are organized into three practices: In-store services, retail outsourcing services and expanded portfolio management.

In-Store Services help retailers enhance the profitability of the wireless category by offering the following services:


	•	*Merchandising Services* — we provide retail store product placement diagrams (planograms), packaging, promotional displays and shippers as well consulting services for the wireless category.

	•	*Sales Force Training* — we work with manufacturers and operators to create training programs and modules that can be delivered to help educate the sales teams at the point of sale and site visits from field staff teams.

	•	*Field Services* — compliance at individual points of sale is an ongoing challenge for retailers so we offer services to audit individual stores to assess product availability, merchandising set up and compliance, sales knowledge and education as well as provide in-store staffing of events or programs.

Retail Outsourcing Services help our customers manage the increased complexity of the wireless category which is often difficult for retailers due to low service staffing models or lack of expertise in the category. In addition, the large number of points of sale offering wireless devices makes the execution of a wireless strategy exceptionally difficult to maintain for non-specialized participants. Increasingly, customers are seeking to outsource components of the management of the wireless category at retail which we can offer through a variety of services ranging from category management to Store-Within-a-Store services.


	•	*Category Management* — many retailers outsource some or all of their category management to us, seeking our expertise in defining the product mix, promotions and even pricing management to optimize the category performance.

	•	*Labor Optimization* — our services combine in-store training with performance incentives to achieve results by driving sales force accountability and improved selling behaviors.

	•	*Store-Within-a-Store (SWAS)* — in some countries, retailers or operators ask us to manage the complete wireless offering within a store. In this model, Brightstar is the retailer and activating agent, sourcing product, activating and receiving commission for wireless services, and staffing and merchandising within a retailer’s store, but the store itself is either owned or leased by the retailer.

Expanded Portfolio Management Services provide innovative solutions that bridge the gap between the assortment available online and the service and immediacy of shopping in a retail environment. Brightstar is able to expand the breadth and depth of the wireless portfolio for our customers through a number of technologically advanced and highly automated operational solutions that include: virtual inventory, online training and recommendation, online integration and direct to consumer management.


	•	*Virtual inventory* — Our proprietary solution allows the retailer to offer an “endless aisle” of products by providing the choice of an online catalog in-store. This is commercialized through a number of patent pending technology solutions that we have including Serial on Demand technology and our automation systems designed to select, reserve, pick and ship unique and serialized devices in real time.

	•	*Online integration* — in order to serve retailers multi-channel strategy, we offer a complete technology and operations solution that allows them to manage the front end of their online stores while integrating directly with our back-end solutions. This allows them access to a greater portfolio of products and ensures a low risk inventory model. The demand for this tool


		is growing as operators and manufacturers are increasingly seeking to create their own online stores.

Our retail services allow our customers to more efficiently and profitably manage the sale of wireless devices across their footprint. We believe our retail services provide significant value to our customers in the form of increased profitability, increased confidence in their wireless device offering, higher customer satisfaction and more streamlined interactions with other wireless industry participants.

Enterprise and Consumer Services

We enable end users, small and medium businesses, enterprises and government organizations to access cost-effective wireless voice and data communication anytime, anywhere. Our tools and services help enterprises, through their IT reseller service providers, and consumers, through their retail environments, simplify the procurement, activation and administration of their wireless devices and productivity tools. Our enterprise and consumer services are categorized as: (i) activation services; (ii) customized billing and wireless administration software; and (iii) handset insurance services.

Activation Services enable our IT reseller and retailer customers the ability to participate as wireless agents. We have a large IT reseller addressable footprint via joint ventures and commercial relationships with IT distributors, such as Tech Data, in Europe and the Americas. Within our activation services, we perform critical functions with process and technology including:


	•	*Activation Gateway* — We provide connectivity into operator activation systems for our channel partners to use their agent activation code to sell wireless services.

	•	*Agent Services* — Agent services include activation code, credit and fraud check, commissions reconciliations, serialized-on-demand services, virtual inventory and online and e-commerce services.

	•	*Carrier Management* — Carrier management services include activation, network agent agreements, billing management and rate plan management.

	•	*Merchandising Services* — Merchandising services include online ordering, order management, catalog and content management and sales training.

Customized Billing and Wireless Administration Software:


	•	*CellManage* — Our web-based platform provides multi-operator billing administration and software renewal technology that can help organizations better manage their wireless deployments and spend while reducing network operator churn.

	•	*Customized IT Services* — Our development of front-end order management portals and back-office billing solutions allows network operators and manufacturers to meet their customers’ fulfillment and billing needs.

Handset Protection and Replacement Services protect new, used or prepaid wireless devices against loss, theft and accidental damage as well as mechanical/electronic failure and malfunction:


	•	Lost-Stolen-Damaged Services — Covers handsets from loss, theft and accidental damage.

	•	Malfunction-Failure Services — Covers malfunction and mechanical/electronic failure after the manufacturer’s warranty ends

	•	Comprehensive Coverage Services — Addresses all the conditions of both lost-stolen-damaged and malfunction-failure.

Our solutions for the Enterprise and Consumer space make selling wireless services easier and allow IT resellers the ability to capitalize on a lucrative and important technology, while expanding

vendor and operator reach allowing organizations to gain more control over their wireless deployments. Additionally, our services allow them to participate in innovative programs like handset replace to ensure they can always have the latest device with a lower total cost of ownership. While our enterprise and consumer services business is small today, we believe the business provides potential for considerable growth and that our service offering, which simplifies and enhances the customer activation experience, adds significant value to our customers and complements our existing suite of services.

Other Services and Products

In addition to our four main categories of services, we periodically develop what we refer to as our “Idea to Consumer” products, which are consumer products designed to take advantage of new product opportunities that we identify. For example, we have developed the Avvio brand under which we design and manufacture wireless devices with an average selling price of under $50. We have developed a range of wireless telephones under both our proprietary Avvio brand (which are designed and manufactured to operate in regions for which fixed-line telephone service connectivity is prohibitively expensive or nonexistent) and under the Motorola brand pursuant to a licensing agreement.

Suppliers and Customers

Our suppliers and customers include some of the most recognized names in the wireless ecosystem. We view manufacturers, operators, retailers and enterprises as our customers. We generally take asset ownership of devices on behalf of manufacturers and sell to operators, retailers and enterprises.

Among others, our customers include:


	•	Manufacturers such as Apple, HTC, Huawei, LG, Motorola, Nokia, RIM and Samsung.

	•	Operators such as America Movil, AT&T, Orange, Telecom New Zealand, Telefonica, Telstra, TIM, Verizon Wireless and Vodafone.

	•	Retailers such as Best Buy, Radio Shack, Target, Tesco and Walmart.

	•	Enterprises such as Dell, PC Connection and Tech Data.

As part of providing services to participants in the wireless ecosystem, we generally develop contractual relationships with a manufacturer, operator, retailer or enterprise customer for a multi-year period to provide services that are intended to lower the cost of the customer’s existing supply chains improve working capital efficiency, among others. We have key contracts for the provision of services with Telstra in Australia, Claró and TIM Celular in Brazil, Comcel in Colombia, Porta in Ecuador, CSL in Hong Kong, Iusacell and Telcel in Mexico, Telecom New Zealand, T-Mobile Puerto Rico, Telefonica in Latin America and Tracfone in the U.S., among others. Our services contracts typically have terms between one and five years and may be terminated by either party subject to a reasonable notice period. We have also established long-term distribution relationships with many leading manufacturers of wireless devices and equipment. Our manufacturer relationships enable us to procure wireless phones, related accessories and data products and to market and resell these products to operators and our other customers. In some cases, we have entered into exclusive and non-exclusive master agreements with our manufacturer customers.

We generally distribute wireless devices either through global distribution agreements, tailored to a specific region by regional amendments, or directly through regional agreements. Typically, our distribution agreements grant us the non-exclusive right to distribute the manufacturer customers’ products and are subject to termination by the manufacturer subject to a short notice period. Most of our distribution agreements terminate on or before December 31, 2011, but automatically renew for successive one-year terms until the manufacturer customer gives notice within the applicable notice period. Our manufacturer customers typically have the right to immediately terminate our agreements

if we fail to comply with certain obligations, such as compliance with local laws and the manufacturer customers’ code of ethics or if we experience bankruptcy, insolvency or a change of control. These agreements may also be immediately terminated if, after notice, we fail to make payment of our obligations to the manufacturer customer or if there is a default under any of our agreements with them (including the occurrence of an event or condition that would have a material adverse effect on our financial condition, business, assets or operations). Many of our distribution agreements grant us the right to purchase goods on trade credit, however our trade credit limit may be unilaterally reduced by the manufacturer customer if our financial condition deteriorates.

Our distribution agreements often include territorial restrictions and limitations on the accounts we are permitted to serve. These agreements often include provisions concerning indemnification of the manufacturer, pricing, price protection, minimum volume purchase requirements, forecasting, funding for marketing and returns management procedures. Most of our distribution agreements require us to pay in U.S. dollars; however, some of these agreements require us, due to local legal requirements, to purchase in the currency of the country in which the manufacturer’s manufacturing facility or invoicing entity is located.

Our manufacturer customers generally provide product warranties for the products that we purchase, which permit returns of defective products, including those returned to us by our customers. We do not independently warrant the products that we distribute, although we do provide warranties for the fixed wireless devices that we contract for manufacture and distribute as part of our Idea to Consumer business. We record a reserve for estimated warranty costs (related to fixed wireless devices) at the time of sale and periodically review and, if necessary, adjust this reserve to reflect actual experience. Historically, our warranty costs have not been significant.

During the year ended December 31, 2010, sales of our top three manufacturer customers’ products accounted for approximately 38%, 19% and 12% of our revenue. Our top five manufacturer customers are LG, Motorola, Nokia, RIM and Samsung, which together represented 82% of our revenue in 2010. See “Risk Factors — Risks Related to Our Business — We depend on a limited number of manufacturer customers to provide us with competitive products at reasonable prices and of good quality.”

Sales and Marketing

As of December 31, 2010, we had approximately 350 employees dedicated to sales and marketing activities. As a general matter, we have local operations teams dedicated to particular geographic regions and customers. In Latin America, a substantial majority of our sales and marketing activities are conducted through our local offices in order to maintain direct relationships with our customers. We augment our local sales forces with a centralized sales and marketing team that works out of our Miami headquarters. Our Miami-based sales and marketing team also serves customers in locations outside of the United States where we do not have a local presence.

In the United States, our sales and marketing teams are organized to support the designated channels we serve, specifically operators, retailers, independent agents, local operators, dealers and resellers. Our sales teams consist of employees with specific, relevant experience in the channels they serve. Sales resources for operators are generally decentralized and located regionally across the United States in order to maintain closer contacts with their customers. Sales resources for retailers and enterprises are generally centrally staffed in order to facilitate customer service and increase operating efficiencies. Our marketing staff supports sales channels as well as new business activities and corporate branding initiatives.

We regularly develop and implement marketing programs and strategies in order to support our sales associates and to assist them in differentiating our product and service offerings and facilitating their sales. Most of our new sales are generated through direct sales efforts. However, we also conduct marketing activities on a regional basis, enabling our efforts to be tailored to the customers on which we focus. We market our products and services through a variety of methods, including:

market research, advertising, customer events, trade shows and conventions, public relations, direct mail, electronic communications and customer relationship management programs that serve as loyalty programs, rewarding customers for maintaining relationships with us. A large portion of our marketing activities are funded through marketing development programs or cooperative advertising funds that we receive from certain manufacturers in order to support sales of their products. We use these funds for our marketing initiatives and to procure and distribute product support materials for use at our customers’ various points of sale.

Competition

Due to the diversified nature of our services offerings, we face competition from different companies in different parts of our business and in our different geographies. For example, companies that offer services to the participants of the wireless ecosystem include management consulting firms such as Accenture, which provide advice on improving their customers’ supply chain management; information services businesses such as IBM, whose products are integrated into their customers’ supply chain; software companies such as Oracle, which develop software for mass use; and logistics services providers, such as UPS, DHL and FedEx. We compete on the basis of market expertise, visibility into the supply chain, customized technology, geographic coverage and price.

For distribution services, most handset deliveries are made by manufacturers selling directly to operators. However, we expect the trend among most large manufacturers to increase their use of distribution partners to continue, especially when entering emerging markets. We believe that our market is highly fragmented due to: (i) manufacturers going direct in many large developed markets and (ii) the non-concentrated nature of distribution in most developing markets (outside of Latin America) where smaller distributors collectively control significant volume.

While our main competitors for distribution services are manufacturers that sell their products directly to operators or retailers, our most significant direct competitor in the distribution services market is Brightpoint, Inc. We also compete with local distributors in many of the regions in which we operate, such as 20/20, a regional distributor in Europe.

As we enter new service categories we will encounter new competitors. For example, with the addition of our handset protection and replacement services we now compete with Asurion and Assurant in the United States.

Information Systems

We have developed and implemented information systems designed to increase the efficiency of our operations and to provide information across all areas of our business. We use web-based solutions for purchasing, inventory, returns management and customer reporting through a combination of off-the-shelf software and internally developed applications. Our systems are designed to deliver business-critical and time-sensitive commercial, financial and market information that help provide transparency internally and allows the efficient information exchange between our customers and us.

We currently operate on two operating platforms, one based on Oracle’s EnterpriseOne ERP and one on Microsoft Dynamics SL. In addition, we have proprietary applications that are integrated into our enterprise platform via proprietary and Microsoft middleware. Hyperion is used as our central financial reporting business intelligence application and is integrated with all of our operations worldwide. A critical component of our information system infrastructure is our serialization technology which we use to track serialized inventory across our supply chain. This technology significantly reduces data errors associated with serialized inventory, enables us to efficiently move millions of serialized components with greater accuracy, and also delivers real-time information relating to sales, inventory and fulfillment activities.

We employ various security measures and backup procedures to protect our internal and our customers’ data against unauthorized access, use, or loss. Information access is controlled through the

use of passwords, firewalls and virtual private networks. Additionally, we have implemented long-term data survivability for our corporate headquarters’ operations by relocating our data center and managed back-up processes to off-site facilities. As of December 31, 2010, we had approximately 230 full-time employees providing information technology services for all aspects of our business operations.

Intellectual Property

We do not rely significantly on any intellectual property, particularly not on any registered intellectual property items. We do, however, rely on certain trade secret and copyright laws to protect our proprietary knowledge, particularly our business methods, database of customers and manufacturers, and business terms such as pricing. We regularly enter into non-disclosure and non-competition agreements with our key employees and seek, to the extent practicable, to restrict access to our trade secrets and other proprietary information. Brightstar and its logo are our trademark and service mark, and we market certain products and services under such marks. Brightstar and its logo are registered in the United States and in various Latin American countries, including Argentina, Dominican Republic, Ecuador, El Salvador, Peru and Venezuela. We have other trademarks, such as Avvio and Brightime that are registered in Latin American countries but are not registered in the United States. We cannot give any assurance when, or if, such marks will become registered in the United States. We possess two patents relating to packaging and tracking of wireless devices.

Employees

As of December 31, 2010, we had approximately 3,500 employees, of which


	•	17% were located in the United States and Canada;

	•	62% were located in Latin America;

	•	18% were located in Asia Pacific; and

	•	3% were located in Europe.

In some of our operations, we from time to time use a temporary workforce hired through employment agencies to perform principally light assembly, kitting and similar tasks. While our work force generally has had low turnover, the use of temporary labor provides us with staffing flexibility that supports peak demand periods.

We are subject to various regulatory and contractual restrictions governing our relationships with employees in the United States and in other countries throughout the Americas. We are generally not subject to collective bargaining or labor agreements, except that in Argentina, Brazil, Ecuador, Mexico and Venezuela, we have labor agreements with our employees as required by local law. We believe that our relations with our employees are satisfactory.

Properties

We lease most properties that we presently use, except for a parcel of real property in Tierra del Fuego, Argentina purchased in 2005 where we maintain an assembly facility. In addition, we recently purchased properties in Venezuela that we lease to tenants as a hedge against our exposure to the political and financial risks of operating in Venezuela. See “Risk Factors — Risks Related to Our Business — We conduct a substantial amount of business in Venezuela.” Our corporate headquarters, located in Miami, Florida occupy 61,053 square feet of office space. Our facilities in Libertyville, Illinois are certified under ISO 9001:2000, which is a set of standards published by the International Standardization Organization used to document, implement and demonstrate quality management and assurance systems. As of December 31, 2010, we operated over 90 offices and facilities in 48 countries.

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The following table summarizes our leased properties as of December 31, 2010:


Region	Location	Square Feet

U.S./Canada	6 facilities in the United States (Libertyville, Miami and Cambridge)	457,540
Latin America	43 facilities in or serving Latin America, including Miami Distribution Center	631,163
	(Argentina, Bolivia, Brazil, Chile, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Paraguay, Peru, Puerto Rico, Uruguay and Venezuela)
Asia Pacific	48 facilities in the Asia Pacific Region	366,662
	(Australia, Hong Kong, Malaysia, New Zealand, Nigeria, South Africa, Vietnam, Thailand and Singapore)

Environmental Matters

Our properties and operations are subject to various foreign, federal, state and local environmental, health and safety laws and regulations, which overall have become more stringent over time. Under some environmental laws, current or previous owners or operators of real property can be held liable for contamination even if they did not know of and did not cause the contamination. Environmental laws may also impose liability on any person who disposes of, or arranges for the disposal of, hazardous substances, regardless of whether the disposal site is owned or operated by such person. Although we do not currently anticipate that the costs of complying with environmental laws and regulations will materially adversely affect us, we could incur significant costs or liabilities in the future due to the discovery of new facts or conditions at our properties or at third-party locations, changes in environmental laws or other developments.

Legal Proceedings

We are from time to time a party to various litigation matters incidental to the conduct of our business. See Note 14 to our consolidated financial statements and notes thereto included elsewhere in this prospectus.

Corporate History

Brightstar Corp. was founded by our Chairman and Chief Executive Officer, R. Marcelo Claure, and David Peterson in October 1997. In June 2007, Lindsay Goldberg LLC acquired an interest in us by purchasing shares of our Series D Redeemable Convertible Preferred Stock.

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MANAGEMENT

Executive Officers and Directors

The following table sets forth information regarding our executive officers and directors as of March 31, 2011:


Name	Age		Position

R. Marcelo Claure		40	Chairman and Chief Executive Officer
Dennis J. Strand		50	Executive Vice President, Chief Financial Officer and Director
Michael J. Cost		46	Global Chief Operating Officer and Director
Oscar J. Fumagali		57	Chief Treasury Officer and Director
Denise W. Gibson		51	President, Brightstar U.S. and Canada and Director
Rod J. Millar		41	President, Brightstar Europe
Arturo A. Osorio		41	President, Brightstar Asia Pacific
Oscar A. Rojas		44	President, Brightstar Latin America
Rafael M. de Guzman III		38	Vice President of Strategy and Director
Steven I. Bandel		58	Director
Charles H. Fine		54	Director
Alan E. Goldberg		56	Director
Lance L. Hirt		43	Director
Robert D. Lindsay		56	Director
Thomas J. Meredith		60	Director
Andrew S. Weinberg		36	Director

R. Marcelo Claure became our Chairman and Chief Executive Officer in 1997. Prior to launching Brightstar, Mr. Claure was active in the expansion of the U.S. telecommunications market through a number of entrepreneurial endeavors. He held an executive position at Unplugged Communications, a company engaged in the distribution and activation of wireless products. He also served as President of Small World Communications, and was President of Cellular Solutions, a successful wireless retailer in the northeastern United States. Mr. Claure holds a B.S. in economics and finance from Bentley College in Massachusetts. He also received an honorary doctorate degree in commercial science from Bentley University, and an honorary doctorate degree from the Universidad Tecnica Privada de Santa Cruz (UTEPSA).

Dennis J. Strand became our Executive Vice President, Chief Financial Officer and director in November 2007. Prior to joining Brightstar, Mr. Strand spent more than 20 years in corporate finance during his tenure at Motorola, having served most recently as Senior Vice President of Finance for Motorola’s Mobile Device Business from 2002 to 2007. Prior to this role, Mr. Strand lived in Europe and was Vice President of Finance in Motorola’s Mobile Device Business in EMEA (Europe, Middle East, and Africa), and prior to that he was Vice President of Finance for the Americas. Mr. Strand holds an M.B.A. in international finance from DePaul University and a B.S. in business administration from the University of Wisconsin — Whitewater.

Michael J. Cost became our Global Chief Operating Officer in September 2009, having previously served as the President and Chief Operating Officer of Brightstar U.S. from 2007 to 2009. Mr. Cost became a director in 2007. Prior to joining Brightstar, Mr. Cost was the Chief Operating Officer of Pantech Wireless, Inc. for the U.S. and Canada from 2006 to 2007. Prior to joining Pantech Wireless, Mr. Cost served in leadership roles in product and supply chain management for Cingular

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Wireless from 2000 to 2006. Mr. Cost holds a B.S. in law, criminal justice, and psychology from Middle Tennessee State University.

Oscar J. Fumagali became our Chief Corporate Treasurer in November 2007, having previously served as our Chief Financial Officer from 2001 to 2007. Mr. Fumagali became a director in 2003. Prior to joining Brightstar, Mr. Fumagali served for five years as Chief Financial Officer for a major division of Watsco, Inc. Prior to that, Mr. Fumagali was the Controller and Director of Business Planning with a division of PepsiCo. Mr. Fumagali holds a B.S. in industrial and systems engineering from Georgia Institute of Technology and an M.B.A. from Florida Atlantic University.

Denise W. Gibson became our President of Brightstar U.S. and Canada in January 2011, having previously served as the President and Chief Operating Officer of Brightstar U.S. from 2001 to 2007. Ms. Gibson became a director in 2001. Prior to joining Brightstar, Ms. Gibson spent 17 years at Motorola in various positions, including Vice President and Director of North America Customer Technical Solutions, Vice President and General Manager of U.S. Markets and Director of Product Business Operations. Ms. Gibson currently serves on the executive board for the Consumer Electronics Association (CEA) and is a founding member of its Green Project. She has served as chair for the CEA’s Wireless Communications Division, and vice chair of the CTIA Wireless Foundation. Ms. Gibson holds a Masters of Management from the Kellogg School of Business at Northwestern University and a B.S. degree in business administration from Drexel University.

Rod J. Millar became our President of Brightstar Europe in April 2007. Prior to joining Brightstar Europe, Mr. Millar was managing director for the largest mobile distributor in the UK, 20:20. Prior to his role at 20:20, Mr. Millar spent eight years at Thomson Directories, a yellow page directory company in various progressive roles including general management.

Arturo A. Osorio became our President of Brightstar Asia Pacific in June 2009, having previously served as our Chief Financial Officer for Asia Pacific from 2007 to 2009. In August 2010, Mr. Osorio’s region was expanded to include the Middle East and Africa. Mr. Osorio has over twenty years of experience in the information technology and telecommunications industries, and extensive international experience through previously held positions in Europe, the United States and Latin America. Prior to joining Brightstar, Mr. Osorio was Vice President for the Latin American division of Intershop, a German software company. Mr. Osorio holds an Executive M.B.A. from the University of Melbourne in partnership with the Kellogg School of Management from Northwestern University.

Oscar A. Rojas became our President of Brightstar Latin America in August 2010. Prior to joining Brightstar, Mr. Rojas spent more than 17 years at Motorola, having most recently served as the Corporate Vice President of Motorola’s Enterprise Mobility Solutions for the Latin America and Caribbean region. Prior to this role, Mr. Rojas served as Vice President and General Manager of Motorola’s Government & Commercial Markets Division for the Latin America and Caribbean region, and prior to that he held the role of Director & General Manager of Motorola’s Mobile Devices business for Latin America North covering the Andean, Caribbean and Central America regions. Mr. Rojas holds a Bachelor’s degree in computer science from Universidad Simon Bolivar in Caracas, Venezuela, and an M.B.A. from Carnegie Mellon University.

Rafael M. de Guzman III became our Vice President of Strategy in June 2010 and has served as our Chief of Staff since April 2007, having previously served as the business manager of our high growth markets business development team from 2006 to 2007. Mr. de Guzman became a director in 2008. Prior to joining Brightstar, Mr. de Guzman completed his J.D. at the University of Miami in December 2005. From April 2002 to August 2003, Mr. de Guzman was Business Development Manager at Desgrippes Gobe, now Desgrippes & Laga, a global brand strategy and design firm. Prior to working at Desgrippes Gobe, Mr. de Guzman spent approximately four years working at a number of brand and communications firms in various roles, including management. In addition to his J.D. from the University of Miami, Mr. de Guzman holds a B.A. in history from Princeton University.

Steven I. Bandel became a director in 2006. Mr. Bandel is the Co-Chairman and Chief Executive Officer of the Cisneros Group of Companies, a privately held media, entertainment, telecommunications and consumer products organization, since 2009. Prior to that, Mr. Bandel served

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as the Executive President and Chief Operating Officer of Cisneros from 2000 to 2009. Prior to 2000, Mr. Bandel served in various other positions within Cisneros, including Chief Financial Officer, President of Multimarket, the Group’s former investment bank, Vice President of Finance for the Communications Division, Director Assistant to the Chairman and Chief Executive Officer, Vice President of Finance for the Information Technology Division and New Business Development Manager. Mr. Bandel currently serves as a director of Claxson Interactive Group, and previously he served as a director of Directv Latin America, LLC from 2003 to 2007 and of America Online Latin America, Inc. from 2000 to 2005. Mr. Bandel holds an M.B.A. from the Institute of Advanced Management Studies in Venezuela and received his B.S. in electronic and electrical engineering from Stevens Institute of Technology.

Charles H. Fine became a director in 2008. Professor Fine teaches operations strategy and supply chain management at the Sloan School of Management of the Massachusetts Institute of Technology (MIT). He has taught at MIT since 1983 and received tenure in 1991. Professor Fine also serves as co-director of a new executive education program, Driving Strategic Innovation, which is a joint venture between the MIT Sloan School of Management and IMD in Lausanne, Switzerland. Professor Fine holds a Ph.D. in business administration (decision sciences) from Stanford University, an M.S. in operations research from Stanford University, and an A.B. in mathematics and management science from Duke University.

Alan E. Goldberg became a director in 2007. Mr. Goldberg co-founded Lindsay Goldberg in 2001. Previously, he served as Chairman and Chief Executive Officer of Morgan Stanley Private Equity from 1998 to 2001. Mr. Goldberg joined Morgan Stanley in 1978 and played an integral role in founding its Private Equity business in 1984 and building the firm’s highly successful global private equity business. Mr. Goldberg holds a J.D. from Yeshiva University, an M.B.A. from the New York University Graduate School of Business, and a B.A. in philosophy and economics from New York University. Mr. Goldberg is a director of FAPS Holdings, Inc., Maine Beverage Company, LLC, PL Olefins LLC, Continental Energy Systems LLC, Intermex Holdings, Inc., The Brock Group, Inc., Rosetta LLC, PL Propylene LLC, RECON Holdings III Inc., Ambulatory Services of America, Inc., Crane & Co., Inc., Scandza AS, PSC, LLC, Panadero Aggregates Holdings, LLC, Aviv REIT, Inc. and Pacific Architects and Engineers Incorporated. He also serves as a Trustee of Yeshiva University.

Lance L. Hirt became a director in 2007 and is the compensation committee chairman. Mr. Hirt is a partner at Lindsay Goldberg. Prior to joining Lindsay Goldberg in 2003, Mr. Hirt was a Managing Director at Morgan Stanley where he spent nine years in the mergers and acquisitions department advising a broad range of general industrial clients. Mr. Hirt began his career practicing law at Sullivan & Cromwell in New York and was subsequently a management consultant at Touche Ross & Co. Mr. Hirt received his M.B.A. and J.D. from Harvard University and graduated from Yeshiva College with a B.A. in economics. He currently serves as a Director of PL Olefins LLC, Brock Holdings, Inc., PL Propylene LLC, RECON Holdings III Inc., Scandza AS, PSC, LLC, Trygg Pharma Holding AS and Panadero Aggregates Holdings, LLC. He also serves as a Trustee of Yeshiva University in New York City.

Robert D. Lindsay became a director in 2007. Mr. Lindsay co-founded Lindsay Goldberg in 2001. Previously, he was the managing general partner of Bessemer Holdings and, prior to joining Bessemer Holdings in 1991, he was a managing director at Morgan Stanley Private Equity, where he played an integral role in founding the business in 1984. Mr. Lindsay holds a B.A. in English and American literature and language from Harvard College and an M.B.A. from Stanford University. He is President and Chief Executive Officer of Bessemer Securities LLC as well as a director of The Bessemer Group, Incorporated and its subsidiary banks, including Bessemer Trust Company, N.A. Mr. Lindsay serves as a director of Pike Electric Corporation, FAPS Holdings, Inc., Maine Beverage Company, LLC, PL Olefins LLC, Continental Energy Systems LLC, Intermex Holdings, Inc., The Brock Group, Inc., Bell Nursery Holdings, LLC, Rosetta LLC, PL Propylene LLC, Ambulatory Services of America, Inc., Crane & Co., Inc., Scandza AS, PSC, LLC, Panadero Aggregates Holdings, LLC, Aviv REIT, Inc. and Pacific Architects and Engineers Incorporated. He also serves as a Trustee of the Cold Spring Harbor Biological Laboratory and St. Paul’s School in Concord, New Hampshire.

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Thomas J. Meredith became a director in 2010 and is the audit committee chairman. Mr. Meredith is a co-founder and general partner of Meritage Capital, L.P., an investment management firm specializing in multi-manager hedge funds. He is the chief executive officer of MFI Capital, the Meredith family’s private investment arm. Mr. Meredith has served as acting Executive Vice President and Chief Financial Officer of Motorola, Inc. from 2007 to 2008, and he was Managing Director of Dell Ventures and Senior Vice President of business development and strategy of Dell Inc. from 2000 to 2001, and Senior Vice President and Chief Financial Officer of Dell from 1992 to 2000. Prior to joining Dell, Mr. Meredith served as a Vice President and Treasurer at Sun Microsystems, Inc. He currently serves on the board of directors of Motorola Mobility, Bazaarvoice, and The Nature Conservancy. Mr. Meredith is an adjunct professor at the McCombs School of Business at the University of Texas. He also serves on the advisory board of the LBJ School of Public Affairs at the University of Texas. Mr. Meredith holds a J.D. from Duquesne University, an LL.M. in taxation from Georgetown University, and a B.A. in political science from St. Francis University.

Andrew S. Weinberg became a director in 2007 and is the strategy committee chairman. Mr. Weinberg served as our Chief Strategy Officer from 2009 to 2011 and as our Chief Operating Officer from 2008 to 2009. Mr. Weinberg is a partner at Lindsay Goldberg, which he joined in 2003. Previously, he was an associate at Goldman, Sachs & Co. in the Principal Investment Area. Mr. Weinberg began his career at Morgan Stanley in the mergers and acquisitions department in New York and in the leveraged finance group in London. Mr. Weinberg holds an M.B.A. from Stanford University, and an A.B. in Economics and History from Dartmouth College. He currently serves as a Director of PL Olefins LLC, The Brock Group, Inc., PL Propylene LLC, RECON Holdings III Inc., Scandza AS, PSC, LLC, and Trygg Pharma Holding AS.

Experience of Directors

Our directors were selected to join our board of directors based upon the following as to each director: such person’s character and integrity; such person’s service as a board member of other boards of directors; and such person’s willingness to serve and willingness and ability to commit the time necessary to perform the duties of a director. No factor, by itself, was controlling.

Board Composition

Our board of directors currently consists of 13 members, and we have two vacancies. Pursuant to our Fourth Amended and Restated Stockholders’ Agreement, and subject to certain limitations, Mitsui & Co., Ltd. is entitled to designate one director for election to the board, Lindsay Goldberg is entitled to designate four directors for election to the board and N&P Holdings, Limited Partnership, is entitled to designate the remainder of the directors for election to the board, provided that the board shall consist of no more than 15 members. Messrs. Weinberg, Goldberg, Hirt and Lindsay are designees of Lindsay Goldberg. No designee of Mitsui & Co., Ltd. currently sits on the board. Following this offering, these provisions of the Fourth Amended and Restated Stockholders’ Agreement will no longer be in effect. See “Certain Relationships and Related Transactions — Stockholders’ Agreement.”

We will avail ourselves of the controlled company exception provided under the Nasdaq Stock Market rules. A controlled company need not comply with the applicable Nasdaq Stock Market rules requiring its board of directors to be comprised of a majority of independent directors. A “controlled company” under the Nasdaq rules is a company of which more than 50% of the voting power for the election of directors is held by a single stockholder or group of stockholders. Upon completion of this offering, Mr. Claure will beneficially own all of our outstanding Class B common stock, representing % of the voting power for directors and % of the total economic ownership. Because Mr. Claure will beneficially own more than 50% of the voting power for the election of our directors immediately following this offering, we will qualify as a “controlled company” under the Nasdaq Stock Market rules. Following the consummation of this offering, we intend to have at least three independent directors. In the event that we are no longer a controlled company, we will be required to

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have a majority of independent directors on our board of directors, subject to a phase-in period during the first year we cease to be a controlled company.

Following this offering, we anticipate that the board will be divided into three classes, with each class having a staggered three-year term. and are our Class I directors and their term expires in 2012. and are our Class II directors and their term expires in 2013. and are our Class III directors and their term expires in 2014. The additional independent directors will be Class II and III directors, respectively. One class of directors will be elected annually. Each of our directors will hold office until his or her successor has been duly elected and qualified. Each of our officers serves at the discretion of the board, subject to the terms of any applicable employment agreement.

Board Committees

Audit Committee

Our Audit Committee will assist our board of directors in its oversight of our internal audit function, the integrity of our financial statements, our independent registered public accounting firm’s qualifications and independence, and the performance of our independent registered public accounting firm.

Our Audit Committee’s responsibilities will include, among others:


	•	reviewing the audit plans and findings of our independent registered public accounting firm and our internal audit and risk review staff, as well as the results of regulatory examinations, and tracking management’s corrective action plans where necessary;

	•	reviewing our financial statements, including any significant financial items and/or changes in accounting policies, with our senior management and an independent registered public accounting firm;

	•	reviewing our financial risk and control procedures, compliance programs and significant tax, legal and regulatory matters; and

	•	appointing annually our independent registered public accounting firm, evaluating its independence and performance, determining its compensation and setting clear hiring policies for employees or former employees of the independent registered public accounting firm.

The members of the Audit Committee are expected to be , and . We expect our board of directors to determine to be independent under the SEC and Nasdaq Stock Market rules. The SEC and Nasdaq Stock Market rules require that each issuer has an audit committee of at least three independent members. The SEC and Nasdaq Stock Market rules allow an issuer to phase-in, in connection with an initial public offering, the number of directors on the audit committee as well as the independence of such directors. Under the initial public offering phase-in, at the time of listing, the audit committee must have at least one member, and that member must be an independent director (as defined in the SEC and Nasdaq Stock Market rules) and must meet the Nasdaq audit committee financial expert requirement at the time of the listing. Within 90 days after listing, the audit committee must have at least two members, and a majority of the members of the audit committee must be independent. Within one year after listing, the audit committee must have at least three members, all of whom must be independent. In addition, each member of the audit committee is required to be financially literate at the time such member is appointed and at least one member of the audit committee must meet the requirements for an audit committee financial expert under SEC rules. qualifies as an “audit committee financial expert” as term is defined under the SEC rules. We will modify the composition of our audit committee as required to comply with the Nasdaq Stock Market and SEC rules.

Nominating and Corporate Governance Committee

We anticipate that , and will serve on the Nominating and Corporate Governance Committee. As long as we are a controlled company, we are not required to maintain a

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nominating and corporate governance committee comprised of independent directors, however, we expect that all members of the Nominating and Corporate Governance Committee will be independent upon the consummation of this offering. Our Nominating and Corporate Governance Committee’s responsibilities will include, among others:


	•	making recommendations to the board regarding the selection of candidates, qualification and competency requirements for service on the board and the suitability of proposed nominees as directors;

	•	advising the board with respect to the corporate governance principles applicable to us;

	•	overseeing the evaluation of the board and management;

	•	reviewing and approving in advance any related party transaction, other than those that are pre-approved pursuant to pre-approval guidelines or rules established by the committee; and

	•	establishing guidelines or rules to cover specific categories of transactions.

Compensation Committee

The members of the Compensation Committee are Lance L. Hirt (Chair), R. Marcelo Claure, Steven I. Bandel, Thomas J. Meredith, and Andrew S. Weinberg. As long as we are a controlled company, we are not required to maintain a nominating and corporate governance committee comprised of independent directors, however, we expect that all members of the compensation committee will be independent upon the consummation of this offering. Our Compensation Committee will assist our board of directors in the discharge of its responsibilities with respect to the compensation and benefit plans and programs of the Corporation’s executive officers.

Our Compensation Committee’s responsibilities will include, among others:


	•	Review and approve corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, evaluate our performance in light of those goals and objectives, and set the compensation of the Chief Executive Officer and other executive officers based on such evaluations.

	•	Review and make recommendations to the board of directors with respect to director compensation.

	•	Administer the issuance of stock options and other awards under our equity plans.

	•	Review and evaluate, at least annually, the performance of the compensation committee and its members, including compliance of the compensation committee with its charter.

Strategy Committee

The Strategy Committee participates with management in the development of the Company’s strategy and monitors the implementation of the Company’s strategy. In addition, this Committee provides advice and counsel to management on mergers and acquisitions, capital management, and financial risk tolerance. Andrew S. Weinberg, Thomas J. Meredith and Steven I. Bandel will serve on the committee.

Compensation Committee Interlocks and Insider Participation

During fiscal 2010, our Chairman and Chief Executive Officer, Mr. Claure, served on our compensation committee. Mr. Weinberg has served as our Chief Strategy Officer from 2009 to 2011 and served as our Chief Operating Officer from 2008 to 2009. None of our executive officers currently serves or in the past year has served as a member of the board of directors or compensation committee of another entity whose executive officers served on our board of directors or compensation committee.

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COMPENSATION DISCUSSION AND ANALYSIS

Named Executive Officer Compensation

This compensation discussion and analysis describes the key elements of our executive compensation program for 2010. For our 2010 fiscal year, our named executive officers (“NEOs”) were:


Name		Title

R. Marcelo Claure		Chairman and Chief Executive Officer
Dennis J. Strand		Executive Vice President and Chief Financial Officer
Oscar A. Rojas		President Brightstar, Latin America
Arturo A. Osorio		President Brightstar, Asia Pacific
Michael J. Cost		Global Chief Operating Officer

This compensation discussion and analysis, as well as the tables following this narrative, are based on our current plans and expectations regarding our future. Actual compensation programs that we adopt following this offering may differ from the programs summarized below.

Executive Summary

Our compensation programs in 2010 consisted of base salary, annual incentives and other benefits. Although we have historically awarded long-term equity-based incentives to our executives and key employees, only Mr. Rojas, who joined the company on August 23, 2010, received a long-term incentive award in 2010. In connection with the commencement of his employment, Mr. Rojas was granted a long-term incentive award consisting of 220,000 stock options.

We are in the process of reviewing, and making enhancements to, the design and governance of our compensation programs. These enhancements include identifying a peer group to be used for benchmarking purposes, articulating our compensation philosophy, re-designing our annual incentive program, and developing a long-term incentive program to deliver equity upon this offering and for future awards. In early 2011, the Compensation Committee engaged a third-party consulting firm, Towers Watson (the “Consultant”), to assist with this process.

Overall Compensation Philosophy

We have implemented a compensation program designed to support our philosophy. At its core, the program will be market-based and performance-oriented. We believe compensation should be based on quantitative factors, such as how well we have attained our net income goals, the operating income of our divisions, and other financial and operational metrics. We also believe compensation should be based on qualitative factors, such as how well an individual supports and enhances our company culture, how well he or she helps us achieve our strategic goals, and his or her ability to support the other members of our team.

We intend for our policies to support the achievement of our strategic objectives by aligning the interests of our executive officers with those of our stockholders through financial and operational performance goals and equity-based compensation. The principles of our compensation philosophy are as follows:


	•	Support a one-company culture, providing consistency and equity but with the flexibility to manage locally.

	•	Drive performance outcomes in support of our business strategy.

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	•	Ensure that the contributions of both individuals and teams are recognized and rewarded through performance-based assessment and compensation.

	•	Consider external market trends and best practices for market-driven, competitive compensation practices.

	•	Orient compensation policies towards total remuneration, offering a full spectrum of cash and non-cash rewards focused on building a high-performance workforce.

	•	Administer our compensation policies and practices on a fair and consistent basis, in a manner that is transparent and builds awareness, understanding and appreciation, based on a foundation of good governance, ethics and compliance and risk management.

This philosophy was developed through discussions with our senior leadership and the Consultant and has been reviewed and approved by our Compensation Committee.

Role of Management, Consultants and Others in Determining Compensation

Our Compensation Committee is responsible for the oversight of executive compensation. Prior to this offering, our compensation programs and levels were primarily driven by the market via published survey data and internal equity comparisons to similar positions in level and scope.

Following this offering, the Compensation Committee will be comprised of independent members and will be responsible for determining compensation for our executives with input from management and the Consultant. We anticipate the Chief Executive Officer and management will prepare recommendations for compensation (other than for themselves) which the Compensation Committee will utilize in making its determinations. The Compensation Committee will have sole responsibility for determining the compensation of our Chief Executive Officer. In addition, the Compensation Committee may engage the services of outside advisers, experts and others as it deems necessary.

In 2009, an independent consulting firm, Hewitt Associates (“Hewitt”), was engaged by management to (1) advise on the design of our long-term incentive plan, (2) prepare a market analysis of executive positions, including the development of a peer group to be utilized in external benchmarking and a market summary of typical long-term incentive award sizes and total compensation and (3) design a compensation plan for members of our board of directors.

In early 2011, the Compensation Committee engaged the Consultant to build on the foundation established by Hewitt, support this offering and assist in developing our future compensation programs. We have also engaged the Consultant in 2011 to review and assess our sales compensation plans and to provide recommendations for compensation plan improvements that will align more effectively with our business strategy.

Benchmarking

Although we have not historically utilized peer groups in determining competitive compensation for our NEOs, we have implemented a process to analyze the compensation of our peer group executives based on industry, size, business model and other performance measures. Generally, such comparisons will focus on peer group compensation data published in their filed proxy statements and results of their financial performance reported in their other public reports. To that end, the Compensation Committee and the Consultant identified the following peer group to be used in future review of

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our compensation levels and programs. We anticipate that this peer group will continue to evolve as the characteristics and profile of the company change.


Peer Group

Arrow Electronics, Inc.		Manhattan Associates, Inc.
Avnet Inc.		ScanSource, Inc.
Brightpoint Inc.		Synchronoss Technologies, Inc.
CACI International Inc.		SYNNEX Corp.
CH Robinson Worldwide Inc.		Tech Data Corp.
DST Systems Inc.		United Stationers Inc.
Genpact Ltd.		UTi Worldwide Inc.
Ingram Micro Inc.

Elements of our Compensation Program

We currently provide the following elements of compensation to some or all of our NEOs:


	•	Base salary;

	•	Annual performance bonus;

	•	Long-term incentive (stock options); and

	•	Other benefits and perquisites.

Each compensation element fulfills one or more of our compensation program objectives. We assess each of these elements independently and collectively to ensure that the amount paid to each NEO for each compensation element and overall is reasonable.

Base Salary

Base salaries are intended to provide a base level of compensation and are paid in recognition of the skills, experience and day-to-day contributions that our NEOs make to the company. We review the salaries of our NEOs, both as a group and individually, on an annual basis. When establishing the base salary for each NEO, we consider the following factors: the individual’s performance, relevant experience, prior changes to the NEO’s overall compensation, role and corresponding responsibilities and contribution level. We also consider the pay of our other executives. Based on our philosophy, we expect to target base salary levels to align with the market median salaries as benchmarked against our peer group.

In 2010, in consideration of the factors set forth above, the salaries for our NEOs were set as follows:


Name	2010 Base Salary

R. Marcelo Claure	$	1,500,000
Dennis J. Strand	$	375,000
Oscar A. Rojas(1)	$	350,000
Arturo A. Osorio(2)	$	366,880
Michael J. Cost	$	375,000


	(1)	Mr. Rojas joined the company on August 23, 2010. The salary presented above reflects his annualized pay.

	(2)	Mr. Osorio is paid in Australian dollars and Mr. Osorio’s base salary has been converted to U.S. dollars using a conversion rate of 1AUD:USD0.9172.

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Annual Performance Bonus

Our annual incentive plan is designed to support our current business needs and drive consistent focus throughout the year. For 2010, our NEOs, with the exception of Mr. Osorio, participated in our 2010 Bonus Plan. Mr. Osorio participated in an Annual Discretionary Bonus Plan that awards him for the business performance of our Asia Pacific region based primarily on EBITDA for such region, with other key performance indicators considered, including Cash Conversion Cycle (“CCC”), Return on Invested Capital (“ROIC”) and Net Profit after Taxes (“NPAT”). CCC measures the length of time in days that it takes us to convert resource inputs (cash utilized for production and sales processes) into cash flows. This plan was amended effective as of August 1, 2010 to reflect an expansion of Mr. Osorio’s region to include the Middle East and Africa. The revised plan rewards him for achieving financial objectives of the Asia Pacific region based on EBITDA, Gross Revenue, Net Revenue, ROIC and CCC performance. If Asia Pacific region EBITDA for Mr. Osorio’s region is between $0 and $40 million, he is eligible to receive a bonus of 1.5% of Asia Pacific region EBITDA. If Asia Pacific region EBITDA exceeds $40 million for the region, he is eligible to receive a bonus of 2.0% of Asia Pacific region EBITDA.

For 2010, Mr. Rojas is eligible to receive an additional annual incentive bonus based on certain growth in Latin America region EBITDA as follows: $100,000 for $79.2 million in Latin America region EBITDA, $200,000 for $91.1 million in Latin America region EBITDA, $300,000 for $100.2 million in Latin America region EBITDA and $400,000 for $110.2 million in Latin America region EBITDA. For purposes of determining Mr. Rojas’ additional annual incentive bonus, Latin America region EBITDA is defined as income or loss from operations before (i) interest expense, (ii) tax expense, (iii) depreciation and amortization expense and (iv) stock-based compensation expense, for the Latin America region. For 2010, Mr. Rojas’ minimum incentive bonus was $140,000 pursuant to his employment agreement.

Our 2010 Bonus Plan uses a scorecard approach to determine each NEO’s annual incentive award. The scorecards translate our business strategy into pre-established, specific and quantifiable goals that monitor the organization’s performance in terms of achieving these goals. The key metric components for our 2010 Bonus Plan are financial and operational metrics, including EBITDA, ROIC and CCC as well as key objectives. The financial and operational metric component is weighted at 80% and the key objectives component is weighted at 20%. The key objectives component is discretionary and determined at the end of the year by the Compensation Committee with recommendations from the Chairman and Chief Executive Officer (for all NEOs other than himself) based on individual performance. The Compensation Committee determines the appropriate payout level under the key corporate objectives for the Chairman and Chief Executive Officer.

In 2010, the NEOs that participated in our 2010 Bonus Plan had an annual incentive target of 100% of base salary. For Mr. Osorio, the maximum payment he is eligible to receive under his revised plan is three times his annual salary of AUD400,000, or AUD1,200,000 (converts to USD1,100,640).

The annual incentive payout under our 2010 Bonus Plan is determined by performance under each component of the scorecard, with 50% payout for 90% of goal achievement at minimum, and 100% payout for 100% achievement at target. Above-target payout is awarded for above target

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achievement determined on a linear basis and capped at 200%. The 2010 pre-established targets and actual performance levels for each component are as follows:


				2010 Bonus Plan Payout Structure									Actual 2010
	Scorecard			Minimum			Target			Maximum			Performance
Component	Weighting			Performance			Performance			Performance			($ / % Payout)

Financial / Operational Measures
EBITDA		32	%	$	107.1M		$	119.0M		$	238.0M		$120.3M / 101.1%
ROIC		32	%		11	%		12.5	%		24	%	12.4% / 99.2%
CCC		16	%		57			51			26		42.0 / 117.6%
Key Objectives		20	%					100	%				Varies

Based on our actual 2010 performance, we provided payout levels for our NEOs as follows:


													Total 2010
	2010 Bonus		Payout Level: Financial/Operational Metrics							Payout Level Key			Incentive
Name	Target(3)		EBITDA			ROIC		CCC		Objectives			Payout

R. Marcelo Claure	$	1,125,000	$	363,946		$	345,600	$	211,765	$	202,500		$	1,123,811
Dennis J. Strand	$	375,000	$	121,315		$	115,200	$	70,588	$	60,000		$	367,103
Oscar A. Rojas(1)	$	126,090		—			—		—	$	140,000	(5)	$	140,000
Arturo A. Osorio(2)		—	$	838,000	(4)		—		—		—		$	838,000
Michael J. Cost	$	375,000	$	121,315		$	115,200	$	70,589	$	52,500		$	359,604


	(1)	In connection with Mr. Rojas’ employment agreement, he is also eligible to receive a special bonus for achieving certain Latin America region EBITDA milestones for his region. In 2010, the Latin America region did not generate sufficient earnings for Mr. Rojas to earn this bonus.

	(2)	Mr. Osorio is paid in Australian dollars and his bonus amount will be converted to Australian dollars at the time of payment.

	(3)	The 2010 Bonus Target has been prorated for a salary adjustment for Mr. Claure in 2010 and to account for the portion of 2010 during which Mr. Rojas was actually employed by the company.

	(4)	Reflects Asia Pacific region EBITDA payout in conjunction with performance of the Asia Pacific region.

	(5)	Mr. Rojas’ incentive payout reflects his minimum guaranteed bonus for 2010 in connection with his employment agreement.

For 2011, and in conjunction with this offering, we have revised our annual incentive program applicable to all of the NEOs to drive corporate performance, regional performance (if applicable), product/service performance (if applicable) and individual performance. The plan will continue to measure both financial and operational metrics, and all eligible employees, including our NEOs, will have a portion of their bonus linked to corporate performance. The corporate and regional performance components will be driven by a pre-established net income and ROIC goal, with a corresponding modifier (upwards or downwards) depending on the quality of net income delivered. The product/service performance component will be driven by a pre-established EBITDA and ROIC goal, with a corresponding modifier (upwards or downwards) depending on the quality of EBITDA delivered. Aligned with our compensation philosophy, our NEOs’ compensation will be tied to their performance and their contribution to our success. We believe these enhancements will help continue to drive our growth and profitability following our IPO and provide value to both our stockholders and employees.

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Long-Term Incentive Plan

In the past, we have granted long-term equity compensation under our 2004 Stock Incentive Plan and 2006 Executive Stock Incentive Plan (the “Existing Plans”), which were approved by the Compensation Committee and our stockholders. The Existing Plans provide an incentive to our executives and other employees to achieve long-term corporate objectives and to align the interests of such executives and employees closely with those of our stockholders. The long-term incentive component of our executive compensation program is designed to ensure commonality of interests between management and our investors. Our Compensation Committee has determined that the grant of stock options pursuant to the Existing Plans serves as an effective means of achieving these goals. Historically, long-term equity compensation has not been granted on an annual basis but instead has been granted in connection with commencement of employment or upon a significant promotion within the company.

With the exception of a new-hire grant awarded to Oscar A. Rojas, our President of the Latin America region, no long-term incentive awards were granted to our NEOs in 2010.

We intend to implement a formal program for delivering equity compensation to executives and other members of management for both an ongoing basis and in connection with this offering. To that end, the board has adopted, and we will submit to our stockholders for approval prior to the offering, the 2011 Stock Incentive Plan, which will permit us to grant several types of equity-based compensation awards, including incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock and restricted stock units. The determination of the types of equity-based compensation to be awarded, the overall grant pool and the allocation of awards will be determined by the Compensation Committee, in its sole discretion, based upon competitive market data and best practice.

Equity Grants and Stock Options

The Compensation Committee believes stock option grants are the most appropriate tool to motivate our NEOs to focus on overall corporate performance over the long-term and to align their interests with those of our stockholders. To that end, we have historically granted stock options to our executives. Our stock option grants typically have a four-year ratable vesting schedule and a ten-year term.

Other Benefits and Perquisites

Our benefits are designed to optimize the health, quality of life, productivity and long-term wealth creation of our employees. Each of our NEOs is entitled to participate in our employee benefit plans (including our 401(k) retirement program and medical, dental and life insurance benefits) on the same basis as our other employees.

In connection with his role as Chief Executive Officer and founder, we have historically provided certain fringe benefits and perquisites to Mr. Claure. Mr. Claure receives a monthly car allowance of $2,000, and we provide for his travel expenses and the use of a chartered aircraft for business travel. We also reimburse Mr. Claure for certain personal expenses. For Mr. Osorio, we reimburse him for 100% of his medical insurance premiums.

Description of Employment Agreements

Each of our NEOs is covered by an employment agreement that determines the terms of his employment with Brightstar. Certain material terms of each employment agreement are summarized below.

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R. Marcelo Claure

Brightstar Corp. entered into an employment agreement with Mr. R. Marcelo Claure (the “Claure Agreement”) in August 2004. The Claure Agreement provides that Mr. Claure will serve as our Chief Executive Officer. The Claure Agreement had an initial term of three years, with automatic one-year renewal periods thereafter (unless terminated in writing 90 days prior to the end of the current term). Under the Claure Agreement, Mr. Claure will receive (i) an annual base salary of at least $500,000 (which has since been increased to $1,500,000), (ii) an opportunity to earn a performance-based annual incentive with a possible payout of up to 200% of his base salary at target (in accordance with an increase of the percentage by the Compensation Committee in 2010), (iii) monthly automobile allowance of $2,000 (gross) per month plus reimbursement for all automobile related maintenance, repairs, gas and insurance expenses, (iv) payment and maintenance of a term life insurance policy with a $5 million death benefit covering the life of Mr. Claure and naming Mr. Claure’s children as sole beneficiaries and (v) four weeks of paid time off per calendar year plus paid holidays and authorized leave (paid or unpaid) in accordance with policies for senior executives. As an executive of the company, Mr. Claure is entitled to indemnification provided by our charter and by-laws. In addition, prior to an initial public offering of our common stock, Brightstar Corp. is required to purchase and maintain director’s and officer’s liability insurance in an amount not less than $2 million or in such amount reasonably agreed upon by Mr. Claure and Brightstar Corp.

If Brightstar Corp. terminates Mr. Claure’s employment without cause or Mr. Claure terminates his employment for good reason, he is entitled to (i) a single-lump sum cash amount equal to three times Mr. Claure’s then current annual base salary plus the larger incentive bonus compensation for the two most recently completed fiscal years, (ii) all legal fees and expenses incurred by him as a result of such termination, (iii) relocation expenses if Mr. Claure elects to relocate within one year after such termination, (iv) automatic acceleration of all of Mr. Claure’s outstanding stock options, and (v) a “gross-up payment” for any excise taxes Mr. Claure is required to pay for amounts received pursuant to clauses (i) through (iv) above.

If Mr. Claure voluntarily terminates his employment without good reason or if Brightstar terminates Mr. Claure’s employment for cause, he is not entitled to any severance, pro-rated annual incentive or any other post-termination payments except for accrued but unpaid salary or bonus.

For termination due to disability, Mr. Claure or his respective estate will receive (i) his annual base salary as of the date of termination for 12 months following the termination date, (ii) any declared but unpaid incentive compensation and (iii) any expenses incurred by Mr. Claure in connection with the termination. In the event of Mr. Claure’s death, his estate is entitled to (i) any unpaid salary and declared but unpaid incentive compensation and (ii) any expenses incurred by Mr. Claure’s estate in connection with the termination.

Oscar A. Rojas

Brightstar Corp. entered into an employment agreement with Mr. Oscar A. Rojas (the “Rojas Agreement”). The Rojas Agreement provides that Mr. Rojas will serve as President, Latin America. The Rojas Agreement became effective on August 23, 2010 and will expire on August 23, 2013. Under the Rojas Agreement, Mr. Rojas will receive (i) an annual base salary of at least $350,000, (ii) a one-time sign-on bonus of $150,000 paid in fifteen equal monthly installments (but only if he remains employed by the company on the applicable payment date), (iii) eligibility to earn a performance-based annual incentive with a possible payout that ranges from 0% to 200% of his base salary, (iv) a grant of 220,000 stock options with an exercise price of $30.00, (v) five weeks of paid time off per calendar year plus paid holidays and authorized leaves (paid or unpaid) in accordance with policies for senior executives and (vi) in addition to the potential performance-based annual incentive mentioned above, Mr. Rojas is eligible to receive an additional annual incentive bonus based on certain earnings growth in the Latin America region (for further discussion see “—Elements of our Compensation Program—Annual Performance Bonus”).

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If Brightstar terminates Mr. Rojas’ employment without cause within his first year of employment, he is entitled to a continuation of his base salary for 18 months. If Brightstar terminates Mr. Rojas’ employment without cause after a year of employment, he is entitled to a continuation of his base salary for 12 months. If Brightstar Corp. terminates Mr. Rojas’ employment without cause as a result of a change in control, he is entitled to a continuation of his base salary for the remaining term of his agreement. In all the above scenarios, Mr. Rojas is also entitled to receive a pro-rata annual incentive (if Brightstar awards annual incentives that year) and a pro-rata portion of his additional annual incentive bonus for the year of termination.

For termination due to death and disability, Mr. Rojas or his estate will receive a cash lump sum payment equal to three months of base salary. Upon such termination, neither Mr. Rojas nor his estate are entitled to any additional severance, pro-rated annual incentive or any other post-termination payments, except for accrued but unpaid payments, such as base salary and vacation pay.

If Mr. Rojas voluntarily terminates his employment for any reason, or if Brightstar Corp. terminates Mr. Rojas’ employment for cause, he is not entitled to any severance, pro-rated annual incentive or any other post-termination payments except for accrued but unpaid payments, such as base salary. If termination occurs within the first year of the agreement for any reason, Mr. Rojas must repay all portions of the sign-on bonus paid before termination.

Following Mr. Rojas’ termination for any reason, all unvested stock options are forfeited. If Mr. Rojas’ employment is terminated due to death, disability, voluntarily, or involuntarily (other than for cause), all of his vested stock options will remain exercisable for 30 days following the termination date. In the event of a change in control of Brightstar Corp., all of Mr. Rojas’ unvested stock options shall immediately vest, regardless of whether or not Mr. Rojas is terminated.

Dennis J. Strand

Brightstar Corp. entered into an employment agreement with Mr. Dennis J. Strand (the “Strand Agreement”). The Strand Agreement provides that Mr. Strand will serve as our Executive Vice President and Chief Financial Officer. The Strand Agreement became effective on November 7, 2007 for an initial term of five years with automatic one-year renewal periods thereafter (unless written notice is provided at least 180 days prior to the expiration of the term). Under the Strand Agreement, Mr. Strand will receive (i) an annual base salary of at least $375,000, (ii) relocation expenses, (iii) a one-time sign-on bonus of $50,000 paid in equal installments on the start date and the one-year anniversary of the start date, (iv) an opportunity to earn a performance-based annual incentive with a possible payout of up to 200% of his base salary at target (in accordance with an increase of the percentage by the Compensation Committee in 2010), (v) a grant of 500,000 stock options with an exercise price of $15.00 (with a vesting commencement date of November 7, 2007) and (vi) four weeks of paid time off per calendar year plus paid holidays and leave for illness or temporary disability in accordance with policies for senior executives.

If Brightstar Corp. terminates Mr. Strand’s employment without cause or Mr. Strand terminates his employment for good reason, in each case other than in connection with a change in control, he is entitled to receive (i) a lump sum payment equal to his base salary and a pro-rata payment of the greater of his current annual incentive at target or his previous actual annual incentive payment prorated based upon the termination date in the then current year, (ii) automatic acceleration of all Mr. Strand’s unvested stock options and (iii) for a period of 12 months after the date of termination, his company benefits in effect at the time of termination. If Brightstar Corp. terminates Mr. Strand’s employment without cause or Mr. Strand terminates his employment for good reason within two years following a change in control or the consummation of an initial public offering, he is entitled to two times the applicable severance payment, his regular benefits for a period of 24 months and automatic acceleration of his unvested stock options. In all termination events that include post-termination payments, Brightstar Corp. will reimburse Mr. Strand for the additional federal income tax liability in

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the year of termination if the marginal rate in the year of termination is above Mr. Strand’s three-year average marginal rate.

If Mr. Strand voluntarily terminates his employment without good reason or if Brightstar Corp. terminates Mr. Strand’s employment for cause, he is not entitled to any severance, pro-rated annual incentive or any other post-termination payments except for accrued but unpaid payments, such as base salary.

For termination due to death and disability, Mr. Strand or his estate will receive a cash lump sum payment equal to three months of base salary and a prorated amount of his incentive bonus target. Upon such termination, neither Mr. Strand nor his estate is entitled to any additional severance or any other post-termination payments, except for accrued but unpaid payments, such as base salary and vacation pay.

In the event Mr. Strand is terminated without cause or Mr. Strand terminates his employment for good reason, all of his stock options would become immediately vested and exercisable until November 13, 2018. In the event of a change in control (including an initial public offering of our common stock), all of Mr. Strand’s unvested stock options shall immediately vest, regardless of whether or not Mr. Strand is terminated. If Mr. Strand’s employment is terminated due to death, disability, retirement, or involuntarily (other than for cause), all of his vested stock options will remain exercisable for 90 days following the termination date. Under a termination for cause by Brightstar Corp. or voluntary termination by Mr. Strand, his vested stock options will remain exercisable for 30 days following the termination date.

Michael J. Cost

Brightstar Corp. entered into an employment agreement with Michael J. Cost (the “Cost Agreement”). The Cost Agreement provides that Mr. Cost will serve as our Chief Operating Officer. The Cost Agreement became effective on September 16, 2009, for an initial term that ends on September 15, 2011, with automatic one-year renewal periods thereafter (unless written notice is provided 60 days before the expiration of the term). Under the Cost Agreement, Mr. Cost will receive (i) an annual base salary of at least $375,000, (ii) an opportunity to earn a performance-based annual incentive with a possible payout of up to 200% of his base salary at target (in accordance with an increase of the percentage by the Compensation Committee in 2010), (iii) a grant of 100,000 stock options (at the effective date of the agreement Mr. Cost had already been awarded a grant of 100,000 stock options for a total of 200,000 stock options) and (iv) four weeks of paid time off per calendar year plus paid holidays and authorized leaves (paid or unpaid) in accordance with policies for senior executives. As an executive of the company, Mr. Cost is entitled to indemnification provided by Brightstar’s charter and by-laws. In addition, the Cost Agreement provides Mr. Cost with indemnification for five years following termination of his employment.

If Brightstar Corp. terminates Mr. Cost’s employment without cause or Mr. Cost terminates his employment for good reason, he is entitled to 12 months continuation of base salary, a lump sum payment of any accrued annual bonus and automatic acceleration of his unvested stock options. Brightstar Corp. agrees to pay any and all federal, state and local income taxes on the severance payment, as well as the tax liability on that tax reimbursement.

If Mr. Cost voluntarily terminates his employment without good reason or if Brightstar Corp. terminates Mr. Cost’s employment for cause, he is not entitled to any severance, pro-rated annual incentive or any other post-termination payments except for accrued but unpaid payments, such as base salary.

For termination due to death and disability, Mr. Cost or his estate will receive a cash lump sum payment equal to three months of base salary. Upon such termination, neither Mr. Cost nor his estate is entitled to any additional severance, pro-rated annual incentive or any other post-termination payments, except for accrued but unpaid payments, such as base salary and vacation pay.

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In the event of a change in control, all of Mr. Cost’s unvested stock options shall immediately vest, regardless of whether or not Mr. Cost’s employment is terminated. Following Mr. Cost’s termination for any reason, all unvested stock options are forfeited. If Mr. Cost’s employment is terminated due to death, disability, retirement, or involuntarily (other than for cause), all of his vested stock options will remain exercisable for 90 days following the termination date. Under a termination for cause by Brightstar Corp. or voluntary termination by Mr. Cost, his vested stock options will remain exercisable for 30 days following the termination date.

Arturo A. Osorio

Brightstar Logistics Pty Limited, Brightstar’s Australian subsidiary, entered into an employment agreement and amendment thereto with Arturo A. Osorio (the “Osorio Agreement”). The Osorio Agreement provides that Mr. Osorio will serve as President, Asia Pacific. The Osorio Agreement became effective on February 25, 2010 and its amendment was effective as of August 1, 2010 and has no fixed termination date. Under the Osorio Agreement, Mr. Osorio will receive (i) an initial base salary of at least AUD350,000 (which has been increased to AUD400,000), (ii) participation in the company’s stock option plan, (iii) paid time off, long service leave and personal (sick and carer’s) leave in accordance with local laws, (iv) reimbursement for all medical insurance expenses for him and his family and (v) effective August 1, 2010, Mr. Osorio is eligible to receive an annual incentive payment based on total earnings before interest, taxes, depreciation and amortization for the Asia Pacific region and other financial measures (for further discussion see “— Elements of our Compensation Program — Annual Performance Bonus”).

Brightstar Logistics PTY Limited may terminate Mr. Osorio’s employment without cause only by giving him six months’ written notice. Brightstar Logistics PTY Limited may elect to pay Mr. Osorio an amount in lieu of providing all or part of the period of notice of termination. The Osorio Agreement does not include the concept of good reason or change in control. If Brightstar Logistics PTY Limited terminates Mr. Osorio’s employment in the event of redundancy of Mr. Osorio’s position, he is entitled to two months’ redundancy payment (calculated on base salary plus any car allowances) for each year of service with Brightstar Logistics PTY Limited in any capacity since September 9, 2004.

If Mr. Osorio voluntarily terminates employment for any reason, or if Brightstar Logistics PTY Limited terminates Mr. Osorio’s employment for cause, he is not entitled to any severance, pro-rated annual incentive or any other post-termination payments except for accrued but unpaid payments, such as base salary.

Following Mr. Osorio’s termination for any reason, all unvested stock options are forfeited. If Mr. Osorio’s employment is terminated due to death, disability, retirement, or involuntarily (other than for cause), all of his vested stock options will remain exercisable for 90 days following the termination date. Under a termination for cause by Brightstar Logistics PTY Limited or voluntary termination by Mr. Osorio, his vested stock options will remain exercisable for 30 days following the termination date.

New Employment Agreements. We are currently negotiating either new or amended employment agreements with each of the NEOs and expect such new or amended employment agreements to be executed prior to the offering. We intend these agreements to provide a greater degree of uniformity with respect to rights and benefits among the NEOs.

Stock Option Plans and Other Benefits

Each of the Claure Agreement, the Rojas Agreement, the Strand Agreement, the Cost Agreement and the Osorio Agreement (together, the “Employment Agreements”) provide that the NEOs are entitled to participate in our employee and executive benefit plans, programs or arrangements implemented by Brightstar (including medical, dental, short- and long-term disability and life insurance), as well as reimbursement for reasonable and customary business expenses. The Employment Agreements also provide for participation in our equity incentive plans and our annual bonus plan. The stock options granted to each executive have the following features: (i) exercise price equal to the

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closing stock price on the grant date, (ii) ratable vesting in four installments on each of the first four anniversaries of the grant date and (iii) ability to exercise vested portions of the award until the earlier of the expiration of the grant date or upon certain termination scenarios. Certain of the Employment Agreements contain different terms than those outlined in each executive’s stock option agreements. The Rojas Agreement and the Cost Agreement each state that the terms of any stock awards granted to the executive will be governed by the terms of any stock option plans and will not be amended or superseded by the executives’ employment agreement. The Strand Agreement has similar language, but, in addition, states that any express terms in the Strand Agreement which relate to the grant of stock options will govern. The Osorio Agreement does not address the terms of any stock option grants. Under the terms of the Existing Plans, the stock options do not have accelerated vesting upon a change in control of the company.

Conclusion

We believe that the compensation changes made and actions taken are aligned with the goals and principles of our compensation programs and reflect our pay philosophy. As we move forward, we fully expect that our programs will evolve to further align with the requirements of our growing company and to reflect any necessary compliance as a publicly-traded company.

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation that we paid during the fiscal year ended December 31, 2010 to our principal executive officer, principal financial officer and our three other most highly compensated executive officers.

SUMMARY COMPENSATION TABLE FISCAL YEAR 2010


											Non Equity
											Incentive Plan
								Option			Compensation		All Other
			Salary(1)		Bonus(2)			Awards(4)			(6)		Compensation			Total
Name and Principal Position	Year		($)		($)			($)			($)		($)			($)

R. Marcelo Claure		2010		1,245,000		202,500			—			921,311		239,066	(7)		2,607,877
Chairman and Chief Executive Officer
Dennis J. Strand		2010		375,000		60,000			—			307,103		3,675			745,778
Executive Vice President and Chief Financial Officer
Oscar A. Rojas		2010		126,090		190,000	(3)		3,079,758	(5)		—		—			3,395,848
President, Brightstar Latin America
Arturo A. Osorio		2010		374,905		—			—			838,000		6,977			1,219,882
President, Brightstar Asia Pacific
Michael J. Cost		2010		375,000		52,500			—			307,103		3,675			738,278
Global Chief Operating Officer


	(1)	Salary column represents compensation actually received in 2010. Mr. Osorio is paid in Australian dollars and all compensation has been converted to US dollars using an exchange rate of 1AUD:USD0.9172. Mr. Rojas joined our company on August 23, 2010 with an annualized salary of $350,000.

	(2)	For Messrs. Claure, Strand and Cost, this column represents payments under the key corporate objectives component of the company’s annual incentive plan.

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	(3)	Mr. Rojas received a sign-on bonus of $50,000 and a $140,000 minimum guaranteed bonus in 2010 in connection with his commencement of employment with the company.

	(4)	The amounts reported in this column reflect the aggregate grant date fair value of option awards granted to the named executive officer during each year, computed in accordance with ASC Topic 718. These amounts reflect our calculation of the value of these awards on the grant date and do not necessarily correspond to the actual value that may ultimately be realized by the officer. For accounting purposes, we use the Black-Scholes option pricing model to calculate the grant date fair value of stock options. See Note 2 to our consolidated financial statements included elsewhere in this prospectus for a discussion of our assumptions in determining the ASC Topic 718 Compensation — Stock Compensation value of our stock options and see the “Grants of Plan-Based Awards In Fiscal 2010” table for information regarding stock option awards to the NEOs during 2010.

	(5)	Mr. Rojas received a sign-on grant of stock options in 2010 in connection with his commencement of employment with the company. The fair value of this award has been calculated as outlined in footnote 4.

	(6)	Reflects cash payouts, if any, under our 2010 Bonus Plan for achievement of performance objectives (for further discussion of the fiscal 2010 Bonus Plan, see “— Elements of our Compensation Program — Annual Performance Bonus” above). Mr. Osorio is covered under a separate annual incentive plan based on the Asia Pacific region that is outlined in his employment agreement amended as of August 1, 2010 (for further discussion of Mr. Osorio’s annual incentive plan, see “— Elements of our Compensation Program — Annual Performance Bonus” above).

	(7)	The amounts in this column include matching contributions of $3,675 made to the company’s 401(k) plan; a car allowance provided to Mr. Claure of $2,000 per month; travel expenses of $66,817, which includes personal use of a chartered aircraft of $34,460 (based on the allocation conducted by a third party between business and personal use based on each leg that is flown and who is on the plane); automobile expenses and transportation costs of $33,178; meals and entertainment expenses of $28,225 not otherwise characterized as a business expense; other personal expenses of $23,706 not otherwise characterized as a business expense; and gross-up payments of $87,140.

Grants of Plan-Based Awards

The following table provides information regarding grants of plan-based awards to the named executive officers in the fiscal year ended December 31, 2010.

GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR 2010


									All Other
									Option				Grant
									Awards:		Exercise or		Date
									Number of		Base		Fair Value
			Estimated Future Payouts Under Non-Equity						Securities		Price of		of Stock
			Incentive Plan Awards(1)						Underlying		Option		and Option
	Grant		Threshold		Target		Maximum		Options		Awards		Awards(2)
Name	Date		($)		($)		($)		(#)		($/Sh)		($)

R. Marcelo Claure		—		450,000		900,000		1,800,000		—		—		—
Dennis J. Strand		—		150,000		300,000		600,000		—		—		—
Oscar A. Rojas(3)		—		49,863		99,726		199,452		—		—		—
		7/27/2010								220,000		30.00		3,079,758
Arturo A. Osorio(4)		—		—		1,100,640		—		—		—		—
Michael J. Cost		—		150,000		300,000		600,000		—		—		—

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	(1)	Under the terms of the 2010 Bonus Plan, payments are awarded based on the achievement of specified financial/operational measures. Awards are earned at threshold, target and maximum opportunity levels based on the company’s performance against its goals.

	(2)	The amounts reported in these columns reflect the aggregate grant date fair value of stock option awards granted to the named executive officer during each year, computed in accordance with ASC Topic 718. These amounts reflect our calculation of the value of these awards on the grant date and do not necessarily correspond to the actual value that may ultimately be realized by the officer. For accounting purposes, we use the Black-Scholes option pricing model to calculate the grant date fair value of stock options.

	(3)	Mr. Rojas received a special one-time award of stock options in connection with the commencement of his employment with the company. Stock options were granted with a ten-year term and vest ratably over four years.

	(4)	Mr. Osorio is eligible for an annual incentive award up to three times his annual base salary based on the financial performance of the Asia Pacific region per his employment agreement.

Outstanding Equity Awards at 2010 Fiscal Year-End

The following table provides information regarding all outstanding equity awards held by each of the named executive officers as of December 31, 2010.

Option Awards

Number of

Securities

Underlying

Option

Underlying

Unexercised

Vesting

Unexercised

Options -

Option

Commencement

Options

Unexercisable

Exercise

Expiration

Name

Date

Exercisable (#)

(#)(1)

Price ($)

Date

R. Marcelo Claure

—

Dennis J. Strand

11/07/2007

375,000

125,000

15.00

11/13/2018

Oscar A. Rojas

8/16/2010

—

220,000

30.00

8/16/2020

Arturo A. Osorio

12/15/2004

2,833

—

12.00

12/15/2014

1/01/2005

3,334

—

12.00

1/01/2015

4/21/2009

12,500

37,500

15.00

4/21/2019

Michael J. Cost

6/1/2007

37,500

12,500

20.00

7/25/2017

4/21/2009

12,500

37,500

15.00

4/21/2019

9/16/2009

25,000

75,000

15.00

9/16/2019


	(1)	Grants of stock options vest in equal installments over a four-year period on each anniversary of the vesting commencement date. Stock options are granted with a ten-year term.

Option Exercises

As of the year ended December 31, 2010, none of the named executive officers exercised any of their stock options.

120

Potential Payments Upon Termination or Change in Control

The table below shows the amounts that the following individuals would be eligible to receive upon termination of their employment with the company, including death or disability, for cause and following a change in control, assuming that termination occurred on December 31, 2010, the last day of our 2010 fiscal year. Detailed descriptions of the agreements providing for compensation upon a termination of employment are provided under the section titled “— Description of Employment Agreements.”


				Termination
				w/o Cause or		Termination
				Executive		following
		Death or		Termination for		“Change in		“Change in
Name	Benefit	Disability($) (1)		Good Reason ($)		Control” ($)		Control” ($)

R. Marcelo Claure	Severance Payment		1,500,000		4,500,000		4,500,000		—
	Settlement — Outstanding Annual Bonus Award		—		1,123,811		1,123,811		—
	Settlement — Outstanding LTIP Equity Award (Stock Options)		—		—		—		—
	Medical and Dental Benefits Continuation		—		—		—		—
	Outplacement Services		—		—		—		—

	TOTAL		1,500,000		5,623,811

Brightstar Corp. S-1