UTStarcom, Inc.
Condensed Consolidated Balance Sheets

(in thousands)

	March 31,			December 31,
	2007			2006
	(Unaudited)			(As reported)
ASSETS
Current assets:
Cash, cash equivalents and short-term investments	$	572,918		$	671,169
Accounts receivable, net	352,936			406,080
Notes receivable	6,161			5,060
Inventories	654,662			635,838
Prepaids and other current assets	132,004			101,795
Short-term restricted cash and investments	5,620			16,666
Total current assets	1,724,301			1,836,608
Property, plant and equipment, net	210,042			213,155
Long-term investments	45,087			47,809
Goodwill	3,063			3,063
Intangible assets, net	52,397			56,443
Long-term deferred costs	172,895			176,649
Other long-term assets	39,575			40,223
Total assets	$	2,247,360		$	2,373,950

LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	265,519		$	304,869
Short-term debt	378,416			102,758
Income taxes payable	—			2,483
Customer advances	312,363			265,812
Deferred revenue	96,874			95,742
Other current liabilities	191,807			271,400
Total current liabilities	1,244,979			1,043,064

Long-term deferred revenue	251,369			261,014
Long-term debt	521			275,161
Other long-term liabilities	21,881			13,858
Total liabilities	1,518,750			1,593,097

Minority interest in consolidated subsidiaries	6,029			6,493
Stockholders’ equity:
Common stock: $0.00125 par value; 750,000,000 authorized shares; 121,299,113 issued and 121,294,645 outstanding at March 31, 2007 and December 31, 2006	152			152
Additional paid-in capital	1,208,349			1,205,592
Accumulated deficit	(549,577		)	(494,244		)
Accumulated other comprehensive income	63,696			62,899
Treasury stock: 4,468 shares held in treasury at March 31, 2007 and December 31, 2006	(39		)	(39		)
Total stockholders’ equity	722,581			774,360
Total liabilities, minority interest and stockholders’ equity	$	2,247,360		$	2,373,950

UTStarcom, Inc.
Condensed Consolidated Statement of Operations
(in thousands, except per share amounts)

	Three months ended March 31,
	2007			2006
	(Unaudited)			(As restated)
Net sales	$	475,902		$	601,981
Cost of sales	400,617			478,190
Gross profit	75,285			123,791

Operating expenses (income):
Selling, general and administrative	79,837			83,727
Research and development	43,662			46,402
Amortization of intangible assets	4,046			4,925
Total net operating expenses	127,545			135,054

Operating loss	(52,260		)	(11,263		)

Interest (expense) income	(1,815		)	32
Other income, net	3,970			3,568

Loss before income taxes, minority interest and equity in loss of affiliated companies	(50,105		)	(7,663		)
Income tax expense	(4,341		)	(2,839		)
Minority interest in losses of consolidated subsidiaries	464			556
Net loss	$	(53,982	)	$	(9,946	)

Loss per share - Basic and diluted	$	(0.45	)	$	(0.08	)

Weighted average shares used in per-share calculation:
- Basic and diluted	120,900			120,600

UTStarcom, Inc.
Condensed Consolidated Statement of Cash Flows
(in thousands)

	March 31,
	2007			2006
	(Unaudited)			(As restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(53,982	)	$	(9,946	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	14,744			17,476
Net (gain) loss on sale of asset	(2,699		)	4,708
Stock-based compensation expense	2,755			2,425
(Recovery of) provision for doubtful accounts	(5,281		)	892
(Recovery of) provision for deferred costs reserves	(1,504		)	795
Other	266			(578		)
Changes in operating assets and liabilities:
Accounts receivable	60,296			28,787
Inventories	(2,422		)	(4,337		)
Deferred costs	(5,222		)	3,248
Other assets	(31,433		)	(6,771		)
Accounts payable	(41,324		)	18,077
Income taxes payable	5,969			(2,020		)
Customer advances	44,298			43,097
Deferred revenue	(11,790		)	8,789
Other current liabilities	(79,336		)	(50,970		)
Net cash provided by (used in) operating activities	(106,665		)	53,672
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment	(5,221		)	(3,162		)
Proceeds from the disposition of an investment interest	1,800			—
Proceeds from the sale of semiconductor design assets	—			19,965
Change in restricted cash and long-term investments	10,365			(17,037		)
Purchase of short-term investments	(15,576		)	(17,041		)
Proceeds from sale of short-term investments	10,483			13,309
Other	(70		)	499
Net cash provided by (used in) investing activities	1,781			(3,467		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings	64,621			62,370
Payments on borrowings	(64,676		)	(89,948		)
Other	(654		)	(3,184		)
Net cash used in financing activities	(709		)	(30,762		)
Effect of exchange rate changes on cash and cash equivalents	2,120			2,374
Net increase (decrease) in cash and cash equivalents	(103,473		)	21,817
Cash and cash equivalents at beginning of period	661,623			645,571
Cash and cash equivalents at end of period	$	558,150		$	667,388

Supplemental disclosure of cash flow information:
Cash paid:
Interest	$	5,388		$	2,511
Income taxes	$	2,788		$	3,801
Non-cash operating activity:
Accounts receivable transferred to notes receivable	$	9,240		$	8,977