Exhibit 99.1

As described in the Explanatory Note preceding Item 1 of this Annual Report, the unaudited quarterly Condensed Consolidated Financial Statements for the first two quarters in the fiscal year ended December 31, 2006 and all quarters in the fiscal year ended December 31, 2005 have been restated to defer a portion of the revenue previously recorded for system sales in China which was recognized earlier than it should have been and recognize additional non-cash stock-based compensation expense arising from using corrected measurement dates for certain stock options grants.

The unaudited Condensed Consolidated Financial Statements for 2005 also reflect restatements to report sales to certain third party resellers and associated cost of net sales, as related party sales and related party cost of net sales, because in 2006 we determined that sales to these entities are, in substance, sales to SOFTBANK CORP., which is one of our significant shareholders. These corrections had no effect on reported total net sales, total cost of sales, total gross profit, or total net income (loss). The accounts receivable resulting from these sales are now reported as accounts receivable, related parties. This correction had no effect on reported total accounts receivable, total current assets, or total assets.

Lastly, the Company has corrected the unaudited Condensed Consolidated Balance Sheets at March 31, 2006 and June 30, 2006 and the Condensed Consolidated Statements of Cash Flows for the three month period ended March 31, 2006 and the six month period ended June 30, 2006 to report $6.2 million of time deposits as short-term investments. Formerly these time deposits with original maturities of more than three months had incorrectly been reported as cash equivalents. These corrections had no effect on reported total current assets or total assets in the restated Condensed Consolidated Balance Sheets at March 31, 2006 or June 30, 2006. The corrections to the Condensed Consolidated Statements of Cash Flow for the three month period ended March 31 and the six month period ended June 30, 2006 resulted in changes in the above amounts to be reported as investing activities rather than changes in cash balances.

Following are the restated Condensed Consolidated Balance Sheets and Statements of Operations at and for the three month and year-to-date periods ended June 30, 2006, March 31, 2006, September 30, 2005, June 30, 3005 and March 31, 2005. Also included are the restated Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2006 and the six months ended June 30, 2006, which give effect to the corrections for the aforementioned 2006 error in the classification of certain time deposits, and the restated Condensed Consolidated Statement of Operations for the three month period ended December 31, 2005. This follows guidance issued by the SEC concerning presenting information about the effects of restating previously issued financial statements for the effects of correcting errors in prior stock option accounting. Pursuant to this guidance we do not intend to amend any of our previously filed Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q for the periods affected by the restatements and such reports should not be relied upon.

UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)

	Three months ended June 30, 2006												Six months ended June 30, 2006
	As previously												As previously
	reported				Adjustments				As restated				reported				Adjustments				As restated
Net sales
Unrelated party		$	515,733			$	(1,835	)		$	513,898			$	1,076,094			$	(5,160	)	$	1,070,934
Related party		33,413				4,215				37,628				69,623				12,949			82,572
		549,146				2,380				551,526				1,145,717				7,789			1,153,506
Cost of net sales
Unrelated party		414,364				(251		)		414,113				873,744				1,953			875,697
Related party		25,496				2,967				28,463				40,233				4,835			45,068
Gross profit		109,286				(336		)		108,950				231,740				1,001			232,741
Operating expenses:
Selling, general and administrative		82,423				686				83,109				165,593				1,240			166,833
Research and development		46,743				(140		)		46,603				93,052				(47		)	93,005
Amortization of intangible assets		4,821				—				4,821				9,746				—			9,746
Total operating expenses		133,987				546				134,533				268,391				1,193			269,584
Operating loss		(24,701		)		(882		)		(25,583		)		(36,651		)		(192		)	(36,843		)
Interest income		3,947				—				3,947				7,479				—			7,479
Interest expense		(3,166		)		—				(3,166		)		(6,667		)		—			(6,667		)
Other income, net		6,887				—				6,887				10,454				—			10,454
Loss before income taxes and minority interest		(17,033		)		(882		)		(17,915		)		(25,385		)		(192		)	(25,577		)
Income tax expense		(4,669		)		—				(4,669		)		(7,508		)		—			(7,508		)
Minority interest in losses of consolidated subsidiaries		259				—				259				815				—			815
Net loss		$	(21,443	)		$	(882	)		$	(22,325	)		$	(32,078	)		$	(192	)	$	(32,270	)
Loss per share—Basic		$	(0.18	)		$	(0.01	)		$	(0.19	)		$	(0.27	)		$	—		$	(0.27	)
Loss per share—Diluted		$	(0.18	)		$	(0.01	)		$	(0.19	)		$	(0.27	)		$	—		$	(0.27	)

UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
(In thousands, except per share amounts)

	Three months ended March 31, 2006
	As previously reported				Adjustments				As restated
Net sales
Unrelated party		$	560,361			$	(3,324	)		$	557,037
Related party		36,210				8,734				44,944
		596,571				5,410				601,981
Cost of net sales
Unrelated party		459,381				2,204				461,585
Related party		14,736				1,869				16,605
Gross profit		122,454				1,337				123,791
Operating expenses:
Selling, general and administrative		83,172				552				83,724
Research and development		46,309				93				46,402
Amortization of intangible assets		4,925				—				4,925
Total operating expenses		134,406				645				135,051
Operating loss		(11,952		)		692				(11,260		)
						—				—
Interest income		3,532				—				3,532
Interest expense		(3,500		)		—				(3,500		)
Other income, net		3,568				—				3,568
Loss before income taxes and minority interest		(8,352		)		692				(7,660		)
Income tax expense		(2,839		)		—				(2,839		)
Minority interest in losses of consolidated subsidiaries		556				—				556
Net loss		$	(10,635	)		$	692			$	(9,943	)
Loss per share—Basic		$	(0.09	)		$	0.01			$	(0.08	)
Loss per share—Diluted		$	(0.09	)		$	0.01			$	(0.08	)

UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
(In thousands, except per share amounts)

	Three months ended December 31, 2005
	As previously
	reported				Adjustments				As restated
Net sales
Unrelated party		$	613,434			$	(13,031	)		$	600,403
Related party		62,220				18,469				80,689
		675,654				5,438				681,092
Cost of net sales						—				—
Unrelated party		570,534				(29,188		)		541,346
Related party		44,019				33,072				77,091
Gross profit		61,101				1,554				62,655
Operating expenses:						—				—
Selling, general and administrative		73,907				166				74,073
Research and development		54,455				60				54,515
Amortization of intangible assets		5,462				—				5,462
Restructuring		11,164				—				11,164
Total operating expenses		144,988				226				145,214
						—				—
Operating loss		(83,887		)		1,328				(82,559		)
						—				—
Interest income		2,617				—				2,617
Interest expense		(3,900		)		—				(3,900		)
Other income, net		45,388				—				45,388
						—				—
Loss before income taxes, minority interest and equity in loss of affiliated companies		(39,782		)		1,328				(38,454		)
Income tax (expense) benefit		(2,501		)		—				(2,501		)
Minority interest in losses of consolidated subsidiaries		598				—				598
Equity in loss of affiliated companies		(3,645		)		—				(3,645		)
Net loss		$	(45,330	)		$	1,328			$	(44,002	)
Loss per share—Basic		$	(0.38	)		$	0.01			$	(0.37	)
Loss per share—Diluted		$	(0.38	)		$	0.01			$	(0.37	)

UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
(In thousands, except per share amounts)

	Three months ended September 30, 2005												Nine months ended September 30, 2005
	As previously reported				Adjustments				As restated				As previously reported				Adjustments				As restated
Net sales
Unrelated party		$	625,902			$	(41,830	)		$	584,072			$	1,921,264			$	(126,369	)	$	1,794,895
Related party		6,144				7,219				13,363				332,425				62,698			395,123
		632,046				(34,611		)		597,435				2,253,689				(63,671		)	2,190,018
Cost of net sales
Unrelated party		575,907				(27,221		)		548,686				1,704,751				(58,958		)	1,645,793
Related party		3,185				7,677				10,862				146,422				24,622			171,044
Gross profit		52,954				(15,067		)		37,887				402,516				(29,335		)	373,181
Operating expenses:
Selling, general and administrative		86,362				52				86,414				298,384				(994		)	297,390
Research and development		60,797				20				60,817				192,678				(381		)	192,297
Amortization of intangible assets		6,643				—				6,643				20,391				—			20,391
Impairment oflong-lived assets		218,094				—				218,094				218,094				—			218,094
Restructuring		3,378				—				3,378				18,505				—			18,505
In-process research and development		—				—				—				660				—			660
Total operating expenses		375,274				72				375,346				748,712				(1,375		)	747,337
Operating loss		(322,320		)		(15,139		)		(337,459		)		(346,196		)		(27,960		)	(374,156		)
Interest income		1,673				—				1,673				4,474				—			4,474
Interest expense		(3,876		)		—				(3,876		)		(12,864		)		—			(12,864		)
Gain on extinguishment of subordinated notes		20,297				—				20,297				31,392				—			31,392
Other income, net		7,352				—				7,352				(1,723		)		—			(1,723		)
Loss before income taxes, minority interest and equity in loss of affiliated companies		(296,874		)		(15,139		)		(312,013		)		(324,917		)		(27,960		)	(352,877		)
Income tax (expense) benefit		(107,469		)		(17,753		)		(125,222		)		(115,388		)		(18,653		)	(134,041		)
Minority interest in losses of consolidated subsidiaries		3				—				3				94				—			94
Equity in loss of affiliated companies		(786		)		—				(786		)		(1,818		)		—			(1,818		)
Net loss		$	(405,126	)		$	(32,892	)		$	(438,018	)		$	(442,029	)		$	(46,613	)	$	(488,642	)
Loss per share—Basic		$	(3.43	)		$	(0.27	)		$	(3.70	)		$	(3.81	)		$	(0.41	)	$	(4.22	)
Loss per share—Diluted		$	(3.43	)		$	(0.27	)		$	(3.70	)		$	(3.81	)		$	(0.41	)	$	(4.22	)

UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
(In thousands, except per share amounts)

	Three months ended June 30, 2005														Six months ended June 30, 2005
	As previously														As previously
	reported					Adjustments					As restated				reported				Adjustments						As restated
Net sales
Unrelated party		$		691,431			$		(42,041	)		$	649,390			$	1,295,362			$			(84,539	)	$		1,210,823
Related party		28,328					22,795					51,123				326,281				55,479					381,760
		719,759					(19,246			)		700,513				1,621,643				(29,060				)	1,592,583
Cost of net sales							—					—								—					—
Unrelated party		591,892					(18,758			)		573,134				1,128,844				(31,738				)	1,097,106
Related party		15,729					8,796					24,525				143,237				16,945					160,182
Gross profit		112,138					(9,284			)		102,854				349,562				(14,267				)	335,295
Operating expenses:							—					—								—					—
Selling, general and administrative		103,009					78					103,087				212,020				(1,047				)	210,973
Research and development		65,621					29					65,650				131,881				(399				)	131,482
Amortization of intangible assets		6,776					—					6,776				13,748				—					13,748
Restructuring		15,127					—					15,127				15,127				—					15,127
In-process research and development		660					—					660				660				—					660
Total operating expenses		191,193					107					191,300				373,436				(1,446				)	371,990
							—					—								—					—
Operating loss		(79,055			)		(9,391			)		(88,446		)		(23,874		)		(12,821				)	(36,695			)
							—					—								—					—
Interest income		1,452					—					1,452				2,801				—					2,801
Interest expense		(4,711			)		—					(4,711		)		(8,989		)		—					(8,989			)
Gain on extinguishment of subordinated notes		11,095					—					11,095				11,095				—					11,095
Other income (expense), net		(2,228			)		—					(2,228		)		(9,075		)		—					(9,075			)
							—					—								—					—
Loss before income taxes, minority interest and equity in loss of affiliated companies		(73,447			)		(9,391			)		(82,838		)		(28,042		)		(12,821				)	(40,863			)
Income tax (expense) benefit		(240			)		(3,050			)		(3,290		)		(7,920		)		(900				)	(8,820			)
Minority interest in losses of consolidated subsidiaries		313					—					313				91				—					91
Equity in loss of affiliated companies		(574			)		—					(574		)		(1,033		)		—					(1,033			)
Net loss		$		(73,948	)		$		(12,441	)		$	(86,389	)		$	(36,904	)		$			(13,721	)	$		(50,625	)
Loss per share—Basic		$		(0.64	)		$		(0.11	)		$	(0.75	)		$	(0.32	)		$		(0.12		)	$		(0.44	)
Loss per share—Diluted		$	(0.64		)		$	(0.11		)		$	(0.75	)		$	(0.32	)		$	(0.12			)	$	(0.44		)

UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
(In thousands, except per share amounts)

	Three months ended March 31, 2005
	As previously reported				Adjustments				As restated
	(in thousands, except per share amounts)
Net sales
Unrelated party		$	603,931			$	(42,499	)		$	561,432
Related party		297,953				32,684				330,637
		901,884				(9,815		)		892,069
Cost of net sales
Unrelated party		536,952				(12,980		)		523,972
Related party		127,508				8,149				135,657
Gross profit		237,424				(4,984		)		232,440
Operating expenses:
Selling, general and administrative		109,011				(1,125		)		107,886
Research and development		66,260				(429		)		65,831
Amortization of intangible assets		6,972				—				6,972
Total operating expenses		182,243				(1,554		)		180,689
Operating income		55,181				(3,430		)		51,751
Interest income		1,349				—				1,349
Interest expense		(4,278		)		—				(4,278		)
Other income, net		(6,847		)		—				(6,847		)
Income before income taxes, minority interest and equity in loss of affiliated companies		45,405				(3,430		)		41,975
Income tax (expense) benefit		(7,680		)		2,150				(5,530		)
Minority interest in losses of consolidated subsidiaries		(222		)		—				(222		)
Equity in loss of affiliated companies		(459		)		—				(459		)
Net income		$	37,044			$	(1,280	)		$	35,764
Earnings per share—Basic		$	0.32			$	(0.01	)		$	0.31
Earnings per share—Diluted		$	0.29			$	(0.02	)		$	0.27

UTSTARCOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)

	June 30, 2006
	As previously reported				Adjustments				As restated
ASSETS
Current assets:
Cash and cash equivalents		$	647,274			$	(6,254	)	$	641,020
Short-term investments		10,339				6,254			16,593
Accounts receivable, net of allowances for doubtful accounts		383,507				(1,779		)	381,728
Accounts receivable, related parties		41,110				1,779			42,889
Notes receivable		11,593				—			11,593
Inventories		455,015				—			455,015
Deferred costs		256,812				—			256,812
Prepaids and other current assets		94,177				—			94,177
Restricted cash and short-term investments		71,119				—			71,119
Total current assets		1,970,946				—			1,970,946
Property, plant and equipment, net		216,325				—			216,325
Long-term investments		29,824				—			29,824
Goodwill		3,063				—			3,063
Intangible assets, net		65,568				—			65,568
Long-term deferred costs		—				180,248			180,248
Other long-term assets		31,092				—			31,092
Total assets		$	2,316,818			$	180,248		$	2,497,066
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	363,097			$	—		$	363,097
Short-term debt		122,587				—			122,587
Income taxes payable		37,101				621			37,722
Customer advances		291,964				—			291,964
Deferred revenue		66,776				33,739			100,515
Other current liabilities		218,194				1,516			219,710
Total current liabilities		1,099,719				35,876			1,135,595
Long-term deferred revenue		16,270				246,194			262,464
Long-term debt		274,900				—			274,900
Other long-term liabilities		11,200				—			11,200
Total liabilities		1,402,089				282,070			1,684,159
Minority interest in consolidated subsidiaries		7,593				—			7,593
Stockholders’ equity:
Common stock		152				—			152
Additional paid-in capital		1,171,175				25,102			1,196,277
Deferred stock compensation		—				—			—
Retained earnings (accumulated deficit)		(285,252		)		(123,914		)	(409,166		)
Accumulated other comprehensive income		21,061				(3,010		)	18,051
Total stockholders’ equity		907,136				(101,822		)	805,314
Total liabilities, minority interest and stockholders’ equity		$	2,316,818			$	180,248		$	2,497,066

UTSTARCOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In thousands)

	March 31, 2006
	As previously reported				Adjustments				As restated
ASSETS
Current assets:
Cash and cash equivalents		$	673,625			$	(6,237	)	$	667,388
Short-term investments		10,852				6,237			17,089
Accounts receivable, net of allowances for doubtful accounts		405,938				(6,936		)	399,002
Accounts receivable, related parties		89,050				6,936			95,986
Notes receivable		7,659				—			7,659
Inventories		424,028				—			424,028
Deferred costs		246,678				—			246,678
Prepaids and other current assets		103,275				—			103,275
Restricted cash and short-term investments		69,078				—			69,078
Total current assets		2,030,183				—			2,030,183
Property, plant and equipment, net		221,003				—			221,003
Long-term investments		25,643				—			25,643
Goodwill		3,063				—			3,063
Intangible assets, net		70,389				—			70,389
Long-term deferred costs		—				182,480			182,480
Other long-term assets		25,235				—			25,235
Total assets		$	2,375,516			$	182,480		$	2,557,996
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	339,865			$	—		$	339,865
Short-term debt		172,141				—			172,141
Income taxes payable		31,708				622			32,330
Customer advances		265,359				—			265,359
Deferred revenue		86,681				33,427			120,108
Other current liabilities		243,888				1,514			245,402
Total current liabilities		1,139,642				35,563			1,175,205
Long-term deferred revenue		17,798				248,104			265,902
Long-term debt		274,900				—			274,900
Other long-term liabilities		13,145				—			13,145
Total liabilities		1,445,485				283,667			1,729,152
						—			—
Minority interest in consolidated subsidiaries		7,852				—			7,852
Stockholders’ equity:
Common stock		152				—			152
Additional paid-in capital		1,166,519				24,591			1,191,110
Deferred stock compensation		—				—			—
Accumulated deficit		(263,809		)		(123,032		)	(386,841		)
Accumulated other comprehensive income		19,317				(2,746		)	16,571
Total stockholders’ equity		922,179				(101,187		)	820,992
Total liabilities, minority interest and stockholders’ equity		$	2,375,516			$	182,480		$	2,557,996

UTSTARCOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In thousands)

	September 30, 2005
	As previously reported				Adjustments				As restated
ASSETS
Current assets:
Cash and cash equivalents		$	496,126			$	—		$	496,126
Short-term investments		15,091				—			15,091
Accounts receivable, net of allowances for doubtful accounts		544,925				(10,749		)	534,176
Accounts receivable, related parties		26,920				10,749			37,669
Notes receivable		22,934				—			22,934
Inventories		474,485				—			474,485
Deferred costs		238,294				—			238,294
Prepaids and other current assets		83,147				—			83,147
Restricted cash and short-term investments		36,922				—			36,922
Total current assets		1,938,844				—			1,938,844
Property, plant and equipment, net		251,009				—			251,009
Long-term investments		37,427				—			37,427
Goodwill		3,063				—			3,063
Intangible assets, net		80,775				—			80,775
Long-term deferred costs		—				188,633			188,633
Other long-term assets		31,932				—			31,932
Total assets		$	2,343,050			$	188,633		$	2,531,683
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	291,466			$	—		$	291,466
Short-term debt		226,400				—			226,400
Income taxes payable		25,244				621			25,865
Customer advances		202,233				—			202,233
Deferred revenue		96,981				32,378			129,359
Other current liabilities		250,260				1,495			251,755
Total current liabilities		1,092,584				34,494			1,127,078
Long-term deferred revenue		—				257,339			257,339
Long-term debt		274,900				—			274,900
Total liabilities		1,367,484				291,833			1,659,317
Minority interest in consolidated subsidiaries		5,287				—			5,287
Stockholders’ equity:
Common stock		151				—			151
Additional paid-in capital		1,165,227				23,819			1,189,046
Deferred stock compensation		(4,052		)		(115		)	(4,167		)
Retained earnings (accumulated deficit)		(207,844		)		(125,055		)	(332,899		)
Accumulated other comprehensive income		16,797				(1,849		)	14,948
Total stockholders’ equity		970,279				(103,200		)	867,079
Total liabilities, minority interest and stockholders’ equity		$	2,343,050			$	188,633		$	2,531,683

UTSTARCOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In thousands)

	June 30, 2005
	As previously reported				Adjustments				As restated
ASSETS
Current assets:
Cash and cash equivalents		$	350,324			$	—		$	350,324
Short-term investments		31,402				—			31,402
Accounts receivable, net of allowances for doubtful accounts		755,251				(74,717		)	680,534
Accounts receivable, related parties		89,569				74,717			164,286
Notes receivable		30,815				—			30,815
Inventories		535,780				—			535,780
Deferred costs		249,589				—			249,589
Prepaids and other current assets		99,691				1,197			100,888
Restricted cash and short-term investments		32,607				—			32,607
Current deferred taxes		43,344				4,759			48,103
Total current assets		2,218,372				5,956			2,224,328
Property, plant and equipment, net		273,027				—			273,027
Long-term investments		37,099				—			37,099
Goodwill		196,037				—			196,037
Intangible assets, net		89,100				—			89,100
Long-term deferred costs		—				165,239			165,239
Other long-term assets		76,801				12,698			89,499
Total assets		$	2,890,436			$	183,893		$	3,074,329
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	431,361			$	—		$	431,361
Short-term debt		265,236				—			265,236
Income taxes payable		3,488				1,522			5,010
Customer advances		144,590				—			144,590
Deferred revenue		86,870				30,121			116,991
Other current liabilities		253,334				1,458			254,792
Total current liabilities		1,184,879				33,101			1,217,980
Long-term deferred revenue		—				219,318			219,318
Long-term debt		364,800				—			364,800
Total liabilities		1,549,679				252,419			1,802,098
Minority interest in consolidated subsidiaries		5,290				—			5,290
Stockholders’ equity:
Common stock		146				—			146
Additional paid-in capital		1,138,374				23,859			1,162,233
Deferred stock compensation		(4,584		)		(223		)	(4,807		)
Retained earnings (accumulated deficit)		197,281				(92,163		)	105,118
Accumulated other comprehensive income		4,250				1			4,251
Total stockholders’ equity		1,335,467				(68,526		)	1,266,941
Total liabilities, minority interest and stockholders’ equity		$	2,890,436			$	183,893		$	3,074,329

UTSTARCOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
(In thousands)

	March 31, 2005
	As previously reported				Adjustments				As restated
ASSETS
Current assets:
Cash and cash equivalents		$	372,714			$	—		$	372,714
Short-term investments		16,224				—			16,224
Accounts receivable, net of allowances for doubtful accounts		737,696				(49,152		)	688,544
Accounts receivable, related parties		168,997				49,151			218,148
Notes receivable		22,926				—			22,926
Inventories		601,717				—			601,717
Deferred costs		211,973				—			211,973
Prepaids and other current assets		109,787				1,195			110,982
Restricted cash and short-term investments		29,551				—			29,551
Current deferred taxes		141,713				4,759			146,472
Total current assets		2,413,298				5,953			2,419,251
Property, plant and equipment, net		278,487				—			278,487
Long-term investments		35,131				—			35,131
Goodwill		195,816				—			195,816
Intangible assets, net		94,438				—			94,438
Long-term deferred costs		—				155,269			155,269
Other long-term assets		83,889				12,699			96,588
Total assets		$	3,101,059			$	173,921		$	3,274,980
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	440,706			$	—		$	440,706
Short-term debt		275,485				3			275,488
Income taxes payable		111,640				(1,529		)	110,111
Customer advances		137,442				—			137,442
Deferred revenue		95,004				27,247			122,251
Other current liabilities		238,668				1,438			240,106
Total current liabilities		1,298,945				27,159			1,326,104
Long-term deferred revenue		—				202,955			202,955
Long-term debt		402,500				—			402,500
Total liabilities		1,701,445				230,114			1,931,559
Minority interest in consolidated subsidiaries		5,604				—			5,604
Stockholders’ equity:
Common stock		144				—			144
Additional paid-in capital		1,123,826				23,901			1,147,727
Deferred stock compensation		(5,527		)		(372		)	(5,899		)
Retained earnings (accumulated deficit)		271,229				(79,722		)	191,507
Accumulated other comprehensive income		4,338				—			4,338
Total stockholders’ equity		1,394,010				(56,193		)	1,337,817
Total liabilities, minority interest and stockholders’ equity		$	3,101,059			$	173,921		$	3,274,980

UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

	Six months ended June 30, 2006
	As previously			Total
	reported			adjustments			As restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		(32,078	)		(190	)		(32,268	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		34,653			—			34,653
Loss on sale and disposal of assets		2,169			—			2,169
Stock-based compensation expense		8,769			1,166			9,935
Provision for doubtful accounts		3,133			—			3,133
Provision for deferred costs		5,978			—			5,978
Other		(2,930	)		—			(2,930	)
Changes in operating assets and liabilities:					—
Accounts receivable		97,596			—			97,596
Inventories		(36,916	)		—			(36,916	)
Deferred costs		(13,677	)		—			(13,677	)
Other assets		(7,784	)		6,822			(962	)
Accounts payable		39,693			—			39,693
Income taxes payable		3,438			—			3,438
Customer advances		69,280			—			69,280
Deferred revenue		(2,699	)		(7,813	)		(10,512	)
Other current liabilities		(89,469	)		15			(89,454	)
Net cash provided by operating activities		79,156			—			79,156
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment		(12,288	)		—			(12,288	)
Investment in affiliates, net of cash acquired		(302	)		—			(302	)
Proceeds from sale of business		19,965			—			19,965
Change in restricted cash and long-term investments		(19,994	)		—			(19,994	)
Purchase of short-term investments		(21,810	)		(6,222	)		(28,032	)
Proceeds from sale of short-term investments		25,588			—			25,588
Other		1,672			—			1,672
Net cash used in investing activities		(7,169	)		(6,222	)		(13,391	)
CASH FLOWS FROM FINANCING ACTIVITIES:					—
Proceeds from borrowing		62,545			—			62,545
Payments on borrowings		(140,053	)		—			(140,053	)
Other		1,967			—			1,967
Net cash used in financing activities		(75,541	)		—			(75,541	)
Effect of exchange rate changes on cash and cash equivalents		5,257			(32	)		5,225
Net increase (decrease) in cash and cash equivalents		1,703			(6,254	)		(4,551	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		645,571			—			645,571
CASH AND CASH EQUIVALENTS AT END OF PERIOD		647,274			(6,254	)		641,020

UTSTARCOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
(In thousands)

	Three months ended March 31, 2006
	As previously				Total
	reported				adjustments				As restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(10,635	)		$	692			$	(9,943	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		17,476				—				17,476
Loss on sale and disposal of assets		4,708				—				4,708
Stock-based compensation expense		1,769				656				2,425
Provision for doubtful accounts		892				—				892
Provision for deferred costs		795				—				795
Other		(578		)		—				(578		)
Changes in operating assets and liabilities:						—
Accounts receivable		28,787				—				28,787
Inventories		(4,337		)		—				(4,337		)
Deferred costs		(810		)		—				(810		)
Other assets		(6,771		)		4,055				(2,716		)
Accounts payable		18,077				—				18,077
Income taxes payable		(2,020		)		—				(2,020		)
Customer advances		43,097				—				43,097
Deferred revenue		14,207				(5,418		)		8,789
Other current liabilities		(50,985		)		15				(50,970		)
Net cash provided by operating activities		53,672				—				53,672
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment		(3,162		)		—				(3,162		)
Sale of business		19,965				—				19,965
Change in restricted cash and long-term investments		(17,037		)		—				(17,037		)
Purchase of short-term investments		(10,819		)		(6,222		)		(17,041		)
Proceeds from sale of short-term investments		13,309				—				13,309
Other		499				—				499
Net cash provided by (used in) investing activities		2,755				(6,222		)		(3,467		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings		62,370				—				62,370
Payments on borrowings		(89,948		)		—				(89,948		)
Other		(3,184		)		—				(3,184		)
Net cash used in financing activities		(30,762		)		—				(30,762		)
Effect of exchange rate changes on cash and cash equivalents		2,389				(15		)		2,374
Net increase (decrease) in cash and cash equivalents		28,054				(6,237		)		21,817
Cash and cash equivalents at beginning of period		645,571				—				645,571
Cash and cash equivalents at end of period		673,625				(6,237		)		667,388