UTStarcom (UTSI) 8-K Other events

Exhibit 99.1

UTStarcom, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

	Three months ended						Twelve months ended
	December 31, 2003			December 31, 2002*			December 31, 2003			December 31, 2002*
Net sales	$	643,596		$	301,095		$	1,964,332		$	981,806
Cost of sales	443,719			199,994			1,328,164			636,334
Gross profit	199,877			101,101			636,168			345,472
Operating expenses:
Selling, general and administrative	57,211			28,475			187,128			110,263
Research and development	47,639			22,657			155,252			86,182
In process research and development	(123		)	—			10,686			670
Amortization of intangible assets	3,111			631			8,370			2,395
Total operating expenses	107,838			51,763			361,436			199,510
Operating income	92,039			49,338			274,732			145,962
Interest and other income (expenses)	(2,530		)	(3,912		)	297			(5,637		)
Equity in loss of affiliated companies	(980		)	(3,109		)	(5,260		)	(4,053		)
Income before income taxes and minority interest	88,529			42,317			269,769			136,272
Income tax expense	22,132			8,464			67,442			27,254
Minority interest in earnings of consolidated subsidiaries	(41		)	—			(76		)	(1,156		)
Net income	$	66,356		$	33,853		$	202,251		$	107,862
Basic earnings per share	$	0.64		$	0.32		$	1.95		$	0.98
Diluted earnings per share	$	0.52		$	0.30		$	1.64		$	0.94
Weighted average shares used in per-share calculation:
- Basic	103,814			106,621			103,659			109,566
- Diluted	129,672			111,233			124,909			114,407
	Three months ended						Twelve months ended
	December 31, 2003			December 31, 2002*			December 31, 2003			December 31, 2002*
1. The above unaudited financial statements include the following non-cash expenses:
Cost of Sales	$	1		$	1		$	6		$	19
Selling, general and administrative	9			61			238			1,237
Research and development	1,056			453			4,058			1,843
Total stock compensation expense	$	1,066		$	515		$	4,302		$	3,099
Amortization of intangible assets	$	3,111		$	631		$	8,370		$	2,395
In-process research and development	$	(123	)	$	—		$	10,686		$	670
Impairment in investment portfolio	$	(348	)	$	4,406		$	(349	)	$	7,230
2. Earnings per share
Basic earnings per share
Income available to common stockholders	$	66,356		$	33,853		$	202,251		$	107,862
Effect of Dilutive Securities
7/8% Convertible Subordinated Notes	617			—			3,090			—
Diluted earnings per share
Income available to common stockholders + assumed conversions	$	66,973		$	33,853		$	205,341		$	107,862

*Certain reclassifications have been made to prior year balances in order to conform to the current year presentation

UTStarcom, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)

	December 31, 2003			December 31, 2002*
	(unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short-term investment	$	422,591		$	339,249
Accounts receivable, net	368,865			222,050
Notes receivable	11,362			12,048
Inventories, net	298,467			183,687
Deferred costs/Inventories at customer sites under contracts	517,548			240,979
Prepaid expenses	136,262			47,220
Restricted cash	24,404			21,251
Other current assets	52,408			40,888
Total current assets	1,831,907			1,107,372
Property, plant and equipment, net	186,076			93,980
Long-term investments	24,066			35,360
Goodwill and intangible assets, net	145,933			49,820
Other long term assets	38,976			19,020
Total assets	$	2,226,958		$	1,305,552
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	251,176		$	256,980
Debt	1			—
Income taxes payable	16,780			13,003
Deferred revenue	503,612			164,247
Other	173,138			104,927
Total current liabilities	944,707			539,157
Long-term debt	402,500			—
Minority interest in consolidated subsidiaries	560			—
Stockholders’ equity:
Common stock	131			135
Additional paid-in capital	653,624			658,546
Deferred stock compensation	(7,761		)	(11,766		)
Retained earnings	229,777			120,520
Receivable from shareholders	—			(282		)
Other comprehensive income/(loss)	3,420			(758		)
Total stockholders’ equity	879,191			766,395
Total liabilities and stockholders’ equity	$	2,226,958		$	1,305,552
	December 31, 2003			December 31, 2002*
	(unaudited)
Inventories are made up of the following:
Inventories at factories	$	207,504		$	143,684
Inventories at customer sites	90,963			40,003
Inventories at customer sites under contracts	517,548			240,979
Total inventories	$	816,015		$	424,666

*Certain reclassifications have been made to prior year balances in order to conform to the current year presentation