UTStarcom Reports Unaudited First Quarter 2013 Financial Results

       UTStarcom Reports Unaudited First Quarter 2013 Financial Results

PR Newswire

BEIJING, May 24, 2013

BEIJING, May 24, 2013 /PRNewswire/ --UTStarcom Holdings Corp. ("UTStarcom" or
"the Company") (NASDAQ: UTSI), a leading provider of media operational support
services and broadband equipment products and services, today reported its
unaudited financial results for the first quarter ended March 31, 2013.

As previously announced, the Company closed the divestiture of its IPTV
business in August 2012, but has not yet met the requirements for reporting
those results as discontinued operations because of the Company's continuing
involvement. Therefore, to enable a comparison of results excluding the IPTV
business and the amortization of PHS deferred revenue the Company is including
non-GAAP comparisons throughout this press release.

Mr. William Wong, UTStarcom's President and Chief Executive Officer, stated,
"Overall, we are pleased with our performance in the first quarter of 2013.
We continued and advanced many of the strategic initiatives that we launched
in late 2012 and made a concerted effort to accelerate the Company's
transition to a higher growth and more profitable business. Furthermore,
during the first quarter we concluded several important initiatives to enhance
shareholder value as part of our longstanding commitment to our shareholders,
including a $30 million cash tender offer and a one-for-three reverse share
split. All of our efforts are geared towards better positioning the Company
for the long term and ensuring that we are delivering value to our business
partners and our shareholders. While there is certainly more to do, we are
pleased with the progress we are making and the improvements that have been
made in a short time."

First Quarter 2013 Highlights

  oOn January 3, 2013, completed a $30 million tender offer to improve
    shareholder value.
  oOn March 21, 2013, effected a one-for-three reverse share split of its
    ordinary shares. As a result, the Company's authorized share capital was
    amended by the consolidation of 750,000,000 ordinary shares of US$0.00125
    par value each prior to the reverse share split into 250,000,000 ordinary
    shares of US$0.00375 par value each after the reverse share split. Unless
    otherwise specified, all share and per share information in this press
    release has been retroactively adjusted to reflect this reverse share
    split.
  oGAAP revenues in the first quarter of 2013 were $37.2 million, a 20.3%
    decrease from the first quarter of 2012.
  oNon-GAAP revenues in the first quarter of 2013 were $36.7 million, a 6.9%
    decrease from the first quarter of 2012.
  oGAAP gross margin for the first quarter of 2013 was 31.4%, compared to
    39.5% for the first quarter of 2012.
  oNon-GAAP gross margin for the first quarter of 2013 was 31.8%, compared to
    38.3% for the first quarter of 2012.
  oGAAP net loss attributable to UTStarcom shareholders was $5.0 million and
    GAAP basic loss per share was $0.13 for the first quarter of 2013,
    compared to GAAP net loss attributable to UTStarcom shareholders of $4.2
    million and GAAP basic loss per share of $0.08 for the first quarter of
    2012.
  oNon-GAAP net loss attributable to UTStarcom shareholders was $5.0 million
    and non-GAAP basic loss per share was $0.13 for the first quarter of 2013,
    compared to non-GAAP net loss attributable to UTStarcom shareholders of
    $2.1 million and non-GAAP basic loss per share of $0.04 for the first
    quarter of 2012.
  oAs of March 31, 2013, cash, cash equivalents and short-term investments
    were $136.0 million.

Mr. Robert Pu, UTStarcom's Chief Financial Officer, commented, "The Company
delivered reasonably sound financial performance in the first quarter of 2013.
Our non-GAAP revenues were within our expectations, we made significant
progress in lowering operating expenses as planned, and we worked hard to hold
our overall gross margin relatively stable during a time of transition. In
addition, our balance sheet remains strong with a cash position of
approximately $136 million as of March 31, 2013. This enabled our shareholder
value enhancements, including the tender offer and an additional investment in
our strategic partner, iTV Media. We will continue to manage our cash wisely,
with a view to balancing growth, profitability and shareholder return."

First Quarter 2013 Financial Results

As part of a plan to transition the Company into higher-growth, more
profitable areas, UTStarcom successfully closed the divestiture of its IPTV
business on August 31, 2012. As of March 31, 2013, the Company did not meet
the requirements to report results from the IPTV division separately as
discontinued operations. To enable a comparison of the financial results in
year-to-date and future periods, the Company has prepared non-GAAP results.
Included below are quarterly and year-to-date non-GAAP comparisons that
exclude financial results from the IPTV business and amortization of PHS
deferred revenue. The Company's GAAP financial results and reconciliation
with the non-GAAP numbers discussed in this release are at the end of this
press release.

Total Revenues

Total revenues for the first quarter of 2013 were $37.2 million, a decrease of
20.3% from $46.7 million for the corresponding period in 2012.

Non-GAAP total revenues for the first quarter of 2013 were $36.7 million, a
decrease of 6.9% from $39.4 million for the corresponding period in 2012.

  oNon-GAAP net sales from equipment for the first quarter of 2013 were $30.3
    million, a decrease of 9.4% year-over-year. The decrease was mainly
    caused by decreased sales of Multi-Service Access Network ("MSAN")
    products in Japan and Multi-Service Optical Transport ("MSTP") products in
    Taiwan which was partially offset by increased sales of Packet Transport
    Network ("PTN") products in Japan.
  oNon-GAAP net sales from equipment-based services for the first quarter of
    2013 were $6.4 million, an increase of 10.6% year-over-year.

Gross Profit

Gross profit was $11.7 million and gross margin was 31.4% for the first
quarter of 2013, compared to $18.4 million and 39.5%, respectively, for the
corresponding period in 2012.

Non-GAAP gross profit was $11.7 million and non-GAAP gross margin was 31.8%
for the first quarter of 2013, compared to $15.1 million and 38.3%,
respectively, for the corresponding period in 2012.

  oNon-GAAP gross profit for equipment sales for the first quarter of 2013
    was $11.5 million, a decrease of 21.7% year-over-year. Non-GAAP gross
    margin for equipment sales for the first quarter of 2013 was 37.8%,
    compared to 43.8% for the corresponding period in 2012. The decrease in
    gross margin was primarily due to decreased gross margins in MSAN and PTN
    products in the first quarter of 2013.
  oNon-GAAP gross profit for equipment-based services for the first quarter
    of 2013 was $0.2 million, compared to gross profit of $0.5 million for the
    corresponding period in 2012. Gross margin for equipment-based services
    for the first quarter of 2013 was 3.4%, compared to 8.0% for the
    corresponding period in 2012. The decrease in gross margin was primarily
    due to lower margins in MSAN product-related services provided in the
    first quarter of 2013.

Operating Expenses

Operating expenses for the first quarter of 2013 were $15.4 million, a
decrease of 30.6% from $22.2 million for the corresponding period in 2012.

Non-GAAP operating expenses for the first quarter of 2013 were $15.4 million,
a decrease of 8.6% from $16.8 million for the corresponding period in 2012.

  oNon-GAAP selling, general and administrative expenses in the first quarter
    of 2013 were $9.2 million, a decrease of 23.0% year-over-year. The
    decrease was primarily due to a decrease in personnel costs as a result of
    the Company's restructuring efforts and the bad debt provision reversal
    due to collection of a previously reserved receivable, partially offset by
    the accelerated depreciation of the leasehold improvement in the Hangzhou
    office building due to early termination of the lease.
  oNon-GAAP research and development expenses in the first quarter of 2013
    were $3.0 million, a decrease of 28.2% year-over-year. The decrease was
    primarily due to a decrease in research and development personnel costs as
    a result of the Company's restructuring efforts.
  oNon-GAAP impairment of long-term investment in the first quarter of 2013
    was $0.1 million.
  oNon-GAAP net loss on the divestiture in the first quarter of 2013 was $3.0
    million, compared to non-GAAP net gain of $0.2 million in the
    corresponding period in 2012. The net loss on the divestiture in the first
    quarter of 2013 was due to the disposal of the Company's Next Generation
    Network related assets, specifically the mSwitch product related assets,
    which included $2.7 million payment to the buyer and $0.5 million of
    severance for the transferred employees, signing bonus, and retention
    bonus to incentivize certain key employees to sign employment contracts
    with the buyer. As of March 31, 2013, the payments had not been made.

Operating Loss

Operating loss for the first quarter of 2013 was $3.7 million, compared to
operating loss of $3.8 million for the corresponding period in 2012.

Non-GAAP operating loss for the first quarter of 2013 was $3.7 million,
compared to non-GAAP operating loss of $1.8 million for the corresponding
period in 2012.

Other Income (Expense), Net

Net other income for the first quarter of 2013 was $1.5 million, compared to
net other income of $0.6 million for the corresponding period of 2012. Net
other income in the first quarter of 2013 primarily consisted of income of
$1.3 million from the release of the remaining reserve related to tax
liabilities provided to the buyers of our subsidiary in Korea due to
expiration of the statute of limitation.

Equity Pick Up of Losses of an Associate

Equity pick up of losses of an associate for the first quarter of 2013 was
$2.0 million due to 49% loss pick up from the Company's equity investment in
iTV Media.

The Company consolidated iTV Media since Oct 2010 due to our investment of 75%
controlling interest in it. Upon the exercising of shares repurchase right in
June 2012, our ownership in iTV Media decreased from 75% to below
approximately 49%. At that point, the Company deconsolidated iTV Media and
presented it by using the cost method after the first quarter of 2012 as the
remaining Series A preference shares of iTV owned by the Company did not
qualify as in-substance common stock due to their substantive liquidation
preference and the existence of other substantive common shareholders.

In January 2013, the Company invested an additional $5.0 million convertible
bond into iTV Media which triggered a reassessment of the Company's accounting
for its investment in the Series A preference shares. Management concluded the
remaining Series A preference shares of iTV owned by the Company now
substantively participated in the risks and rewards of iTV, irrespective of
the liquidation preferences, and as such qualified as in-substance common
stock. Therefore, the equity method criteria had been met and the equity
accounting commenced in Q1 2013. 

The Company consolidated a net loss of $1.5 million from iTV Media in the
first quarter of 2012.

Net Income (Loss)

Net loss attributable to UTStarcom's shareholders for the first quarter of
2013 was $5.0 million, compared to net loss attributable to UTStarcom's
shareholders of $4.2 million for the corresponding period in 2012. Basic loss
per share for the first quarter of 2013 was $0.13, compared to basic loss per
share of $0.08 for the first quarter of 2012.

Non-GAAP net loss attributable to UTStarcom's shareholders for the first
quarter of 2013 was $5.0 million, compared to non-GAAP net loss attributable
to UTStarcom's shareholders of $2.1 million for the corresponding period in
2012. Non-GAAP basic loss per share for the first quarter of 2013 was $0.13,
compared to non-GAAP basic loss per share of $0.04 for the first quarter of
2012.

Cash Flow

  oCash used by operating activities for the first quarter of 2013 was $4.7
    million.
  oCash used by investing activities for the first quarter of 2013 was $5.8
    million, primarily driven by $5.0 million in investments in iTV Media.
  oCash used in financing activities for the first quarter of 2013 was $30.7
    million, primarily driven by $30.0 million for the tender offer
    transaction.

As of March 31, 2013, UTStarcom had cash, cash equivalents and short-term
investments of $136.0 million.

Overview of Recent Key Events

Returning Cash to Shareholders

The Company completed a $30 million cash tender offer in the first quarter of
2013 for 25,000,000 of the Company's outstanding ordinary shares at a purchase
price of $1.20 per share (number of shares and price per share have not been
adjusted to reflect the reverse stock split). In addition, at an
extraordinary meeting of shareholders held on March 21, 2013, the Company's
shareholders approved a one-for-three reverse share split of the Company's
ordinary shares. Following the purchase of the tendered shares and the
effectiveness of the reverse share split, the Company had approximately
39,400,398 ordinary shares outstanding as of March 31, 2013. Both of these
actions are expected to help enhance shareholder value in the short and long
term.

Further, the Company's continued commitment to its share repurchase program
reflects management's long-term confidence in the Company's prospects.

To date, the Company has repurchased approximately 12.5 million shares (number
of shares has not been adjusted to reflect the reverse stock split)for a
total of $15 million, out of the total authorized repurchase amount of $20
million in the share repurchase program.

Regains NASDAQ Listing Compliance

On March 15, 2013, the Company received formal notice from NASDAQ that it was
not in compliance with listing requirements relating to the price per share at
which the Company's shares trade and was given 180 days to regain compliance
with the listing standards. On April 11, 2013, the Company received formal
notice from NASDAQ that it had regained compliance with Listing Rule
5450(a)(1) as a result of the closing bid price of the Company's ordinary
shares being at $1.00 per share or greater for the previous 11 consecutive
business days.

Receipt of "Going-Private" Proposal

The Company's board of directors received a preliminary non-binding proposal
letter dated March 27, 2013 from a consortium consisting of one of the
Company's directors, Mr. Hong Liang Lu, and entities affiliated with him, and
Shah Capital Opportunity Fund LP and Himanshu H. Shah to acquire all of the
outstanding shares of the Company in a going private transaction for $3.20 per
ordinary share in cash, subject to certain conditions. The board of directors
has formed a special committee of independent directors (the "Special
Committee") to consider this proposal. In addition, the Special Committee has
appointed legal counsel and retained a financial advisor to assist it in its
work. No decisions have been made by the Special Committee with respect to
the Company's response to the proposal.

Business Outlook

The Company views 2013 as a year of investment and continued transition. At
the same time, the Company reiterates its expectation that for 2013 it
willachieve a degree of incremental improvement in overall financial
performance versus 2012. Unprofitable revenues that were removed with the
IPTV divestiture will need to be replaced, and as a result total revenues for
2013 are expected to decrease from 2012 while this process is ongoing and
revenue sources are in transition. At the same time, with respect to
operating performance, the Company will focus onholding margins relatively
stable by maintaining asimilar product mix to 2012, as well as continuing to
lower operating expenses.

Additionally, the Company's current outlook is based on constant currency
exchange rates compared to 2012. The depreciation of the Japanese Yen against
the U.S. dollar may have a negative impact on the Company's gross profit and
gross margin, as sales generated in Japan has accounted for an increasing
portion of the Company's total revenues.

From a long-term perspective, the Company's new strategic initiatives is
expected to in time result in a more predictable, recurring revenue stream and
higher rates of growth beginning in 2014. More specifically, the Company
anticipates profit from the new TV over IP services to become the major
contributor for UTStarcom by 2015, as the new TV over IP business is expected
to have gross margin exceeding 50%.

Mr. Wong concluded, "Looking ahead, we currently remain comfortable with our
operating expectations for full year 2013 and we are confident that our new
strategy positions us very well in the evolving media environment. We expect
our actions will enable us to capture the long-term opportunities that will
translate into significant overall improvement in the Company's business
performance and enable us to deliver enhanced shareholder value over the
long-term."

About Non-GAAP Financial Measures

To supplement the Company's consolidated financial results presented in
accordance with United States Generally Accepted Accounting Principles
("GAAP"), the Company uses certain non-GAAP financial measures, which are
adjusted from results based on GAAP to exclude the effects of the results of
its divested IPTV business and PHS-related deferred revenue amortization from
the results of each reported period. For more information on these non-GAAP
financial measures, please see the table captioned "Reconciliation of GAAP and
non-GAAP Financial Data" set forth at the end of this press release.

The Company believes that these non-GAAP financial measures provide meaningful
supplemental information regarding its operating performance by excluding
amortization of PHS net sales and results from IPTV-related business that may
not be indicative of the Company's operating performance. The Company
believes that both management and investors benefit from referring to these
non-GAAP financial measures in assessing its operating performance and when
planning for and forecasting future periods. These non-GAAP financial
measures also facilitate management's internal comparisons of the Company's
current performance to its historical performance. The Company computes its
non-GAAP financial measures on a consistent basis from quarter to quarter.
The Company believes these non-GAAP financial measures are useful to
investors in allowing for greater transparency with respect to supplemental
information used by management in its financial and operational
decision-making. The presentation of this additional information is not meant
to be considered in isolation or as a substitute for financial information
prepared in accordance with GAAP.

First Quarter 2013 Conference Call Details

The Company's management will host an earnings conference call at 7:00 a.m.
U.S. Eastern Time on May 24, 2013 (7:00 p.m. Beijing/Hong Kong Time on May 24,
2013).

The conference call dial-in numbers are as follows:

United States:     + 1-800-860-2442
International:    + 1-412-858-4600
China:             10-800-712-2304
Hong Kong:         800-962475
The conference ID number is 10029246.

A replay of the call will be available one hour after the end of the
conference until 9:00 a.m. U.S. Eastern Time on May 31, 2013.

The conference call replay numbers are as follows:

United States:                   + 1-877-344-7529
International:                  + 1-412-317-0088
The conference ID number for accessing the recording is 10029246.

Investors will also have the opportunity to listen to the live conference call
and the replay over the Internet through the investor relations section of
UTStarcom's web site at: http://www.utstar.com.

About UTStarcom Holdings Corp.

UTStarcom is focused on providing next generation media operational support
services in the rapidly growing markets for TV over IP services and broadband
equipment products and services. UTStarcom is committed to meeting the
evolving needs of cable and broadband service providers to enable a more
personalized entertainment experience. The Company sells its media
operational support services and broadband equipment products and services to
operators in both emerging and established broadband and cable markets around
the world.

UTStarcom was founded in 1991 and listed on the NASDAQ in 2000. It has
operational headquarters in Beijing, China and research and development
operations in China and India. In 2011, the Company deployed a revamped
growth strategy that concentrates on providing media operation support
services. For more information about UTStarcom, visit the Company's website
at http://www.utstar.com.

Forward-Looking Statements

This press release includes forward-looking statements, including statements
regarding the Company's strategic initiatives, the effects of the tender offer
and reverse share split, and the Company's business outlook. These statements
are forward-looking in nature and subject to risks and uncertainties that may
cause actual results to differ materially and adversely from the Company's
current expectations. These include risks and uncertainties related to, among
other things, changes in the financial condition and cash position of the
Company, changes in the composition of the Company's management and their
effect on the Company, the Company's ability to realize anticipated results of
operational improvements and benefits of the divestiture transaction, the
ability to successfully identify and acquire appropriate technologies and
businesses for inorganic growth and to integrate such acquisitions, the
ability to internally innovate and develop new products, assumptions the
Company makes regarding the growth of the market and the success of the
Company's offerings in the market, and the Company's ability to execute its
business plan and manage regulatory matters. The risks and uncertainties also
include the risk factors identified in the Company's latest annual report on
Form 20-F and current reports on Form 6-K as filed with the Securities and
Exchange Commission. The Company is in a period of strategic transition and
the conduct of its business is exposed to additional risks as a result. All
forward-looking statements included in this press release are based upon
information available to the Company as of the date of this press release,
which may change, and the Company assumes no obligation to update any such
forward-looking statements.



UTStarcom Holdings Corp.
Unaudited Condensed Consolidated Balance Sheets
                                                   March31,     December31,
                                                   2013          2012
ASSETS                                             (In thousands, except par
                                                   value)
Current assets:
Cash,cashequivalentsandshort-terminvestments  $  136,010    $    179,880
Accounts and notes receivable, net                    11,182          15,000
Inventories and deferred costs                        151,589         151,500
Prepaids and other current assets                     36,428          40,960
Total current assets                                  335,209         387,340
Long-term assets:
Property, plant and equipment, net                    8,470           8,866
Long-term deferred costs                              18,266          20,556
Other long-term assets                                73,354          71,329
Total assets                                       $  435,299    $    488,091
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable                                   $  17,424     $    24,991
Customer advances                                     92,262          89,362
Deferred revenue                                      38,049          41,461
Other current liabilities                             35,099          35,154
Total current liabilities                             182,834         190,968
Long-term liabilities:
Long-term deferred revenue and other liabilities      74,065          80,467
Total liabilities                                     256,899         271,435
Total equity                                          178,400         216,656
Total liabilities and equity                       $  435,299    $    488,091



UTStarcom Holdings Corp.
Unaudited Condensed Consolidated Statements of Operations
                                         ThreemonthsendedMarch31,
                                         2013                   2012
                                         (inthousands,exceptpersharedata)
Net sales                                $     37,178           $    46,658
Cost of net sales                              25,495                28,233
Gross profit                                  11,683                18,425
                                               31.4%                 39.5%
Operating expenses:
Selling, general and administrative         9,216                 14,405
Research and development                    3,028                 7,127
Amortization of intangible assets           -                     310
Impairment of long-term investment          134                   -
Restructuring                              (22)                  544
Net loss (gain) on divestiture              3,047                 (198)
Total operating expenses                       15,403                22,188
Operating income (loss)                        (3,720)               (3,763)
Interest income, net                           121                   428
Other income (expense), net                    1,497                 555
Equity pick up of losses of an                 (2,015)               -
associate
Income (loss) before income taxes              (4,117)               (2,780)
Income taxes benefit(expense)                  (880)                 (1,943)
Net income (loss)                              (4,997)               (4,723)
Net loss attributable to noncontrolling        1                     565
interest
Net income (loss) attributable to        $     (4,996)          $    (4,158)
UTStarcom Holdings Corp.
Net income (loss) per share
attributable to UTStarcom                $     (0.13)           $    (0.08)

Holdings Corp.—Basic
Weighted average shares                        39,497                50,443
outstanding—Basic



UTStarcom Holdings Corp
Unaudited Condensed Consolidated Statements of Cash Flows
                                                 Three months ended March 31,
                                                 2013            2012
                                                 (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                              $   (4,997)     $  (4,723)
Adjustments to reconcile net loss to net cash
provided by

(used in) operating activities:
Depreciation and amortization                       886            1,219
Amortization of deferred gain on                                    -
sale-leaseback
Provision for (recovery of) doubtful accounts       (140)          215
Stock-based compensation expense                    232            736
Net loss (gain) on divestitures                     3,047          (198)
Loss on accelerated amortization of terminated       1,043          -
lease
Gain on release of tax liability due to
expiration of the                                    (1,240)        -

statuteof limitation
Deferred income taxes                               (87)           (127)
Loss from equity investments, net                   2,015          -
Other-than-temporary impairment of equity            134            -
investments
Other                                               -              (113)
Changes in operating assets and liabilities:        (5,573)        (11,727)
Accounts receivable                                 3,844          (913)
Inventories and deferred costs                      2,961          (2,846)
Other assets                                        2,361          (1,362)
Accounts payable                                    (5,204)        3,956
Income taxes payable                                (1,339)        967
Customer advances                                   2,669          2,347
Deferred revenue                                    (9,069)        (4,877)
Other liabilities                                   (1,796)        (8,999)
Net cash used in operating activities               (4,680)        (14,718)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment          (1,837)        (2,446)
Net proceeds from divestitures                      65             -
Change in restricted cash                          1,899          1,176
Purchase of investment interest                    (6,592)        -
Proceeds from disposition of an investment           190            -
interest
Purchase of short-term investments                  -              (1,357)
Proceeds from sale of short-term investments        293            1,848
Other                                               172            116
Net cash used in investing activities               (5,810)        (663)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of ordinary share                        (30,680)       (378)
Net cash provided by (used in) financing             (30,680)       (378)
activities
Effect of exchange rate changes on cash and         (2,404)        (2,381)
cash equivalents
Net increase (decrease) in cash and cash             (43,574)       (18,140)
equivalents
Cash and cash equivalents at beginning of           179,584        301,626
period
Cash and cash equivalents at end of period     $   136,010     $  283,486



UTSTARCOM HOLDINGS CORP.
May 24, 2013 Conference Call
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL DATA
(In thousands)
(Unaudited)
To supplement our condensed consolidated financial statements
presented on a GAAP basis, UTStarcom uses certain non-GAAP measures
which are adjusted to present those metrics as if PHS-related deferred
revenue amortization and IPTV related business had been excluded in
the current year and prior years' comparatives. We believe this
enables year over year comparisons to our recent financial results.
These adjustments to our GAAP results are made with the intent of
providing both management and investors a more complete understanding
of UTStarcom's underlying results and trends. In addition, these
adjusted non-GAAP results are among the information management uses as
a basis for our planning and forecasting of future periods. The
presentation of this additional information is not meant to be
considered in isolation or as a substitute for results prepared in
accordance with generally accepted accounting principles in the United
States.
                           Qtr ended      Qtr ended
                           31-Mar-13      31-Mar-12
Non-GAAP Revenue           $36,696        $39,411
Non-GAAP Gross Profit      $11,683        $15,092
 Non-GAAP Gross Margin % 31.8%          38.3%
Non-GAAP Operating Income  ($3,720)       ($1,754)
(Loss)
Non-GAAP Net Income (Loss) ($4,996)       ($2,149)
attributable to UTStarcom
Non-GAAP Net Income (Loss)
per Share Attributable to
UTStarcom                  ($0.13)        ($0.04)

Holdings Corp.—Basic
Please refer to the preceding reconciliation tables for the adjustments to
GAAP Revenue, Gross Profit,

Operating Income (Loss), Net Income (Loss) and EPS.



UTSTARCOM HOLDINGS CORP.
May 24, 2013 Conference Call
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL DATA
($ in thousand)
(Unaudited)
To supplement our condensed consolidated financial statements presented
on a GAAP basis, UTStarcom uses certain non-GAAP measures which are
adjusted to present those metrics as if PHS-related deferred revenue
amortization and IPTV related business had been excluded in the current
year and prior years' comparatives. We believe this enables year over
year comparisons to our recent financial results. These adjustments to
our GAAP results are made with the intent of providing both management
and investors a more complete understanding of UTStarcom's underlying
results and trends. In addition, these adjusted non-GAAP results are
among the information management uses as a basis for our planning and
forecasting of future periods. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for results prepared in accordance with generally accepted
accounting principles in the United States.
                         Qtr ended     Qtr ended
                         31-Mar-13     31-Mar-12
GAAP Revenue (a)         $37,178       $46,658
Less: Amortization of    $0            $0
PHS Revenue
Less: IPTV Revenue       $482          $7,247
Non-GAAP Revenue         $36,696       $39,411
(a) GAAP Revenue for each period is the consolidated revenue as reported on
Form 10-Q or Form 6-K, as

applicable, for such period.



UTSTARCOM HOLDINGS CORP.
May 24, 2013 Conference Call
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL DATA
($ in thousand)
(Unaudited)
To supplement our condensed consolidated financial statements presented on a
GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted to
present those metrics as if PHS-related deferred revenue amortization and IPTV
related business had been excluded in the current year and prior years'
comparatives. We believe this enables year over year comparisons to our recent
financial results. These adjustments to our GAAP results are made with the
intent of providing both management and investors a more complete
understanding of UTStarcom's underlying results and trends. In addition, these
adjusted non-GAAP results are among the information management uses as a basis
for our planning and forecasting of future periods. The presentation of this
additional information is not meant to be considered in isolation or as a
substitute for results prepared in accordance with generally accepted
accounting principles in the United States.
                                                     Qtr ended  Qtr ended
                                                     31-Mar-13  31-Mar-12
GAAP Gross Profit (a)                                $11,683    $18,425
 GAAP Gross Margin %                               31.4%      39.5%
Less:GrossProfitfromAmortizationofPHSRevenue  $0         $0
Less: Gross Profit from IPTV Revenue                 $0         $3,333
Non-GAAP Gross Profit                                $11,683    $15,092
 Non-GAAP Gross Margin %                           31.8%      38.3%
(a) GAAP Gross Profit and GAAP Gross Margin % for each period is the
consolidated gross profit and

gross margin % as reported on Form 10-Q or Form 6-K, as applicable, for such
period.



UTSTARCOM HOLDINGS CORP.
May 24, 2013 Conference Call
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL DATA
($ in thousand)
(Unaudited)
To supplement our condensed consolidated financial statements presented on a
GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted to
present those metrics as if PHS-related deferred revenue amortization and IPTV
related business had been excluded in the current year and prior years'
comparatives. We believe this enables year over year comparisons to our recent
financial results. These adjustments to our GAAP results are made with the
intent of providing both management and investors a more complete
understanding of UTStarcom's underlying results and trends. In addition, these
adjusted non-GAAP results are among the information management uses as a basis
for our planning and forecasting of future periods. The presentation of this
additional information is not meant to be considered in isolation or as a
substitute for results prepared in accordance with generally accepted
accounting principles in the United States.
                                                   Qtr ended  Qtr ended
                                                   31-Mar-13  31-Mar-12
GAAP Operating Expenses(a)                         $15,403    $22,188
Less:OperatingExpensesdirectlyrelatedtoIPTV  $0         $5,342
Non-GAAP Operating Expenses                        $15,403    $16,846
(a) GAAP Operating Expenses for each period is the consolidated Operating
Expenses as reported on Form 6-K,

as applicable, for such period.



UTSTARCOM HOLDINGS CORP.
May 24, 2013 Conference Call
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL DATA
($ in thousand)
(Unaudited)
To supplement our condensed consolidated financial statements
presented on a GAAP basis, UTStarcom uses certain non-GAAP measures
which are adjusted to present those metrics as if PHS-related deferred
revenue amortization and IPTV related business had been excluded in
the current year and prior years' comparatives. We believe this
enables year over year comparisons to our recent financial results.
These adjustments to our GAAP results are made with the intent of
providing both management and investors a more complete understanding
of UTStarcom's underlying results and trends. In addition, these
adjusted non-GAAP results are among the information management uses as
a basis for our planning and forecasting of future periods. The
presentation of this additional information is not meant to be
considered in isolation or as a substitute for results prepared in
accordance with generally accepted accounting principles in the United
States.
                          Qtr ended       Qtr ended
                          31-Mar-13       31-Mar-12
GAAP Operating Income     ($3,720)        ($3,763)
(Loss) (a)
Less: Profit from
Amortization of PHS       $0              $0
Revenue
Less: Profit from IPTV   $0              $3,333
Revenue
Less: Operating Expenses  $0              $5,342
directly related to IPTV
Non-GAAP Operating Income ($3,720)        ($1,754)
(Loss)
(a) GAAP Operating Income (Loss) for each period is the consolidated operating
loss as reported on Form 6-K,

as applicable, for such period.



UTSTARCOM HOLDINGS CORP.
May 24, 2013 Conference Call
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL DATA
($ in thousand)
(Unaudited)
To supplement our condensed consolidated financial statements presented on
a GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted
to present those metrics as if PHS-related deferred revenue amortization
and IPTV related business had been excluded in the current year and prior
years' comparatives. We believe this enables year over year comparisons to
our recent financial results. These adjustments to our GAAP results are
made with the intent of providing both management and investors a more
complete understanding of UTStarcom's underlying results and trends. In
addition, these adjusted non-GAAP results are among the information
management uses as a basis for our planning and forecasting of future
periods. The presentation of this additional information is not meant to be
considered in isolation or as a substitute for results prepared in
accordance with generally accepted accounting principles in the United
States.
                       Qtr ended     Qtr ended
                       31-Mar-13     31-Mar-12
GAAP Income taxes      ($880)        ($1,943)
benefit (expense)(a)
Less: Income tax
expenses directly      $0            $0
related to IPTV
Non-GAAP Income taxes  ($880)        ($1,943)
benefit (expense)
(a) GAAP Income taxes benefit (expense) for each period is the consolidated
Operating Expenses as reported on

Form 6-K, as applicable, for such period.



UTSTARCOM HOLDINGS CORP.
May 24, 2013 Conference Call
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL DATA
($ in thousand)
(Unaudited)
To supplement our condensed consolidated financial statements presented on
a GAAP basis, UTStarcom uses certain non-GAAP measures which are adjusted
to present those metrics as if PHS-related deferred revenue amortization
and IPTV related business had been excluded in the current year and prior
years' comparatives. We believe this enables year over year comparisons to
our recent financial results. These adjustments to our GAAP results are
made with the intent of providing both management and investors a more
complete understanding of UTStarcom's underlying results and trends. In
addition, these adjusted non-GAAP results are among the information
management uses as a basis for our planning and forecasting of future
periods. The presentation of this additional information is not meant to be
considered in isolation or as a substitute for results prepared in
accordance with generally accepted accounting principles in the United
States.
                                                     Qtr ended Qtr ended
                                                     31-Mar-13 31-Mar-12
GAAP Net Income (Loss) attributable to UTStarcom(a)  ($4,996)  ($4,158)
Less: Profit from Amortization of PHS Revenue       $0        $0
Less: Profit from IPTV Revenue                      $0        $3,333
Less: Operating Expenses directly related to IPTV    $0        $5,342
Less: Income tax benefit (expense) directly related  $0        $0
to IPTV
Non-GAAPNetIncome(Loss)attributabletoUTStarcom ($4,996)  ($2,149)
(a) GAAP Net Income (Loss) for each period is the consolidated net loss as
reported on Form 6-K, as applicable, for

such period.



UTSTARCOM HOLDINGS CORP.
May 24, 2013 Conference Call
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL DATA
(In thousands)
(Unaudited)
To supplement our condensed consolidated financial statements presented on a GAAP
basis, UTStarcom uses certain non-GAAP measures which are adjusted to present those
metrics as if PHS-related deferred revenue amortization and IPTV related business had
been excluded in the current year and prior years' comparatives. We believe this
enables year over year comparisons to our recent financial results. These adjustments
to our GAAP results are made with the intent of providing both management and
investors a more complete understanding of UTStarcom's underlying results and trends.
In addition, these adjusted non-GAAP results are among the information management
uses as a basis for our planning and forecasting of future periods. The presentation
of this additional information is not meant to be considered in isolation or as a
substitute for results prepared in accordance with generally accepted accounting
principles in the United States.
                                                               Qtr ended Qtr ended
                                                               31-Mar-13 31-Mar-12
GAAP Net Income (Loss) attributable to UTStarcom(a)            ($4,996)  ($4,158)
Less: Profit from Amortization of PHS Revenue                  $0        $0
Less:Profit from IPTV Revenue                                 $0        $3,333
Less: Operating Expenses from IPTV Related                     $0        $5,342
Less: Income tax benefit (expense) directly related to IPTV    $0        $0
Non-GAAP Net Income (Loss) attributable to UTStarcom           ($4,996)  ($2,149)
Weighted Average Shares Outstanding—Basic                      39,497    50,443
GAAPNetIncome(Loss)perShareAttributabletoUTStarcom
                                                               ($0.13)   ($0.08)
Holdings Corp.—Basic
Non-GAAPNetIncome(Loss)pershareattributabletoUTStarcom ($0.13)   ($0.04)
Holdings Corp.—Basic
(a) GAAP Net Income (Loss) per share for each period is the consolidated net income (loss)
as reported on

Form 6-K, as applicable, for such period.



UTStarcom Holdings Corp.
Unaudited Condensed Consolidated Statements of Cash Flows
                                                      ThreemonthsendedMarch31,
                                                      2013              2012
                                                      (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
GAAP Net cash used in operating activities          ($4,680)          ($14,718)
Less:Netcashprovidedby(usedin)IPTVoperating
                                                      $0                ($3,903)
activities
Non-GAAP Net cash used in operating activities      ($4,680)          ($10,815)
CASH FLOWS FROM INVESTING ACTIVITIES:
GAAP Net cash provided by (used in) investing        ($5,810)          ($663)
activities
Less: Net cash provided by (used in) IPTV investing
                                                      $0                ($140)
activities
Non-GAAP Net cash used in investing activities      ($5,810)          ($523)
CASH FLOWS FROM FINANCING ACTIVITIES:
GAAP Net cash used in financing activities          ($30,680)         ($378)
Less: Net cash provided by (used in) IPTV financing
                                                      $0                $0
activities
Non-GAAP Net cash provided by (used in) financing
                                                      ($30,680)         ($378)
activities
Effect of exchange rate changes on cash and cash     ($2,404)          ($2,381)
equivalents
Non-GAAP Net decrease in cash and cash equivalents
                                                      ($43,574)         ($14,097)
in continuing operations
Non-GAAP Net increase (decrease) in cash and cash     $0                ($4,043)
equivalents in IPTV disposed operation
Cash and cash equivalents at beginning of period    $179,584          $301,626
Cash and cash equivalents at end of period          $             $    
                                                      136,010          283,486



SOURCE UTStarcom Holdings Corp.

Website: http://www.utstar.com
Contact: Jing Ou-Yang, UTStarcom Holdings Corp., +86-10-8520-5153,
jouyang@utstar.com, or May Shen (Beijing), +86-10-8591-1951,
May.Shen@fticonsulting.com, or Daniel DelRe (Hong Kong), +852-3768-4547,
Daniel.DelRe@fticonsulting.com, or Rob Dougherty (San Francisco),
+1-415-293-4427, Rob.Dougherty@fticonsulting.com