VIALTA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)

                       

                                   December 31, 2004 December 31, 2003
                                   ----------------- -----------------
Assets
Current assets:
 Cash and cash equivalents         $          7,296  $          9,356
 Restricted cash                              3,057             2,226
 Short-term investments                      11,106            14,952
 Accounts receivable, net                     2,761             3,941
 Inventory, net                               4,500             5,196
 Prepaid expenses and other                     351               729
                                   ----------------- -----------------
  Total current assets                       29,071            36,400

Property and equipment, net                     302               685
Other assets                                     29                29
                                   ----------------- -----------------
  Total assets                     $         29,402  $         37,114
                                   ================= =================


Liabilities and stockholders'
 equity
Current liabilities:
 Accounts payable                  $            373  $          1,915
 Accrued liabilities and other                2,070             3,149
 Deferred profit                              1,310             3,997
                                   ----------------- -----------------
  Total current liabilities                   3,753             9,061
                                   ----------------- -----------------

Stockholders' equity:
 Common stock                                    95                95
 Additional paid-in capital                 144,122           144,114
 Treasury stock                              (9,458)           (9,458)
 Accumulated deficit                       (109,098)         (106,709)
 Accumulated other comprehensive
  income (loss)                                 (12)               11
                                   ----------------- -----------------
  Total stockholders' equity                 25,649            28,053
                                   ----------------- -----------------
  Total liabilities and
   stockholders' equity            $         29,402  $         37,114
                                   ================= =================

                             VIALTA, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except per share data)
                              (unaudited)

                                     Three months      Twelve months
                                         ended             ended
                                   ----------------- -----------------
                                      December 31,      December 31,
                                   ----------------- -----------------
                                      2004     2003     2004     2003
                                   -------- -------- -------- --------

Revenue, net                       $ 3,626  $ 2,684  $12,747  $10,331
Cost of goods sold                   1,911      991    8,022    2,941
                                   -------- -------- -------- --------
Gross profit                         1,715    1,693    4,725    7,390
                                   -------- -------- -------- --------

Operating expenses:
  Engineering and development          324      488    1,247    2,557
  Sales and marketing                  611    2,797    2,011    4,427
  General and administrative         1,035      958    4,573    5,753
                                   -------- -------- -------- --------
      Total operating expenses       1,970    4,243    7,831   12,737
                                   -------- -------- -------- --------

Operating loss                        (255)  (2,550)  (3,106)  (5,347)

Interest income and other:
  Interest income, net                 177      199      717      733
  Gain on investment                     -      571        -      571
                                   -------- -------- -------- --------
      Total interest income and
       other                           177      770      717    1,304
                                   -------- -------- -------- --------


Net loss                           $   (78) $(1,780) $(2,389) $(4,043)
                                   ======== ======== ======== ========

Net loss per share:
   basic and diluted               $ (0.00) $ (0.02) $ (0.03) $ (0.05)
                                   ======== ======== ======== ========

Weighted average common shares
 outstanding:
   basic and diluted                83,025   82,523   82,930   82,285
                                   ======== ======== ======== ========