Common use of NET LOSS PER SHARE Clause in Contracts

NET LOSS PER SHARE. Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common stock. Potential common stock consists of convertible preferred stock, unvested restricted common stock, stock options and warrants, convertible subordinated notes and contingently issuable stock. The following table sets forth potential common stock excluded from the calculation of earnings per share since their inclusion would be antidilutive: AS OF SEPTEMBER 30, ---------------------------- 1999 ---------- 2000 ---------- Stock options......................................... 11,236,650 15,938,887 Unvested restricted common stock...................... 18,049,104 12,394,250 Convertible preferred stock........................... 37,519,041 -- Warrants.............................................. 2,075,100 2,146,494 Convertible subordinated notes........................ -- 2,598,074 Contingently issuable stock (see Note 9)........................................ -- 190,420 5. GOODWILL AND OTHER INTANGIBLE ASSETS: Goodwill and other intangible assets consist of the following (in thousands): DECEMBER 1999 31, SEPTEMBER 30, 2000 ESTIMATED USEFUL LIVES IN YEARS Goodwill.................................. $ -- $2,816,138 3 $434 ==== $2,425,207 ========== Goodwill and other intangible assets will be amortized as follows (in millions): Three months ending December 31, 2000....................... $ 239 2001........................................................ 955 2002........................................................ 955 2003........................................................ 276 ------ Total $2,425 ======

NET LOSS PER SHARE. Basic The following is a reconciliation of the numerators and denominators used in computing basic and diluted net loss per share is computed using the weighted (in thousands): YEAR ENDED DECEMBER 31, 1999 1998 1997 Numerator: Net loss:................................................. $(4,354) $(1,673) $ (527) Redeemable preferred stock accretion...................... 6 6 3 Net loss applicable to common stockholders.................. $(4,360) $(1,679) $ (530) ======= ======= ====== Denominator: Weighted average number of common shares outstanding................ 6,675 3,970 3,338 Weighted average common shares held in escrow............. (76) -- -- Weighted average common shares outstanding during the period. Diluted subject to repurchase............................................. -- (61) (176) Shares used in computation, basic and diluted............. 6,599 3,909 3,162 ======= ======= ====== Net loss per share, basic and diluted....................... $ (0.66) $ (0.43) $(0.17) ======= ======= ====== The Company's computation of net loss per share is computed using excludes 88,770 shares held in escrow as discussed in Note 2, as the weighted average number conditions required to release these shares from escrow had not been satisfied as of common shares December 31, 1999. For the above-mentioned periods, the Company had securities outstanding during that could potentially dilute basic earnings per share in the periodfuture, plus but were excluded from the dilutive computation of diluted net loss per share in the periods presented since their effect would have been anti-dilutive. These outstanding securities consisted of potential common stock. Potential common stock consists of the following: ---------- ---------- Redeemable convertible preferred stock, unvested restricted common stock, stock options and warrants, convertible subordinated notes and contingently issuable stock. The following table sets forth potential common stock excluded from the calculation of earnings per share since their inclusion would be antidilutive: AS OF SEPTEMBER 30, ---------------------------- 1999 ---------- 2000 ---------- Stock options......................................... 11,236,650 15,938,887 Unvested restricted common stock...................... 18,049,104 12,394,250 ................. -- 863,771 864,642 Convertible preferred stock........................... 37,519,041 ............................ -- 4,267,329 2,862,159 Shares of common stock subject to repurchase........... -- 23,537 125,813 Outstanding options.................................... 4,902,987 2,921,883 3,313,006 Warrants.............................................. 2,075,100 2,146,494 Convertible subordinated notes........................ -- 2,598,074 Contingently issuable stock (see Note 9)........................................ -- 190,420 5. GOODWILL AND OTHER INTANGIBLE ASSETS: Goodwill and other intangible assets consist ............................................... 425,963 182,854 287,087 ---------- ---------- Weighted average exercise price of the following (in thousands): DECEMBER 1999 31, SEPTEMBER 30, 2000 ESTIMATED USEFUL LIVES IN YEARS Goodwill.................................. options............. $ -- $2,816,138 3 $434 ==== $2,425,207 3.99 $ 0.36 $ 0.16 ========== Goodwill and other intangible assets will be amortized as follows (in millions): Three months ending December 31, 2000....................... $ 239 2001........................................................ 955 2002........................................................ 955 2003........................................................ 276 ------ Total $2,425 ========== ========== Weighted average exercise price of warrants............ $ 2.93 $ 0.95 $ 0.56 ========== ========== ========== 48 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997