Common use of Consolidated Statements of Operations Clause in Contracts

Consolidated Statements of Operations. ... 47 Consolidated Statements of Comprehensive Income............. 48 Consolidated Balance Sheets................................. 49 Consolidated Statements of Stockholders' Equity............. 50 Consolidated Statements of Cash Flows....................... 51 Notes to Consolidated Financial Statements.................. 52-91 Selected Quarterly Financial Data (unaudited)............... 92-93 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Xxxxxx Xxxxxx, Inc. In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Xxxxxx Xxxxxx, Inc. (formerly K N Energy, Inc.) and its subsidiaries at December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule appearing under Item 14(a)(2) on page 95 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed in Note 15 to the financial statements, the Company changed its method of accounting for derivative instruments and hedging activities effective January 1, 2001. /s/ PRICEWATERHOUSECOOPERS LLP Houston, Texas February 15, 2002 CONSOLIDATED STATEMENTS OF OPERATIONS XXXXXX XXXXXX, INC. AND SUBSIDIARIES

Consolidated Statements of Operations. ... 47 Consolidated Statements of Comprehensive Income............. 48 Consolidated Balance Sheets................................. 49 5 Consolidated Statements of Stockholders' Equity............. 50 ...........................6 Consolidated Statements of Cash Flows....................... 51 Flows ....................................7 Notes to the Consolidated Financial Statements.................. 52-91 Selected Quarterly Financial Data (unaudited)............... 92-93 ............................8 XXXXXX BIERWOLF & XXXXXXXX Certified Public Accountants 00 Xxxx Xxxxxxxx, Xxxxx 0000 Xxxx Xxxx Xxxx, Xxxx 00000 INDEPENDENT AUDITOR'S REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Xxxxxx XxxxxxUnimex Transnational Consultants, Inc. In our opinion, the consolidated financial statements listed in We have audited the accompanying index present fairly, in all material respects, the financial position consolidated balance sheets of Xxxxxx XxxxxxUnimex Transnational Consultants, Inc. (formerly K N EnergyA Development Stage Company), Inc.) and its subsidiaries at as of December 31, 2001 1995 and 20001994, and the results related consolidated statements of their operations operations, stockholders' equity and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. In addition1995, in our opinion1994 and 1993, the financial statement schedule appearing under Item 14(a)(2) and from Inception on page 95 presents fairlyJune 18, in all material respects1990 through December 31, the information set forth therein when read in conjunction with the related consolidated financial statements1995. These financial statements and financial statement schedule are the responsibility of the Company's management; our . Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which auditing standards. Those standards require that we plan and perform the audit audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, . An audit also includes assessing the accounting principles used and significant estimates made by management, and as well as evaluating the overall financial statement presentation. We believe that our audits provide provides a reasonable basis for our opinion. As discussed In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Unimex Transnational Consultants, Inc. (A Development Stage Company) as of December 31, 1995 and 1994, and the results of its operations and cash flows for the years ended December 31, 1995, 1994 and 1993 and from inception on June 18, 1990 through December 31, 1995 in conformity with generally accepted accounting principles. Salt Lake City, Utah March 8, 1996 Unimex Transnational Consultants, Inc. (A Development Stage Enterprise) Consolidated Balance Sheets December 31, -------------------------- 1995 1994 ----------- ----------- Assets Current assets Cash $ 2,250 $ - Prepaid expenses $ 1,700 - ----------- ----------- Total Current Assets 3,950 - ----------- ----------- Other assets Organization cost (Note 15 1) 6,000 - ----------- ----------- Total Assets $ 9,950 $ - =========== =========== Liabilities and Stockholders Equity Liabilities $ - $ - ----------- ----------- Stockholders' Equity Common Stock, authorized 100,000,000 shares of $.001 par value, issued and 50,000 and 30,000, respectively 50 30 Additional Paid in Capital 12,950 2,970 Deficit Accumulated During the Developmental Stage (3,050) (3,000) ----------- ----------- Total Equity 9,950 - ----------- ----------- Total Liabilities and Stockholders' Equity $ 9,950 $ - =========== =========== The accompanying notes are an integral part of these financial statements. Unimex Transnational Consultants, Inc. (A Development Stage Company) Consolidated Statements of Operations Cumulative Total Since For the Years ended December 31, Inception ---------------------------------- ---------- 1995 1994 1993 Revenues: $ - $ - $ - $ - Expenses: Bank charges 50 - - 50 Amortization - 3,000 - 3,000 -------- -------- -------- -------- Total Expenses 50 3,000 - - Net Loss $ (50) $(3,000) $ - $(3,050) Net Loss Per Share $ (.002) $ (.10) $(.000) $ (.099) ======== ======== ======== ======== The accompanying notes are an integral part of these financial statements. Unimex Transnational Consultants, Inc. (A Development Stage Company) Consolidated Statement of Stockholder' Equity From Inception on June 18, 1990 through December 31, 1995 Additional Deficit accumulated Common Stock Paid-in during the Shares Amount Capital Development Stage -------- -------- ---------- -------------------- Issuance of stock to officers, 30,000 $ 30 $ 2,970 $ - directors and other individuals for organization costs on April 10, 1991 Net Loss from inception through December 31, 1992 - - - - Net Loss for the years ended December 31, 1993 - - - - --------- --------- --------- --------------------- Balance at December 31, 1993 30,000 $ 30 2,970 $ - Net Loss for the year ended (3,000) December 31, 1994 --------- --------- --------- --------------------- Balance at December 31, 1994 30,000 30 2,970 (3,000) Issuance of common stock to the public for cash on October 31, 1995 8,000 8 3,992 - Issuance of common stock for services 12,000 12 5,988 - Net Loss for the year ended December 31, 1995 (50) --------- --------- --------- --------------------- Balance December 31, 1995 50,000 $ 50 $ 12,950 $ (3,050) The accompanying notes are an integral part of these financial statements. Unimex Transnational Consultants, Inc. (A Development Stage Company) Consolidated Statements of Cash Flow Cumulative Total Since For the Company changed its method Years ended December 31, Inception ---------------------------------- ---------- 1995 1994 1993 Cash Flows From Operating Activities: Net Loss $ (50) $ (3,000) $ - $ (3,050) -------- -------- -------- ---------- Less non-cash items: Amortization - 3,000 - 3,000 -------- -------- -------- ---------- Net Cash Used by Operating Activities (50) - - (50) -------- -------- -------- ---------- Cash flow from Investing Activities: Cash paid for prepaid expenses (1,700) - - (1,700) -------- -------- -------- ---------- Net cash used in Investing Activities (1,700) - - (1,700) -------- -------- -------- ---------- Cash Flows From Financing Activities: Proceeds From Issuance of accounting for derivative instruments Common Stock 4,000 - - 4,000 -------- -------- -------- ---------- Net Cash Provided by 4,000 - - 4,000 Financing Activities -------- -------- -------- ---------- Net Increase (Decrease) in Cash and hedging activities effective January 1Cash Equivalents 2,250 - - 2,250 -------- -------- -------- ---------- Cash and Cash Equivalents at Beginning of Year - - - - -------- -------- -------- ---------- Cash and Cash Equivalents at End of Year $ 2,250 $ - $ - $ 2,250 ======== ======== ======== ========== The accompanying notes are an integral part of these financial statements. Unimex Transnational Consultants, 2001. /s/ PRICEWATERHOUSECOOPERS LLP HoustonInc. (A Development Stage Company) Notes to the Consolidated Financial Statements December 31, Texas February 15, 2002 CONSOLIDATED STATEMENTS OF OPERATIONS XXXXXX XXXXXX, INC. AND SUBSIDIARIES1995 and 1994 NOTE 1 - Summary Of Significant Accounting Policies

Consolidated Statements of Operations. ... 47 50 Consolidated Statements of Comprehensive Income............. 48 Consolidated Balance Sheets................................. 49 Consolidated Statements Statement of Stockholders' Equity............. 50 ......................................... 51 Consolidated Statements of Cash Flows....................... 51 .................................................. 52 Notes to Consolidated Financial Statements.................. 52-91 Selected Quarterly Financial Data (unaudited)............... 92-93 ............................................. 53 REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS To the AUDITORS The Board of Directors and Stockholders of Xxxxxx XxxxxxGilead Sciences, Inc. In our opinion, the consolidated financial statements listed in We have audited the accompanying index present fairly, in all material respects, the financial position consolidated balance sheets of Xxxxxx XxxxxxGilead Sciences, Inc. (formerly K N Energy, Inc.) and its subsidiaries at as of December 31, 2001 1998 and 2000, 1997 and the results related consolidated statements of their operations operations, stockholders' equity and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule appearing under Item 14(a)(2) on page 95 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements1998. These financial statements and financial statement schedule are the responsibility of the Company's management; our . Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, . An audit also includes assessing the accounting principles used and significant estimates made by management, and as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed in Note 15 to In our opinion, the financial statementsstatements referred to above present fairly, in all material respects, the Company changed consolidated financial position of Gilead Sciences, Inc. at December 31, 1998 and 1997, and the consolidated results of its method operations and its cash flows for each of the three years in the period ended December 31, 1998, in conformity with generally accepted accounting for derivative instruments and hedging activities effective January 1, 2001principles. /s/ PRICEWATERHOUSECOOPERS ERNST & YOUNG LLP HoustonPalo Alto, Texas February 15California January 21, 2002 CONSOLIDATED STATEMENTS OF OPERATIONS XXXXXX XXXXXX1999 GILEAD SCIENCES, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND SUBSIDIARIESPER SHARE AMOUNTS) DECEMBER 31, 1998 1997 ASSETS Current assets: Cash and cash equivalents........................................... $ 32,475 $ 31,990 Short-term investments.............................................. 247,464 290,308 Other current assets................................................ 8,371 17,960 Total current assets.................................................. 288,310 340,258 Property and equipment, net........................................... 10,182 10,313 Other assets.......................................................... 4,368 1,498 $ 302,860 $ 352,069 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable.................................................... $ 3,422 $ 3,303 Accrued clinical and preclinical expenses........................... 11,925 12,989 Other accrued liabilities........................................... 12,358 5,705 Deferred revenue.................................................... Current portion of long-term debt and equipment financing obligations....................................................... 3,275 770 9,541 1,853 Total current liabilities............................................. 31,750 33,391 Non-current portion of long-term debt................................. 563 1,331 Commitments Stockholders' equity: Preferred stock, par value $.001 per share, issuable in series; 5,000,000 shares authorized; 1,133,786 shares of Series B convertible preferred issued and outstanding at December 31, 1998

Consolidated Statements of Operations. ... 47 40 Consolidated Statements of Comprehensive Income............. 48 Consolidated Balance Sheets................................. 49 Consolidated Statements Statement of Stockholders' Equity............. 50 .......................... 41 Consolidated Statements of Cash Flows....................... 51 ................................... 42 Notes to Consolidated Financial Statements.................. 52-91 Selected Quarterly Financial Data (unaudited)............... 92-93 .............................. 43 REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS To the AUDITORS The Board of Directors and Stockholders of Xxxxxx XxxxxxExtreme Networks, Inc. In our opinion, the consolidated financial statements listed in We have audited the accompanying index present fairly, in all material respects, the financial position consolidated balance sheets of Xxxxxx XxxxxxExtreme Networks, Inc. (formerly K N Energyas of June 30, Inc.) 1999 and its subsidiaries at December 31, 2001 and 20001998, and the results related consolidated statements of their operations operations, stockholders' equity and their cash flows for the period from inception, May 8, 1996 to June 30, 1997 and for each of the three two years in the period ended December 31June 30, 2001 in conformity with accounting principles generally accepted in the United States of America1999. In addition, in our opinion, Our audits also included the financial statement schedule appearing under listed in the Index at Item 14(a)(2) on page 95 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements14(a). These financial statements and financial statement schedule are the responsibility of the Company's management; our . Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, . An audit also includes assessing the accounting principles used and significant estimates made by management, and as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed In our opinion, the financial statements referred to above present fairly, in Note 15 all material respects, the consolidated financial position of Extreme Networks, Inc. at June 30, 1999 and 1998, and the consolidated results of its operations and its cash flows for the period from inception, May 8, 1996 to June 30, 1997, and for each of the two years in the period ended June 30, 1999, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. Ernst & Young LLP Palo Alto, California July 20, 1999 EXTREME NETWORKS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) June 30, ------------------- 1999 1998 --------- -------- ASSETS Current assets: Cash and cash equivalents................................ $ 107,143 $ 9,510 Short-term investments................................... 16,422 10,995 Accounts receivable, net of allowance for doubtful accounts of $1,374 in 1999 and $433 in 1998)............................... 20,797 7,808 Inventories.............................................. 2,626 123 Other current assets..................................... Total current assets.................................... 1,978 --------- 148,966 588 -------- 29,024 Property and equipment, net............................... 6,506 4,469 Investments............................................... 16,097 -- Other assets.............................................. 234 --------- $ 171,803 ========= 238 -------- $ 33,731 ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable......................................... $ 13,418 $ 9,993 Accrued compensation..................................... 2,500 462 Accrued commissions...................................... 1,600 473 Accrued warranty......................................... 1,400 1,073 Accrued purchase commitments............................. 1,111 893 Deferred revenue......................................... 1,717 283 Other accrued liabilities................................ 4,883 701 Income tax liability..................................... 1,650 -- Notes payable, current portion........................... -- 834 Capital lease obligations, current portion............... Total current liabilities............................... 1,648 --------- 29,927 516 -------- 15,228 Notes payable, net of current portion..................... -- 1,167 Capital lease obligations, net of current portion......... -- 1,467 Commitments Stockholders' equity: Convertible preferred stock, $.001 par value, issuable in series: 2,000,000 shares authorized at June 30, 1999 (29,900,000 shares authorized at June 30, 1998); no shares and 29,061,315 shares issued and outstanding at June 30, 1999 and 1998, respectively.................... -- 29 Common stock, $.001 par value; 150,000,000 shares authorized at June 30, 1999, (50,000,000 shares authorized at June 30, 1998); 49,345,230 and 11,534,525, shares issued and outstanding at June 30, 1999 and 1998, respectively............................................ 49 12 Additional paid-in capital............................... 165,618 38,056 Deferred stock compensation.............................. (197) (369) Accumulated other comprehensive loss..................... (118) -- Accumulated deficit...................................... (23,476) (21,859) --------- -------- Total stockholders' equity.............................. 141,876 15,869 --------- -------- $ 171,803 $ 33,731 ========= ======== See accompanying notes to consolidated financial statements. EXTREME NETWORKS, the Company changed its method of accounting for derivative instruments and hedging activities effective January 1, 2001INC. /s/ PRICEWATERHOUSECOOPERS LLP Houston, Texas February 15, 2002 CONSOLIDATED STATEMENTS OF OPERATIONS XXXXXX XXXXXX(In thousands, except per share amounts) Year Ended June 30, ------------------- For the Period from May 8, 1996 (Date of Inception) 1999 1998 through June 30, 1997 -------- --------- --------------------- Net revenue......................... $ 98,026 $ 23,579 $ 256 Cost of revenue..................... 48,520 14,897 388 -------- --------- ------- Gross profit (loss)................. 49,506 8,682 (132) Operating expenses: Research and development.......... 17,036 10,668 5,351 Selling and marketing............. 27,056 9,601 1,554 General and administrative........ 6,859 2,440 1,023 -------- --------- ------- Total operating expenses........ 50,951 22,709 7,928 -------- --------- ------- Operating loss...................... (1,445) (14,027) (8,060) Interest income..................... 1,855 613 234 Interest expense.................... (398) (326) (79) Other income (loss), net............ 21 (196) (18) -------- --------- ------- Income (loss) before income taxes... 33 (13,936) (7,923) Provision for income taxes.......... 1,650 -- -- -------- --------- ------- Net loss............................ $ (1,617) $ (13,936) $(7,923) ======== ========= ======= Basic and diluted net loss per common share....................... $ (0.17) $ (3.18) $ (4.51) Weighted average shares outstanding used in computing basic and diluted net loss per share............................. 9,462 4,379 1,758 Pro forma basic and diluted net loss per share (unaudited).............. $ (0.04) $ (0.44) Shares used in computing pro forma basic and diluted net loss per share (unaudited).................. 38,523 31,701 See accompanying notes to consolidated financial statements. 40 EXTREME NETWORKS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (in thousands, except share amounts) Convertible Accumulated Preferred Stock Common Stock Additional Deferred Other Total ----------------- ------------- Paid-In Stock Comprehensive Accumulated Stockholders' Shares Amount Shares Amount Capital Compensation Loss Deficit Equity Issuance of common stock to founders............ -- $ -- 4,725 $ 4 $ 12 $ -- $ -- $ -- $ 16 Issuance of Series A convertible preferred stock to investors for cash (less issuance costs of $5)........... 14,580 14 -- -- 4,841 -- -- -- 4,855 Issuance of common stock to the former share- holders of Mammoth Technology............. -- -- 675 1 12 -- -- -- 13 Issuance of Series B convertible preferred stock to investors for cash (less issuance costs of $27).......... 8,886 9 -- -- 12,227 -- -- -- 12,236 Exercise of options to purchase common stock.. -- -- 5,410 6 102 -- -- -- 108 Net loss................ -- -- -- -- -- -- -- (7,923) (7,923) Balances at June 30, 1997................... 23,466 23 10,810 11 17,194 -- -- (7,923) 9,305 Issuance of warrant for 48,347 shares of Series B convertible preferred stock.................. -- -- -- -- 28 -- -- -- 28 Issuance of Series C convertible preferred stock to investors for cash (less issuance