DREAMWORKSANIMATIONSKG,INC. NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) outstanding for the entire period and (ii) from the Separation Date through December 31, 2004, the weighted average number of shares of common stock outstanding. For the years ended December 31, 2002 and 2003 diluted per share amounts are calculated using the number of shares of common stock outstanding immediately following the Separation, but not including the shares issued in our initial public offering, as is such shares were outstanding for all periods presented, excluding, because their effect would be anti-dilutive, the impact of 487,000 shares of Class A common stock which underlie equity based compensation awards converted at the Separation. For the year ended December 31, 2004 the diluted share amount is calculated using the weighted average of: (i) from January 1, 2004 through the Separation Date, the number of shares of common stock outstanding immediately following the separation, but not including the shares issued in our initial public offering, plus the impact of 487,000 shares of Class A common stock which underlie equity based compensation awards converted at the Separation (using the treasury stock method) and (ii) from the Separation Date through December 31, 2004, the weighted average number of shares of common stock outstanding plus 1,418,000 shares of Class A common stock which underlie equity based compensation awards converted at the Separation and issued during the period (using the treasury stock method). For the period from the Separation Date through December 31, 2004, options to purchase 442,000 shares were not included in the calculation of diluted per share amounts because these options were out-of-the-money and 1,020,952 shares of unvested restricted stock to certain named executive officers were not included in the calculation of diluted per share amounts because the performance criteria for these awards were not set by the Compensation Committee of the Company’s Board of Directors until January, 2005. The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands except per share amounts) 2002 2003 2004 Numerator: Income (loss) before cumulative effect of accounting change ......... $(25,067) $(184,639) $333,000 Cumulative effect of accounting change .......................... — (2,522) — Net income (loss) ............................................ $(25,067) $(187,161) $333,000 Denominator: Weighted average common shares and denominator for basic calculation ............................................... 76,636 76,636 81,432 Weighted average effects of dilutive equity-based compensation awards Employee stock options ............................... — — 660 Unvested restricted shares ............................. — — 59 Denominator for diluted calculation ............................. 76,636 76,636 82,151 Net income (loss) per share—basic Income (loss) per share before cumulative effect of accounting change ......................................... $ (0.33) $ (2.41) $ 4.09 Cumulative effect of accounting change per share .................. — (0.03) — Net income (loss) per share .................................... $ (0.33) $ (2.44) $ 4.09 Net income (loss) per share—diluted Income (loss) per share before cumulative effect of accounting change .................................................. $ (0.33) $ (2.41) $ 4.05 Cumulative effect of accounting change per share .................. — (0.03) — Net income (loss) per share .................................... $ (0.33) $ (2.44) $ 4.05 95