DREAMWORKSANIMATIONSKG,INC. CONSOLIDATEDSTATEMENTSOFOPERATIONS Years Ended December31, 2002 2003 2004 (in thousands) Operating revenue ............................................. $434,324 $ 300,986 $1,078,160 Costs of revenue ............................................... 391,214 438,959 566,209 Gross profit (loss) ............................................. 43,110 (137,973) 511,951 Selling, general and administrative expenses ........................ 34,922 29,322 73,608 Operating income (loss) ......................................... 8,188 (167,295) 438,343 Interest expense, net of interest income ............................. (3,940) (12,360) (15,402) Other income (expense), net ..................................... (27,124) (3,145) 385 Income (loss) before income taxes and cumulative effect of accounting change .................................................... (22,876) (182,800) 423,326 Provision for income taxes ...................................... (2,191) (1,839) (90,326) 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 Basic net income (loss) per share: Income (loss) before cumulative effect of accounting change ....... $ (0.33) $ (2.41) $ 4.09 Cumulative effect of accounting change ........................ — (0.03) — Net income (loss) .......................................... $ (0.33) $ (2.44) $ 4.09 Diluted net income (loss) per share: Income (loss) before cumulative effect of accounting change ....... $ (0.33) $ (2.41) $ 4.05 Cumulative effect of accounting change ........................ — (0.03) — Net income (loss) .......................................... $ (0.33) $ (2.44) $ 4.05 Shares used in computing net income (loss) per share Basic .................................................... 76,636 76,636 81,432 Diluted .................................................. 76,636 76,636 82,151 See accompanying notes. 68