EXHIBIT 11.1
McLeodUSA Incorporated
COMPUTATION OF LOSS PER COMMON
AND COMMON EQUIVALENT SHARE
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
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1994 1995 1996 1996 1997
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Computation of weighted average
number of common shares
outstanding and common
equivalent shares:(A)
Common shares, Class A,
outstanding at the beginning
of the period...................... 11,994 14,456 16,387 16,387 36,173
Common shares, Class B,
outstanding at the beginning
of the period(B)................... 5,625 7,671 15,626 15,626 15,626
Weighted average number of
shares issued during the
period(C).......................... 3,860 -- 8,473 5,806 953
Weighted average number of
shares purchased for the
treasury during the period......... (15) -- -- -- --
Weighted average number of
shares reissued from the
treasury during the period......... -- 22 -- -- --
Common equivalent shares
attributable to stock options
granted(D)......................... 5,019 5,019 2,510 3,346 --
Common stock issued(C)............... 9,887 9,887 23 23 --
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Weighted average number of
common and common equivalent
shares............................. 36,370 37,055 43,019 41,188 52,752
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Net loss............................. $ (11,416) $ (11,329) $ (22,346) $ (13,418) $ (53,556)
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Loss per common and common
equivalent share................... $ (0.31) $ (0.31) $ (0.52) $ (0.33) $ (1.02)
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(A) All shares have been adjusted to give effect to the 3.75 for 1 stock split
effected in the form of a stock dividend effective March 28, 1996.
(B) The Class B common stock, $.01 par value per share is convertible on a
one-for-one basis at any time at the option of the holder into Class A common
stock. As of September 30, 1997, all shares of Class B common stock had been
converted into shares of Class A common stock.
(C) All stock issued during the year ended December 31, 1995 was within the
twelve-month period discussed in (D) below. As a result, the shares issued at
prices below the assumed initial public offering price during this period have
been included in the calculation as if they were outstanding for all periods
presented. For the year ended December 31, 1996 and the nine months ended
September 30, 1997, the shares of Class A and B common stock issued during the
year ended December 31, 1995 are shown as shares outstanding at the beginning
of the period.
(D) All stock options are anti-dilutive, however, pursuant to Securities and
Exchange Commission Staff Accounting Bulletin No. 83 (SAB 83), stock options
granted with exercise prices below the assumed initial offering price during
the twelve-month period preceding the date of the initial filing of the
Registration Statement filed in connection with the Company's initial public
offering have been included in the calculation of common stock equivalent shares
as if they were outstanding for all periods through June 30, 1996, the
quarter in which the initial public offering was declared effective.