FORM 10-K

Index Company Profile Financial Highlights Dear Fellow Shareholders Question and Answer with the CEO ASP Solutions HealtheWare HealthWeb Complementary Business Milestones Form 10-K Report of Independent Accountants Balance Sheets Statements of Operations Statements of Comprehensive Loss Statement of Stockholders' Equity (Deficit) Statements of Cash Flows Notes to Consolidated Financial Statements Valuation and Qualifying Accounts Corporate Information

PART II ITEM 6 -- SELECTED FINANCIAL DATA    The following selected consolidated financial data, except as noted herein, has been taken or derived from our audited consolidated financial statements and should be read in conjunction with the full consolidated financial statements included herein. CROGHAN & ASSOCIATES, INC. THE TRIZETTO GROUP, INC. (In thousands, except per share amounts) Year ended December 31, 1996 Nine months ended September 30, 1997 Period from May 27, 1997 (Date of inception) to December 31, 1997 Year ended December 31, 1998 1999 2000 Revenue:    Recurring revenue $ 5,088 $ 3,881 $ 1,191 $ 5,300 $ 19,448 $ 61,811    Non-recurring revenue - - 1,328 6,131 13,478 27,245     Total revenue 5,088 3,881 2,519 11,431 32,926 89,056     Cost of revenue:    Recurring revenue 4,068 3,609 1,250 3,978 17,350 54,929    Non-recurring revenue - - 422 3,498 10,037 20,089     Total cost of revenue 4,068 3,609 1,672 7,476 27,387 75,018     Gross profit 1,020 272 847 3,955 5,539 14,038     Operating expenses:    Research and development - - - 1,084 2,394 8,463    Selling, general and administrative 2,142 2,415 672 2,887 9,366 34,144    Amortization of goodwill and acquired intangibles - - - - 783 18,622    Write-off of acquired in-process technology(1) - - - - 1,407 1,426           Total operating expenses 2,142 2,415 672 3,971 13,950 62,655     Income (loss) from operations (1,122 ) (2,143 ) 175 (16 ) (8,411 ) (48,617 ) Interest income 21 15 15 210 527 1,394 Interest expense (1,341 ) (84 ) (13 )   (52 )   (256 )   (883 )     Income (loss) before provision for income taxes    and extraordinary item (2,442 ) (2,212 ) 177 142 (8,140 ) (48,106 ) Provision for (benefit of) income taxes - - 74 82 (213 ) (5,848 )     Income (loss) before extraordinary item (2,442 ) (2,212 ) 103 60 (7,927 ) (42,258 ) Extraordinary item:    Gain on forgiveness of debt - 1,000 - - - -        Net income (loss) $ (2,442 ) $ (1,212 ) $ 103 $ 60 $ (7,927 ) $ (42,258 )     Net income (loss) per share:    Basic $ 0.05 $ 0.01 $ (0.85 ) $ (1.80 )        Diluted $ 0.03 $ 0.00 $ (0.85 ) $ (1.80 )     Shares used in computing net income (loss) per share:    Basic 2,065 4,937 9,376 23,444        Diluted 4,074 12,783 9,376 23,444       CROGHAN & ASSOC., INC. THE TRIZETTO GROUP, INC. (In thousands) Year ended 1996 Year ended December 31, 1997 1998 1999 2000 CONSOLIDATED BALANCE SHEET DATA: Cash, cash equivalents, restricted cash, and short-term investments $ 1,757 $ 773 $ 3,681 $ 24,806 $ 28,384 Total assets 11,174 2,634 8,720 68,418 363,751 Total short-term debt and capital lease obligations - - 80 1,857 14,555 Total long-term debt and capital lease obligations 1,400 520 645 2,728 4,440 Mandatorily redeemable convertible preferred stock(2) - - 6,449 - - Total stockholders' equity (deficit) 7,819 563 (741 ) 51,296 269,430 (1) In connection with our acquisitions in 1999 and 2000, we wrote off $1.4 million per year, of the total purchase price to acquired in-process technology as technological feasibility of the products had not been established. See Note 12 of Notes to Consolidated Financial Statements for an explanation of the acquisitions and the acquired in-process technology.   (2) The mandatory redeemable convertible preferred stock was converted to common stock at the time of our initial public offering.