Masimo Reports Fourth Quarter 2007 and Full Year 2007 Financi...(low. The following tables provide a c...)

The following tables provide a comparison of our diluted earnings per

share calculated under Emerging Issues Task Force Issue No. 03-6,

"Participating Securities and the Two-Class Method under FASB Statement

No. 128", or EITF 03-6, and Financial Accounting Standards Board No. 128

"Earnings per Share", or FASB 128, in accordance with GAAP and the

non-GAAP if converted method based upon FASB 128. The non-GAAP if

converted method assumes conversion of all shares of the Company's

preferred stock into common stock as of December 31, 2005.

Upon the closing of our initial public offering on August 13, 2007, all

outstanding shares of our prior Series A through Series G convertible

preferred stock were converted into an aggregate of 34,612,503 shares of

common stock. Therefore, effective August 13, 2007, we transitioned from

computing diluted earnings per share from the two class method in

accordance with EITF 03-6 to the if converted method in accordance with

FASB 128. Net income for the year ended December 29, 2007 was allocated

between the periods during which two classes of equity securities were

outstanding and during which a single class of equity securities was

outstanding based on the respective number of days. For the year ended

December 29, 2007, two classes of equity securities were outstanding for

224 days and a single class of equity securities was outstanding for 139

days, or 61.7% and 38.3% of the total days in the twelve month reporting

period, respectively. For the three months ended December 29, 2007, a

single class of equity securities was outstanding for the entire period.

We believe that the following non-GAAP diluted earnings per share

information is relevant and useful information that can be used by

analysts, investors and other interested parties to assess our performance

on a co
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