<PAGE>   1

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------


                                  FORM 10-K/A


                   FOR ANNUAL AND TRANSITION REPORTS PURSUANT
         TO SECTIONS 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

(MARK ONE)
   [X]            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
                  DECEMBER 31, 2000

                                       OR

   [ ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

           FOR THE TRANSITION PERIOD FROM ____________ TO ____________

                        COMMISSION FILE NUMBER 000-26167

                              IXL ENTERPRISES, INC.
             (Exact Name of Registrant as Specified in Its Charter)

                   DELAWARE                                  58-2234342
       (State or other Jurisdiction of                    (I.R.S. Employer
        Incorporation or Organization)                   Identification No.)

1600 PEACHTREE STREET, N.E., ATLANTA, GEORGIA                   30309
   (Address of Principal Executive Offices)                  (Zip Code)

                                 (404) 279-1000
               Registrant's Telephone Number, Including Area Code

           Securities Registered Pursuant to Section 12(b) of the Act:
                                      NONE

           Securities Registered Pursuant to Section 12(g) of the Act:

                     COMMON STOCK, $.01 PAR VALUE PER SHARE
                                (Title of Class)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. [ ]


         The aggregate market value of the common stock held by non-affiliates
of the Company, based upon the closing price of the registrant's common stock as
of September 4, 2001 was $29,999,536. There were 96,772,696 shares of common
stock outstanding as of September 4, 2001.



<PAGE>   2

                       DOCUMENTS INCORPORATED BY REFERENCE


         The information required to be provided in Part III was (Items 10, 11,
12, and 13) of this Annual Report on Form 10-K/A is hereby incorporated by
reference from the Company's Definitive 2000 Proxy Statement which was filed
with the Securities and Exchange Commission on April 30, 2001.


================================================================================


<PAGE>   3

                              IXL ENTERPRISES, INC.


                          ANNUAL REPORT ON FORM 10-K/A

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                PAGE
                                                                                                ----

         <S>                <C>                                                                 <C>
         PART I
           Item  1.         Business.........................................................     1
           Item  2.         Properties.......................................................     7
           Item  3.         Legal Proceedings................................................     7
           Item  4.         Submission of Matters to a Vote of Security Holders..............     7

         PART II
           Item  5.         Market for Registrant's Common Equity and Related Stockholder         8
                            Matters..........................................................
           Item  6.         Selected Financial Data..........................................     8
           Item  7.         Management's Discussion and Analysis of Financial Condition and
                               Results of Operations.........................................     9
           Item  7A.        Quantitative and Qualitative Disclosures About Market Risk.......    21
           Item  8.         Financial Statements and Supplementary Data......................    22
           Item  9.         Changes in and Disagreements with Accountants on Accounting and
                               Financial Disclosure..........................................    46

         PART III
           Item 10.         Directors and Executive Officers of the Registrant...............    46
           Item 11.         Executive Compensation...........................................    46
           Item 12.         Security Ownership of Certain Beneficial Owners and Management...    46
           Item 13.         Certain Relationships and Related Transactions...................    46

         PART IV
           Item 14.         Exhibits, Financial Statement Schedules, and Reports on Form 8-K.    46
                            Signatures.......................................................    52
</TABLE>

               SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION


         Certain statements contained in this Annual Report on Form 10-K/A,
including information with respect to the Company's future business plans,
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. For this purpose, any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the foregoing, the
words "believes," "plans," "expects" and similar expressions are intended to
identify forward-looking statements. There are a number of important factors
that could cause the results of the Company to differ materially from those
indicated by such forward-looking statements. These factors include those set
forth in Part II, Item 7 "Management's Discussion and Analysis of Financial
Conditions and Results of Operations -- Risk Factors."


Our forward-looking statements speak only as of the date they are made and
should not be relied upon as representing our plans and expectations as of any
subsequent date. While we may elect to update or revise forward-looking
statements at some time in the future, we specifically disclaim any obligation
to do so, even if our plans and expectations change.
<PAGE>   4

                                     PART I

ITEM 1. BUSINESS

OVERVIEW

         iXL is a leading business and technology consultancy that helps
companies use the power of emerging technologies and advanced business strategy
to build stronger, more profitable relationships with their customers, employees
and business partners. We use our expertise in strategy, creative design and
systems engineering to design, develop and deploy Internet-based advanced
e-business solutions for Global 1000 companies and other corporate users of
information technology. We do this for some of the world's leading companies,
including American International Group, Inc., BellSouth Corporation, British
Airways, J.P. Morgan Chase & Co., Citicorp Development Center, Inc., The
Coca-Cola Company, Delta Air Lines, FedEx, FleetBoston Financial Corporation,
General Electric Company and Lloyds TSB Bank plc.

         Our goal is to be the leader in providing unique e-business solutions
for Global 1000 companies and other corporate users of information technology.
To achieve our goal, we will utilize a focused set of vertical market
capabilities and cost-effective development and implementation resources. We
intend to leverage and expand our industry expertise, capture and disseminate
our knowledge and best practices, recruit, train and retain experienced
professionals, expand our client relationships and leverage our strategic
alliances with key technology companies such as Sun Microsystems, Intel, Oracle,
BEA, Art Technology Group, Cisco and others.

         We derive our revenue from fees for services for the design and
delivery of e-business solutions. These solutions typically include Web-based
applications, many of which integrate with a client's existing computer systems.
These solutions can incorporate multiple capabilities, including business
strategy consulting; creative design; information architecture; software
engineering; project management; and audio, video and animation production. We
offer our services on a time and materials and fixed-price basis.

         We typically staff engagements with a multi-disciplined team of
professionals including, for example, project managers, strategic consultants,
creative designers, information architects, industry experts and software
engineers. By assembling these multi-disciplined teams of professionals, we
provide comprehensive e-business solutions to our clients.

         We utilize a proprietary engagement methodology called iD5, which
defines and delineates business procedures and processes to take full advantage
of best practices developed throughout iXL. iD5 governs and directs all phases
of project management from initial engagement definition to final solutions
delivery. The goal of iD5 is to provide consistent procedures for all engagement
phases by encouraging the use of best practices, while providing clients with
greater clarity of expectations, regular progress reports and a higher degree
of project organization. We believe iD5 helps us achieve on-time and on-budget
solutions, capture our best practices and leverage our industry expertise

         We use our extensive engineering capabilities to deliver complex
e-business solutions by employing proven technologies such as Java, XML, Perl,
CGI, C and C++. We have also entered into an agreement with HPS America, Inc.
Under this agreement, HPS will complement and supplement our existing core
engineering capabilities with its expertise in e-commerce, Web technology, rapid
application development, re-engineering and migration, legacy system maintenance
and enterprise integration.

         Our growth and our ability to provide e-business services depend in
large part on our ability to recruit, train and retain experienced
professionals. Our strategy is to expand our existing expertise by recruiting
senior professionals from major consulting firms, creative design firms,
information technology services firms and other e-business services companies.
We maintain an informal, team-driven and results-oriented culture that is
attractive to energetic, talented professionals and provides incentives for our
employees through a competitive compensation plan, equity ownership and our
stock option plans.


         iXL is a Delaware corporation. Our principal executive offices are
located at 1600 Peachtree Street, NE, Atlanta, Georgia 30309, and our telephone
number is (404) 279-1000. We maintain a World Wide Web site at www.iXL.com. The
reference to our World Wide Web address does not mean we are incorporating by
reference the information contained at the site. In this Annual Report on Form
10-K/A, "the Company," "iXL," "we," "us" and "our" refer to iXL Enterprises,
Inc. and its subsidiaries. These terms include the businesses we have acquired,
unless the context otherwise requires.



                                       1
<PAGE>   5

INDUSTRY GROUPS

         To provide our clients with the best possible solutions and service, we
have targeted key industries for growth. We believe that these industries have
been leaders in the utilization of Internet-enabled technologies. iXL has
established industry groups staffed with experienced professionals in the
Financial Services, Retail and Consumer Goods, Travel and Transportation and
Manufacturing industries. We have also established an Enterprise Services
industry team staffed with experts in the communications, healthcare and
high-tech industries.

         Our industry groups are in varying stages of development, staffing and
activity. To build our groups' expertise, we leverage the experience of our
employees who have previously worked for major consulting firms or companies in
the relevant industries. We have utilized our industry expertise in serving the
clients listed below. These clients, included for illustrative purposes, are not
intended to be representative of our clients generally.

<TABLE>
<CAPTION>
        INDUSTRY                                      CLIENTS
        --------                                      -------

        <S>                                <C>
        Financial Services.............    American International Group, Inc.
                                           Citicorp Development Center, Inc.
                                           Fleet Boston Financial Corporation
                                           Lloyds TSB Bank plc
                                           J.P. Morgan Chase & Co.

        Retail and Consumer Goods......    BMG Direct
                                           The Coca-Cola Company
                                           Kraft

        Travel and Transportation......    British Airways
                                           Budget Rent a Car
                                           Delta Air Lines
                                           FedEx

        Manufacturing..................    Cemtec
                                           Dupont
                                           Eastman Chemical

        Enterprise Services............    General Electric Company
                                           BellSouth
</TABLE>

         Our industry expertise enables us to accurately design and deliver
effective e-business strategy and solutions tailored to the special needs of our
clients. Our strategy is to expand our existing global industry teams by
recruiting senior professionals from major consulting firms and companies in the
relevant industries. In addition, industry expertise reduces the learning curve
on new engagements, improving efficiency of implementation and reducing project
delivery times.

SERVICE LINES

         We have organized our solution delivery around six service lines:
Business to Employee, E-Commerce/Core Engineering, Strategy, Enterprise
Relationship Management, E-Value Chain and User Experience.

Strategy

         We offer our clients, leading national and multinational businesses, a
single source for the comprehensive range of solutions required to identify,
design, develop and deploy e-business solutions that complement or expand
conventional business processes. Our strategy services combine innovative
strategic thinking, creative design capabilities, change management and
technological expertise to identify and develop innovative solutions.

Business to Employee

         iXL's B2E group currently has three primary offerings: Knowledge
Management, eLearning and eHR and Employee Portals. The focus for these
solutions is to increase employee productivity and effectiveness. Together,
these solutions provide the basis for a powerful differentiator for iXL in
developing and winning eValue and ERM opportunities, as well as large enterprise
client engagements.

         iXL's B2E group has been named the strategic services partner for
Cisco's E-Learning Eco-system. Through this partnership, iXL will work with
Cisco to provide reference architecture and set solutions built on Cisco
technologies. Together iXL and Cisco will offer a number of knowledge management
and learning tools for large-scale enterprise solutions, including:


                                       2
<PAGE>   6

         -        a means for employees to update their skill sets and job
                  knowledge;

         -        an efficient channel for sharing and disseminating
                  information;

         -        content creation and reuse;

         -        increased employee productivity and reduced operational costs;
                  and

         -        delivery technologies including interactive multimedia,
                  content on demand, virtual classroom, learning management and
                  streaming media.

E-Commerce/Core Engineering

         We design, develop and deploy sophisticated e-commerce applications for
bringing buyers and sellers together via the Internet. We have created a broad
range of e-commerce applications for our clients, ranging from online retail
sites to electronic procurement systems. Our strength in e-commerce lies in our
ability to integrate third-party software with a client's existing computing and
network infrastructure to create a robust e-commerce environment for the
client's customers and prospects. Our technology group utilizes a set of core
e-commerce enabling technologies from companies, including:

         -        Microsoft and BEA, for e-commerce server;

         -        Oracle, for database platform development; and

         -        Compaq and Sun Microsystems, for computing platforms and
                  networking products and services.

         We have created our own e-commerce applications for specific client
needs. We also work with many third-party software companies that have developed
more general applications for conducting different aspects of e-commerce,
ranging from security to online transaction payments processing.

         Our E-Commerce/Core Engineering service line also features specialized
skills in E-Globalization. E-Globalization is the process that enables a company
to deliver products and services to customers internationally. iXL works with
clients to prepare Internet-related business strategies and processes to handle
international inquiries, orders and customer support. Technology
internationalization is the creation or modification of software code, or HTML,
to support information processing in multiple locales, languages, currencies,
calendars and other differing data types. iXL assists clients in assessing the
readiness of their technology systems for globalization and localization.
Technology localization is the adaptation of a product or service to the legal,
cultural, linguistic and technical requirements of a particular market.

Enterprise Relationship Management

         We design and develop sophisticated computer-based business information
management systems. These include database-driven Web sites that help clients
manage their customer, supplier and vendor relationships more effectively and
provide secure database access. Some of these Web sites also have the capacity
to recognize and profile the types of information a user is typically interested
in, and to provide that information automatically to the user during future
visits to the site. As part of our ERM capability, we develop intranets and
extranets, which enable our clients to communicate with employees, customers,
suppliers and vendors, as well as to track and store critical business data and
other information.


                                       3
<PAGE>   7

E-Value Chain

         iXL's e-Value Chain group designs, builds and manages integrated
trading partner communities. We work with clients to develop solutions that
provide the ability to create, manage, maintain and optimize relationships with
their partners and suppliers across the entire Value Chain. iXL's e-Value Chain
practice provides strategic analysis and solutions to clients including
strategy, demand planning and order management, procurement, technology,
marketplaces for trading communities and supply chain transformation and
optimization.

User Experience

         iXL's User Experience group builds a customized bridge between every
client and its customers. Our User Experience team is composed of experts in
creative strategy, branding strategy, content strategy and management, design,
information architecture, site authoring and usability engineering. Excellence
in quality and innovation in delivery are iXL's dominant drivers, allowing each
customer a unique and compelling experience.

SALES AND MARKETING

         Our marketing department has overall responsibility for communications,
advertising, public relations and our World Wide Web site. iXL's sales &
marketing activities are aligned with our vertical industry groups.
Industry-aligned sales and marketing professionals are responsible for
developing new business within each industry, targeting new clients and
supporting the growth of existing client relationships. iXL's sales approach is
consultative and involves industry and solution experts who understand the
client's specific business and technology issues. Senior client executives are
assigned to strategic accounts to support and expand follow-on business.

         Our sales and marketing strategy is to leverage our industry expertise,
engineering, and technology skills to attract new clients and expand the scope
of existing client relationships into broader engagements, and to create and
sustain preference and loyalty for the IXL brand as a leading provider of
e-business solutions and services.

STRATEGIC ALLIANCES AND AFFILIATIONS

         We have entered into, and intend to continue entering into, strategic
alliances and affiliations with a select group of technology service providers.

         The primary goals of our strategic alliances and affiliations are:

         -        to train and retain our engineers, architects, creative talent
                  and strategists;

         -        to create or identify new revenue opportunities through
                  referrals and the creation of new service offerings; and

         -        to increase iXL's credibility and visibility in the
                  marketplace by operating an industry-leading alliances program
                  as well as collaborating with alliance partners in joint
                  marketing efforts.

         We have established strategic affiliations with, among others, Cisco,
Compaq, EMC, Intel, Microsoft, Oracle and Sun Microsystems. These strategic
affiliations provide us early access to training, product support, tools, best
practices and technology for these core elements of IT infrastructure.

         We have also established strategic alliances with companies offering
technologies that serve specific roles in the deployment or delivery of iXL
services. These alliances are arranged by portfolios that focus on a particular
solution set or service line. Some of the portfolios and representative alliance
partner companies include Art Technology Group, BEA, Blue Martini, BroadVision,
Documentum, Interwoven, Vignette, Epicentric, Epiphany, Kana, Siebel and Ariba.

         The contracts governing the strategic affiliations and alliances
generally do not have long durations or minimum requirements. In addition, they
are generally terminable by iXL or the other party at will.


                                       4
<PAGE>   8

         We have also entered into an agreement with HPS America, Inc. This
agreement is intended to enable HPS to complement and supplement our existing
core engineering capabilities with its expertise in e-commerce, Web technology,
rapid application development re-engineering and migration, legacy system
maintenance and enterprise integration.

         HPS is a joint venture between HCL Technologies Limited, India's
largest information technology company, and Perot Systems, the world's third
largest IT outsourcing company. HPS will provide iXL with preferred pricing,
priority scheduling and customized capabilities via SEI-CMM Level 5
iXL-dedicated facilities in Noida and Bangalore, India. HPS was assessed
enterprise-wide at Level 5 of the Capability Maturity Model (CMM) developed by
the Software Engineering Institute, Carnegie Mellon University, Pittsburgh, USA.
The Software Engineering Institute (SEI) is a federally funded research and
development center sponsored by the U.S. Department of Defense and operated by
Carnegie Mellon University. Only 20 of over 1,000 worldwide assessments have
been assessed at this level. The CMM for Software describes the principles and
practices underlying software process maturity and is intended to help software
organizations improve the maturity of their software processes in terms of an
evolutionary path from ad hoc, chaotic processes to mature, and disciplined
software processes. The CMM is organized into five maturity levels with Level 5
being the highest: 1) Initial; 2) Repeatable; 3) Defined; 4) Managed; and 5)
Optimizing. Predictability, effectiveness, and control of an organization's
software processes are believed to improve as the organization moves up these
five levels. The key process areas at Level 5 cover the issues that both the
organization and the projects must address in order to implement continual,
measurable software process improvement.

TRADEMARKS


         iXL(TM), the iXL logo, Interactive Excellence(TM), Internet
Excellence(TM), iD5(TM) and the names of products and services offered by iXL
are trademarks, registered trademarks, service marks or registered service marks
of iXL. This Annual Report on Form 10-K/A also includes product names, trade
names and trademarks of other companies.


IXL VENTURES

         As a complement to iXL's core business, iXL assists in the development
of other Internet-related businesses. Through its subsidiary iXL Ventures, LP,
iXL lends its management experience to early stage and developing
Internet-related businesses, some of which were internally developed by iXL. iXL
Ventures relationships frequently include many of the following facets:

         -        executive-level introductions of the developing business to
                  other businesses in the same market;

         -        advising the developing business with respect to the
                  development of its business plan; and

         -        designation by iXL of one member of the developing business'
                  board of directors.

         In return for its assistance, iXL maintains or receives an equity
interest in the developing business. iXL generally does not recognize any
revenue related to these activities because of the difficulty in valuing such
services. In addition, because of the high degree of uncertainty surrounding
these businesses, most equity interests held by iXL in connection with this
program are not recorded in the consolidated financial statements.

         Some of our more significant Ventures companies include:

         -        CyberStarts, Inc., a technology holding company, funds
                  companies that develop technologies of interest to financial
                  institutions, including opportunities related to
                  business-to-business financial services, payments and Web
                  infrastructure opportunities;

         -        ProAct Technologies Corp., formerly Consumer Financial
                  Network, Inc., develops integrated human resources and
                  marketplace technology. ProAct provides Fortune 1000 companies
                  solutions to automate their employee benefit, HR and
                  life-event planning processes;

         -        AppGenesys, Inc., an application infrastructure provider,
                  focuses on the deployment, staging, testing, validation and
                  scalability of mission critical Web systems and enabling
                  software delivery for those systems;

         -        Digital Planet, Inc., a business-to-business broadband Web
                  services company, creates and produces content to attract and
                  retain users for businesses online;


                                       5
<PAGE>   9

         -        Promisant (Holdings) Ltd. provides international credit card
                  payment and currency settlement software and services; and

         -        Sekani, Inc. provides advanced media asset management services
                  to businesses.

         In connection with the delivery of our services, some of these business
were started, developed and subsequently determined to be non-strategic to the
scope of iXL's principal business. In such circumstances, iXL seeks strategic
investors to assist in the full development of these projects into viable
stand-alone businesses, while retaining an equity interest in the project.
Additionally, a committee of independent directors must approve any such
transaction before any non-core assets are transferred by iXL. ProAct was the
first major stand-alone business to emerge from this process. Our chairman, U.
Bertram Ellis, Jr., serves as a director on the board of several iXL Ventures
companies, including ProAct, Sekani, AppGenesys, Digital Planet and CyberStarts.
Some of the iXL Ventures companies have received financing from investment funds
of which Mr. Ellis and certain directors of iXL are private investors.

COMPETITION

         The market for our solutions and services is highly competitive and
characterized by a growing number of companies that have introduced or developed
similar offerings. Our target market is rapidly evolving and is subject to
continuous technological changes. In addition, there are relatively low barriers
of entry into our business. We currently have limited patented or other
proprietary technology that would preclude or inhibit competitors from entering
the Internet consulting market. As a result, iXL's competitors may be better
positioned to address these developments and may react more favorably to these
changes, which could have a material adverse effect on iXL's business, results
of operations and financial condition. Existing and future competitors may
develop or offer solutions and services that provide significant technological,
creative, performance, price or other advantages over the services offered by
us.

         We classify our competitors into several groups:

         -  e-business solution providers;

         -  strategic consulting firms;

         -  large information technology consulting services providers; and

         -  computer hardware and service vendors.

         Our primary competitors today are Sapient Corporation, Proxicom, Inc.,
Scient Corp., Viant Corp. and smaller professional services firms. In addition,
the "Big Five" consulting firms as well as other large and small services firms
are now offering Internet consulting services. We also compete with professional
services groups of computer equipment companies such as IBM, Computer Sciences
Corporation and Electronic Data Systems. These larger firms may be better
positioned than iXL to secure attractive client engagements, and may also be
better positioned to withstand any fluctuations in demand.

         Many of iXL's current and potential competitors have longer operating
histories and relationships with clients; larger installed customer bases; and
significantly greater financial, technical, marketing and public relations
resources than iXL. Competitors that have established relationships with large
companies but limited expertise in providing e-business solutions may
successfully use their client relationships to enter our target market or
prevent our penetration into their client accounts.

         We believe that due to the relatively low cost of entering our markets,
competition will intensify and increase in the future. Many larger traditional
companies have chosen to utilize in-house resources for the implementation of
their Internet initiatives in lieu of those offered by iXL and its competitors.
This intense competition may limit our ability to become profitable or result in
the loss of market share. As a result, our competitors may be better positioned
to address developments in the industry or may react more effectively to
industry changes, which could adversely affect our business. Additionally,
because competition for Global 1000 client accounts is significant, some clients
are demanding discounts and/or other preferred terms in their contracts. iXL's
unwillingness or inability to grant discounts in an effort to protect profit
margins may impact iXL's ability to attract or maintain these clients.


                                       6
<PAGE>   10

EMPLOYEES

         As of December 31, 2000, iXL had approximately 1,600 employees,
including approximately 1,250 professional services employees, 310 general and
administrative employees, and 40 sales and marketing employees. None of iXL's
employees is represented by a labor union. iXL has experienced no work stoppages
and believes its relationship with its employees is good.

ITEM 2. PROPERTIES


         iXL's executive offices are located in Atlanta. Additionally, iXL
leases office space for its principal operations in the following metropolitan
areas: New York, NY; Chicago, IL; Boston, MA; Washington, D.C.; Richmond, VA;
and London, England. We have obligations under leases for several of our
recently closed offices. We have sublet certain of this space and are currently
working to sublet or enter into lease termination agreements for the remaining
space. Even if we are able to sublet these offices, we will continue to be
responsible for the tenant obligations in the event of a default by our
subtenant.


ITEM 3. LEGAL PROCEEDINGS


         On or about September 8, 2000, the first in a series of shareholder
class action complaints was filed against iXL and certain of its present and
former directors and officers in the United States District Court for the
Northern District of Georgia. Those cases were consolidated by Order dated
January 23, 2001, and a consolidated amended class action complaint (Case No.
1:00-CV-2347-CC) was filed on March 27, 2001, naming only iXL as a defendant, on
behalf of a putative class of all those who purchased or otherwise acquired
securities of iXL between November 30, 1999 and September 1, 2000. The amended
complaint seeks damages based on general allegations of false and misleading
press releases and SEC filings concerning our business prospects and financial
statements. The amended complaint asserts claims under Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5. Another complaint related to the
volatility in the market price of iXL's common stock was filed in Redwing Ltd.
v. iXL Enterprises, Inc., et al., Case No. 1:00-CV-29790HTW, United States
District Court for the Northern District of Georgia against iXL and certain of
its present and former directors and officers. The Redwing complaint alleges
causes of action under Section 10(b) and Rule 10b-5 of the Securities Exchange
Act of 1934, Sections 12 and 15 of the Securities Act of 1933, the Georgia Blue
Sky laws, as well as common law claims for breach of contract and negligent
misrepresentation. A second related complaint was filed in Next Century
Communications Corp. v. U. Bertram Ellis, Case No. 1:01-CF-0755-TWT, United
States District Court for the Northern District of Georgia. The Next Century
complaint alleges fraud, negligent misrepresentation and breach of fiduciary
duty. We have filed motions to dismiss the Redwing complaint. We have moved to
dismiss the class action amended complaint and the Next Century complaint. We
believe we have meritorious defenses to the allegations and intend to defend
these cases vigorously. In light of the nature of the litigation process, there
can be no assurance that iXL will not be constrained to consider reasonable
settlement opportunities or suffer an adverse result, either of which could have
a material adverse impact on iXL.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         We submitted no matters to a vote of security holders during the
quarter ended December 31, 2000.


                                       7
<PAGE>   11

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         iXL's common stock commenced trading publicly on the NASDAQ National
Market on June 3, 1999 and is traded under the symbol IIXL. Prior to that date,
there was no public market for our common stock. The following table sets forth
for the periods indicated the high and low sales prices of our common stock.

<TABLE>
<CAPTION>
                                                                                  HIGH      LOW
                                                                                -------- --------
         <S>                                                                    <C>      <C>
         Year Ended December 31, 1999:
           Second Quarter (from June 3, 1999 through June 30, 1999).........    $  27.00 $  13.75
           Third Quarter....................................................    $  38.38 $  20.00
           Fourth Quarter...................................................    $  58.00 $  31.63

         Year Ended December 31, 2000:
           First  Quarter...................................................    $  58.75 $  28.00
           Second Quarter...................................................    $  30.38 $  13.63
           Third Quarter....................................................    $  19.69 $   4.13
           Fourth Quarter...................................................    $   4.53 $   0.69
</TABLE>


As of September 4, 2001, there were approximately 936 holders of record of our
common stock. We have never declared or paid any cash dividends on our common
stock nor do we expect to pay any cash dividends in the foreseeable future.
Under the terms of its credit agreement, iXL is restricted from paying cash
dividends to its stockholders.


ITEM 6. SELECTED FINANCIAL DATA

         You should read the following selected consolidated financial data with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and iXL's audited consolidated financial statements and the notes
thereto included elsewhere in this report. iXL commenced operations on May 1,
1996. Since then we have completed 38 acquisitions. All of iXL's acquisitions
have been accounted for using the purchase method, and accordingly, the
consolidated statement of operations data of iXL for all periods presented
reflect the results of operations of these businesses from their respective
acquisition dates. The consolidated statement of operations data set forth below
for the years ended December 31, 1998, 1999 and 2000, and the consolidated
balance sheet data as of December 31, 1999 and 2000 are derived from iXL's
audited consolidated financial statements, which appear elsewhere in this
report. Certain items in the prior year financial statements have been
reclassified to conform to the current year presentation.

<TABLE>
<CAPTION>
                                                           EIGHT MONTHS
                                                              ENDED                        YEARS ENDED DECEMBER 31,
                                                           DECEMBER 31,    --------------------------------------------------------
                                                               1996          1997           1998            1999            2000
                                                           ------------    --------      ----------      ----------      ----------
                                                                              (IN THOUSANDS, EXCEPT PER SHARE DATA)

<S>                                                        <C>             <C>           <C>             <C>             <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenue ...............................................      $  5,379      $ 18,986      $   64,767      $  218,343      $  359,336
Expenses:
    Professional services expenses ....................         3,167        10,044          35,924         110,317         213,754
    Sales and marketing expenses ......................           678         3,785          15,983          49,019          39,304
    General and administrative expenses ...............         1,791        15,351          42,590          95,633         175,805
                                                             --------      --------      ----------      ----------      ----------
      Operating loss before charges and non-cash
      expenses ........................................          (257)      (10,194)        (29,730)        (36,626)        (69,527)
    Stock-based compensation and other ................            --            --           1,641           4,920           4,198
    Depreciation ......................................           372         1,408           5,217          12,857          20,532
    Amortization ......................................           928         5,191          10,590          18,174          43,969
    Impairment charge on intangible assets ............            --            --              --              --          97,402
    Restructuring charges .............................            --            --              --              --          76,588
                                                             --------      --------      ----------      ----------      ----------
Loss from operations ..................................        (1,557)      (16,793)        (47,178)        (72,577)       (312,216)
Other income (expense) ................................            48           116             (28)           (161)         (1,754)
Interest income .......................................            32           136             750           3,577           5,391
Interest expense ......................................           (30)         (238)           (770)           (987)         (2,118)
Equity in net losses of affiliates ....................          (249)       (1,443)         (1,640)            (65)        (41,168)
                                                             --------      --------      ----------      ----------      ----------
          Loss before income taxes ....................        (1,756)      (18,222)        (48,866)        (70,213)       (351,865)
Income tax expense (benefit) ..........................          (302)       (2,782)             --              --             600
                                                             --------      --------      ----------      ----------      ----------
          Net loss ....................................        (1,454)      (15,440)        (48,866)        (70,213)       (352,465)
Dividends and accretion on mandatorily redeemable
   preferred stock ....................................            --            --          (9,099)        (20,966)             --
                                                             --------      --------      ----------      ----------      ----------
          Net loss available to common stockholders ...      $ (1,454)     $(15,440)     $  (57,965)     $  (91,179)     $ (352,465)
                                                             ========      ========      ==========      ==========      ==========
Net loss per share:
Basic and diluted net loss per common share ...........      $  (0.37)     $  (2.36)     $    (4.92)     $    (2.08)     $    (4.73)
                                                             ========      ========      ==========      ==========      ==========
Weighted average common shares outstanding ............         3,972         6,540          11,777          43,747          74,593
                                                             ========      ========      ==========      ==========      ==========
</TABLE>


                                       8
<PAGE>   12

<TABLE>
<CAPTION>
                                                                                    AS OF DECEMBER 31,
                                                             ----------------------------------------------------------------
                                                               1996          1997          1998          1999          2000
                                                             --------      --------      --------      --------      --------
                                                                                      (IN THOUSANDS)

<S>                                                          <C>           <C>           <C>           <C>           <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents .............................      $    409      $ 23,038      $ 19,259      $120,812      $ 48,595
Working capital .......................................           217        23,879        27,119       199,450        40,498
Total assets ..........................................        16,472        57,612       142,951       357,855       234,435
Debt, including current portion .......................           691         1,273        21,420         1,838        20,718
Mandatorily redeemable preferred stock ................            --        29,930        65,679            --            --
Mandatorily redeemable preferred stock of subsidiary ..            --            --         9,839        48,955            --
Total stockholders' equity ............................        12,989        21,950        25,560       260,095       126,408
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


         You should read the following discussion of the financial condition and
results of operations of iXL in conjunction with the Consolidated Financial
Statements and the Notes thereto included elsewhere in this Annual Report on
Form 10-K/A.

OVERVIEW

         iXL is a leading business and technology consultancy that helps
companies utilize emerging technologies and business strategy designed to build
stronger, more profitable relationships with their customers and business
partners. iXL has 7 principal offices in the United States and Europe. iXL began
operations in May 1996, and since that time iXL has acquired a total of 38
companies. iXL has incurred substantial losses since its inception. As of
December 31, 2000, iXL had an accumulated deficit of approximately $488.4
million. Although iXL had experienced year over year revenue growth since
inception, there has been a decline in revenue over the last two quarters of the
year ended December 31, 2000. Growth in prior periods may not be indicative of
future results of operations.


         On June 30, 2000, our voting interest in ProAct Technologies Corp. was
reduced to less than 50% as the result of its issuance of additional stock.
Accordingly, during the three months ended June 30, 2000, we deconsolidated
ProAct. iXL has presented its results of operations and financial condition as
if the deconsolidation occurred on January 1, 2000. This change did not have a
material effect on our consolidated revenue but resulted in a decrease in
consolidated operating expenses during the year ended December 31, 2000.

         On September 1, 2000, iXL announced several organizational changes and
reported that revenue and earnings for the third quarter ended September 30,
2000 would be materially below management's expectations. The organizational
changes included the resignation of William C. Nussey, the former Chief
Executive Officer of the Company's principal operating subsidiary, iXL, Inc.,
and former Director of iXL, and also announced the reassignment of Niraj Shah,
the former Chief Operating Officer of iXL, Inc., to Executive Vice President of
Operations. On November 6, 2000, Mr. Shah resigned as an officer and Director of
the Company. On October 31, 2000, Jonathan Ballon, the former Chief Marketing
Officer, resigned. On September 6, 2000, the Company announced a restructuring
of its workforce including the termination of approximately 350 employees. On
November 28, 2000, iXL announced plans for additional restructuring which
included the closing or sale of several offices and a reduction in workforce by
approximately 850 additional employees. Of these total reductions in workforce,
approximately 800 were professional services personnel, 300 were general and
administrative personnel, and 100 were in sales and marketing personnel. The
restructuring was an effort to become a more industry-focused company and to
deliver a higher level of quality and depth of expertise for our clients.
Several factors precipitated these announcements, which are further discussed
below.

         The demand for Internet consulting services is changing rapidly.
Beginning in the third quarter of 2000, Internet consultants, including iXL,
experienced a significant reduction in demand. This overall slowdown affected
iXL in that many of the Company's Global 1000 clients rethought or delayed
implementing their Internet strategy. This shift in market dynamics as to our
Global 1000 clients resulted in part from diminished competitive pressures from
dot.com companies, which were struggling or failing. In addition, many larger
traditional companies have chosen to utilize in-house resources for the
implementation of their Internet initiatives in lieu of those offered by iXL and
its competitors. As a result, the average amount of time invested by iXL to sell
its services has increased. It is likely that demand for Internet consulting
services, including those offered by the Company, will remain lower than prior
levels for the foreseeable future.

         This reduction in demand adversely affected iXL's revenue during the
second half of 2000. In response to these factors, iXL initiated an extensive
restructuring plan designed to reduce iXL's workforce and minimize general and
administrative expenses. This is further discussed in Note 4 of the consolidated
financial statements contained elsewhere in this


                                       9
<PAGE>   13

report. As a result of the restructuring and employee terminations iXL may have
difficulty retaining its most qualified employees. Likewise, we may have
difficulty attracting new qualified employees. The failure to attract and retain
qualified creative, technical, consulting and sales personnel could materially
and adversely affect the Company's financial condition and results of
operations.

         As a result of our restructuring plan, we recorded a $76.6 million
restructuring charge during the year ended December 31, 2000. The restructuring
charges amount includes charges for: (i) rent and sublease expenses net of
anticipated sublease income for office leases abandoned due to the reduction in
workforce; (ii) impairment of property and equipment as a result of the decrease
in demand for the Company's services and resulting decrease in revenue; and
(iii) severance due to the reduction in workforce. In connection with our
restructuring plan, we have recorded a reserve of approximately $41.6 million,
of which approximately $30.3 million is expected to be paid in the next twelve
months.

         As a result of a sustained drop in the market capitalization of the
Company and the changes in the dynamics of the demand for Internet consulting
services, the Company evaluated the recoverability of its intangible
assets pursuant to SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." As a result of this
evaluation, the Company recorded an impairment charge of $97.4 million. The
impairment charge is a reduction of both goodwill and acquired workforce amounts
originally recorded as a result of the purchase price allocation of many of our
acquisitions. The reduction was made in order to more accurately reflect the
recoverable value, as measured on a discounted cash flow basis, of the assets
recorded as part of these acquisitions.

         On December 19, 2000, the Company consummated a transaction with ProAct
in which iXL Ventures PHC, Inc., an indirect wholly-owned subsidiary of the
Company, issued debt instruments due January 7, 2004 to ProAct in exchange for a
cash payment of $20.0 million, which was in turn transferred by dividend to iXL,
Inc., a direct wholly-owned subsidiary of the Company. The debt is secured by
and exchangeable for 10 million shares of common stock of ProAct held by iXL
Ventures PHC, Inc., upon satisfaction of certain conditions. In addition, ProAct
obtained call rights with respect to 10 million shares of the common stock of
ProAct held by iXL Ventures, L.P. The note is non-recourse to iXL Enterprises,
Inc.

    On December 28, 2000, we entered into a stock purchase agreement with HPS
America, Inc. under which HPS purchased one million shares of our common stock
at $3.00 per share. The agreement requires us to purchase $65.0 million of
services from HPS over a three-year period. These services include application
software development, migration, re-engineering, systems integration, service
management and other professional services. HPS paid $1.5 million upon execution
of the agreement. The remaining $1.5 million is due on August 31, 2001 and was
recorded as subscription receivable in stockholders' equity.

         On February 1, 2001, Christopher M. Formant became our new President
and Chief Executive Officer. U. Bertram Ellis, Jr. continues to serve as
Chairman of the Board of iXL.

         On March 30, 2001, pursuant to an agreement in principal reached
March 26, 2001, the Company sold 15,875,000 shares of restricted common stock to
unaffiliated third parties and to parties related to the Company through its
principal shareholder, including two directors, for total proceeds of
approximately $15.9 million before expenses. This stock sale was subject to
certain subsequent events, including the effectiveness of the amendment to the
credit facility, discussed in "Liquidity and Capital Resources" below, effective
April 2, 2001.


         On July 31, 2001, iXL and Scient Corporation jointly announced that
they entered into an Agreement and Plan of Merger dated July 31, 2001, which
sets forth the terms and conditions of a pending business combination of iXL
and Scient. Each share of iXL common stock outstanding immediately prior to
the effective time of the merger will be converted into the right to receive
0.25 shares of the new company's common stock, and each share of Scient common
stock outstanding immediately prior to the effective time of the merger will
be converted into the right to receive 0.31 shares of the new company's common
stock.

         Consummation of the transaction is subject to various conditions,
including the approval by both iXL's and Scient's stockholders and the receipt
of required regulatory approvals. In connection with the execution of the merger
agreement, iXL and certain stockholders of Scient who own approximately 34% of
the outstanding common stock of Scient entered into a voting agreement pursuant
to which such Scient stockholders have agreed to vote their shares of Scient
common stock in favor of the adoption of the merger agreement. Similarly, Scient
and certain stockholders of iXL who own approximately 34% of the outstanding
common stock of iXL entered into a voting agreement pursuant to which such iXL
stockholders have agreed to vote their shares of iXL common stock in favor of
the adoption of the merger agreement.


RESULTS OF OPERATIONS

   Years Ended December 31, 2000 and December 31, 1999

         In June 2000, the Company's ownership of ProAct was reduced to
approximately 49% of the voting interest and 85% of ProAct's outstanding common
stock. Accordingly, the Company's consolidated financial statements for the year
ended December 31, 2000 do not include the consolidated financial statements of
ProAct as a consolidated subsidiary. The Company instead has accounted for its
ownership using the equity method of accounting. As a result, we believe it is
difficult to compare the operating results for the year ended December 31, 2000
to the operating results for the year ended December 31, 1999.

    Revenue. Revenue increased $141.0 million, or 64.6%, to $359.3 million for
the twelve months ended December 31, 2000 from $218.3 million for the twelve
months ended December 31, 1999. The increase was attributable to an increase in
the number and size of client engagements. Revenue for the six months ended
December 31, 2000 was $139.6 million as compared to $219.7 million for the six
months ended June 30, 2000. Beginning in the third quarter of 2000, Internet
consultants, including iXL, experienced a significant reduction in demand. This
overall slowdown affected iXL in that many of the Company's Global 1000 clients
rethought or delayed implementing their Internet strategy. This shift in market
dynamics as to our Global 1000 clients resulted in part from diminished
competitive pressures from dot.com companies, which were struggling or failing.
In addition, many larger traditional companies have chosen to utilize in-house
resources for the implementation of their Internet initiatives in lieu of those
offered by iXL and its competitors.


                                       10
<PAGE>   14

         Professional services expenses. Professional services expenses
increased $103.5 million, or 93.8%, to $213.8 million for the twelve months
ended December 31, 2000 from $110.3 million for the twelve months ended December
31, 1999. This increase was primarily attributable to an increase in
professional services headcount over the same period last year. As a percentage
of professional services revenue, professional services expenses increased from
50.5% for the twelve months ended December 31, 1999 to 59.5% for the twelve
months ended December 31, 2000. The increase as a percentage of professional
services revenue was due to an increased number of professional services
personnel hired in anticipation of higher demand for Internet consulting
services. The demand for our services did not reach the level we anticipated.
See the discussion of the industry trend in the Overview section above.

         Sales and marketing expenses. Sales and marketing expenses decreased
$9.7 million, or 19.8%, to $39.3 million for the twelve months ended December
31, 2000 from $49.0 million for the twelve months ended December 31, 1999. As
discussed in Note 3 of the consolidated financial statements contained elsewhere
in this report, the sales and marketing expenses for ProAct were included in the
consolidated sales and marketing expenses contained in the financial statements
for the twelve months ended December 31, 1999 but were excluded from the
consolidated sales and marketing expenses contained in the financial statements
for the twelve months ended December 31, 2000. An increase in salaries and other
payroll related costs, travel expenses and use of outside services in 2000 over
1999 was offset by the inclusion of ProAct's sales and marketing expenses in
1999. As a percentage of revenue, sales and marketing expenses decreased to
10.9% for the twelve months ended December 31, 2000 from 22.4% for the twelve
months ended December 31, 1999.

         General and administrative expenses. General and administrative
expenses increased $80.2 million, or 83.9%, to $175.8 million for the twelve
months ended December 31, 2000 from $95.6 million for the twelve months ended
December 31, 1999. This increase was primarily attributable to an increase in
bad debt expense, an increase in rent and increases in salaries, travel and
other administrative expenses related to the increase in the number of general
and administrative personnel necessary to support the Company's anticipated
growth. As discussed in Note 3 of the consolidated financial statements
contained elsewhere in this report, the general and administrative expenses for
ProAct were included in the consolidated general and administrative expenses
contained in the financial statements for the twelve months ended December 31,
1999 but were excluded from the consolidated general and administrative expenses
contained in the financial statements for the twelve months ended December 31,
2000. As a percentage of revenue, general and administrative expenses
increased to 48.9% for the twelve months ended December 31, 2000 from 43.8% for
the twelve months ended December 31, 1999.

         Stock-based compensation and other. Stock-based compensation and other
expense decreased $0.7 million to $4.2 million for the twelve months ended
December 31, 2000 from $4.9 million for the twelve months ended December 31,
1999. The decrease in stock-based compensation expense was due to a decrease in
the number of employees with such stock options as a result of the
restructuring.

         Depreciation. Depreciation expense increased $7.6 million to $20.5
million for the twelve months ended December 31, 2000 from $12.9 million for the
twelve months ended December 31, 1999. The increase was primarily related to
increases in leasehold improvements and equipment.

         Amortization. Amortization expense increased $25.8 million to $44.0
million for the twelve months ended December 31, 2000 from $18.2 million for the
twelve months ended December 31, 1999. The increase was primarily a result of
the amortization of goodwill and assembled workforce recorded in connection with
the acquisition of Tessera Enterprises Systems, Inc.

         Impairment charge on intangible assets. The Company recorded a $97.4
million impairment charge on intangible assets during the twelve months ended
December 31, 2000. No such charge was recorded for the twelve months ended
December 31, 1999. The charge is the result of a write-down of certain
intangible assets resulting from a sustained drop in the market capitalization
of the Company and the changes in the dynamics of the demand for Internet
consulting services. See Note 5 of the consolidated financial statements
included elsewhere in this report.

         Restructuring charges. The Company recorded a $76.6 million
restructuring charge during the twelve months ended December 31, 2000. No such
charge was recorded for the twelve months ended December 31, 1999. The
restructuring charge includes charges for rent and sublease expenses and
severance costs. See Note 4 of the consolidated financial statements included
elsewhere in this report.

         Other expenses. Other expenses increased $1.6 million to $1.8 million
for the twelve months ended December 31, 2000 from $0.2 million for the twelve
months ended December 31, 1999. This increase was primarily the result of the
write off of property and equipment not affiliated with the restructuring
charge.


                                       11
<PAGE>   15

         Interest income. Interest income increased $1.8 million to $5.4 million
for the twelve months ended December 31, 2000 from $3.6 million for the twelve
months ended December 31, 1999. This increase was primarily due to increased
cash and marketable securities balances in 2000 versus 1999.

         Interest expense. Interest expense increased $1.1 million to $2.1
million for the twelve months ended December 31, 2000 from $1.0 million for the
twelve months ended December 31, 1999. This increase was primarily due to
borrowings under iXL's credit facility.

         Equity in net losses of affiliates. The Company incurred a $41.1
million loss on equity investments during the twelve months ended December 31,
2000 as compared to a $65,000 loss during the twelve months ended December 31,
1999. This loss was primarily related to the Company's percentage share in
ProAct's results of operations under the equity method of accounting. See Note 3
of the consolidated financial statements contained elsewhere in this report.

         Income taxes. The Company recorded income tax expense of $600,000 for
the twelve months ended December 31, 2000. The Company recorded no income tax
expense or benefit in the twelve months ended December 31, 1999. This expense
was recorded for state income taxes related to our operations in Massachusetts,
as a result of the Tessera acquisition.

   Years Ended December 31, 1999 and December 31, 1998

         The following discussion relates to iXL's actual operating results for
the periods noted. These operating results include the operations of the
companies acquired by iXL during the periods referenced from the date of
acquisition only. iXL completed 24 acquisitions during 1998 and one during 1999.
As a result, we believe the operating results for the year ended December 31,
1999 are not comparable to the operating results for the year ended December 31,
1998.

         Revenue. Revenue increased $153.5 million, or 236.9%, to $218.3 million
for the twelve months ended December 31, 1999 from $64.8 million for the twelve
months ended December 31, 1998. The increase was primarily attributable to a
series of acquisitions throughout 1998 and to an aggressive hiring initiative
throughout 1999 and 1998 which expanded our client base and headcount. The
growth was also due to an increase in the number and size of client engagements
and the development and growth of industry practice groups and other internet
based business solutions.

         Professional services expenses. Professional services expenses
increased $74.5 million, or 208.1%, to $110.3 million for the twelve months
ended December 31, 1999 from $35.8 million for the twelve months ended December
31, 1998. This increase was primarily attributable to an increase in headcount
due to the integration of the companies acquired by iXL, organic growth in
billable headcount, as well as to the development of ProAct. As a percentage of
revenue, professional services expenses decreased to 50.5% for the twelve months
ended December 31, 1999, down from 55.2% for the twelve months ended December
31, 1998. This decrease was primarily attributable to increases in billing rates
and improvements in revenue per billable employee.


         Sales and marketing expenses. Sales and marketing expenses increased
$33.0 million, or 206.3%, to $49.0 million for the twelve months ended December
31, 1999 from $16.0 million for the twelve months ended December 31, 1998. The
increase was primarily attributable to the increase in headcount due to the
development of iXL's sales and marketing infrastructure and staff. As a
percentage of revenue, sales and marketing expenses decreased to 22.4% for the
twelve months ended December 31, 1999, down from 24.7% for the twelve months
ended December 31, 1998.


         General and administrative expenses. General and administrative
expenses increased $53.0 million, or 124.4%, to $95.6 million for the twelve
months ended December 31, 1999 from $42.6 million for the twelve months ended
December 31, 1998. The increase was primarily attributable to the increase in
headcount due to the integration of the companies acquired by iXL since January
1, 1998, as well as the expansion of management and physical infrastructure to
support the growth in iXL's operations. As a percentage of revenue, general and
administrative expenses decreased to 43.8% for the twelve months ended December
31, 1999, from 65.8% for the twelve months ended December 31, 1998.

         Stock-based compensation and other. Stock-based compensation and other
expense increased $3.3 million to $4.9 million for the twelve months ended
December 31, 1999 from $1.6 million for the twelve months ended December 31,
1998. The increase in stock-based compensation expense was due to an increase in
the number of employees with such stock options.


                                       12
<PAGE>   16

         Depreciation. Depreciation expense increased $7.7 million, or 146%, to
$12.9 million for the twelve months ended December 31, 1999 from $5.2 million
for the twelve months ended December 31, 1998. The increase primarily related to
the depreciation of assets of the companies acquired by iXL since January 1,
1998 and an increase in property and equipment at these companies after
acquisition.

         Amortization. Amortization expense increased $7.6 million, or 72%, to
$18.2 million for the twelve months ended December 31, 1999 from $10.6 million
for the twelve months ended December 31, 1998. The increase was a result of the
amortization of goodwill and assembled workforce recorded in connection with the
acquisitions that took place during 1998.

         Interest income. Interest income increased $2.8 million to $3.6 million
for the twelve months ended December 31, 1999 from $0.8 million for the twelve
months ended December 31, 1998. This increase was primarily due to increased
cash and marketable securities balances in 1999 versus 1998.

         Interest expense. Interest expense increased $0.2 million to $1.0
million for the twelve months ended December 31, 1999 from $0.8 million for the
twelve months ended December 31, 1998. This increase was primarily due to
borrowings under iXL's credit facility.

         Equity in net losses of affiliates. Loss on equity investments
decreased to $65,000 for the twelve months ended December 31, 1999 from $1.6
million for the twelve months ended December 31, 1998. The decrease was a result
of a reduction in equity investments on which to record losses.

LIQUIDITY AND CAPITAL RESOURCES

CREDIT FACILITY

         iXL has funded its operations primarily with cash generated from
operations, sales of securities and bank borrowings. On January 7, 2000, we
entered into a senior secured revolving syndicated credit facility with several
institutions providing for borrowings of up to $50.0 million. The credit
facility expires on January 7, 2002. The credit facility bears interest payable
at least quarterly at a rate of either (i) 2.75% plus an adjusted LIBOR rate or
(ii) 1.75% plus the greater of Chase Manhattan Bank's prime rate or .5% plus the
federal funds rate. The credit facility is secured by liens on substantially all
of the assets of our domestic operating subsidiaries. These obligations are also
secured by all of the capital stock of iXL's domestic operating subsidiaries,
iXL's stock holdings in ProAct, the general and limited partnership interests in
iXL Ventures LP, and 65% of the capital stock of iXL's foreign subsidiaries,
including the pledge of the capital stock of the same subsidiary companies. The
credit facility provided for borrowings based upon a borrowing base formula of
qualified billed and unbilled accounts receivable. A commitment fee is charged
on the unused portion of the credit facility.

         On December 7, 2000, the Company executed an amendment to the credit
facility to waive a violation of a financial covenant. The credit facility was
further amended to: restrict the borrowing base to qualified billed accounts
receivable from domestic operations; permit the sale by the Company of equity
interests forming part of the collateral securing iXL's obligations associated
with the credit facility; reduce the amount of permitted capital expenditures;
reduce the minimum required consolidated EBITDA (earnings before interest,
income taxes, depreciation and amortization); and require the Company to
maintain an minimum level of liquidity.

         As of December 31, 2000, our borrowing base had been reduced due to a
decrease in our qualified billed accounts receivables and borrowings available
under the credit facility. As a result, we had a restricted cash balance of
approximately $4.7 million at December 31, 2000. The Company had utilized
approximately $24.7 million of the credit facility for letters of credit issued
primarily as security for office leases as of December 31, 2000. Approximately
$21.1 million of these letters of credit utilized pertain to properties that we
have abandoned but for which we still have a contractual obligation.


         On March 30, 2001, iXL executed an amendment to its senior secured
revolving syndicated credit facility which reduced the commitment the credit
facility in stages from $50,000,000 to $20,000,000 pursuant to certain events,
expanded the borrowing base to include foreign receivables and certain assets of
iXL Ventures and eliminated and amended certain financial covenants. The
amended credit facility established certain EBITDA (earnings before interest,
income taxes, depreciation and amortization) covenants for the second, third
and fourth quarters of 2001. This amendment to the credit facility became
effective on April 2, 2001. At June 30, 2001, iXL was in violation of a
financial covenant under the credit facility. Effective August 10, 2001, the
lenders waived any event of default resulting from this covenant violation
until the earlier of the completion of the pending merger or November 30, 2001
and the commitment under the credit facility was reduced to $8,050,000.


NOTE PAYABLE TO PROACT

         On December 19, 2000 the Company consummated a transaction with ProAct
in which iXL Ventures PHC, Inc., an indirect wholly owned subsidiary of the
Company, issued a 5.75% secured convertible note to ProAct in exchange for a
cash payment of $20.0 million. The note is secured by and exchangeable for (upon
satisfaction of certain conditions) 10 million shares of common stock of ProAct
held by iXL Ventures PHC, Inc. iXL Ventures PHC, Inc. has no other properties or
assets other than its interest in the ProAct common stock. The note is
non-recourse to iXL Enterprises, Inc.


                                       13
<PAGE>   17

         The note accrues interest at 5.75% per annum on a quarterly basis
commencing March 31, 2001. The entire amount of unpaid principal and accrued and
unpaid interest is due and payable on January 7, 2004. The Company may at any
time prepay all or a portion of the principal amount. The Company may repay the
principal amount of the note by payment in cash or by transfer of the pledged
collateral. Also, ProAct, at its option, may at any time (1) exchange the note
for the pledged collateral or (2) purchase the pledged collateral for $20.0
million.

         Additionally, in conjunction with the issuance of the secured
convertible note, the Company issued to ProAct call rights to purchase up to 10
million shares of its common stock owned by iXL Ventures L.P. at a purchase
price of $3.00 per share. ProAct may exercise the call rights at any time for
all or a portion of the call shares provided that the minimum amount of call
shares purchased at any time is 500,000. The call rights expire on January 7,
2004.


         iXL is required to make adjustments to the carrying value of the note
for changes in the fair value of ProAct's common stock because the terms of the
note enable ProAct to exchange the note for the pledged collateral. iXL will
record any resulting adjustment as interest income or interest expense. iXL is
also required to carry the call rights at their fair value during their term
with any resulting changes in the fair value being recorded as other income or
expense. iXL uses the Black-Scholes option-pricing model to determine the fair
value of the call rights. During the three months ended June 30, 2001, iXL
adjusted the value of the call rights by approximately $7.0 million and
recorded this amount as other income.


STOCK SALES

         On December 28, 2000, the Company entered into a stock purchase
agreement with HPS America, Inc. under which HPS purchased one million shares of
the Company's common stock at $3.00 per share. The Company agreed to subcontract
$65.0 million of services to HPS over a three-year period. Services that will be
subcontracted to HPS include application software development, migration,
re-engineering, systems integration, service management and other professional
services. HPS paid $1.5 million upon execution of the agreement. The remaining
$1.5 million is due on August 31, 2001 and was recorded as subscription
receivable in stockholders' equity. The $65.0 million commitment is required to
be met as follows: $5.0 million in the first six months; $10.0 million in the
second six months; $20.0 million in the second year; and $30.0 million in the
third year. If the Company fails to meet these commitments, the Company must pay
HPS the difference between the commitment and the value of the business actually
given during the applicable period. Likewise, in any future periods, excess
business over the defined commitment is applied against shortfalls in prior
periods and returned to the Company. If the requirement for the first six months
is not met, HPS can apply the remaining $1.5 million due on the common stock
purchase against any shortfall.

         On March 30, 2001, pursuant to an agreement in principal reached March
26, 2001, the Company sold 15,875,000 shares of restricted common stock to
unaffiliated third parties and to parties related to the Company through its
principal shareholder, including two directors, for total proceeds of
approximately $15.9 million before expenses. This stock sale was subject to
certain subsequent events, including the effectiveness of the amendment to the
credit facility discussed above on April 2, 2001.

WORKING CAPITAL

         As of December 31, 2000, iXL had $40.5 million of working capital,
including $48.6 million of cash and cash equivalents and $4.0 million of
marketable securities, as compared to $199.5 million of working capital,
including $120.8 million in cash and cash equivalents and $34.9 million in
marketable securities as of December 31, 1999.

         Cash used in operating activities was $37.1 million for the year ended
December 31, 2000, as compared to cash used in operating activities of $65.7
million for the year ended December 31, 1999. The changes in net cash used in
operating activities generally reflect the changes in earnings plus the effect
of changes in working capital. The Company calculates average days' sales
outstanding, or DSO, based on billed and unbilled receivables less deferred
revenue. The DSO for the quarter ended December 31, 2000 was 92 as compared to
87 for the quarter ended December 31, 1999. Cash used in investing activities
was $81.9 million for the year ended December 31, 2000, as compared to cash used
in investing activities of $61.1 million for the year ended December 31, 1999.
Cash used in investing activities for the year ended December 31, 2000 and 1999
was primarily used for the purchases of property and equipment and investments
in marketable securities. Cash provided by financing activities was $48.0
million for the year ended December 31, 2000 as compared to cash provided by
financing activities of $228.6 million for the year ended December 31, 1999.
Cash provided by financing activities for the year ended December 31, 2000
primarily resulted from the exercise of stock options and the $20.0 million
received from ProAct. Cash provided by financing activities for the year ended
December 31, 1999 primarily resulted from the initial and secondary public
offerings.


         The Company has sustained losses and negative cash flows from
operations since its inception. iXL's future liquidity and capital requirements
will depend on many factors. Our cash, cash equivalents, and marketable
securities decreased to $52.6 million at December 31, 2000 from $155.7 million
at December 31, 1999, of which $15.2 million related to ProAct. Our cash, cash
equivalents and marketable securities decreased to $25.8 million at June 30,
2001. At the time of filing of our Annual Report on Form 10-K, we believed that
our existing cash and cash equivalents and marketable securities, together with
funds available under the credit facility, and proceeds from our recent stock
sales in March would be sufficient to meet our anticipated needs for working
capital and capital expenditures for the remainder of 2001.




         Subsequent to the filing of the Form 10-K, we have experienced
additional declines in revenue resulting in continued operating losses and we
violated an amended debt covenant as of June 30, 2001. The Company and Scient
have entered into a definitive agreement to merge. Shareholders of approximately
34% of the outstanding common stock of iXL and shareholders of approximately 34%
of the outstanding common stock of Scient have agreed to vote their shares in
favor of the adoption of the merger agreement. However, there can be no
assurance that the merger will be successfully completed as it is subject to
shareholder approval by the shareholders of each of the Company and Scient
respectively.


         We believe that our existing cash and cash equivalents and marketable
securities and cash from operations, together with funds that may be available
under the credit facility will be sufficient to meet our anticipated needs for
working capital and capital expenditures until the earlier of the consummation
of the pending merger or November 30, 2001. In the event the merger does not
close by November 30, 2001, the Company would be in violation of certain debt
covenants or be required to collateralize outstanding letters of credit under
the credit facility with cash and, among other things, would not have access to
funds under the credit facility. As a result, we would require additional funds
or liquidity to fund our operations or further reduce our workforce, or both. We
are also continuing our efforts to raise additional funds through the sale of
certain minority equity interests in developing businesses held by iXL Ventures.
There can be no assurance any such assets can be sold on acceptable terms or for
cash. If we raise additional funds through the issuance of equity,
equity-related or debt securities, such equity securities may have rights,
preferences or privileges senior to those of common stock. Furthermore, because
of the low trading price of iXL's common stock, the number of shares of the new
equity or equity-related securities that may be required to be issued may cause
stockholders to experience significant additional dilution. In addition, the
issuance of debt securities could increase the risk or perceived risk of iXL. We
cannot, however, be certain that additional financing, or funds from asset
sales, will be available on acceptable terms if required. If this additional
financing becomes necessary and is not available or we are unable to raise funds
from the sale of assets or our pending merger with Scient does not close in the
time period anticipated, we may need to dramatically change our business plan or
face bankruptcy or liquidation. The matters above raise substantial doubt about
the Company's ability to continue as a going concern if the merger is not
completed. The accompanying financial statements do not include any adjustments
that might result from the outcome of this uncertainty.


                                       14
<PAGE>   18



NEW ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. Adoption of
SFAS 133, as amended by FAS 138, is required for the fiscal quarter beginning
January 1, 2001. We do not expect the adoption of SFAS 133 to have a material
impact on our financial statements.

         In September 2000, the FASB issued SFAS 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities - a
Replacement of FASB Statement No. 125." This statement revises the standards for
accounting for securitizations and other transfers of financial assets and
collateral. This statement is effective for transfers and servicing of financial
assets and extinguishments of liabilities occurring after March 31, 2001. We do
not expect the adoption of SFAS 140 to have a material impact on our financial
statements.

                                  RISK FACTORS

         iXL stockholders may be exposed to risks inherent to our business.
Prospective investors should carefully consider the following factors as well as
other information contained in this Annual Report on Form 10-K/A before deciding
to invest in iXL common stock.


RISKS RELATED TO IXL'S BUSINESS AND OPERATIONS




OUR FAILURE TO RAISE ADDITIONAL CAPITAL OR TO ACHIEVE PROFITABILITY WOULD HARM
OUR BUSINESS.


         The Company has sustained losses and negative cash flows form
operations since its inception. iXL's future liquidity and capital requirements
will depend on many factors. Our cash, cash equivalents, and marketable
securities decreased to $52.6 million at December 31, 2000 from $155.7 million
at December 31, 1999, of which $15.2 million related to ProAct. Our cash, cash
equivalents and marketable securities decreased to $25.8 million at June 30,
2001. At the time of filing of our Annual Report on Form 10-K, we believed that
our existing cash and cash equivalents and marketable securities, together with
funds available under the credit facility, and proceeds from our recent stock
sales in March would be sufficient to meet our anticipated needs for working
capital and capital expenditures for the remainder of 2001.

         Subsequent to the filing of the Form 10-K, we have experienced
additional declines in revenue resulting in continued operating losses and we
violated an amended debt covenant as of June 30, 2001. The Company and Scient
have entered into a definitive agreement to merge. Shareholders of approximately
34% of the outstanding common stock of iXL and shareholders of approximately 34%
of the outstanding common stock of Scient have agreed to vote their shares in
favor of the adoption of the merger agreement. However, there can be no
assurance that the merger will be successfully completed as it is subject to
shareholder approval by the shareholders of each of the Company and Scient
respectively.

         We believe that our existing cash and cash equivalents and marketable
securities and cash from operations, together with funds that may be available
under the credit facility will be sufficient to meet our anticipated needs for
working capital and capital expenditures until the earlier of the consummation
of the pending merger or November 30, 2001. In the event the merger does not
close by November 30, 2001, the Company would be in violation of certain debt
covenants or be required to collateralize outstanding letters of credit under
the credit facility with cash and, among other things, would not have access to
funds under the credit facility. As a result, we would require additional funds
or liquidity to fund our operations or further reduce our workforce, or both. We
are also continuing our efforts to raise additional funds through the sale of
certain minority equity interests in developing businesses held by iXL Ventures.
There can be no assurance any such assets can be sold on acceptable terms or for
cash. If we raise additional funds through the issuance of equity, equity-
related or debt securities, such equity securities may have rights, preferences
or privileges senior to those of common stock. Furthermore, because of the low
trading price of iXL's common stock, the number of shares of the new equity or
equity-related securities that may be required to be issued may cause
stockholders to experience significant additional dilution. In addition, the
issuance of debt securities could increase the risk of perceived risk of iXL.
We cannot, however, be certain that additional financing, or funds from asset
sales, will be available on acceptable terms if required. If this additional
financing becomes necessary and is not available or we are unable to raise
funds from the sale of assets or our pending merger with Scient does not close
in the time period anticipated, we may need to dramatically change our business
plan or face bankruptcy or liquidation. The matters discussed above raise
substantial doubt about the Company's ability to continue as a going concern
if the merger is not completed. The accompanying financial statements do not
include any adjustments that might result from the outcome of this uncertainty.



WE HAVE AN ACCUMULATED DEFICIT, ARE NOT CURRENTLY PROFITABLE AND MAY INCUR
FUTURE LOSSES.

         As of December 31, 2000, we had an accumulated deficit of approximately
$488.4 million. Additionally, our revenue composition has changed substantially
from inception, and we expect further change as our business develops. As a
result, we may not be able to achieve or sustain profitability. If we fail to
achieve or sustain profitability, the trading price of our common stock would
likely decline. In addition, iXL's independent accountants have indicated that
there is substantial doubt about iXL's ability to continue as a growing company.
In addition, iXL's independent accountants have indicated that there is
substantial doubt about iXL's ability to continue as a going concern.

WE MAY NOT BE ABLE TO ADAPT OUR BUSINESS SUCCESSFULLY TO THE REDUCTION IN DEMAND
FOR INTERNET CONSULTING SERVICES.

         The dynamics of the demand for Internet consulting services changed
rapidly and are continuing to do so. The average amount of time invested to
secure any given project has been extended. It is likely that demand for
Internet consulting services will remain lower than prior levels for the near
future. We are attempting to adapt our business and business processes to this
evolving environment. If we fail to restructure our operations sufficiently and
adapt our business processes to the evolving marketplace, our business will
suffer a material adverse impact.


POTENTIAL FLUCTUATIONS IN OUR QUARTERLY RESULTS MAKE FINANCIAL FORECASTING
DIFFICULT AND COULD AFFECT OUR COMMON STOCK TRADING PRICE.

         As a result of our ongoing restructuring, our limited operating
history, the fluctuations in demand for Internet consulting services, rapid
historical growth, numerous historical acquisitions and the emerging nature of
the markets in which we compete, we believe that quarter-to-quarter comparisons
of results of operations for preceding quarters are not necessarily meaningful.
Also, it is difficult to forecast our quarterly results due to, among other
things, the difficulty in predicting the amount and timing of client
expenditures, our acquisitions and our employee utilization. Our quarterly
results of operations may fluctuate significantly in the future as a result of a
variety of factors, many of which are outside our control. You should not rely
on the results of any one quarter as an indication of our future performance.
When the Company or authorized executives make forecasts or comments about
future results, those statements are subject to, among other things, risks and
uncertainties noted in this paragraph and discussed in this and other of our SEC
filings.


                                       15
<PAGE>   19

WE MAY NOT BE ABLE TO COMPLETE OUR RESTRUCTURING SUCCESSFULLY AND ADAPT TO OUR
NEW STRUCTURE.

         In response to diminished demand for Internet consulting services, we
have undertaken an extensive restructuring effort. We began this restructuring
in September 2000, and believe that the vast majority of our restructuring
efforts are behind us. However, additional adjustments to our structure are
expected and further adjustments may be necessary to adapt to the evolving
demand for internet consulting services.


         The following actions have occurred in the course of this
restructuring:

         -        our workforce has been reduced (through layoffs and voluntary
                  resignations) to a level of approximately 1,600 employees as
                  of December 31, 2000;

         -        as of December 31, 2000 we had closed 11 of our prior total of
                  23 offices leaving 12 offices in the following metropolitan
                  areas: Atlanta, GA; Charlotte, NC; Richmond, VA; Washington,
                  DC; New York, NY; Boston, MA; Chicago; IL; Memphis, TN;
                  Dallas, TX; San Francisco and San Diego, CA; and London,
                  England; and


         -        we have experienced significant changes in our executive
                  management team and effective February 2001, we have hired
                  Christopher M. Formant as our new Chief Executive Officer and
                  President.

         Our failure to complete our restructuring successfully and to adapt to
our new structure may have a material adverse effect on our financial condition
and results of operations.

         As a result of our office closings, we have many leased offices that we
no longer occupy. Our obligations under certain of these leases are secured by
cash security deposits and/or letters of credit issued under our senior credit
facility. In the aggregate, these lease obligations, including the deposits and
letters of credit, have a material impact on iXL's expenses and on our liquidity
and capital resources. Our failure to relet these offices and to secure the
return of the security deposits and letters of credit may have a material
adverse effect on our liquidity and financial resources.

THE LOSS OF ONE OR MORE OF OUR MAJOR CLIENTS COULD HARM OUR BUSINESS.

         For fiscal year 2000, approximately 60% of iXL's revenue was received
from its top thirty clients. The loss of one or more of our major clients, the
failure to attract new clients on a timely basis, or a reduction in revenue
associated with existing or proposed customers would harm our business and
prospects. One of iXL's clients comprised more than 5% of revenue.

WE GENERALLY DO NOT HAVE LONG-TERM CONTRACTS AND NEED TO ESTABLISH RELATIONSHIPS
WITH NEW CLIENTS.

         Our clients generally retain us on a project-by-project basis, rather
than under long-term contracts. As a result, a client may or may not engage us
for further services once a project is completed or may unilaterally reduce the
scope of, or terminate, existing projects. To become profitable, we need to
establish and develop relationships with additional Global 1000 companies and
other corporate users of information technology. The absence of long-term
contracts and the need for new clients create an uncertain revenue stream, which
could negatively affect our financial condition and our results of operations.


                                       16
<PAGE>   20



OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO EVALUATE OUR BUSINESS.

         Our operations commenced in May 1996, and we have engaged in extensive
restructuring efforts since September 2000. As a result, we have a limited
operating history on which you can base your evaluation of our business and
prospects. Our business and prospects must be considered in light of the risks
and uncertainties frequently encountered by companies in their early stages of
development. These risks are further amplified by the fact that we are operating
in the new and rapidly evolving strategic Internet services market. These risks
and uncertainties include, among others, the following:

         -        our business model and strategy have evolved and are
                  continually being reviewed;

         -        we may not be able to successfully implement our business
                  model and strategy;

         -        our management has not worked together for very long; and

         -        we may not be able to attract and maintain executives and
                  other employees.

         We cannot be sure that we will be successful in meeting these
challenges and addressing these risks and uncertainties. If we are unable to do
so, our business will not be successful and the value of your investment in iXL
will decline.




WE MAY BE UNABLE TO GROW OR TO MANAGE OUR GROWTH EFFECTIVELY.

         Continued, planned growth is a key component of increasing the value of
our common stock. Since its inception, our business has grown significantly,
although much of this growth has been offset through our ongoing restructuring.
To increase the value of our common stock, we must succeed at growing our
revenue and attaining and improving profitability. Our growth could be adversely
affected by many factors, including, among others, fluctuations in demand and
economic downturns. As a result of these concerns, we are not likely to repeat
our historical growth rate. Rapid changes in our employee base place significant
demand on management and operational resources. In order to manage growth
effectively, we must implement and improve our operational systems and controls.

IF WE FAIL TO ATTRACT AND RETAIN EMPLOYEES, OUR GROWTH COULD BE LIMITED AND OUR
COSTS COULD INCREASE.

         Historically, we have experienced significant employee turnover. Our
future success will depend in large part upon our ability to attract, train and
retain additional highly skilled executive-level management and creative,
technical, consulting and sales personnel. The competition in the Internet
consulting industry for such personnel is intense, and we cannot be sure that we
will be successful in attracting, training and retaining such personnel.
Therefore, we must compensate our employees in a manner that is competitive
within the industry. Most of our employees have been granted stock options, the
majority of which have an exercise price above the current market value of our
common stock. Many of our employees and several of our executive officers have
joined us recently. Our ability to generate revenue is dependent upon the number
and expertise of the personnel we employ. High turnover resulting in additional
training and recruiting expense would decrease our profitability.

WE DEPEND ON OUR KEY MANAGEMENT PERSONNEL FOR OUR FUTURE SUCCESS.


         Our success depends largely on the skills of our key management
personnel. The loss of one or more of our key management personnel may
materially and adversely affect our business and results of operations. Our key
management personnel are U. Bertram Ellis, Jr., our Chairman of the Board, and
Christopher M. Formant, our Chief Executive Officer and President. We do not
maintain key man insurance for any of our employees other than Mr. Ellis and
Mr. Formant. We cannot guarantee that we will be able to replace either of
these individuals in the event their services become unavailable. In addition,
Michael J. Casey, our Chief Financial Officer, Executive Vice President and
Treasurer, has submitted his resignation and will leave the Company on
September 10, 2001.



                                       17
<PAGE>   21

         We have experienced significant turnover of our executives. Of the
executives listed above, only one (Mr. Ellis) was employed with iXL as of the
beginning of March 2000. Additionally, seven persons (William C. Nussey, former
Chief Executive Officer of our subsidiary iXL, Inc., Niraj Shah, former Chief
Operating Officer of iXL, Inc., M. Wayne Boylston, our former Executive Vice
President, Chief Financial Officer, Treasurer, and Assistant Secretary, Barry
Sikes, former Chief Operating Officer of iXL, Inc., David Clauson, former
Executive Vice President for Worldwide Marketing of iXL, Inc., Benjamin Chen,
former Chief Technology Officer of iXL, Inc., and Vincent M. Copeland, former
Executive Vice President for Worldwide Client Development and Kevin Foster, our
Executive Vice President for Client Services) who were key iXL executives during
2000 are no longer employed by iXL. As a result, our current management team has
not worked together for very long, and will continue to evolve as we hire new
executives to support our new Chief Executive Officer. We have also made and
intend to make management changes throughout the Company.


OUR ABILITY TO PROTECT OUR INTELLECTUAL PROPERTY IS IMPORTANT TO OUR BUSINESS.

         We have a variety of copyrights, trademarks, trade secrets and other
intellectual property rights, which are important to our business. The steps we
take to protect our intellectual property may not be adequate. Effective
protection may not be available in every country. In addition, although we
believe that our intellectual property rights do not infringe on the
intellectual property rights of others, we cannot be sure that other parties
will not assert claims against us. We may expend significant financial and
managerial resources on these claims. Further, because patent applications are
not matters of public record until approved and issued, we may be using
technologies subject to patent applications by other parties, and we cannot be
sure that we will be entitled to continued use of such technologies if any such
third party patent were approved and issued.

OUR INVESTMENTS IN IXL VENTURES INVOLVE RISK.

         Through iXL Ventures, we have occasionally assisted in the development
of businesses engaged in the "new media and e-commerce" segment of the
technology industry. iXL's relationship with these businesses is typically
publicized by press releases. Accordingly, the failure of these businesses may
directly or indirectly harm our reputation. The businesses are generally
unproven, involve substantial risk and may never be profitable.

OUR INTERNATIONAL OPERATIONS INVOLVE FINANCIAL AND OPERATIONAL RISK.

         We have limited experience in managing foreign offices and limited
experience in marketing services to clients operating in foreign markets. There
are risks inherent in conducting business on a global level, such as, among
other things, instability, labor disturbances or regulations, fluctuations in
currency exchange rates and potentially adverse tax consequences, any of which
could adversely affect our operations.

OUR FIXED-PRICE CONTRACTS INVOLVE FINANCIAL RISK.

         Most of our client engagements are performed on a time and materials
basis, rather than a fixed-price basis. However, from time to time certain of
our clients demand fixed-price arrangements. We assume greater financial risk on
fixed-price contracts than on time-and-materials engagements. We have a limited
history in estimating our costs for our fixed-price engagements. If we fail to
estimate costs on fixed-price contracts accurately or encounter unexpected
problems, our financial performance will be adversely effected. We have had to
commit unanticipated resources to complete some of our fixed-price projects,
resulting in lower gross margins. We may experience similar situations in the
future.

WE MAY BE SUBJECT TO POTENTIAL CLAIMS FOR DEFECTS OR ERRORS IN THE SOLUTIONS WE
DEVELOP.

         Many of the solutions we develop are critical to the operations of our
clients' businesses. Any defects or errors in these solutions could result in,
among other things, the following:

         -        lower realization rates;
         -        delayed or lost client revenue;
         -        adverse customer reaction toward iXL;
         -        negative publicity;
         -        additional expenditures to correct the problem; and
         -        claims against us.


                                       18
<PAGE>   22

         Our standard contracts limit our damages arising from negligent conduct
in rendering our services. We believe these limitations on damages are
enforceable but may be subject to a challenge in litigation and, if such a
challenge is successful, may not protect us from liability for damages. In
addition, large claims may not be adequately covered by insurance and may raise
our insurance costs.

RISKS RELATED TO THE INTERNET CONSULTING INDUSTRY

THE DEVELOPING MARKET FOR INTERNET CONSULTING SERVICES AND THE LEVEL OF
ACCEPTANCE OF THE INTERNET AS A BUSINESS MEDIUM WILL AFFECT OUR BUSINESS.

         The market for Internet consulting services is relatively new and is
evolving rapidly. Our future growth is dependent upon our ability to provide
Internet consulting services that are accepted by our existing and future
clients as an integral part of their business model. Demand and market
acceptance for recently introduced services are subject to a high level of
uncertainty. The level of demand and acceptance of strategic Internet services
is dependent upon a number of factors, including, among other things, the
following:

         -        the growth in consumer access to and acceptance of new
                  interactive technologies such as the Internet;
         -        companies adopting Internet-based business models; and
         -        the development of technologies that facilitate two-way
                  communication between companies and targeted audiences.

         Significant issues concerning the commercial use of these technologies
include security, reliability, cost, ease of use and quality of service. These
issues remain unresolved and may inhibit the growth of Internet business
solutions that utilize these technologies.

         Industry analysts and others have made many predictions concerning the
growth of the Internet as a business medium. These predictions should not be
relied upon. If the market for strategic Internet services fails to develop, or
develops more slowly than expected, or if our services do not achieve market
acceptance, our business will not succeed and the value of your investment in
our common stock will decline.

WE MAY NOT BE ABLE TO ADAPT TO THE CONTINUOUS TECHNOLOGICAL CHANGE IN OUR
MARKET.

         Our success will depend, in part, on our ability to respond to
technological advances. We may not be successful in responding quickly,
cost-effectively and sufficiently to these developments. If we are unable, for
technical, financial or other reasons, to adapt in a timely manner in response
to technological advances, we will not be able to compete effectively. In
addition, employee time allocated to responding to technological advances will
not be available for client engagements.

WE OPERATE IN A HIGHLY COMPETITIVE MARKET WITH RELATIVELY LOW BARRIERS TO ENTRY.

         The market for our solutions and services is highly competitive and
characterized by a growing number of companies that have introduced or developed
similar offerings. Our target market is rapidly evolving and is subject to
continuous technological changes. Additionally, there are relatively low
barriers of entry into our business. We currently have limited patented or other
proprietary technology that would preclude or inhibit competitors from entering
the Internet consulting market. As a result, iXL's competitors may be better
positioned to address these developments and may react more favorably to these
changes, which could have a material adverse effect on iXL's business, results
of operations and financial condition. Existing and future competitors may
develop or offer solutions and services that provide significant technological,
creative, performance, price or other advantages over the services offered by
us.

         We classify our competitors into several groups:

         -        e-business solution providers;

         -        strategic consulting firms;

         -        large information technology consulting services providers;
                  and

         -        computer hardware and service vendors.


                                       19
<PAGE>   23

         Our primary competitors today are Sapient Corporation, Razorfish, Inc.,
Proxicom, Inc., Scient Corp., Viant Corp., and smaller professional services
firms. In addition, the "Big Five" consulting firms as well as other large and
small services firms are now more involved in the Internet consulting services
arena. We also compete with professional services groups of computer equipment
companies such as IBM; outsourcing firms, such as Computer Sciences Corporation
and Electronic Data Systems; and the in-house information technology, marketing
and design service departments of iXL's current and potential clients. These
larger firms may be better positioned than iXL to secure attractive client
engagements, and may also be better positioned to withstand any fluctuations in
demand.

         Many of iXL's current and potential competitors have longer operating
histories and relationships with clients; larger installed customer bases; and
significantly greater financial, technical, marketing and public relations
resources than iXL. Competitors that have established relationships with large
companies but limited expertise in providing e-business solutions may
successfully use their client relationships to enter our target market or
prevent our penetration into their client accounts.

         We believe that due to the low cost of entering our markets,
competition will intensify and increase in the future. This intense competition
may limit our ability to become profitable or result in the loss of market
share. As a result, our competitors may be better positioned to address
developments in the industry or may react more effectively to industry changes,
which could adversely affect our business. Additionally, because competition for
Fortune 500 client accounts is significant, some clients are demanding discounts
and/or other preferred terms in their contracts. iXL's unwillingness or
inability to grant discounts in an effort to protect its profit margins may
impact iXL's ability to attract and maintain these clients.

RISKS RELATED TO OUR COMMON STOCK

YOU MAY ENCOUNTER VOLATILITY IN THE MARKET PRICE FOR OUR COMMON STOCK.

         The trading price of our common stock has been and is likely to
continue to be highly volatile. Our stock price could be subject to wide
fluctuations in response to, among others, factors such as the following:

         -        actual or anticipated variations in quarterly results of
                  operations;
         -        the addition or loss of affiliates or providers;
         -        our ability to hire and retain employees;
         -        additions or departures of key personnel;
         -        announcements of technological innovations, new products or
                  services by us or our competitors;
         -        changes in financial estimates or recommendations by
                  securities analysts;
         -        conditions or trends in the Internet and online commerce
                  industries;
         -        changes in the market valuations of other Internet or online
                  service companies;
         -        our announcements of significant acquisitions, strategic
                  partnerships, joint ventures or capital commitments;
         -        sales of our common stock;
         -        general market conditions; and
         -        other events or factors, many of which are beyond our control.

         In addition, the stock market in general, and the Nasdaq National
Market and the market for Internet and technology companies in particular, have
experienced extreme price and volume fluctuations that have often been unrelated
or disproportionate to the operating performance of these companies. These broad
market and industry factors may materially and adversely affect our stock price,
regardless of our operating performance. As a result of these and other broad
factors, there can be no assurance that our stock price will reach levels
previously attained.

         Further, the existing market for our common stock may not be sustained.
In such circumstances, it may be difficult for shareholders to sell shares of
our common stock at a price that is attractive. Also, in connection with our
acquisition strategy and financing activities, we have issued many shares of our
common stock to a large number of people and entities under exemptions from the
relevant securities laws. In addition, as a part of our compensation and
employee retention program, we have granted 31,336,074 stock options as of
December 31, 2000. The number of shares issued and number of stock options
granted could have a significant effect on the volatility of the market price of
our stock.

                                       20
<PAGE>   24
OUR COMMON STOCK MAY LOSE ELIGIBILITY FOR TRADING ON THE NASDAQ NATIONAL MARKET.

         Due to the recent downturn for Internet consultants, the bid price for
our common stock has declined substantially, and it is possible that in the
future we may lose our eligibility under various tests for trading on the NASDAQ
National Market. If our stock were no longer eligible for trading on the NASDAQ
National Market, it is likely that trading activity in our common stock would
decline substantially, further depressing the trading price of our common stock.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The Company does not believe that there is any material market risk
exposure with respect to derivative or other financial instruments, which would
require disclosure under this item.

NOTE PAYABLE TO PROACT

         On December 19, 2000 the Company consummated a transaction with ProAct
in which iXL Ventures PHC, Inc., an indirect wholly owned subsidiary of the
Company, issued a 5.75% secured convertible note to ProAct in exchange for a
cash payment of $20.0 million. The note is secured by and exchangeable for, upon
satisfaction of certain conditions, 10 million shares of common stock of ProAct
held by iXL Ventures PHC, Inc. iXL Ventures PHC, Inc. has no other properties
or assets other than its interest in the ProAct common stock. The note is
non-recourse to iXL Enterprises, Inc.

         The note accrues interest at 5.75% per annum on a quarterly basis
commencing March 31, 2001. The entire amount of unpaid principal and accrued
and unpaid interest is due and payable on January 7, 2004. The Company may at
any time prepay all or a portion of the principal amount. The Company may repay
the principal amount of the note by payment in cash or by transfer of the
pledged collateral. Also, ProAct, at its option, may at any time (1) exchange
the note for the pledged collateral or (2) purchase the pledged collateral for
$20,000. We are required to make adjustments to the carrying value of the note
for changes in the fair value of ProAct's common stock because the terms of the
note enable ProAct to exchange the note for the pledged collateral. We will
record any resulting adjustment as interest income or interest expense.

         Additionally, in conjunction with the issuance of the secured
convertible note, the Company issued to ProAct call rights to purchase up to 10
million shares of its common stock owned by iXL Ventures LP at a purchase price
of $3.00 per share. ProAct may exercise the call rights at any time for all or
a portion of the call shares provided that the minimum amount of call shares
purchased at any time is 500,000. The call rights expire on January 7, 2004.


         iXL is required to make adjustments to the carrying value of the note
for changes in the fair value of ProAct's common stock because the terms of the
note enable ProAct to exchange the note for the pledged collateral. iXL will
record any resulting adjustment as interest income or interest expense. iXL is
also required to carry the call rights at their fair value during their term
with any resulting changes in the fair value being recorded as other income or
expense. iXL uses the Black-Scholes option-pricing model to determine the fair
value of the call rights. During the three months ended June 30, 2001, iXL
adjusted the value of the call rights by approximately $7.0 million and
recorded this amount as other income.



                                       21
<PAGE>   25

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Financial Statements

<TABLE>
<CAPTION>
                                                                                PAGE
                                                                                ----

<S>                                                                             <C>
FINANCIAL STATEMENTS:

Report of Independent Accountants .........................................      23

Consolidated Balance Sheets at December 31, 1999 and 2000 .................      24

Consolidated Statements of Operations for each of the three
  years in the period ended December 31, 2000 .............................      25

Consolidated Statements of Changes in Stockholders' Equity for
  each of the three years in the period ended December 31, 2000 ...........      26

Consolidated Statements of Cash Flows for each of the three
  years in the period ended December 31, 2000 .............................      27

Notes to Consolidated Financial Statements ................................      28

FINANCIAL STATEMENT SCHEDULE:

For each of the three years in the period ended December 31,
  2000 II -- Valuation and Qualifying Accounts ............................      44

Summary of Quarterly Results of Operations-- Unaudited ....................      45
</TABLE>

         All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.


                                       22
<PAGE>   26


                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
iXL Enterprises, Inc.:

         In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of iXL Enterprises, Inc. and its subsidiaries at December 31, 2000 and
1999, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States of America. In addition, in
our opinion, the financial statement schedule listed in the accompanying index
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
These financial statements and financial statement schedule are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

         The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has sustained losses and negative cash flows
from operations since its inception. These matters raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters, which include the Company's proposed merger with Scient
Corporation, are also described in Note 2. The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

/s/ PricewaterhouseCoopers LLP


Atlanta, Georgia
February 12, 2001, except as to
Notes 2 and 22, which are as of August 23, 2001



                                       23
<PAGE>   27

                     IXL ENTERPRISES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                                        DECEMBER 31,
                                                                                                 --------------------------
                                                                                                    1999            2000
                                                                                                 ----------      ----------

<S>                                                                                              <C>             <C>
                                                          ASSETS
Current assets:
  Cash and cash equivalents ...............................................................      $  120,812      $   48,595
  Marketable securities ...................................................................          34,895           3,967
  Accounts receivables less allowance for doubtful accounts
    of $4,021 and $21,339 in 1999 and 2000 ................................................          62,836          47,330
  Unbilled revenue ........................................................................          21,794          13,858
  Prepaid expenses and other assets .......................................................           6,610           3,035
                                                                                                 ----------      ----------
         Total current assets .............................................................         246,947         116,785
  Property and equipment, net .............................................................          52,273          69,896
  Intangible assets, net ..................................................................          55,851          41,589
  Other non-current assets ................................................................           2,784           6,165
                                                                                                 ----------      ----------
         Total assets .....................................................................      $  357,855      $  234,435
                                                                                                 ==========      ==========

                                    LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK
                                                  AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable ........................................................................      $   13,988      $   22,919
  Deferred revenue ........................................................................          10,750           7,537
  Accrued liabilities .....................................................................          22,229          15,180
  Restructuring reserve ...................................................................              --          30,328
  Current portion of long-term debt .......................................................             530             323
                                                                                                 ----------      ----------
         Total current liabilities ........................................................          47,497          76,287
Non-current portion of restructuring reserve ..............................................              --          11,297
Long-term debt less current portion........................................................           1,308          20,395
Other long-term liabilities ...............................................................              --              48
                                                                                                 ----------      ----------
         Total liabilities ................................................................          48,805         108,027
                                                                                                 ----------      ----------

Mandatorily redeemable preferred stock of subsidiary.......................................          48,955              --
                                                                                                 ----------      ----------

Commitments and contingencies (Note 19)

Stockholders' equity:
 Common stock, par value of $.01, 200,000,000 authorized; issued 67,558,858 and
   77,150,700 in 1999 and 2000; outstanding 67,206,442 and 76,798,284 in 1999 and
   2000 ...................................................................................             676             775
  Additional paid-in capital ..............................................................         392,432         620,914
  Note receivable from stockholder ........................................................            (900)             --
  Subscription receivable .................................................................              --          (1,500)
  Unearned compensation ...................................................................          (7,272)         (3,455)
  Accumulated deficit .....................................................................        (135,973)       (488,438)
  Accumulated other comprehensive income (loss)............................................          12,020          (1,000)
  Treasury stock at cost; 352,416 shares ..................................................            (888)           (888)
                                                                                                 ----------      ----------
     Total stockholders' equity ...........................................................         260,095         126,408
                                                                                                 ----------      ----------
     Total liabilities, mandatorily redeemable preferred stock and stockholders' equity ...      $  357,855      $  234,435
                                                                                                 ==========      ==========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       24
<PAGE>   28

                     IXL ENTERPRISES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                                1998            1999            2000
                                                             ----------      ----------      ----------
<S>                                                          <C>             <C>             <C>
Revenue ...............................................      $   64,767      $  218,343      $  359,336
Expenses:
     Professional services expenses ...................          35,924         110,317         213,754
     Sales and marketing expenses .....................          15,983          49,019          39,304
     General and administrative expenses ..............          42,590          95,633         175,805
     Stock-based compensation and other ...............           1,641           4,920           4,198
     Depreciation .....................................           5,217          12,857          20,532
     Amortization .....................................          10,590          18,174          43,969
     Impairment charge on intangible assets ...........              --              --          97,402
     Restructuring charges ............................              --              --          76,588
                                                             ----------      ----------      ----------
        Loss from operations ..........................         (47,178)        (72,577)       (312,216)

Other expense .........................................             (28)           (161)         (1,754)
Interest income .......................................             750           3,577           5,391
Interest expense ......................................            (770)           (987)         (2,118)
Equity in net losses of affiliates ....................          (1,640)            (65)        (41,168)
                                                             ----------      ----------      ----------
        Loss before income taxes ......................         (48,866)        (70,213)       (351,865)
Income tax expense ....................................              --              --             600
                                                             ----------      ----------      ----------
        Net loss ......................................         (48,866)        (70,213)       (352,465)

Dividends and accretion on mandatorily redeemable
   preferred stock ....................................          (9,099)        (20,966)             --
                                                             ----------      ----------      ----------
        Net loss available to common stockholders .....      $  (57,965)     $  (91,179)     $ (352,465)
                                                             ==========      ==========      ==========
Net loss per share:
Basic and diluted net loss per common share ...........      $    (4.92)     $    (2.08)     $    (4.73)
                                                             ==========      ==========      ==========
Weighted average common shares outstanding ............          11,777          43,747          74,593
                                                             ==========      ==========      ==========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       25
<PAGE>   29
                     IXL ENTERPRISES, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                       (IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                           CLASS A
                                       PREFERRED STOCK            COMMON STOCK        ADDITIONAL
                                      -----------------       --------------------     PAID-IN    SUBSCRIPTION
                                      SHARES      VALUE       SHARES         VALUE     CAPITAL     RECEIVABLE
                                      -------     -----       -------        -----    ----------  ------------


<S>                                  <C>          <C>         <C>            <C>      <C>         <C>
Balance, December 31, 1997...        169,260      $   2       8,229,800      $  82     $ 38,760     $    --
                                     -------      -----      ----------      -----     --------     -------
Stock issuance...............          8,031                         --         --        5,512
Stock issuance in connection
 with acquisitions...........                                 8,047,305         81       41,663
Treasury stock acquired......                                  (252,416)
Stock options exercised......                                    57,800
Dividends and accretion on
 mandatorily redeemable
 preferred stock.............                                                            (8,671)
Common stock to be issued in
 connection with class D
 preferred stock.............                                                            13,235
Issuance of stock options and
  warrants...................                                                             3,508
Stock compensation and warrant
  expense....................                                                               813
Comprehensive loss:
  Net loss...................
  Foreign currency translation
   adjustment................
Total comprehensive income loss
                                     -------      -----      ----------      -----     --------     -------
Balance, December 31, 1998...        177,291          2      16,082,489        163       94,820          --
                                     -------      -----      ----------      -----     --------     -------

Stock issuance...............       (177,291)        (2)     33,437,434        335      183,969
Conversion of escrow shares to
 treasury stock..............                                  (100,000)
Conversion, dividends and
 accretion of mandatorily
 redeemable preferred stock..                                17,786,519        178       85,870
Issuance of stock options....                                                            10,325
Accretion of mandatorily
 redeemable preferred stock
 of subsidiary...............                                                            (1,054)
Stock compensation and warrant
 expenses....................                                                            18,502
Comprehensive loss:
  Net loss...................
  Foreign currency translation
   adjustment................
  Unrealized gain on
   marketable securities.....
Total comprehensive loss.....
                                     -------      -----      ----------      -----     --------     -------
Balance, December 31, 1999...             --         --      67,206,442        676      392,432          --
                                     -------      -----      ----------      -----     --------     -------

Stock issuance...............                                 1,000,000         10        2,990      (1,500)
Stock issuance in connection
 with acquisitions...........                                 4,007,910         40      137,718
Issuance of stock options....                                                             2,108
Stock options exercised and
 stock issued under employee
 stock purchase plan.........                                 4,936,348         49       26,070
Repayment of note receivable
 from stockholder............
Deconsolidation of
 subsidiaries to equity basis                                                            59,596
Stock compensation expense...
Comprehensive loss:
  Net loss...................
  Foreign currency translation
   adjustment................
  Unrealized loss on
   marketable securities.....
Total comprehensive loss.....
                                     -------      -----      ----------      -----     --------     -------
Balance, December 31, 2000...             --      $  --      77,150,700      $ 775     $620,914     $(1,500)
                                     =======      =====      ==========      =====     ========     =======

<CAPTION>
                                                      ACCUMULATED       NOTE
                                                         OTHER       RECEIVABLE                                   TOTAL
                                    ACCUMULATED      COMPREHENSIVE      FROM         UNEARNED      TREASURY   STOCKHOLDERS'
                                      DEFICIT         INCOME(LOSS)   STOCKHOLDER   COMPENSATION     STOCK        EQUITY
                                    -----------      -------------   -----------   ------------    --------   -------------

<S>                                 <C>              <C>             <C>           <C>             <C>        <C>
Balance, December 31, 1997...        $  (16,894)       $    --        $   --         $     --       $   --       $ 21,950
                                     ----------        -------        ------         --------       ------       --------
Stock issuance...............                                           (900)                                       4,612
Stock issuance in connection
 with acquisitions...........                                                                                      41,744
Treasury stock acquired......                                                                         (888)          (888)
Stock options exercised......
Dividends and accretion on
 mandatorily redeemable
 preferred stock.............                                                                                      (8,671)
Common stock to be issued in
 connection with class D
 preferred stock.............                                                                                      13,235
Issuance of stock options and
  warrants...................                                                          (3,508)
Stock compensation and warrant
  expense....................                                                           1,641                       2,454
Comprehensive loss:
  Net loss...................           (48,866)
  Foreign currency translation
   adjustment................                              (10)
Total comprehensive income loss                                                                                   (48,876)
                                     ----------        -------        ------         --------       ------       --------
Balance, December 31, 1998...           (65,760)           (10)         (900)          (1,867)        (888)        25,560
                                     ----------        -------        ------         --------       ------       --------

Stock issuance...............                                                                                     184,302
Conversion of escrow shares to
treasury stock...............
Conversion, dividends and
 accretion of mandatorily
 redeemable preferred stock..                                                                                      86,048
Issuance of stock options....                                                         (10,325)
Accretion of mandatorily
 redeemable preferred stock
 of subsidiary...............                                                                                      (1,054)
Stock compensation and warrant
 expenses....................                                                           4,920                      23,422
Comprehensive loss:
  Net loss...................           (70,213)
  Foreign currency translation
   adjustment................                             (197)
  Unrealized gain on
   marketable securities.....                           12,227
Total comprehensive loss.....                                                                                     (58,183)
                                     ----------        -------        ------         --------       ------       --------
Balance, December 31, 1999...          (135,973)        12,020          (900)          (7,272)        (888)       260,095
                                     ----------        -------        ------         --------       ------       --------

Stock issuance...............                                                                                       1,500
Stock issuance in connection
 with acquisitions...........                                                                                     137,758
Issuance of stock options....                                                          (2,108)
Stock options exercised and
 stock issued under employee
 stock purchase plan.........                                                                                      26,119
Repayment of note receivable
 from stockholder............                                            900                                          900
Deconsolidation of
 subsidiaries to equity basis                                                           1,787                      61,383
Stock compensation expense...                                                           4,138                       4,138
Comprehensive loss:
  Net loss...................          (352,465)
  Foreign currency translation
   adjustment................                           (1,212)
  Unrealized loss on
   marketable securities.....                          (11,808)
Total comprehensive loss.....                                                                                    (365,485)
                                     ----------        -------        ------         --------       ------       --------
Balance, December 31, 2000...        $ (488,438)       $(1,000)       $   --         $ (3,455)      $ (888)      $126,408
                                     ==========        =======        ======         ========       ======       ========
</TABLE>

             The accompanying notes are an integral part of these
                      consolidated financial statements.


                                      26
<PAGE>   30


                     IXL ENTERPRISES, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                                DECEMBER 31,
                                                                              -------------------------------------------------
                                                                                1998                1999                2000
                                                                              ---------           ---------           ---------
<S>                                                                           <C>                 <C>                 <C>
Cash flows from operating activities:
Net loss ...........................................................          $ (48,866)          $ (70,213)          $(352,465)
Adjustments to reconcile net loss to net cash used in
  operating activities:
  Depreciation .....................................................              5,217              12,857              20,532
  Amortization .....................................................             10,590              18,174              43,969
  Provision for doubtful accounts ..................................              1,227               5,111              25,260
  Gain on sale of marketable securities ............................                 --                  --              (1,764)
  Non-cash investment and losses in equity affiliates and
    amortization ...................................................              1,365                  65              41,168
  Impairment on intangible assets ..................................                 --                  --              97,402
  Write-down of leasehold improvements and equipment ...............                 --                  --              35,680
  Stock compensation and warrant expense ...........................              2,454              11,923               4,198
  Changes in assets and liabilities, net of effects from purchase
    of subsidiaries and deconsolidation of subsidiaries:
     Accounts receivable ...........................................             (9,840)            (49,893)             (2,762)
     Unbilled revenue ..............................................             (5,328)            (13,705)              9,882
     Prepaid expenses and other assets .............................             (4,669)             (5,223)             (1,584)
     Accounts payable and accrued liabilities ......................              5,523              20,597               6,108
     Restructuring reserve .........................................                 --                  --              41,625
     Deferred revenue ..............................................              4,888               4,587              (4,392)
                                                                              ---------           ---------           ---------
          Net cash used in operating activities ....................            (37,439)            (65,720)            (37,143)
                                                                              ---------           ---------           ---------
Cash flows from investing activities:
  Purchases of property and equipment ..............................            (20,304)            (36,797)            (82,322)
  Cost of acquisitions, net of cash acquired .......................            (16,602)             (3,717)             (2,640)
  Deconsolidation of subsidiaries to equity basis ..................                 --                  --             (15,221)
  Purchases of marketable securities ...............................                 --             (28,504)            (64,922)
  Proceeds from sales and maturities of marketable securities ......                 --               5,998              82,801
  Proceeds from sale of assets .....................................                 --               1,892                 408
                                                                              ---------           ---------           ---------
          Net cash used in investing activities ....................            (36,906)            (61,128)            (81,896)
                                                                              ---------           ---------           ---------
Cash flows from financing activities:
  Proceeds from borrowings .........................................             23,428                  --              20,000
  Repayment of borrowings ..........................................             (6,729)            (20,130)               (485)
  Repayment of note receivable from stockholder ....................                 --                  --                 900
  Proceeds from issuance of mandatorily redeemable preferred stock .             40,314                  --                  --
  Proceeds from issuance of stock ..................................              4,612             199,466              27,619
  Proceeds from issuance of mandatorily redeemable  preferred
    stock of subsidiary ............................................              9,839              49,262                  --
  Acquisition of treasury stock ....................................               (888)                 --                  --
                                                                              ---------           ---------           ---------
          Net cash provided by financing activities ................             70,576             228,598              48,034
                                                                              ---------           ---------           ---------
Effect of exchange rate changes on cash and cash equivalents .......                (10)               (197)             (1,212)
          Net increase (decrease) in cash and cash equivalents .....             (3,779)            101,553             (72,217)
Cash and cash equivalents at beginning of year .....................             23,038              19,259             120,812
                                                                              ---------           ---------           ---------
Cash and cash equivalents at end of year ...........................          $  19,259           $ 120,812           $  48,595
                                                                              =========           =========           =========
Supplemental disclosure of cash flow information:
  Cash paid for interest ...........................................          $     797           $     819           $   1,320
                                                                              =========           =========           =========
  Cash paid for income taxes .......................................          $      --           $      --           $     302
                                                                              =========           =========           =========
Non-cash investing and financing activities:
  Acquisition of equipment through capital leases ..................          $     569           $     440           $      --
  Unrealized gain (loss) on marketable securities ..................          $      --           $  12,227           $ (11,808)
</TABLE>

             The accompanying notes are an integral part of these
                      consolidated financial statements.


                                      27
<PAGE>   31


                     IXL ENTERPRISES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1.       BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         iXL Enterprises, Inc. is a leading business and technology consultancy
that helps companies utilize the power of emerging technologies and advanced
business strategies to build stronger, more profitable relationships with their
customers and business partners. iXL has 12 offices in the United States and
Europe. The Company helps businesses identify how the Internet can be used to
their competitive advantage and provides expertise in creative design and
systems engineering to design, develop and deploy advanced Internet applications
and solutions.

BASIS OF PRESENTATION

         The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries after the elimination of all
significant intercompany accounts and transactions. The Company accounts for
its investments in ProAct Technologies Corp., Digital Planet and AppGenesys,
Inc. under the equity method of accounting.

         During the second quarter of 2000, the Company's voting interest in
ProAct, formerly Consumer Financial Network, Inc., was reduced to less than 50%
as the result of ProAct's issuance of additional common stock and mandatorily
redeemable convertible preferred stock. Accordingly, in the second quarter of
2000, the Company deconsolidated ProAct. The Company has presented its results
of operations and financial condition as if the deconsolidation occurred on
January 1, 2000. For additional information about the Company's interest in
ProAct, see Note 3.

         During the fourth quarter of 2000, the Company's voting interest in
Digital Planet, formerly iXL Live, was reduced to less than 50% as the result
of Digital Planet's issuance of additional mandatorily redeemable preferred
stock. Accordingly, in the fourth quarter of 2000, the Company deconsolidated
Digital Planet. The Company has presented its results of operations and
financial condition as if the deconsolidation occurred on January 1, 2000.

         Certain items in the prior year financial statements have been
reclassified to conform to the current year presentation.

REVENUE RECOGNITION

         Revenue is recognized for fixed fee contracts using the percentage of
completion method based on costs incurred. Revenue is recognized as services are
performed for time and material contracts. Revenue is recognized in accordance
with Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements."

         Unbilled revenue represents revenue earned under contracts in advance
of billings. Such amounts are normally converted into accounts receivable
within 90 days. Deferred revenue represents billings made or cash received in
advance of services performed or costs incurred under contracts. Any
anticipated losses on contracts are charged to earnings when identified.
Revenue from post-contract support is recorded as services are provided.

CASH AND CASH EQUIVALENTS

         The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

MARKETABLE SECURITIES

         Marketable securities include the Company's investments classified as
available-for-sale securities and reported at fair value with unrealized gains
and losses reported as a component of other comprehensive income in
stockholders' equity. Marketable securities also include short-term investments
with original maturities in excess of three months.


                                      28
<PAGE>   32


PROPERTY AND EQUIPMENT

         Property and equipment is recorded at cost, less accumulated
depreciation. Expenditures for renewals and improvements that significantly add
to the productive capacity or extend the useful life of an asset are
capitalized. Expenditures for maintenance and repairs are charged to operations
as incurred. Depreciation expense is provided using the straight-line method
over the estimated useful lives for purchased assets. Equipment held under
capital leases is amortized using the straight-line method over the lesser of
the useful life or the lease term. Leasehold improvements are amortized over
the shorter of the useful lives of the assets or the remaining term of the
lease.

INTANGIBLE ASSETS

         Intangible assets consist primarily of assembled workforce and excess
of cost over fair value of net assets acquired, referred to as goodwill, and
are stated at cost less accumulated amortization. Identifiable intangible
assets consist primarily of assembled workforce, which is being amortized over
its estimated future life of three years. Goodwill is being amortized over its
estimated future life of five years.

IMPAIRMENT OF LONG-LIVED ASSETS

         In accordance with Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of," the carrying value of intangible assets and other
long-lived assets is reviewed on a regular basis for the existence of facts or
circumstances, both internally and externally, that may suggest impairment. If
such circumstances exist, the Company evaluates the carrying value of
long-lived assets to determine if impairment exists based upon estimated
undiscounted expected future cash flows or other fair market value
determinations. See Notes 4 and 5 for further discussion.

ADVERTISING COSTS

         The Company expenses production costs of advertising the first time
the advertising takes place. Advertising expenses were $1,584, $9,927, and
$1,396 for the years ended December 31, 1998, 1999 and 2000, respectively.

INCOME TAXES

         The Company has applied the asset and liability approach of SFAS No.
109, "Accounting for Income Taxes," for financial accounting and reporting
purposes. The Company accounts for certain items of income and expense in
different time periods for financial reporting and income tax purposes.
Provisions for deferred income taxes are made in recognition of such temporary
differences, where applicable. A valuation allowance is established against
deferred tax assets unless the Company believes it is more likely than not that
the benefit will be realized.

STOCK-BASED COMPENSATION PLANS

         The Company accounts for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and related Interpretations and
elects the disclosure option of SFAS No. 123, "Accounting for Stock-Based
Compensation." Accordingly, compensation cost for stock options is measured as
the excess, if any, of the fair value of the Company's stock at the date of the
grant over the amount an employee must pay to acquire the stock. The Company
also records stock compensation expense for any options issued to non-employees
using the fair value method prescribed in SFAS 123.

BASIC AND DILUTED NET LOSS PER SHARE

         Basic net loss per common share is based on the weighted average
number of shares of common stock outstanding during the period. No potential
common shares have been included in the diluted earnings per share calculated
as they would have been antidilutive due to the net loss reported by the
Company. The convertible securities outstanding and the number of common shares
into which they are convertible are as follows:


                                      29
<PAGE>   33


<TABLE>
<CAPTION>
                                                                 COMMON STOCK EQUIVALENTS AT DECEMBER 31,
                                                            --------------------------------------------------
                     SECURITY                                  1998               1999                 2000
--------------------------------------------------          ----------          ----------          ----------

<S>                                                         <C>                 <C>                 <C>
Stock options ....................................          18,226,112          28,862,536          31,336,074
Warrants .........................................           2,486,006           3,500,000           3,000,000
Class A convertible preferred stock ..............          17,729,100                  --                  --
Class B mandatorily redeemable
  convertible preferred ..........................           9,876,700                  --                  --
Class C mandatorily redeemable
  convertible preferred ..........................             923,200                  --                  --
</TABLE>

         Net loss available to common stockholders used in calculating basic
and diluted earnings per share includes charges related to dividends and
accretion on mandatorily redeemable preferred stock and mandatorily redeemable
preferred stock of subsidiary.

FOREIGN CURRENCY TRANSLATION

         The financial position and results of operations of foreign
subsidiaries are measured using the currency of the respective countries as the
functional currency. Assets and liabilities are translated into the reporting
currency (U.S. dollars) at the foreign exchange rate in effect at the balance
sheet date, while revenue and expenses for the period are translated at the
average exchange rate in effect during the period. Translation gains and losses
are accumulated and reported as a separate component of stockholders' equity.
The Company has not entered into any hedging contracts during any of the periods
presented.

FAIR VALUE OF FINANCIAL INSTRUMENTS

         The carrying amounts of financial instruments including cash, cash
equivalents, marketable securities, accounts receivable, accounts payable and
accrued expenses, approximate fair value. The carrying amount of capital lease
obligations approximates fair value based on current rates of interest available
to the Company for leases of similar maturities. We are required to make
adjustments to the carrying value of our note payable to ProAct as well as
certain call rights granted to ProAct, both of which are included in long-term
debt. See Note 10 for further discussion.

COMPREHENSIVE INCOME

         SFAS No. 130 "Reporting Comprehensive Income" requires that the total
changes in equity resulting from revenue, expenses, and gains and losses,
including those that do not affect the accumulated deficit, be reported.
Accordingly, those amounts, comprised of foreign currency translation
adjustments and unrealized gains or losses on marketable securities, are
included in other comprehensive income in the consolidated statements of
stockholders' equity.

USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue
and expenses and disclosure of contingent assets and liabilities. The estimates
and assumptions used in the accompanying consolidated financial statements are
based upon management's evaluation of the relevant facts and circumstances as
of the date of the financial statements. Actual results could differ from those
estimates. The Company relied on estimates in its calculation of restructuring
charges and the impairment charge on intangible assets. See further discussion
in Notes 4 and 5.

NEW ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." This
statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. Adoption of SFAS 133, as amended by FAS
138, is required for the fiscal quarter ending March 31, 2001. We do not expect
the adoption of SFAS 133 to have a material impact on our financial statements.

         In September 2000, the FASB issued SFAS 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities - a
Replacement of FASB Statement No. 125." This statement revises the standards
for accounting for securitizations and other transfers of financial assets and
collateral. This statement is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after March 31,
2001. We do not expect the adoption of SFAS 140 to have a material impact on
our financial statements.


                                      30
<PAGE>   34

2.       LIQUIDITY


         The Company has sustained losses and negative cash flows from
operations since its inception. iXL's future liquidity and capital requirements
will depend on many factors. Our cash, cash equivalents, and marketable
securities decreased to $52.6 million at December 31, 2000 from $155.7 million
at December 31, 1999, of which $15.2 million related to ProAct. Our cash, cash
equivalents and marketable securities decreased to $25.8 million at June 30,
2001. At the time of filing of our Annual Report on Form 10-K, we believed that
our existing cash and cash equivalents and marketable securities, together with
funds available under the credit facility, and proceeds from our recent stock
sales (see Note 22) in March would be sufficient to meet our anticipated needs
for working capital and capital expenditures for the remainder of 2001.

         Subsequent to the filing of the Form 10-K, we have experienced
additional declines in revenue resulting in continued operating losses and we
violated an amended debt covenant as of June 30, 2001 (See Note 22). The Company
and Scient have entered into a definitive agreement to merge. Shareholders of
approximately 34% of the outstanding common stock of iXL and shareholders of
approximately 34% of the outstanding common stock of Scient have agreed to vote
their shares in favor of the adoption of the merger agreement. However, there
can be no assurance that the merger will be successfully completed as it is
subject to shareholder approval by the shareholders of each of the Company and
Scient respectively.

         We believe that our existing cash and cash equivalents and marketable
securities and cash from operations, together with funds that may be available
under the credit facility will be sufficient to meet our anticipated needs for
working capital and capital expenditures until the earlier of the consummation
of the pending merger or November 30, 2001. In the event the merger does not
close by November 30, 2001, the Company would be in violation of certain debt
covenants or be required to collateralize outstanding letters of credit under
the credit facility with cash and, among other things, would not have access to
funds under the credit facility. As a result, we would require additional funds
or liquidity to fund our operations or further reduce our workforce, or both. We
are also continuing our efforts to raise additional funds through the sale of
certain minority equity interests in developing businesses held by iXL Ventures.
There can be no assurance any such assets can be sold on acceptable terms or for
cash. If we raise additional funds through the issuance of equity,
equity-related or debt securities, such equity securities may have rights,
preferences or privileges senior to those of common stock. Furthermore, because
of the low trading price of iXL's common stock, the number of shares of the new
equity or equity-related securities that may be required to be issued may cause
stockholders to experience significant additional dilution. In addition, the
issuance of debt securities could increase the risk or perceived risk of iXL. We
cannot, however, be certain that additional financing, or funds from asset
sales, will be available on acceptable terms if required. If this additional
financing becomes necessary and is not available or we are unable to raise funds
from the sale of assets or our pending merger with Scient does not close in the
time period anticipated, we may need to dramatically change our business plan or
face bankruptcy or liquidation. The matters discussed above raise substantial
doubt about the Company's ability to continue as a going concern if the merger
is not completed. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


3.       DECONSOLIDATION OF PROACT TECHNOLOGIES CORP.

         During 1998 and 1999, the Company consolidated the operating results,
cash flows and financial position of ProAct Technologies Corp., formerly known
as Consumer Financial Network, Inc. On March 22, 2000, ProAct sold 32,896,000
shares of its mandatorily redeemable series C convertible preferred stock for
net proceeds of approximately $127,084. During the second quarter of 2000,
ProAct completed three acquisitions for cash and shares of its common stock
totaling approximately $111,000. On June 30, 2000, ProAct sold 25,000,000 shares
of mandatorily redeemable series D convertible preferred stock for net proceeds
of approximately $148,000. As a result of these transactions, the Company's
ownership of ProAct was reduced to approximately 49% of the voting interest and
85% of ProAct's outstanding common stock. Accordingly, the Company's
consolidated financial statements for the year ended December 31, 2000 no longer
include the consolidated financial statements of ProAct as a consolidated
subsidiary, and the Company instead has accounted for its ownership using the
equity method of accounting. The above transactions resulted in the Company
recording an increase in its stockholders' equity of approximately $62,800 in
accordance with the SEC's Staff Accounting Bulletin No. 51. During the three
months ended June 30, 2000, ProAct recorded approximately $1,700 of stock
compensation expense for the acceleration of the Company's stock options. At
December 31, 2000, the Company's investment in ProAct was zero as a result of
recording its share of ProAct's losses using the equity method of accounting.
Unaudited summary financial information for ProAct is included in Note 10.

4.       RESTRUCTURING CHARGES

         In September 2000, the Company announced a major restructuring of its
business operations. The restructuring plan was designed to reduce costs and
improve efficiency, and as a result, the Company reduced its workforce by
approximately 350 employees. In November 2000, the Company announced plans for
additional restructuring which included the closing or sale of several offices
and a reduction in workforce by approximately 850 additional employees. Of these
total reductions in workforce approximately 800 were professional services
personnel, 300 were general and administrative personnel, and 100 were in sales
and marketing personnel.  The restructuring was an effort to become a more
industry-focused company and to deliver a higher level of quality and depth of
expertise for our clients. As a result of this restructuring, the Company
recorded a charge of $76,588. Included in this total are $38,463 of costs
related to rent and sublease expenses net of anticipated sublease income for
abandoned office leases, $27,299 million resulting from the write-down leasehold
improvements and equipment that were impaired as a result of the closure of
offices and a decrease in demand for the Company's services and resulting
decrease in revenue, and $10,826 million in severance due to the reduction in
workforce.

         The restructuring charges and their utilization as of and for the year
ended December 31, 2000 are summarized as follows:


<TABLE>
<CAPTION>
                                                                                            AMOUNTS             RESTRUCTURING
                                                                     CHARGES                UTILIZED              RESERVE
                                                                     -------                --------            -------------
     <S>                                                             <C>                    <C>                 <C>
     Abandoned leases .................................              $ 38,463               $ (1,566)              $36,897
     Write down of impaired leasehold
       improvements and equipment .....................                27,299                (27,169)                  130
     Employee termination and severance costs .........                10,826                 (6,228)                4,598
                                                                     --------               --------               -------
                                                                     $ 76,588               $(34,963)              $41,625
                                                                     ========               ========               =======
</TABLE>

         The Company expects future cash expenditures related to these
restructuring activities to be approximately $41,625, of which $30,328 is
anticipated to be paid within the next twelve months. The Company recorded an
impairment charge in conjunction with its restructuring charges. The impairment
charge is discussed in further detail in Note 5.

5.       IMPAIRMENT CHARGE ON INTANGIBLE ASSETS

         As a result of a sustained drop in the market capitalization of the
Company and the changes in the dynamics of the demand for Internet consulting
services, during the fourth quarter of 2000, the Company evaluated the
recoverability of its intangible assets pursuant to SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of." The Company reviewed the undiscounted future cash flows to be
generated by its operations. These cash flows were below the carrying value of
the goodwill recorded as a result of the Company's acquisitions. Therefore the
Company adjusted the carrying value of the goodwill and acquired workforce and
recorded an impairment charge of $97,402. Of the total impairment charge taken,
$74,047 was a write-down of assets recorded as a result of the Tessera
acquisition.

         These intangible assets resulted from the Company's acquisitions.
These acquisitions are discussed further in Note 6.

6.                ACQUISITIONS

         During 1998 and 1999, the Company and its subsidiaries acquired 25
companies. The companies acquired and purchase price, including the shares of
common stock and related warrants and options issued, are as follows:


                                      31
<PAGE>   35


<TABLE>
<CAPTION>
                                                               FAIR VALUE
                                                                 OF NET                                                 EXCESS OF
                                                                TANGIBLE                                                COST OVER
                                               TOTAL             ASSETS                                               FAIR VALUE OF
                                              PURCHASE        (LIABILITIES)        ASSEMBLED           OTHER            NET ASSETS
BUSINESS ACQUIRED                              PRICE            ACQUIRED           WORKFORCE         INTANGIBLES         ACQUIRED
-----------------                            ----------       -------------        ---------         -----------      -------------

<S>                                           <C>                <C>                 <C>                <C>               <C>
Digital Planet .....................          $ 3,550            $   (39)            $ 1,012            $   --            $ 2,577
Micro Interactive, Inc. ............            5,809                281                 999                --              4,529
CommerceWave, Inc. .................            5,459             (1,037)                662               700              5,134
Image Communications, Inc. .........            3,324                381               1,213                --              1,730
Spinners Incorporated ..............            5,543                499               1,129                --              3,915
Tekna, Inc. ........................            4,758                527                 820                --              3,411
Larry Miller Productions, Inc. .....            3,490               (143)                963                --              2,670
NetResponse, L.L.C .................            5,307              1,312               1,168                --              2,827
Ionix Development Corp. ............            3,013                231                 778                --              2,004
Pequot Systems, Inc. ...............            2,501                154                 357                --              1,990
TwoWay Communications LLC ..........            2,469                335                 713                --              1,421
Lava Gesellschaft fur Digitale
  Medien GmbH ......................            1,519               (274)                892                --                901
Other Acquisitions .................           12,669              1,069               5,183                --              6,417
                                              -------            -------             -------            ------            -------
      Total of 1998 acquisitions ...          $59,411            $ 3,296             $15,889            $  700            $39,526
                                              =======            =======             =======            ======            =======

Lava (additional consideration) ....            3,381                 --                  --                --              3,381
iExpert, Inc. ......................            8,359                142                 369             3,900              3,948
                                              -------            -------             -------            ------            -------
      Total of 1999 acquisitions ...          $11,740            $   142             $   369            $3,900            $ 7,329
                                              =======            =======             =======            ======            =======
</TABLE>

         On January 11, 2000, the Company acquired Tessera Enterprise Systems,
Inc. in exchange for $3,700 and 3,588,655 shares of the Company's common stock.
The Company recorded an aggregate purchase price of approximately $132,846. The
purchase price in excess of identifiable tangible and intangible assets
acquired and liabilities assumed of approximately $116,535 was allocated to
goodwill and is being amortized over an estimated useful life of five years.
Approximately $6,136 of the aggregate purchase price was allocated to assembled
workforce and is being amortized over an estimated useful life of three years.

         All acquisitions have been accounted for using the purchase method,
and accordingly, the purchase price has been allocated to the tangible and
identifiable intangible assets acquired and liabilities assumed on the basis of
their fair value on the acquisition dates. The historical carrying amounts of
tangible net assets acquired approximated their fair values. The fair value of
identifiable intangible assets acquired were based on independent appraisals or
management estimates. Since the date of acquisition, the results of operations
of the acquired companies have been included in the consolidated statements of
operations.

         The Company amortizes goodwill over its estimated useful life of
primarily five years and assembled workforce over its estimated useful life of
three years. However, the Company evaluates the recoverability of its intangible
assets pursuant to SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." As a part of this
evaluation, the Company recorded an impairment charge of $97,402 as further
discussed in Note 5.

         The following unaudited pro forma financial information reflects the
results of operations for the year ended December 31, 1999, as if the
acquisitions had occurred on January 1, 1999. These unaudited pro forma results
have been prepared for comparative purposes only and do not purport to be
indicative of what operating results would have been had the acquisitions
actually taken place on January 1, 1999 and may not be indicative of future
operating results. The unaudited pro forma results are summarized as follows:


<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31, 1999
                                                       ----------------------------
        <S>                                            <C>
        Revenue................................                 $ 243,401
        Net loss...............................                  (74,915)
        Net loss available to common
          stockholders.........................                  (95,881)
        Basic and diluted net loss per common
          share................................                    (2.02)
</TABLE>

7.       MARKETABLE SECURITIES

         Marketable securities include short-term investments, such as United
States government agency obligations and commercial paper, with original
maturities in excess of three months. These short-term investments at December
31, 1999 and 2000 were $22,507 and $3,508, respectively. The fair value of these
investments is not materially different from their carrying value. Interest and
amortization of premiums and discounts for these short-term investments are
included in interest income.

         Marketable securities also include available-for-sale securities, which
are recorded at fair market value. These available-for-sale securities represent
our investment in the common stock of affiliated companies that are publicly
traded, including principally Student Advantage, Inc. We calculated the market
value for these securities based on their quoted sales prices at December 31
1999 and 2000. The difference between amortized cost and fair market value is
included in other comprehensive income and shown as a separate component of
stockholders' equity.


                                      32
<PAGE>   36


         The following tables summarize the Company's available-for-sale
securities:


<TABLE>
<CAPTION>
                                                                     December 31, 1999
                                              ---------------------------------------------------------------
                                                                  Gross            Gross
                                              Amortized        Unrealized        Unrealized
                                                Cost              Gains            Losses        Market Value
                                              ---------        ----------        ----------      ------------
<S>                                           <C>              <C>               <C>             <C>
Common stock of affiliates............         $161             $12,227              $--            $12,388
</TABLE>


<TABLE>
<CAPTION>
                                                                     December 31, 2000
                                              ---------------------------------------------------------------
                                                                  Gross            Gross
                                              Amortized        Unrealized        Unrealized
                                                Cost              Gains            Losses        Market Value
                                              ---------        ----------        ----------      ------------
<S>                                           <C>              <C>               <C>             <C>
Common stock of affiliates............          $40                $419              $--               $459
</TABLE>


         During the year ended December 31, 2000, we realized a gain of $1,764
on the sale of 566,311 shares of Student Advantage common stock.

8.       PROPERTY AND EQUIPMENT

    Property and equipment are summarized as follows:


<TABLE>
<CAPTION>
                                                     ESTIMATED        DECEMBER 31,
                                                   USEFUL LIVES    -----------------
                                                     IN YEARS      1999        2000
                                                   ------------    ----      --------
    <S>                                            <C>           <C>         <C>
    Land......................................         N/A       $    100    $     --
    Building..................................         40             550          --
    Leasehold improvements....................        5-10         13,074      28,753
    Furniture and fixtures....................         5-7         11,539      16,640
    Computer equipment and software...........         3-5         41,429      42,241
    Equipment and other.......................        5-10          6,706       8,577
                                                                 --------    --------
                                                                   73,398      96,211
    Less: Accumulated depreciation and
    amortization..............................                    (21,125)    (26,315)
                                                                 --------    --------
                                                                 $ 52,273    $ 69,896
                                                                 ========    ========
</TABLE>

         At December 31, 1999 and 2000, the Company had approximately $2,735
and $2,003, respectively, of equipment under capital leases included in
property and equipment and related accumulated amortization of approximately
$1,257 and $1,059, respectively. Amortization of these assets recorded under
capital leases is included in depreciation expense.

9.       INTANGIBLE ASSETS

    Intangible assets are comprised of the following:


<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                          --------------------
                                                            1999       2000
                                                          --------   ---------
        <S>                                               <C>        <C>
        Excess of cost over fair value of net assets
          acquired...................................     $ 60,447   $ 147,495
        Assembled work force.........................       20,285      14,438
        Other........................................        7,665       1,058
                                                          --------   ---------
                                                            88,397     162,991
        Less-- accumulated amortization..............      (32,546)   (121,402)
                                                          --------   ---------
                                                          $ 55,851   $  41,589
                                                          ========   =========
</TABLE>

         See Note 5 for discussion on the impairment charge on intangible
assets.

10.       EQUITY IN NET LOSSES OF AFFILIATES

         During the year ended December 31, 1998, the Company accounted for its
investment in Student Advantage, Inc. using the equity method. Our investment in
Student Advantage had a book value of $0 at December 31, 1998. When the
Company's ownership interest in Student Advantage fell below 20% in June 1999,
we began accounting for our investment using the cost method


                                      33
<PAGE>   37




and classified our investment in marketable securities. In the fourth quarter
of 2000, we sold 566,311 shares of Student Advantage common stock for an
aggregate sales price of $1,926.

         During the year ended December 31, 2000, the Company
accounted for its investments in three affiliates using the equity method.
These affiliates and our voting percentage in them include ProAct (49%),
Digital Planet (49%) and AppGenesys, Inc. (22%). The Company recorded equity
losses of $41,168 associated with these affiliates of which, approximately
$39,181 related to ProAct. The investment balances as of December 31, 2000 for
each of these affiliates is $0.

         The following is a summary of certain unaudited financial information
of ProAct:


<TABLE>
<CAPTION>
                                                              DECEMBER 31,                        September 30,
                                                                  1999                                 2000
                                                              ------------                        -------------
<S>                                                             <C>                                 <C>
Current assets ...............................                  $ 20,513                            $ 159,736
Non-current assets ...........................                    17,313                              183,873
Current liabilities ..........................                    25,880                               21,605
Non-current liabilities ......................                       134                                  447
Mandatorily redeemable preferred stock .......                    48,955                              309,826
Stockholders' equity .........................                   (37,143)                              11,729


                                                                       NINE MONTHS ENDED SEPTEMBER 30,
                                                                  1999                                 2000
                                                                ---------------------------------------------
Net revenue ..................................                     1,201                                6,468
Gross margin .................................                    (1,120)                               1,789
Net loss .....................................                   (18,840)                             (57,305)
</TABLE>

11.      LONG-TERM DEBT

         The Company's long-term debt is comprised of the following:


<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                  ------------------------------
                                                                   1999                   2000
                                                                  -------               --------
<S>                                                               <C>                   <C>
Borrowings under credit facility ...................              $    --               $     --
5.75% secured convertible note payable to ProAct due
  January 2004 .....................................                   --                 20,000
8.25% note payable to bank in monthly installments
  through January 2002, collateralized by land and
  building .........................................                  444                     --
Notes payable to a former shareholder
  at interest rates from 4.75 to 8.0% expiring from
  2000 to 2001 .....................................                  137                     --
Capital lease obligations, at interest rates from 4%
  to 24% expiring from 1999 to 2004 ................                1,257                    718
                                                                  -------               --------
          Long-term debt............................                1,838                 20,718
Less current portion of long-term debt .............                 (530)                  (323)
                                                                  -------               --------
                                                                  $ 1,308               $ 20,395
                                                                  =======               ========
</TABLE>

CREDIT FACILITY

         On January 7, 2000, the Company entered into a senior secured revolving
syndicated credit facility with several institutions providing for borrowings of
up to $50,000. The credit facility expires on January 7, 2002. The credit
facility bears interest payable at least quarterly at a rate of either (i) 2.75%
plus an adjusted LIBOR rate or (ii) 1.75% plus the greater of Chase Manhattan
Bank's prime rate or .5% plus the federal funds rate. The credit facility is
secured by liens on substantially all of the assets of our domestic operating
subsidiaries, excluding iXL Ventures. These obligations are also secured by all
of the capital stock of iXL's domestic operating subsidiaries, iXL's stock
holdings in ProAct, the general and limited partnership interests in iXL
Ventures LP, and 65% of the capital stock of iXL's foreign subsidiaries,
including the pledge of the capital stock of the same subsidiary companies. The
credit facility provided for borrowings based upon a borrowing base formula of
qualified billed and unbilled accounts receivable. A commitment fee is charged
on the unused portion of the credit facility.

         On December 7, 2000, the Company executed an amendment to the credit
facility to waive a violation of a financial covenant. The credit facility was
further amended to: restrict the borrowing base to qualified billed accounts
receivable from domestic operations; permit the sale by the Company of equity
interests forming part of the collateral securing iXL's obligations associated
with the credit facility; reduce the amount of permitted capital expenditures;
reduce the minimum required consolidated EBITDA (earnings before interest,
income taxes, depreciation and amortization); and require the Company to
maintain an minimum level of liquidity.


                                      34
<PAGE>   38


         Because of reductions in the available borrowing base, there were no
borrowings available under the credit facility as of December 31, 2000. We also
had a restricted cash balance of approximately $4,700. The Company had utilized
approximately $24,700 of the credit facility for letters of credit issued
primarily as security for office leases as of December 31, 2000. Of the letters
of credit utilized as of December 31, 2000, approximately $21,100 pertain to
properties that we have abandoned but for which we still have a contractual
obligation.

         On March 30, 2001, the Company executed an amendment to the credit
facility which reduced the commitment under the credit facility from $50,000 to
$35,000, to expand the borrowing base to include foreign receivables and certain
assets of iXL Ventures and to eliminate and amend certain financial covenants.
This amendment required the Company to provide $10,000 of additional collateral
in the form of restricted cash and further required the provision of an
additional $5,000 in the form of restricted cash by September 30, 2001. The
collateral and the commitment are each subject to further reductions of up to
$15,000 upon the elimination or reduction of outstanding letters of credit. The
amended credit facility established certain EBITDA covenants for the second,
third and fourth quarters of 2001. This amendment to the credit facility became
effective on April 2, 2001.

NOTE PAYABLE TO PROACT

         On December 19, 2000 the Company consummated a transaction with ProAct
in which iXL Ventures PHC, Inc., an indirect wholly owned subsidiary of the
Company, issued a 5.75% secured convertible note to ProAct in exchange for a
cash payment of $20,000. The note is secured by and exchangeable for, upon
satisfaction of certain conditions, 10 million shares of common stock of ProAct
held by iXL Ventures PHC, Inc. iXL Ventures PHC, Inc. has no other properties
or assets other than its interest in the ProAct common stock. The note is
non-recourse to iXL Enterprises, Inc.

         The note accrues interest at 5.75% per annum on a quarterly basis
commencing March 31, 2001. The entire amount of unpaid principal and accrued
and unpaid interest is due and payable on January 7, 2004. The Company may at
any time prepay all or a portion of the principal amount. The Company may repay
the principal amount of the note by payment in cash or by transfer of the
pledged collateral. Also, ProAct, at its option, may at any time (1) exchange
the note for the pledged collateral or (2) purchase the pledged collateral for
$20,000. We are required to make adjustments to the carrying value of the note
for changes in the fair value of ProAct's common stock because the terms of the
note enable ProAct to exchange the note for the pledged collateral. We will
record any resulting adjustment as interest income or interest expense.

         Additionally, in conjunction with the issuance of the secured
convertible note, the Company issued to ProAct call rights to purchase up to 10
million shares of its common stock owned by iXL Ventures LP at a purchase price
of $3.00 per share. ProAct may exercise the call rights at any time for all or
a portion of the call shares provided that the minimum amount of call shares
purchased at any time is 500,000. The call rights expire on January 7, 2004.

         The Company allocated the proceeds received from the debt issuance
between the note and the call rights based on their relative fair market values
at the date of issuance. The portion allocated to the call rights resulted in a
corresponding discount on the note and will be recognized as additional
interest expense over the term of the note. As a result, the effective rate of
interest on the note was approximately 20% at December 31, 2000. The note is
recorded in long-term debt at its discounted value plus accrued interest,
together with the call rights that are recorded at their fair value. We are
required to reflect the call rights at their fair value while they are
outstanding with any resulting changes in the fair value being recorded as
income or expense. The Company uses the Black-Scholes option-pricing model to
determine the fair value of the call rights.

12.      AGREEMENT WITH HPS AMERICA, INC.

         On December 28, 2000, the Company entered into a stock purchase
agreement with HPS under which HPS purchased one million shares of the
Company's common stock at $3.00 per share. HPS paid $1,500 upon execution of
the agreement. The remaining $1,500 is due on August 31, 2001 and was recorded
as subscription receivable in stockholders' equity. The Company agreed to
subcontract $65,000 of services to HPS over a three-year period. Services that
will be subcontracted to HPS include application software development,
migration, re-engineering, systems integration, service management and other
professional services. The $65,000 commitment is required to be met as follows:
$5,000 in the first six months; $10,000 in the second six months; $20,000 in
the second year; and $30,000 in the third year. If the Company fails to meet
these commitments, the Company must pay HPS the difference between the
commitment and the value of the business actually given during the applicable
period. Likewise, in any future periods, excess business over the defined
commitment is applied against shortfalls in prior periods and returned to the
Company. If the requirement for the first six months is not met, HPS can apply
the remaining the $1,500 due on the common stock purchase against any
shortfall.


                                      35
<PAGE>   39


13.      STOCKHOLDERS' EQUITY

         During the year ended December 31, 1998, the Company issued 8,031
shares of class A preferred stock for approximately $5,510, including a $900
note receivable.

         In January 1999, the Company issued 22,825 shares of class A preferred
stock for approximately $22,718. A portion of the proceeds from the sale was
used to repay approximately $9,430 of borrowings outstanding under the
revolving line of credit portion of our credit facility.

         On June 8, 1999, the Company completed its initial public offering and
received net proceeds of approximately $61,700 from the sale of 6,000,000
shares of common stock. Also, on June 8, 1999, the Company sold 2,000,000
shares of common stock for $23,500 in a private placement. On June 14, 1999,
the underwriters exercised their over-allotment option resulting in the sale of
900,000 additional shares of common stock for net proceeds of approximately
$10,000.

         Upon the closing of the Company's initial public offering, all
outstanding shares of (i) class A, class B and class C convertible preferred
stock and class D non-voting preferred stock and (ii) class A and class B
common stock were reclassified as common stock. This reclassification precluded
the automatic conversion feature of the class A, class B and class C
convertible preferred stock.

         As a result of the reclassification, the class D preferred
stockholders received in the aggregate (i) 3,722,502 shares of common stock
plus (ii) a number of shares equal to the class D preferred stock liquidation
value of $35,700 plus accrued dividends divided by the gross initial public
offering price of common stock before deducting any underwriting or other
selling accounts, or 3,264,115 shares.

         On November 24, 1999, the Company completed a secondary public
offering and received net proceeds of approximately $68,600 from the sale of
2,000,000 shares of common stock. On December 14, 1999, the underwriters
exercised their over-allotment option resulting in the sale of 50,000
additional shares of common stock for net proceeds of approximately $1,800.

         On December 28, 2000, the Company issued shares to HPS as discussed in
Note 12.

         As of December 31, 1999 and 2000, the Company's capital stock
consisted of $.01 par value common stock and $.01 par value class A preferred
stock. The Company had 5,000,000 authorized class A preferred shares at
December 31, 1999 and 2000. No preferred shares were outstanding at either
date.

WARRANTS

         In November 1998, the Company issued warrants to purchase 500,000
shares of common stock at $10 per share. The fair value of the warrants, which
were immediately exercisable at the grant date, was measured on the date the
warrants were earned and was recorded as an expense of approximately $815 in
the fourth quarter of 1998. We calculated the fair value of these warrants
using the Black-Scholes option-pricing model with the following assumptions:
dividend yield 0%, risk-free interest rate 5.0%, expected volatility 72% and
expected life of three years. The warrants expire three years from the date of
grant.

         In December 1998, the Company issued warrants to purchase 500,000
shares of common stock at $10 per share. The warrants, which were immediately
exercisable at the grant date, were issued in conjunction with a services
contract. The related charge, based on the fair value of the warrants, was
recorded as reduction of revenue as we provided the services. Accordingly, we
reduced services revenue by $1,050 and $150 during 1999 and 2000, respectively.
We calculated the fair value of these warrants using the Black-Scholes
option-pricing model with the following assumptions: dividend yield 0%, risk
free interest rate 5.0%, expected volatility 82% and expected life of 18
months. The warrants were exercised during the second quarter of 2000. Instead
of paying cash to us, the holder exchanged all 500,000 warrants for 206,959
shares of common stock. The number of shares issued at the exercise date was
based on the fair market value of our common stock on that date.

         As more fully described in Note 21, in 1999 the Company granted
warrants to purchase 2,500,000 shares of common stock to a related party.

TREASURY STOCK

         During February and March 1998, the Company purchased a total of
242,416 shares of class B common


                                      36
<PAGE>   40


stock from two employees at a purchase price of $3.25 per share. During
September 1998, the Company purchased a total of 10,000 shares of class B
common stock from an employee at a price of $10 per share. During November
1999, the Company converted 100,000 shares of common stock held in escrow into
treasury stock.

14.      MANDATORILY REDEEMABLE PREFERRED STOCK

         Prior to the Company's initial public offering, a total of 265,000
shares of mandatorily redeemable convertible preferred stock had been
designated for issuance; 200,000, 15,000 and 50,000 of such shares had been
designated as class B, class C and class D convertible preferred stock,
respectively.

         Prior to the closing of the Company's initial public offering, the
Company's shareholders approved an amendment to the Company's certificate of
incorporation, which took effect upon such closing. Pursuant to such amendment,
upon the closing of the initial public offering, all outstanding shares were
reclassified as common stock.

         In December 1997, for net consideration of approximately $26,900 and
$2,990, the Company issued 83,075 shares of class B preferred, par value $.01
and 9,232 shares of class C preferred, par value $.01. In conjunction with this
equity transaction, the Company issued warrants to purchase 10,650 shares of
class B preferred for $458 per share. In February 1998, for net consideration
of approximately $4,935, the Company issued 15,692 shares of class B preferred
and warrants to purchase 1,810 shares of class B preferred for $458 per share.
In August 1998, for net consideration of approximately $35,400, the Company
issued 35,700 shares of class D preferred, $.01 par value. The Company
accounted for the class B, class C and class D preferred as mandatorily
redeemable preferred stock. Accordingly, the Company accrued dividends and
amortized any difference between the carrying value and the redemption value
over the projected redemption period with a charge to additional paid-in
capital, or APIC. The amount charged to APIC related to the class B and class C
preferred was $5,449 and $926, respectively, for the year ended December 31,
1998. The amount charged to APIC related to the class B and class C preferred
was $5,160 and $482, respectively, for the year ended December 31, 1999.

         The class D preferred provided that, upon redemption the holders would
receive $1,000 per share plus any accrued and unpaid dividends and a certain
number of shares of class B common stock of the Company. The aggregate number
of shares of class B common stock to be issued varied based on the timing of an
initial public offering of the Company's common stock with a per share price of
at least $7 and for which the aggregate proceeds to the Company equal at least
$30,000 (a "Qualified Public Offering"). At a minimum, the number of class B
common stock shares to be issued would equal 3,722,502 shares. The proceeds
from the issuance of the class D preferred were allocated to the class D
preferred (included in mandatorily redeemable preferred stock) and class B
common stock to be issued (included in additional paid-in-capital), based on
the relative fair values of the securities as of the date of issuance. Of the
approximately $35,400 total proceeds from the issuance of the class D
preferred, $22,165 was allocated to the class D preferred and the remaining
$13,235 was allocated to class B common stock to be issued. The amount
allocated to the class B common stock to be issued was based on the fair value
of the guaranteed minimum number of shares (3,722,502) to be issued. The number
of shares of class B common stock to be issued could potentially increase up to
a maximum of 5,279,293 shares, depending on the timing of a Qualified Public
Offering. The fair value of the additional 1,556,791 potentially issuable
shares of class B common stock was determined at the end of each reporting
period was ratably charged to net loss available to common stockholders, over
the projected 7-year redemption period. Through the date of the closing of the
initial public offering, the Company accrued the 12% dividend on the class D
preferred and accreted any difference between the carrying value and the
redemption value over the projected 7-year redemption period with a charge to
APIC.

         Upon the closing of the Company's initial public offering in June
1999, the class D preferred stockholders received in the aggregate 3,722,502
shares of common stock plus a number of shares equal to the class D preferred
Stock liquidation value of $35,700 plus accrued dividends divided by the gross
initial public offering price of common stock before deducting any underwriting
or other selling discounts or 3,264,115 shares. This transaction resulted in a
charge to net loss available to common shareholders equal to the difference
between $35,700 plus accrued dividends and the carrying value of the class D
preferred. The amount of this charge was $12,341.

15.      MANDATORILY REDEEMABLE PREFERRED STOCK OF A SUBSIDIARY

         In November 1998, ProAct sold 13,333,334 shares of the mandatorily
redeemable ProAct series A convertible preferred stock for net proceeds of
$9,839. As more fully described in the Note 21, in April 1999, the Company and
ProAct entered into several agreements with a related party. In one of the
agreements, the related party purchased 16,190,475 shares of the mandatorily
redeemable ProAct Series B convertible preferred stock with a face value of
$50,000. Warrants to purchase iXL common stock were issued to the related party
in conjunction with these agreements. We calculated the fair value of the
warrants using the Black-Scholes


                                      37
<PAGE>   41


option-pricing model and $11,200 of the value of these warrants was allocated
to the purchase of the mandatorily redeemable ProAct Series B convertible
preferred stock. As such, we recorded this $11,200 as a reduction of
mandatorily redeemable preferred stock of subsidiary and an increase in APIC.
This amount was being accreted ratably over the redemption period to increase
the carrying value of the mandatorily redeemable ProAct series B convertible
preferred stock to its redemption value of $50,000. ProAct received net
proceeds of approximately $49,300 from the sale of the mandatorily redeemable
ProAct series B convertible preferred. Stock. The amount charged to APIC
related to the accretion of the mandatorily redeemable ProAct series B
convertible preferred stock was $1,054 for the year ended December 31, 1999.

16.      STOCK-BASED COMPENSATION

         The Company has three stock option plans and an employee stock
purchase plan. In general, we can issue stock options to officers, employees or
non-employees with the approval of our board of directors. We expect that most
options granted pursuant to the plans will be subject to vesting over a period
of four to five years, such as 25% increments each year over a period of four
years, during which time the option holder must continue to be an employee of
the Company. We may choose, however, to impose different vesting requirements
or none at all. Options outstanding under the stock option plans generally have
a term of ten years. The stock options plans authorize the granting of up to an
aggregate maximum of 37,094,353 of which 31,122,215 were outstanding at
December 31, 2000.

         In connection with the acquisition of Tessera during January 2000, the
Company assumed its stock option plan. The options outstanding under the
Tessera plan and their exercise prices were converted to options to purchase
iXL common stock using a ratio equal to that used to convert common shares
exchanged in the business combination. We granted a total of 634,392 options,
as converted, at the date of acquisition, of which 213,859 were outstanding as
of December 31, 2000. No further options can be issued under the Tessera Plan.

         In February 2000, the Board of Directors of the Company adopted the
2000 Employee Stock Purchase Plan. Under this plan, we are authorized to issue
up to an aggregate maximum of 1,500,000 shares of common stock to domestic
employees, nearly all of whom are eligible to participate. Subject to certain
limitations, employees can elect every three months to have from two to ten
percent of their salary and bonus withheld to purchase shares of our common
stock. The purchase price of our common stock under the plan is 85 percent of
the lower of its beginning-of-period or end-of-period market price. During the
year ended December 31, 2000, we sold 375,674 shares of common stock through the
stock purchase plan. As of December 31, 2000, we had available 1,124,326 shares
for issuance under the 2000 Employee Stock Purchase Plan.

         The Company applies APB 25 and related interpretations in accounting
for the stock option plans and the stock purchase plan. During the years ended
December 31, 1998, 1999 and 2000, we recognized compensation expense of $1,641,
$4,920 and $4,138, respectively for stock options issued to employees and
non-employees. Stock options issued or assumed in connection with acquisitions
were accounted for as additional purchase price for the acquired businesses.

         If we had determined compensation expense for the Company's stock
option plans and employee stock purchase plan under the provisions of FAS 123
based on the fair value at the grant date, the Company's net loss and loss per
share would have been increased to the pro forma amounts shown below:


<TABLE>
<CAPTION>
                                                                      FOR THE YEARS ENDED
                                                                         DECEMBER 31,
                                                        ----------------------------------------------
                                                          1998              1999               2000
                                                        --------          --------           ---------
<S>                                                     <C>               <C>                <C>
Net loss:
  As reported ..............................            $(48,866)         $(70,213)          $(352,465)
  Pro forma ................................             (50,388)          (86,323)           (390,859)
Basic and diluted net loss per common share:
  As reported ..............................            $  (4.92)         $  (2.08)          $   (4.73)
  Pro forma ................................               (5.05)            (2.45)              (5.24)
</TABLE>

         We estimated the fair value of the options granted under the stock
option plans on the date of grant using the Black-Scholes option pricing model
with the following weighted-average assumptions used for grants during the
1998, 1999 and 2000 periods, respectively: dividend yield of 0% for all
periods; expected volatility of 0%, 85% and 125%; risk free interest rate of
5.0%, 5.75% and 5.88%; expected life of four years for all periods. We used the
same weighted-average assumptions for the look-back options granted under the
employee stock purchase plan during the 2000 period except that we used a risk
free interest rate of 6.12% and an expected life of three months.


                                      38
<PAGE>   42


    A summary of stock options as of December 31, 1998, 1999, and 2000 and
activity during the period ending on those dates is as follows:


<TABLE>
<CAPTION>
                                              1998                             1999                               2000
                                    -------------------------        --------------------------        --------------------------
                                                     WEIGHTED                          WEIGHTED                          WEIGHTED
                                                     AVERAGE                           AVERAGE                           AVERAGE
                                                     EXERCISE                          EXERCISE                          EXERCISE
                                     OPTIONS          PRICE           OPTIONS           PRICE            OPTIONS          PRICE
                                    ----------       --------        ----------        --------        -----------       --------
<S>                                 <C>              <C>             <C>               <C>             <C>               <C>
Outstanding at beginning of
  Year ....................          5,549,200         $2.35         18,226,112         $ 5.89          28,862,536         $11.50
Granted ...................         13,310,331         $7.31         15,155,523         $17.78          17,817,702         $11.15
Exercised .................            (57,800)        $ .01           (930,080)        $ 3.02          (4,354,466)        $ 5.77
Forfeited .................           (575,619)        $5.39         (3,589,019)        $11.17         (10,989,698)        $17.06
                                    ----------         -----         ----------         ------         -----------         -----
Outstanding at the end of
  Year ....................         18,226,112         $5.89         28,862,536         $11.50          31,336,074         $10.15
                                    ==========         =====         ==========         ======         ===========         =====
Options exercisable at end
  of Year .................          7,833,247         $3.88         11,223,327         $5.51           13,165,450         $9.20
</TABLE>


         The following table presents the weighted average fair value of
options granted during the periods:


<TABLE>
<CAPTION>
                                               1998                 1999                 2000
                                        ------------------   -------------------  -------------------
                                        WEIGHTED  WEIGHTED   WEIGHTED   WEIGHTED  WEIGHTED   WEIGHTED
                                         AVERAGE    FAIR      AVERAGE     FAIR     AVERAGE     FAIR
                                        EXERCISE   MARKET    EXERCISE    MARKET   EXERCISE    MARKET
     OPTION GRANTED DURING THE YEAR       PRICE    VALUE       PRICE      VALUE     PRICE      VALUE
    --------------------------------    --------   -----     --------  ---------  --------   --------
    <S>                                  <C>        <C>      <C>        <C>        <C>        <C>
    Option price > fair market value     $ 9.87     $ .02    $ 14.33    $  5.76    $ 2.00     $ 0.84
    Option price = fair market value     $ 5.00     $ .94    $ 25.72    $ 16.69    $16.61     $13.50
    Option price < fair market value     $ 3.42     $ .78    $ 10.85    $  5.86    $15.21     $29.98
</TABLE>

    The following table summarizes information about stock options outstanding
at December 31, 2000:


<TABLE>
<CAPTION>
                                           OPTIONS OUTSTANDING               OPTIONS EXERCISABLE
                                 --------------------------------------    -----------------------
                                    NUMBER        WEIGHTED     WEIGHTED      NUMBER       WEIGHTED
                                  OUTSTANDING      AVERAGE     AVERAGE     EXERCISABLE    AVERAGE
                                      AT          REMAINING    EXERCISE        AT         EXERCISE
                                 DECEMBER 31,    CONTRACTUAL    PRICE      DECEMBER 31,    PRICE
      RANGE OF EXERCISE PRICES       2000           LIFE          $           2000           $
      ------------------------   ------------    -----------   --------    ------------   --------
      <S>                        <C>             <C>           <C>         <C>            <C>
         $ 0.010  --  $ 1.990      1,155,638       6.89        $ 0.8121       852,519     $ 0.8749
         $ 2.000  --  $ 2.000      7,833,551       9.16        $ 2.0000     1,499,356     $ 2.0000
         $ 2.500  --  $ 2.500      2,800,369       9.31        $ 2.5000       398,750     $ 2.5000
         $ 2.563  --  $ 4.500      2,563,084       7.21        $ 3.9370     2,364,733     $ 3.9689
         $ 4.719  --  $ 5.000      1,309,514       8.13        $ 4.9105       793,538     $ 4.9747
         $ 5.680  --  $10.000      5,550,454       7.91        $ 9.8751     4,207,514     $ 9.9200
         $10.063  --  $15.000      4,488,880       8.66        $14.3507     1,702,114     $14.8163
         $15.313  --  $30.750      3,518,932       8.74        $22.4980       927,326     $22.5798
         $31.000  --  $54.500      2,115,652       8.97        $37.4923       419,600     $36.1084
                                  ----------                                ----------
                                  31,336,074                                13,165,450
                                  ==========                                ==========
</TABLE>

17.      INCOME TAXES

         In 2000, we made a current provision for state income taxes of $600
relating to the operations of Tessera in Massachusetts. We did not record
income taxes in 1998 or 1999.

         Actual income taxes differ from the expected income tax benefit
calculated by applying the federal statutory rate of 34% to our loss before
income taxes as follows:


                                      39
<PAGE>   43


<TABLE>
<CAPTION>
                                                                  YEARS ENDED DECEMBER 31,
                                                    ---------------------------------------------------
                                                      1998                 1999                  2000
                                                    --------             --------             ---------
<S>                                                 <C>                  <C>                  <C>
Expected income tax benefit at the domestic
  federal statutory rate of 34% .............       $ 16,614             $ 23,872             $ 119,634
State income taxes ..........................            743                2,780                13,934
Nondeductible amortization ..................         (2,667)              (3,666)              (46,778)
Equity in net losses of affiliates ..........             --                   --               (14,873)
Change in valuation allowance, including
  effect of acquisition .....................        (13,427)             (22,892)              (72,511)
Other .......................................         (1,263)                 (94)                  594
                                                    --------             --------             ---------
                                                    $     --             $     --             $      --
                                                    ========             ========             =========
</TABLE>

    Significant components of our deferred tax assets and liabilities are as
follows:


<TABLE>
<CAPTION>
                                                                                DECEMBER 31,
                                                                    ------------------------------------
                                                                      1999                       2000
                                                                    --------                   ---------
<S>                                                                 <C>                        <C>
Deferred tax assets:
  Allowance for doubtful accounts ................                  $  1,526                   $   7,826
  Equity in net losses of affiliates .............                     1,290                       9,417
  Net operating loss carryforward ................                    45,819                      77,977
  Restructuring reserve ..........................                        --                      16,201
  Other ..........................................                        --                       6,831
  Valuation allowance ............................                   (42,121)                   (118,093)
                                                                    --------                   ---------
                                                                       6,514                         159
                                                                    --------                   ---------
Deferred tax liabilities:
  Unrealized gain on marketable
securities .......................................                     4,646                         159
  Other ..........................................                     1,868                          --
                                                                    --------                   ---------
                                                                       6,514                         159
                                                                    --------                   ---------
Net deferred tax asset ...........................                  $     --                   $      --
                                                                    ========                   =========
</TABLE>

         As of December 31, 2000, the Company had net operating loss
carryforwards for federal income tax purposes of approximately $205,000,
including foreign losses of approximately $26,000. Of the Company's net
operating loss carryforwards, $66,000 relates to tax deductions from exercised
stock options and warrants, which will be tax-effected and reflected as
additional paid-in-capital when realized. The Company's net operating loss
carryforwards expire in varying amounts between 2011 and 2020.

         In addition, the amounts of, and the benefits from, net operating loss
carryforwards may be impaired or limited in certain circumstances. The Company
experienced ownership changes as defined under Section 382 of the Internal
Revenue Code. As a result of the ownership changes, net operating loss
carryforwards for the Company, which were incurred prior to the date of change,
are subject to annual limitations on their future use. As of December 31, 2000,
a valuation allowance has been established against the deferred tax assets we
do not believe are more likely than not to be realized.

         Due to the deconsolidation of ProAct in 2000, as discussed in Note 3,
the Company's deferred tax assets and liabilities have been adjusted to remove
the cumulative effect of ProAct's deferred tax assets and deferred tax
liabilities. The Company's deferred tax assets at December 31, 2000 include a
temporary difference for its equity investment in ProAct.

18.      EMPLOYEE BENEFIT PLANS

         Employees of the Company can elect to participate in the iXL
Enterprises, Inc. Savings Plan which is intended to be qualified and exempt
from tax under Section 401(k) of the Internal Revenue Code. Employees are
eligible to participate in the 401(k) plan after one month of service and can
elect to invest 1% to 16% of their pre-tax earnings. All employee contributions
are fully vested. The Company is not required, but may at its discretion make
contributions to the 401(k) plan. In 2000, the Company contributed $1,800 to
the 401(k) plan for the 1999 plan year. The Company has not made any other
discretionary contributions.


                                      40
<PAGE>   44


19.      COMMITMENTS AND CONTINGENCIES

Operating Leases

         The Company leases certain operating facilities and equipment under
non-cancelable agreements expiring through 2015, some of which require us to
pay operating costs including property taxes, insurance and maintenance. These
facility leases generally contain renewal options and some contain escalation
provisions that increase the lease payments in future periods. We record rent
expense on a straight-line basis over the term of the lease.

         As of December 31, 2000, the approximate future minimum lease payments
for noncancelable operating leases are as follows:


<TABLE>
<CAPTION>
     <S>                            <C>
     2001...................        $  28,327
     2002...................           28,446
     2003...................           28,167
     2004...................           26,872
     2005...................           24,245
     Thereafter.............          129,322
                                     --------
                                     $265,379
                                     ========
</TABLE>

         Total minimum lease payments have not been reduced for future minimum
sublease rentals aggregating approximately $14,857. Operating lease expense
charged to operations was approximately $3,844 in 1998, $8,125 in 1999, and
$18,499 in 2000 net of sublease rental income of approximately $2,552 in 2000.
Sublease income was not material in 1998 and 1999.

         Many of the payments detailed above pertain to offices that we have
shutdown or significantly reduced in size in conjunction with our restructuring
plan. This plan is discussed further in Note 4.

Legal Proceedings

         On or about September 8, 2000, the first in a series of shareholder
class action complaints was filed against iXL and certain of its present and
former directors and officers in the United States District Court for the
Northern District of Georgia. Those cases were consolidated by Order dated
January 23, 2001, and a consolidated amended class action complaint (Case No.
1:00-CV-2347-CC) was filed on March 27, 2001, naming only iXL as a defendant, on
behalf of a putative class of all those who purchased or otherwise acquired
securities of iXL between November 30, 1999 and September 1, 2000. The amended
complaint seeks damages based on allegedly false and misleading press releases
and SEC filings concerning our business prospects and revenue recognition. The
amended complaint asserts claims under Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5. A related complaint was filed in Redwing Ltd. v. iXL
Enterprises, Inc., et al., Case No. 1:00-CV-29790HTW, United States District
Court for the Northern District of Georgia. The Redwing complaint alleges causes
of action under Section 10(b) and Rule 10b-5 of the Securities Exchange Act of
1934, Sections 12 and 15 of the Securities Act of 1933, the Georgia Blue Sky
laws, as well as common law claims for breach of contract and negligent
misrepresentation arising out of a merger agreement. We have filed motions to
dismiss the Redwing complaint. We intend to move to dismiss the class action
amended complaint. We believe we have meritorious defenses to the allegations
and intend to defend these cases vigorously.

20.      BUSINESS SEGMENTS

         In 1999, the Company operated in two business segments: strategic
Internet services, which includes Internet strategy consulting, Internet-based
business solutions and solution sets; and ProAct, an e-commerce and software
application company, which markets financial services and employee benefits
over corporate intranets and the Internet, as well as through telesales. In the
second quarter of 2000, the Company deconsolidated ProAct as further discussed
in Note 3. Accordingly, we have only one business segment in 2000.

         Information concerning the operations in these reportable segments is
as follows:


                                      41
<PAGE>   45


<TABLE>
<CAPTION>
                                          Years Ended December 31,
                                       -----------------------------
                                          1998               1999
                                       ---------           ---------
  <S>                                  <C>                 <C>
  Revenue:
       Strategic Internet services     $  64,658           $ 216,870
       ProAct                                251               1,850
       Eliminations                         (142)               (377)
                                       ---------           ---------
                                       $  64,767           $ 218,343
                                       =========           =========

  Loss from operations:
       Strategic Internet services     $ (33,619)          $ (34,444)
       ProAct                            (13,559)            (38,133)
                                       ---------           ---------
                                       $ (47,178)          $ (72,577)
                                       =========           =========

  Depreciation and amortization:
       Strategic Internet services     $  15,076           $  28,619
       ProAct                                731               2,412
                                       ---------           ---------
                                       $  15,807           $  31,031
                                       =========           =========
</TABLE>


<TABLE>
<CAPTION>
                                              As of December 31,
                                       -----------------------------
                                          1998               1999
                                       ---------           ---------
  <S>                                  <C>                 <C>
 Identifiable assets:
      Strategic Internet Services    $  86,207               $ 281,211
      ProAct                             9,696                  34,368
                                      --------                --------
                                     $  95,903               $ 315,579
                                     =========               =========
</TABLE>

21.      RELATED PARTY TRANSACTIONS

         In January 1997, the Company entered into an agreement to lease office
space for eleven years from an entity in which our chairman is a limited
partner. The Company made rent payments of $628 in 1998, $1,602 in 1999 and
$1,115 in 2000 under this office lease agreement.

         In June 1998, the chairman's spouse loaned the Company $4,000 at an
interest rate of 10%. The principal and interest on this note were repaid in
July 1998.

         The Company has agreed to pay one of its investors an annual fee of
$15 for financial advisory services. The investor is indemnified against
certain claims, losses, damages, liabilities and expenses that may arise in
connection with rendering such financial advisory services. During 1999, the
Company paid the investor 62,500 shares of common stock valued at $750 in
connection with services provided to the Company during its initial public
offering.

         The Company recognized revenue in 1998, 1999 and 2000 from providing
services to some of its investors, and entities related to its investors, of
$2,177, and $30,005 and $31,644, respectively.

         A member of the Company's board of directors was also the chief
executive office of one of our customers through 2000. In 1998, 1999 and 2000
the Company recognized revenue of approximately $5,540, $3,311 and $1,177,
respectively, from this customer or its predecessor companies.

         As of December 31, 2000, amounts due from a single related party
comprised approximately $4,501 or 9% of accounts receivable. Amounts relating
to contracts with the same related party comprised approximately $707 or 5% of
unbilled revenue as of December 31, 2000.

         In April 1999, the Company entered into several agreements with
affiliates of a related party whereby:

         (1)      the related party purchased 16,190,475 shares of ProAct
                  series B mandatorily redeemable convertible preferred stock,
                  which at that time represented 12.5% of ProAct, on an
                  as-converted basis, for a purchase price of approximately
                  $50,000;
         (2)      the related party entered into an agreement to purchase
                  $20,000 of services from the Company and in exchange for
                  entering into such agreement the Company would grant the
                  related party warrants to purchase 1,000,000 shares of the
                  Company's common stock at an exercise price of $15 per share;
         (3)      the related party purchased 2,000,000 shares of the Company's
                  common stock at a price per share equal to the initial public
                  offering price in a private placement that was concurrent
                  with the initial public offering; and
         (4)      the Company granted to the related party warrants to purchase
                  1,500,000 shares of the Company's common stock at an
                  exercise price equal to the initial public offering price in
                  consideration for the related party (a) implementing a
                  mutually acceptable marketing campaign to advertise its
                  relationships with the Company and ProAct, and (b) entering
                  into an agreement to use reasonable efforts to provide access
                  to ProAct's platform to employees of its affiliate.

         All the warrants issued in connection with the April 1999 transactions
referred to above were 100% vested on the date of grant, nonforfeitable and are
exercisable after one year subsequent to the date of grant. The fair value of
the warrants to purchase 1,000,000 shares of common stock issued in connection
with the $20,000 service agreement was $4,800. During 1999, the related charges


                                      42
<PAGE>   46


were recorded as a reduction of revenue as the services were provided. We
calculated the fair value of the warrants using the Black-Scholes
option-pricing model with the following assumptions: dividend yield 0%;
expected volatility 85%; risk free interest rate 5%; life of warrants is three
years; fair market value of underlying iXL common stock on date of grant was
$10.00.

         The fair value of the warrants to purchase 1,500,000 shares of
common stock was $12,600. We calculated the fair value of the warrants using
the Black Scholes option-pricing model with the following assumptions: dividend
yield 0%; expected volatility 85%; risk free interest rate 5%; life of warrant
is five years; fair market value of underlying iXL common stock on date of
grant was $12.00 (based on the initial public offering price); exercise price
of warrants was $12.00.

         The fair value of these warrants to purchase 1,500,000 shares of the
Company's common stock was allocated and recorded as follows:

         -        $200 to the agreement to provide access to ProAct's platform
                  to employees of its affiliate. Such amount was recorded as
                  expense in 1999.

         -        $1,200 to the agreement to provide marketing services to iXL
                  and ProAct. Such amount was expensed as the marketing
                  services were received. The amount charged to expense during
                  1999 and 2000 was $820 and $380, respectively.

         -        the remaining $11,200 of value of the warrants was recorded as
                  a reduction of mandatorily redeemable preferred stock of
                  subsidiary and an increase in additional paid-in capital. This
                  amount was being accreted ratably over the redemption period
                  to increase the carrying value of the ProAct series B
                  convertible preferred stock to its redemption value of
                  $50,000. We obtained an independent valuation of the ProAct
                  business for the purpose of allocating the value of the
                  warrants to the investment in ProAct.

         The Company recorded revenue of approximately $1,138 from service
agreements with an affiliated company. In addition, the affiliated company paid
us approximately $1,246 for rent, management fees and other administrative
charges.  The Company recorded the management fees in other income, while the
payments for rent and other administrative charges were recorded as a reduction
of operating expenses.

22.      SUBSEQUENT EVENTS

         On March 30, 2001, pursuant to an agreement in principal reached March
26, 2001, the Company sold 15,875,000 shares of restricted common stock to
unaffiliated third parties and to parties related to the Company through its
principal shareholder, including two directors, for total proceeds of $15,875
before expenses. This stock sale was subject to certain subsequent events,
including the effectiveness of the amendment to the credit facility discussed
below effective on April 2, 2001.

         On March 30, 2001, the Company executed an amendment to the credit
facility which reduced the commitment under the credit facility from $50,000 to
$35,000, to expand the borrowing base to include foreign receivables and certain
assets of iXL Ventures and to eliminate and amend certain financial covenants.
This amendment required the Company to provide $10,000 of additional collateral
in the form of restricted cash and further required the provision of an
additional $5,000 in the form of restricted cash by September 30, 2001. The
collateral and the commitment are each subject to further reductions of up to
$15,000 upon the elimination or reduction of outstanding letters of credit. The
amended credit facility established certain EBITDA covenants for the second,
third, and fourth quarters of 2001. This amendment to the credit facility
became effective on April 2, 2001.


         On July 31, 2001, iXL and Scient Corporation jointly announced that
they entered into an Agreement and Plan of Merger dated July 31, 2001, which
sets forth the terms and conditions of a pending business combination of iXL
and Scient. Each share of iXL common stock outstanding immediately prior to the
effective time of the merger will be converted into the right to receive 0.25
shares of the new company's common stock, and each share of Scient common stock
outstanding immediately prior to the effective time of the merger will be
converted into the right to receive 0.31 shares of the new company's common
stock.

         Consummation of the transaction is subject to various conditions,
including the approval by both iXL's and Scient's stockholders and the receipt
of required regulatory approvals. In connection with the execution of the
merger agreement, iXL and certain stockholders of Scient who own approximately
34% of the outstanding common stock of Scient entered into a voting agreement
pursuant to which such Scient stockholders have agreed to vote their shares of
Scient common stock in favor of the adoption of the merger agreement.
Similarly, Scient and certain stockholders of iXL who own approximately 34% of
the outstanding common stock of iXL entered into a voting agreement pursuant
to which such iXL stockholders have agreed to vote their shares of iXL common
stock in favor of the adoption of the merger agreement.



                                      43
<PAGE>   47


                                                                    SCHEDULE II

                             IXL ENTERPRISES, INC.

                       VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 1998, 1999 AND 2000
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                 BALANCE AT        CHARGES TO        DEDUCTIONS                         BALANCE AT
                                                 BEGINNING         COSTS AND            AND                                 END
           DESCRIPTION                           OF PERIOD          EXPENSES     RECLASSIFICATIONS(1)    OTHER(2)        OF PERIOD
<S>                                              <C>               <C>           <C>                     <C>            <C>
Allowance for doubtful accounts
  for the years ended December 31,
  2000 ...............................            $4,021            $25,260            $(7,942)            $ --           $21,339
  1999 ...............................               796              5,111             (1,886)              --             4,021
  1998 ...............................               138              1,227               (765)             196               796
</TABLE>

----------

(1)      Amounts represent write-offs.

(2)      Amounts represent the beginning balances of the allowance for doubtful
         accounts for the companies acquired during the respective periods.


                                      44
<PAGE>   48


            SUMMARY OF QUARTERLY RESULTS OF OPERATIONS -- UNAUDITED.


<TABLE>
<CAPTION>
                                                   FOR THE QUARTER ENDED                        FOR THE QUARTER ENDED
                                    ---------------------------------------------   ----------------------------------------------
                                    3/31/1999   6/30/1999   9/30/1999   12/31/1999  3/31/2000   6/30/2000   9/30/2000   12/31/2000
                                    ---------   ---------   ---------   ----------  ---------   ---------   ---------   ----------
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Revenue ..........................  $  33,012   $  45,896   $  63,731   $  75,704   $ 101,295   $ 118,423   $  87,288   $  52,330
Expenses:
 Professional services expenses ..     15,840      22,747      32,512      39,218      47,896      55,122      62,176      48,560
 Sales and marketing expenses ....      7,527       9,935      11,019      20,538       9,734      11,370      11,790       6,410
 General and administrative
  expenses .......................     19,675      21,686      24,981      29,291      37,018      42,449      57,848      38,490
 Stock-based compensation and
  other ..........................      1,474         641       1,286       1,519       3,110         756         134         198
 Depreciation ....................      2,284       2,931       3,284       4,358       4,185       4,928       5,728       5,691
 Amortization ....................      4,351       4,333       4,329       5,161      10,831      11,205      11,203      10,730
 Impairment charge on intangible
  assets .........................         --          --          --          --          --          --          --      97,402
 Restructuring charges ...........         --          --          --          --          --          --      16,222      60,366
                                    ---------   ---------   ---------   ---------   ---------   ---------   ---------   ---------
Loss from operations .............    (18,139)    (16,377)    (13,680)    (24,381)    (11,479)     (7,407)    (77,813)   (215,517)
Other income (expense) ...........         69        (183)        (69)         22        (182)        (84)     (2,290)        802
Interest income ..................        216         517       1,447       1,397       1,677       1,667       1,305         742
Interest expense .................       (336)       (357)       (136)       (158)       (471)       (219)       (364)     (1,064)
Equity in net losses of affiliates        (65)         --          --          --     (10,171)    (21,908)     (8,910)       (179)
                                    ---------   ---------   ---------   ---------   ---------   ---------   ---------   ---------
   Loss before income taxes ......    (18,255)    (16,400)    (12,438)    (23,120)    (20,626)    (27,951)    (88,072)   (215,216)
Income tax expense ...............         --          --          --          --          --         600          --          --
                                    ---------   ---------   ---------   ---------   ---------   ---------   ---------   ---------

   Net loss ......................    (18,255)    (16,400)    (12,438)    (23,120)    (20,626)    (28,551)    (88,072)   (215,216)
Dividends and accretion on
 mandatorily redeemable preferred
 stock ...........................     (5,293)    (14,769)       (452)       (452)         --          --          --          --
                                    ---------   ---------   ---------   ---------   ---------   ---------   ---------   ---------

   Net loss available to common
    stockholders .................  $ (23,548)  $ (31,169)  $ (12,890)  $ (23,572)  $ (20,626)  $ (28,551)  $ (88,072)  $(215,216)
                                    =========   =========   =========   =========   =========   =========   =========   =========
Net loss per share:
Basic and diluted net loss per
common share .....................  $   (1.46)  $   (1.09)  $   (0.20)  $   (0.36)  $   (0.29)  $   (0.38)  $   (1.16)  $   (2.83)
                                    =========   =========   =========   =========   =========   =========   =========   =========
Weighted average common shares
outstanding ......................     16,082      28,719      64,539      65,648      71,877      74,801      75,701      75,992
                                    =========   =========   =========   =========   =========   =========   =========   =========
</TABLE>

         The results for the quarters ended March 31, 2000, June 30, 2000 and
September 30, 2000 are not consistent with those reported in the Form 10-Q for
the corresponding quarters due to the deconsolidation of ProAct and Digital
Planet as discussed in Note 1 to the consolidated financial statements contained
elsewhere in this report.

         The impairment charge on intangible assets and restructuring charges
are described in Notes 4 and 5 to the consolidated financial statements
contained elsewhere in this report.


                                      45
<PAGE>   49


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information with respect to this item is incorporated by reference
from the Company's Definitive 2001 Proxy Statement, which shall be filed with
the Securities and Exchange Commission within 120 days of the end of its fiscal
year.

ITEM 11.  EXECUTIVE COMPENSATION

         Information with respect to this item is incorporated by reference
from the Company's Definitive 2001 Proxy Statement, which shall be filed with
the Securities and Exchange Commission within 120 days of the end of its fiscal
year.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information with respect to this item is incorporated by reference
from the Company's Definitive 2001 Proxy Statement, which shall be filed with
the Securities and Exchange Commission within 120 days of the end of its fiscal
year.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information with respect to this item is incorporated by reference
from the Company's Definitive 2001 Proxy Statement, which shall be filed with
the Securities and Exchange Commission within 120 days of the end of its fiscal
year.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K.

1.       Financial Statements

         The consolidated financial statements filed as part of this report are
         listed and indexed under Item 8 Financial Statements and
         Supplementary Data.

2.       Financial Statement Schedules

         The financial statement schedules filed as part of this report are
         listed and indexed under Item 8 Financial Statements and
         Supplementary Data.

3.       Exhibits

         Items marked with an asterisk, "*," relate to management contracts or
         compensatory plans or arrangements.

2.1      Exchange Agreement, dated April 30, 1996, between iXL Enterprises,
         Inc., Creative Video Library, Inc. and its stockholders for the
         purchase of all of the issued and outstanding capital stock of
         Creative Video Library, Inc. (originally filed as Exhibit 2.1 to the
         Company's Form S-1 (No. 333-71937); incorporated herein by reference)

2.2      Exchange Agreement, dated April 30, 1996, between iXL Enterprises,
         Inc., Creative Video, Inc. and its stockholders for the purchase of
         all of the issued and outstanding capital stock of Creative Video,
         Inc. (originally filed as Exhibit 2.2 to the Company's Form S-1 (No.
         333-71937); incorporated herein by reference)


                                      46
<PAGE>   50


2.3      Exchange Agreement, dated April 30, 1996, between iXL Enterprises,
         Inc., IXL Interactive Excellence, Inc. and its stockholders for the
         purchase of all of the issued and outstanding Stock of IXL Interactive
         Excellence, Inc. (originally filed as Exhibit 2.3 to the Company's
         Form S-1 (No. 333-71937); incorporated herein by reference)

2.4      Exchange Agreement, dated April 30, 1996, between iXL Enterprises,
         Inc., Entrepreneur Television, Inc. and its stockholders for the
         purchase of all of the issued and outstanding capital stock of
         Entrepreneur Television, Inc. (originally filed as Exhibit 2.4 to the
         Company's Form S-1 (No. 333-71937); incorporated herein by reference)

2.5      Purchase and Sale Agreement, dated as of June 5, 1996, by and among
         iXL Acquisition Corp., Memphis On Line, Inc. Southern On Line Systems,
         Inc., and Southern Tel Supply, Inc. (originally filed as Exhibit 2.5
         to the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

2.6      Agreement and Plan of Merger, dated as of December 13, 1996, by and
         among IXL Merger Corp., the Registrant, Consumer Financial Network,
         Inc., Mellett, Reene & Smith, LLC, Derek V. Smith, Michael W. Reene
         and Edwin R. Mellett. (originally filed as Exhibit 2.6 to the
         Company's Form S-1 (No. 333-71937); incorporated herein by reference)

2.7      Asset Purchase Agreement, dated as of February 14, 1997, by and
         between iXL Enterprises, Inc., iXL, Inc., Webbed Feet, LLC, F. Blair
         Schmidt-Fellner and Michael Brendon Dowdle. (originally filed as
         Exhibit 2.7 to the Company's Form S-1 (No. 333-71937); incorporated
         herein by reference)

2.8      Agreement and Plan of Merger, dated as of April 4, 1997, by and
         between iXL Enterprises, Inc., IXL Merger Corp. II, Inc., The Whitley
         Group, Inc. and William C. Whitley. (originally filed as Exhibit 2.8
         to the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

2.9      Agreement of Plan of Merger, dated as of May 30, 1997, by and between
         iXL Enterprises, Inc., IXL Merger Corp. III, Inc., BoxTop Interactive,
         Inc., and the Shareholders of Boxtop Interactive, Inc. (originally
         filed as Exhibit 2.9 to the Company's Form S-1 (No. 333-71937);
         incorporated herein by reference)

2.10     Agreement and Plan of Merger, dated as of July 28, 1997, by and
         between iXL Enterprises, Inc., IXL Merger Corp. IV, Inc., Mark
         Swanson, N. Blake Patton, Marc Sirkin, Edwin Davis, Estate of Robert
         H. Kriebel and Swan Interactive Media, Inc. (originally filed as
         Exhibit 2.10 to the Company's Form S-1 (No. 333-71937); incorporated
         herein by reference)

2.11     Agreement and Plan of Merger, dated as of January 23, 1998, by and
         between iXL Enterprises, Inc., iXL-New York, Inc., Small World
         Software, Inc., and the Shareholders of Small World. (originally filed
         as Exhibit 2.11 to the Company's Form S-1 (No. 333-71937);
         incorporated herein by reference)

2.12     Asset Purchase Agreement, dated as of February 5, 1998, by and between
         iXL Enterprises, Inc., iXL-San Francisco, Inc., Green Room
         Productions, L.L.C. and the Controlling Members. (originally filed as
         Exhibit 2.12 to the Company's Form S-1 (No. 333-71937); incorporated
         herein by reference)

2.13     Asset Purchase Agreement, dated as of March 27, 1998, by and between
         iXL Enterprises, Inc., iXL-Denver, Inc., Continental Communications
         Group, Inc., d/b/a Customer Communications Group, Inc. and John R.
         Klug. (originally filed as Exhibit 2.13 to the Company's Form S-1 (No.
         333-71937); incorporated herein by reference)

2.14     Agreement and Plan of Merger, dated as of May 4, 1998, by and between
         iXL Enterprises, Inc., iXL-New York, Inc., MicroInteractive, Inc. and
         the Micro Shareholders. (originally filed as Exhibit 2.14 to the
         Company's Form S-1 (No. 333-71937); incorporated herein by reference)

2.15     Agreement and Plan of Merger, dated as of May 8, 1998, by and between
         iXL Enterprises, Inc., iXL-Los Angeles, Inc., Spin Cycle Entertainment
         and the SCE Shareholders. (originally filed as Exhibit 2.15 to the
         Company's Form S-1 (No. 333-71937); incorporated herein by reference)


                                      47
<PAGE>   51


2.16     Agreement and Plan of Merger, dated as of May 12, 1998, by and between
         iXL Enterprises, Inc., iXL-Los Angeles, Inc., Digital Planet and the
         Digital Shareholders. (originally filed as Exhibit 2.16 to the
         Company's Form S-1 (No. 333-71937); incorporated herein by reference)

2.17     Agreement and Plan of Merger, dated as of May 12, 1998, by and between
         InTouch Interactive, Inc., iXL Enterprises, Inc., iXL-Charlotte, Inc.,
         and the InTouch Shareholders. (originally filed as Exhibit 2.17 to the
         Company's Form S-1 (No. 333-71937); incorporated herein by reference)

2.18     Share Sale and Purchase Agreement dated as of 11 May, 1998 between iXL
         London Limited, and Derek Scanlon. (originally filed as Exhibit 2.18
         to the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

2.19     Agreement and Plan of Merger, dated as of July 2, 1998, by and between
         CommerceWAVE, Inc., iXL Enterprises, Inc., iXL-San Diego, Inc., and
         the CommerceWAVE shareholders. (originally filed as Exhibit 2.19 to
         the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

2.20     Agreement and Plan of Merger, dated as of July 8, 1998, by and between
         iXL Enterprises, Inc., iXL-New York, Inc., Wissing & Laurence, Inc.
         and the W&L Shareholders. (originally filed as Exhibit 2.20 to the
         Company's Form S-1 (No. 333-71937); incorporated herein by reference)

2.21     Asset Purchase Agreement, dated as of July 16, 1998, by and among
         Robert Ortiz and John Tierney, iXL Enterprises, Inc. and iXL-New York,
         Inc. (originally filed as Exhibit 2.21 to the Company's Form S-1 (No.
         333-71937); incorporated herein by reference)

2.22     Agreement and Plan of Merger, dated as of July 22, 1998, by and
         between Image Communications, Inc., iXL Enterprises, Inc., iXL-DC,
         Inc., and the Image Shareholders. (originally filed as Exhibit 2.22 to
         the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

2.23     Share Purchase Agreement, dated as of July 28, 1998, by and among iXL
         Enterprises, Inc., iXL-Madrid, S.A., Campana New Media, S.L, The Other
         Media, S.L., the Campana Companies Beneficial Owners and the Campana
         Companies Shareholders. (originally filed as Exhibit 2.23 to the
         Company's Form S-1 (No. 333-71937); incorporated herein by reference)

2.24     Agreement and Plan of Merger, dated as of July 30, 1998, by and among
         Spinners Incorporated, iXL Enterprises, Inc., iXL-Boston, Inc. and the
         Spinners Shareholders. (originally filed as Exhibit 2.24 to the
         Company's Form S-1 (No. 333-71937); incorporated herein by reference)

2.25     Agreement and Plan of Merger, dated as of September 4, 1998, by and
         among iXL Enterprises, Inc., iXL-Richmond, Inc., Tekna, Inc., and the
         Tekna Shareholders. (originally filed as Exhibit 2.25 to the Company's
         Form S-1 (No. 333-71937); incorporated herein by reference)

2.26     Share Sale and Purchase Agreement, dated as of September 7,1998, by
         and between iXL Enterprises, Inc., Jens Bley, Manfred Ottenbreit,
         Stephan Balzer and Matthias Oelmann. (originally filed as Exhibit 2.26
         to the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

2.27     Agreement and Plan of Merger dated as of September 9, 1998 by and
         among iXL Enterprises, Inc., iXL-Boston, Inc., Larry Miller
         Productions, Inc., and the LMP Principals. (originally filed as
         Exhibit 2.27 to the Company's Form S-1 (No. 333-71937); incorporated
         herein by reference)

2.28     Agreement and Plan of Merger, dated as of September 10,1998, by and
         between iXL Enterprises, Inc., iXL, Inc., Exchange Place Solutions,
         Inc., and the Exchange Place Shareholder. (originally filed as Exhibit
         2.28 to the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

2.29     Agreement and Plan of Merger, dated as of September 18,1998, by and
         among iXL Enterprises, Inc., iXL-San Francisco Inc., Pantheon
         Interactive, Inc., and the Pantheon Shareholders. (originally filed as
         Exhibit 2.29 to the Company's Form S-1 (No. 333-71937); incorporated
         herein by reference)


                                      48
<PAGE>   52


2.30     Agreement and Plan of Merger, dated as of September 18,1998, by and
         among iXL Enterprises, Inc., iXL-Chicago, Inc., Two-Way
         Communications, L.L.C., and the TWC Members. (originally filed as
         Exhibit 2.30 to the Company's Form S-1 (No. 333-71937); incorporated
         herein by reference)

2.31     Agreement and Plan of Merger, dated as of September 22,1998, by and
         between iXL Enterprises, Inc., iXL-DC, Inc., NetResponse, L.L.C., and
         Next Century Communications Corp. (originally filed as Exhibit 2.31 to
         the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

2.32     Agreement and Plan of Merger, dated as of September 23,1998, by and
         among iXL Enterprises, Inc., iXL-Chicago, Inc., Ionix Development,
         Corporation, and the Ionix Shareholder. (originally filed as Exhibit
         2.32 to the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

2.33     Agreement and Plan of Merger, dated as of September 24,1998, by and
         between iXL Enterprises, Inc., iXL-Connecticut, Inc., Pequot Systems,
         Inc. and the Pequot Shareholders. (originally filed as Exhibit 2.33 to
         the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

2.34     Agreement and Plan of Merger, dated as of October 4, 1999, by and
         between iXL Enterprises, Inc., iXL-Massachusetts, Inc., and Tessera
         Enterprise Systems, Inc. (originally filed as Exhibit 2.1 to the
         Company's Form 8-K dated October 12, 1999; incorporated herein by
         reference)

3.1      Amended and Restated Certificate of Incorporation. (originally filed
         as Exhibit 3.1 to the Company's Form S-4 (No. 333-81731); incorporated
         herein by reference)

3.2      Amended and Restated Bylaws. (originally filed as Exhibit 3.2 to the
         Company's Form S-4 (No. 333-81731); incorporated herein by reference)

4.1      Form of Common Stock Certificate. (originally filed as Exhibit 4.1 to
         the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

4.2      Third Amended and Restated Stockholders' Agreement dated as of June 8,
         1999 among iXL Enterprises, Inc., Kelso Investment Associates V, L.P.,
         Kelso Equity Partners V, L.P., and CB Capital Investors, L.P.
         (originally filed as Exhibit 4.7 to the Company's Form S-4 (No.
         333-81731); incorporated herein by reference)

10.1     *Employment Agreement between Boxtop Interactive, Inc. and Kevin Wall,
         dated as of August 1, 1996, as amended, together with related
         agreements. (originally filed as Exhibit 10.1 to the Company's Form
         S-1 (No. 333-88847); incorporated herein by reference)

10.2     *Employment Agreement dated as of May 1, 1998 between iXL, Inc. and
         William C. Nussey. (originally filed as Exhibit 10.2 to the Company's
         Form S-1 (No. 333-71937); incorporated herein by reference)

10.3     *Employment Agreement dated August 17, 1998 between iXL, Inc. and
         David Clauson. (originally filed as Exhibit 10.3 to the Company's Form
         S-1 (No. 333-71937); incorporated herein by reference)


10.4     *Employment Agreement dated between iXL Enterprises, Inc. and
         Christopher M. Formant dated as of January 3, 2001 (originally filed
         as Exhibit 10.4 to the Company's Form 10-K filed on April 2, 2001,
         incorporated herein by reference)



10.5     *Employment Agreement dated between iXL Enterprises, Inc. and Michael
         J. Casey dated July 31, 2000. (originally filed as Exhibit 10.5 to the
         Company's Form 10-K filed on April 2, 2001, incorporated herein by
         reference)



10.6     Subscription Agreement dated January 9, 2001 between iXL Enterprises,
         Inc. and Christopher M. Formant together with related agreements.
         (originally filed as Exhibit 10.6 to the Company's Form 10-K filed on
         April 2, 2001, incorporated herein by reference)


10.7     *iXL Enterprises, Inc. 1996 Stock Option Plan, together with related
         agreements. (originally filed as Exhibit 10.5 to the Company's Form
         S-1 (No. 333-71937); incorporated herein by reference)


                                      49
<PAGE>   53


10.8     *iXL Enterprises, Inc. 1998 Non-Employee Stock Option Plan, together
         with related agreements. (originally filed as Exhibit 10.6 to the
         Company's Form S-1 (No. 333-71937); incorporated herein by reference)


10.9     *iXL Enterprises, Inc. 1999 Employee Stock Option Plan, as amended and
         restated. (originally filed as Exhibit 10.9 to the Company's Form 10-K
         filed on April 2, 2001 incorporated herein by reference)



10.10    *iXL Enterprises, Inc. 1999B Employee Stock Option Plan as amended and
         restated. (originally filed as Exhibit 10.10 to the Company's Form 10-K
         filed on April 2, 2001 incorporated herein by reference)


10.11    *iXL Enterprises, Inc. Tessera 1995 Stock Option Plan. (originally
         filed as Exhibit 10.73 to the Company's Form 10-K filed on February
         15, 2000; incorporated herein by reference)


10.12    *iXL Enterprises, Inc. 2000 Employee Stock Purchase Plan, as amended
         and restated. (originally filed as Exhibit 10.12 to the Company's
         Form 10-K filed on April 2, 2001 incorporated herein by reference)


10.13    Amended and Restated Registration Rights Agreement dated as of October
         28, 1999 among iXL Enterprises, Inc., Kelso Investment Associates V,
         L.P., Kelso Equity Partners V, L.P., and certain other stockholders of
         iXL Enterprises, Inc., together with the First Amendment to such
         agreement, dated November 2, 1999. (originally filed as Exhibit 10.53
         to the Company's Form S-1 (No. 333-88847); incorporated herein by
         reference)

10.14    Consulting Agreement dated as of February 5, 1999 by and between iXL
         Enterprises, Inc. and Kelso & Company. (originally filed as Exhibit
         10.9 to the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

10.15    Indemnification Agreement dated June 8, 1999 by and among iXL
         Enterprises, Inc. and the Indemnitees named therein. (originally filed
         as Exhibit 10.54 to the Company's Form S-4 (No. 333-81731);
         incorporated herein by reference)


10.16    Indemnity Agreement dated as of September 1, 2000 by and between iXL
         Enterprises, Inc. and the Indemnities named therein (originally filed
         as Exhibit 10.16 to the Company's Form 10-K filed on April 2, 2001
         incorporated herein by reference)



10.17    Indemnity Agreement dated as of February 1, 2001 by and between iXL
         Enterprises, Inc. and Christopher M. Formant (originally filed as
         Exhibit 10.17 to the Company's Form 10-K filed on April 2, 2001
         incorporated herein by reference)


10.18    Securities Purchase Agreement, dated January 15, 1999, among iXL
         Enterprises, Inc. and the Purchasers listed therein for the purchase
         of shares of iXL Enterprises, Inc.'s Class A Convertible Preferred
         Stock. (originally filed as Exhibit 10.47 to the Company's Form S-1
         (No. 333-71937); incorporated herein by reference)

10.19    Warrant Agreement, dated as of November 3, 1998, among iXL
         Enterprises, Inc. and General Electric Capital Corporation.
         (originally filed as Exhibit 10.49 to the Company's Form S-1 (No.
         333-71937); incorporated herein by reference)

10.20    Master Services Agreement dated April 7, 1999 by and between iXL-New
         York, Inc. and General Electric Capital Corporation. (originally filed
         as Exhibit 10.56 to the Company's Form S-1 (No. 333-71937);
         incorporated herein by reference)

10.21    Securities Purchase Agreement dated April 7, 1999 by and among iXL
         Enterprises, Inc., GE Capital Equity Investments, Inc., and the
         General Electric Pension Trust. (originally filed as Exhibit 10.59 to
         the Company's Form S-1 (No. 333-71937); incorporated herein by
         reference)

10.22    Warrant Agreement dated April 7, 1999 by and between iXL Enterprises,
         Inc. and GE Capital Equity Investments, Inc. (originally filed as
         Exhibit 10.57 to the Company's Form S-1 (No. 333-71937); incorporated
         herein by reference)

10.23    Letter Agreement for Marketing Services dated May 11, 1999 by and
         between iXL Enterprises, Inc. and GE Capital Equity Investments, Inc.
         (originally filed as Exhibit 10.66 to the Company's Form S-1 (No.
         333-71937); incorporated herein by reference)

10.24    Warrant Agreement dated June 8, 1999 by and between iXL Enterprises,
         Inc. and GE Capital Equity Investments, Inc. (originally filed as
         Exhibit 10.60 to the Company's Form S-4 (No. 333-81731); incorporated
         herein by reference)


                                      50
<PAGE>   54


10.25    U.S. Purchase Agreement dated as of June 2, 1999 by and among iXL
         Enterprises, Inc. and the underwriters listed therein. (originally
         filed as Exhibit 10.67 to the Company's Form S-4 (No. 333-81731);
         incorporated herein by reference)

10.26    International Purchase Agreement dated as of June 2, 1999 by and among
         iXL Enterprises, Inc. and the underwriters listed herein. (originally
         filed as Exhibit 10.68 to the Company's Form S-4 (No. 333-81731);
         incorporated herein by reference)

10.27    U.S. Purchase Agreement dated as of November 18, 1999 by and among iXL
         Enterprises, Inc. and the underwriters listed therein. (originally
         filed as Exhibit 10.70 to the Company's Form S-4 (No. 333-81731);
         incorporated herein by reference)

10.28    International Purchase Agreement dated as of November 18,1999 by and
         among iXL Enterprises, Inc. and the underwriters listed therein.
         (originally filed as Exhibit 10.71 to the Company's Form S-4 (No.
         333-81731); incorporated herein by reference)

10.29    Credit Agreement dated as of January 7, 2000 among iXL Enterprises,
         Inc., the lenders party hereto and The Chase Manhattan Bank, as
         Administrative Agent and First Union National Bank as Syndication
         Agent (originally filed as Exhibit 10.72 to the Company's Form 10-K
         filed on February 15, 2000; incorporated herein by reference),
         together with Amendment dated as of December 7, 2000 to Credit
         Agreement dated as of January 7, 2000, among iXL Enterprises, Inc.,
         the lenders party thereto, and The Chase Manhattan Bank, as
         administrative agent (originally filed as Exhibit 10.1 to the
         Company's Form 8-K filed on December 22, 2000; incorporated herein by
         reference)

10.30    Note Purchase Agreement dated December 19, 2000 by and among ProAct
         Technologies Corp., iXL Enterprises, Inc., iXL Ventures L.P., and iXL
         Ventures PHC, Inc., together with related transaction documents.
         (originally filed as Exhibit 10.2 to the Company's Form 8-K filed on
         December 22, 2000; incorporated herein by reference)


10.31    Stock Purchase Agreement dated December 28, 2000 by and between HPS
         America, Inc. and iXL Enterprises, Inc. (originally filed as Exhibit
         10.31 to the Company's Form 10-K filed on April 2, 2001 incorporated
         herein by reference)



10.32    Lease Agreement by and between 1600 Peachtree, LLC and iXL Enterprises,
         Inc. dated December 6, 1999 (originally filed as Exhibit 10.32 to the
         Company's Form 10-K filed on April 2, 2001 incorporated herein by
         reference)



10.33    Lease between TST 555/575 Market, LLC and iXL Enterprises, Inc. dated
         May 31, 2000 (originally filed as Exhibit 10.33 to the Company's Form
         10-K filed on April 2, 2001 incorporated herein by reference)



10.34    Subscription Agreements dated March 30, 2001 between iXL Enterprises,
         Inc. and each of Riverstone Group, LLC, Daniel L. Simon, Frank K.
         Bynum, Jr., James J. Connors II, David I. Wahrhaftig, Philip E. Berney,
         Frank J. Loverro, Barbara F. Alechman, Frank T. Nickell, Thomas R.
         Wall, IV and George E. Matelich. (originally filed as Exhibit 10.34 to
         the Company's Form 10-K filed on April 2, 2001 incorporated herein by
         reference)



21       Subsidiaries of the Company


23.1     Consent of PricewaterhouseCoopers LLP

(b).     The following Reports on Form 8-K were filed:



<TABLE>
<CAPTION>
     DATE OF REPORT      DATE FILED     ITEMS INCLUDED
    ------------------   ------------   --------------
    <S>                  <C>            <C>
    12/7/00........      12/22/00              5
    1/18/01........       1/19/01              9
    3/30/01........        4/4/01            5,7
    7/31/01........        8/2/01            5,7
</TABLE>




                                      51
<PAGE>   55


                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Atlanta, State of Georgia, on September 7, 2001.



                                    iXL Enterprises, Inc.,
                                    a Delaware corporation

                                    By: /s/ Michael J. Casey
                                       ----------------------------------------
                                       Name: Michael J. Casey
                                       Title: Chief Financial Officer
                                       (Principal Financial and
                                       Accounting Officer)

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
                SIGNATURE                                 TITLE

<S>                                             <C>
/s/  U. Bertram Ellis, Jr.                      Chairman of the Board
------------------------------------------
          U. Bertram Ellis, Jr.

/s/ Christopher M. Formant                      Chief Executive Officer and Director
------------------------------------------      (Principal Executive Officer)
         Christopher M. Formant

/s/ Jeffrey T. Arnold                           Director
------------------------------------------
            Jeffrey T. Arnold

/s/ Frank K. Bynum, Jr.                         Director
------------------------------------------
           Frank K. Bynum, Jr.

/s/ Thomas G. Rosencrants                       Director
------------------------------------------
          Thomas G. Rosencrants

/s/ Jeffrey C. Walker                           Director
------------------------------------------
            Jeffrey C. Walker

/s/ Thomas R. Wall, IV                          Director
------------------------------------------
           Thomas R. Wall, IV

/s/ Gary C. Wendt                               Director
------------------------------------------
              Gary C. Wendt

/s/ Michael J. Casey                            Chief Financial and Accounting Officer
------------------------------------------
             Michael J. Casey
</TABLE>


                                      52