Creative 2004 Annual Report Download - page 35

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33
Creative and Subsidiary Pro Forma Disclosures
The fair value of the purchase rights under the Creative employee share purchase plan and stock option plan is estimated at the date
of the grant using the Black-Scholes model based on the following assumptions:
Fiscal 2004 Fiscal 2003 Fiscal 2002
Volatility 35% 45% 60%
Risk-free interest rates
Share purchase plan 2.78% to 3.26% 2.18% to 3.26% 2.18% to 5.16%
Stock options 1.24% to 2.27% 1.27% to 3.01% 2.16% to 5.16%
Dividend yield 2.0% 3.0% 2.5%
Expected lives:
Share purchase plan 6 months 6 months 6 months
Stock options 0.01 years after vest date 0.01 years after vest date 0.01 years after vest date
Years ended June 30
2004 2003 2002
Weighted average fair value of stock options granted:
Stock options:
At market $ 2.06 $ 1.70 $ 1.53
Below market $ – $ – $ 3.74
The following table illustrates the effect on net income and earnings per share if the company had applied the fair value recognition
provisions of SFAS 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation:
(In US$’000, except per share data) Years ended June 30
2004 2003 2002
Net income (loss), as reported $ 134,247 $ 23,377 $ (19,727)
Less: Total stock-based employee compensation expense
determine under fair value based method for all awards,
net of related tax effects (2,949) (7,309) (6,031)
Add: Stock-based employee compensation
expense included in reported net income,
net of related tax effects 2,256 3,703 2,295
Pro forma net income (loss) $ 133,554 $ 19,771 $ (23,463)
Earnings (loss) per share:
Basic – as reported $ 1.66 $ 0.30 $ (0.27)
Basic – pro forma $ 1.66 $ 0.25 $ (0.32)
Diluted – as reported $ 1.61 $ 0.29 $ (0.27)
Diluted – pro forma $ 1.60 $ 0.25 $ (0.32)