Support.com 2011 Annual Report Download - page 49

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For the years ended December 31, 2011, 2010 and 2009, 2.9 million, 941,000 and 11.4 million outstanding options were excluded from the
computation of diluted net loss per share, respectively, since their effect would have been anti-dilutive.
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The components of accumulated other comprehensive loss relate entirely to accumulated foreign currency translation losses and unrealized
gains and losses on investments. Accumulated currency translation losses were $1.4 million and $1.2 million as of December 31, 2011 and 2010,
respectively, and accumulated unrealized gains (losses) on investments were $(0.3) million and $(0.1) million as of December 31, 2011 and 2010,
respectively.
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Comprehensive net income/loss includes the impact of foreign currency translation adjustments and changes in the fair value of available-for-
sale securities. The following are the components of comprehensive loss (in thousands):
  
        
Net loss $ (18,640 ) $ (18,067 ) $ (14,577 )
Net unrealized
gain/(loss) on
available-for-sale
securities (185 ) (66 ) 1,518
Foreign currency
translation loss (182 ) (32 ) (210 )
Total comprehensive
loss $ (19,007 ) $ (18,165 ) $ (13,269 )
The amounts noted in the table above are shown before taking into account the related income tax impact. The income tax effect allocated to
each component of other comprehensive income for each of the periods presented is not significant.
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We apply the provisions of ASC 718,  which requires the measurement and recognition of compensation expense for all
stock-based payment awards, including grants of stock and options to purchase stock, made to employees and directors based on estimated fair values.
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Valuation and Attribution Method: We estimate the fair value of stock options granted using the option pricing model.
Stock options vest on a graded schedule; however we recognize the expense on a straight-line basis over the requisite service period of the entire
award, net of estimated forfeitures and subject to the minimum expense requirements of ASC 718. These limitations require that on any date the
compensation cost recognized is at least equal to the portion of the grant-date fair value of the award that is vested at that date.
Risk-free Interest Rate: We base our risk-free interest rate on the yield currently available on U.S. Treasury zero coupon issues for the expected
term of the stock options.
Expected Term: Our expected term represents the period that our stock options are expected to be outstanding and is determined based on
historical experience of similar stock options considering the contractual terms of the stock options, vesting schedules and expectations of future
employee behavior.
Expected Volatility: Our expected volatility represents the amount by which the stock price is expected to fluctuate throughout the period that
the stock option is outstanding. Historically, we have based our expected volatility on historical company data. However, given the focus and overall
nature of our business changed upon the sale of our Enterprise business, we no longer believe our historical volatility to be reflective of our expected
volatility going forward. Therefore, in 2010 we adopted a methodology which combines available Company-specific volatility for the period
following the sale of our Enterprise business with the volatility of a peer group. The relative weight given to Company-specific volatility increases
each reporting period, while the relative weighting for our peer group’s volatility decreases. Given the expected life of our stock grants, we expect
company-specific volatility to wholly account for our volatility estimates beginning in 2013.
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