TiVo 2003 Annual Report Download - page 61

Table of Contents
year, 108,382 shares of restricted stock were granted to employees who were former employees of Strangeberry Inc resulting in $925,000 of deferred
compensation. Total deferred compensation of $1.4 million was recorded as a result of the stock options granted at below fair market value, stock awards and
restricted stock granted during the year, which is being amortized using the accelerated method over a two-year period. Stock based compensation expense
recognized for the year was $173,000.
In December 2002, the FASB issued Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation – Transition
and Disclosure an Amendment of FASB Statement No. 123" (SFAS No. 148). SFAS No. 148 provides alternative methods of transition for companies
making a voluntary change to fair value-based accounting for stock-based employee compensation. TiVo continues to account for its stock option plans under
the intrinsic value recognition and measurement principles of APB Opinion No. 25, and related Interpretations. Effective for interim periods beginning after
December 15, 2002, SFAS No. 148 also requires disclosure of pro-forma results on a quarterly basis as if the Company had applied the fair value recognition
provisions of SFAS No. 123.
The following table illustrates the effect on the Company's net loss and basic and diluted loss per share as if the Company had applied the fair value
recognition provisions of SFAS No. 123, as amended, to options granted under the Company's stock option plans and under the Company's Employee Stock
Purchase Plan for the fiscal years ended January 31, 2004, 2003, and 2002:
Fiscal Year Ended January 31,
2004
2003 2002
(In thousands, except per share data)
Net loss attributable to common stockholders, as reported $(32,018) $(82,261) $(160,723)
Add back: stock based compensation expense recognized, net of related tax effects 173 503 1,247
Pro forma effect of stock based compensation expense determined under the fair value method for all awards, net of related
tax effects (14,368) (15,501) (15,789)
Net loss attributable to common stockholders, pro forma $(46,213) $(97,259) $(175,265)
Basic and diluted loss per common share, as reported $ (0.48) $ (1.61) $ (3.74)
Basic and diluted loss per common share, pro forma $ (0.69) $ (1.90) $ (4.08)
In addition, option-pricing models require the input of highly subjective assumptions, including the option's expected life and the price volatility of the
underlying stock. See Note 10. " Equity Incentive Plans" for a discussion of the assumptions used in the option-pricing model and estimated grant date fair
value of employee stock options.
Income Taxes
The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes."
The Company assesses the likelihood that deferred tax assets will be recovered from future taxable income. To the extent the Company believes that, based
upon all the available positive and negative evidence, it is not likely that the Company will realize the benefit of a deferred tax asset in the future, the
Company establishes a valuation allowance. The Company considers future taxable income and ongoing prudent and feasible tax planning strategies in
assessing the amount of the valuation allowance. Adjustments may be required in the future if it is determined that the amount of deferred tax assets to be
realized is greater or less than the amount recorded. The Company has established valuation allowances on its net deferred tax assets.
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