TiVo 2005 Annual Report Download - page 72

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Table of Contents
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 ("ESPP") for the fiscal years ended January 31, 2006, 2005, and 2004:
Fiscal Year Ended January 31,
2006 2005 2004
(In thousands, except per share data)
Net loss, as reported $ (34,398) $ (79,842) $ (32,018)
Add back: stock based compensation expense (benefit) recognized, net of related tax effects 386 1,056 173
Pro forma effect of stock based compensation expense determined under the fair value method for all awards, net of related
tax effects (10,640) (11,383) (14,368)
Net loss, proforma $ (44,652) $ (90,169) $ (46,213)
Net loss, per common share basic and diluted, as reported $ (0.41) $ (0.99) $ (0.48)
Net loss, per common share basic and diluted, proforma $ (0.53) $ (1.12) $ (0.69)
Stock-based employee compensation expense for fiscal year ended January 31, 2006, 2005 and 2004 was $386,000, $1.1 million, and $173,000,
respectively, was recorded for stock options issued to employees below market price of the Company's stock on the respective dates, resulting in expense
calculated using intrinsic method of valuation.
The fair value of stock options issued to employees and non-employee directors and ESPP offerings were estimated using the Black Scholes Option-
pricing model assuming no expected dividends and the following weighted average assumptions:
ESPP Stock Options
Fiscal year ended January 31,
2006 2005 2004 2006 2005 2004
Weighted Average Assumptions
Expected term (in years) 0.4 0.5 0.5 4.0 3.6 4.0
Volatility 62% 58% 52% 61% 54% 51%
Average risk free interest rate 3.54% 1.76% 1.38% 3.85% 3.31% 2.45%
Comprehensive Loss
The Company has no material components of other comprehensive income or loss and, accordingly, the comprehensive loss is the same as the net loss
for all periods presented.
Fair Value of Financial Instruments
Carrying amounts of certain of the Company's financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and
accrued expenses approximate their fair value because of their short maturities. Available-for-sale marketable securities are reported at their fair value based
on quoted market prices.
Business Concentrations and Credit Risk
Financial instruments that potentially subject the Company to a concentration of credit risk principally consist of cash, cash equivalents, short-term
investments, and trade receivables. The Company currently invests the majority of its cash in money market funds and maintains them with several financial
institutions with high credit ratings. The Company also invests in debt instruments of the U.S. government and its agencies and corporate issuers with high
credit ratings. As part of its cash management process, the Company performs periodic evaluations of the relative credit ratings of these financial institutions.
The Company has not experienced any credit losses on its cash, cash equivalents, or short-term investments.
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