TiVo 2006 Annual Report Download - page 98

Table of Contents
Proforma information required under SFAS No. 123 and SFAS 148 for periods prior to fiscal year 2007 as if the Company had applied the fair value
recognition provisions of SFAS No. 123 to options granted under the Company's equity incentive plans, was as follows:
Fiscal Year Ended January 31,
2006 2005
Net loss, as reported $ (36,999) $ (79,842)
Add back: stock-based compensation expense recognized, net of related tax effects 385 1,056
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)
Net loss, pro forma $ (47,254) $ (90,169)
Basic and diluted loss per common share, as reported $ (0.44) $ (0.99)
Basic and diluted loss per common share, pro forma $ (0.56) $ (1.12)
SFAS No. 123R requires the use of a valuation model to calculate the fair value of stock-based awards. The Company has elected to use the Black-
Scholes option-pricing model, which incorporates various assumptions including volatility, expected life, and interest rate. The expected volatility is based on
a combination of historical volatility of the Company's common stock and implied volatility in market traded options on the Company's common stock. The
expected life of an award is based on the simplified calculation of expected life pursuant to Staff Accounting Bulletin No. 107 "Share Based Payments". The
interest rate is based on the average of U.S. Treasury yield curve for the expected life of the award.
The assumptions used for the twelve months ended January 31, 2007, 2006, and 2005, respectively, and the resulting estimates of weighted-average fair
value per share of options and ESPP shares granted during those periods are as follows:
ESPP Stock Options
Fiscal Year Ended January 31,
2007 2006 2005 2007 2006 2005
Expected life (in years) 0.57 0.40 0.50 6.25 4.00 3.60
Volatility 55% 62% 58% 81% 61% 54%
Average risk free interest rate 4.96% 3.54% 1.76% 4.81% 3.85% 3.31%
Dividend Yield 0% 0% 0% 0% 0% 0%
Weighted-average fair value during the period $ 1.95 $ 2.03 $ 2.32 $ 4.96 $ 2.38 $ 2.92
Prior to the adoption of SFAS 123R, the Company presented deferred compensation as a separate component of stockholder' equity, In accordance with
the provisions of SFAS 123R, on February 1, 2006, the Company reclassified the balance in deferred compensation to additional paid-in capital on the
balance sheet.
15. INCOME TAXES
Income tax provision was $52,000, $64,000 and $134,000 in fiscal years 2007, 2006, and 2005, respectively, due to state income taxes and foreign
withholding taxes paid in Korea and Japan. The income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 35%
to pretax loss as a result of the following:
Fiscal Year Ended January 31,
2007 2006 2005
(In thousands)
Federal statutory rate of 35% $ (16,696) $ (12,927) $ (27,898)
State taxes 41 38 21
Foreign withholding tax 11 26 113
Net operating loss and temporary differences for which no tax benefit was realized 13,540 12,766 26,470
Stock Based Compensation 3,074 — —
Non-deductible expenses and other 82 161 1,428
Total tax expense $ 52 $ 64 $ 134
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