Yahoo 2003 Annual Report Download - page 72

Restricted Stock. The 1995 Stock Plan permits the granting approximately $52 million remains to be amortized over
of restricted stock either alone, or in addition to, or in the remaining vesting periods of the options and restricted
tandem with other awards made by the Company. Right stock. If the fair value based method had been applied in
of repurchase on restricted stock grants generally lapses measuring stock compensation expense, the pro forma
upon meeting certain performance-based milestones, or effect on net income (loss) and net income (loss) per
passage of time, or a combination of both. Restricted share would have been as follows (in thousands, except
stock grants are generally measured at fair value on the per share amounts):
date of grant based on the number of shares granted and
Years Ended December 31,
the quoted price of our common stock. Such value is
2001 2002 2003
recognized as an expense over the corresponding service
period. Restricted stock awards that have performance cri- Net income (loss):
teria are subject to variable accounting treatment. For the As reported $ (92,788) $ 42,815 $ 237,879
Add: Stock compensation expense
year ended December 31, 2003, approximately 219,000
included in reported net income
shares of restricted stock were issued. (loss), net of related tax effects 9,096 5,041 12,987
Less: Stock compensation expense
Employee Stock Purchase Plan. The Company has an Employee determined under fair value based
Stock Purchase Plan (the ‘‘Purchase Plan’’), which provides method for all awards, net of
for the issuance of a maximum of approximately 8 million related tax effects (899,503) (487,959) (216,025)
shares of common stock. In February 2001, the Company Pro forma net income (loss) $(983,195) $(440,103) $ 34,841
amended the Purchase Plan to allow, among other things, Net income (loss) per share:
a 24-month offering period beginning with the July 1, As reported – basic $ (0.16) $ 0.07 $ 0.39
2001 offering period. Eligible employees can have up to Pro forma – basic $ (1.73) $ (0.74) $ 0.06
As reported – diluted $ (0.16) $ 0.07 $ 0.37
15 percent of their earnings withheld, up to certain maxi-
Pro forma – diluted $ (1.73) $ (0.74) $ 0.05
mums, to be used to purchase shares of the Company’s
common stock at certain plan-defined dates. The price of Diluted and pro forma diluted net loss per share for the
the common stock purchased under the Purchase Plan for year ended December 31, 2001 is computed excluding
offering periods prior to July 1, 2001 was equal to potential common shares of 27 million shares, as their
85 percent of the lower of the fair market value of the effect is anti-dilutive. Pro forma diluted net loss per share
common stock on the commencement date of each for the year ended December 31, 2002 is computed
six-month offering period or the specified purchase date. excluding potential common shares of 16 million shares,
The price of the common stock purchased under the Pur- as their effect is anti-dilutive.
chase Plan for offering periods on or subsequent to July 1,
2001 will be equal to 85 percent of the lower of the fair The weighted average fair value of options where the exer-
market value of the common stock on the commencement cise price equaled the market price on grant date was
date of each 24-month offering period or the specified $10.36, $9.99, and $18.43 for grants in the years ended
purchase date. During 2001, 645,000 shares were pur- December 31, 2001, 2002 and 2003, respectively. The
chased at prices from $9.25 to $16.99 per share. During weighted average fair value of options where the exercise
2002, 1,228,000 shares were purchased at prices from price was greater than the market price on grant date was
$9.25 to $12.55 per share. During 2003, 1,598,000 $9.87, $10.62, and $20.99 for grants in the years ended
shares were purchased at prices from $9.25 to $21.05 per December 31, 2001, 2002 and 2003, respectively. The
share. As of December 31, 2003, approximately 3 million weighted average exercise price of options where the exer-
shares were available under the Purchase Plan for future cise price was greater than the market price on grant date
issuance. was $46.48, $17.12, and $41.67 for grants in the years
ended December 31, 2001, 2002, and 2003, respectively.
Stock Based Compensation. The Company measures compen-
sation expense for its stock-based employee compensation Because additional stock options are expected to be
plans using the intrinsic value method. The Company granted each year, the pro forma disclosures are not repre-
recorded compensation expense in the amount of approxi- sentative of pro forma effects on reported financial results
mately $9 million, $8 million and $22 million, in 2001,
2002, and 2003, respectively. As of December 31, 2003,
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