NOTES TO CONSOLIDATED FINANCIAL STATEMENTS disclosures, the estimated fair value of the options is amortized over the vesting period, typically four years, and the estimated fair value of the stock purchases is amortized over the six-month purchase period: 2001 2002 2003 Net income (loss) attributable to common shareholders (in thousands)  —As reported $(20,375) $ (83,466) $(170,017) Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects (25,654) (21,734) (14,566) Pro forma $(46,029) $(105,200) $(184,583) Net income (loss) attributable to common shareholders per share —Basic and diluted— As reported $ (0.68) $ (2.58) $ (4.42) Pro forma (1.54) (3.26) (4.80) The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used for grants during the applicable period: 2001 2002 2003 Risk free interest rates 5.14-6.05% 3.91-4.39% 2.78-4.15% Expected dividend yield None None None Expected life 5 Years 5 Years 5 Years Expected volatility 101% 72% 125% Weighted average fair value per option $16.97 $8.00 $2.63 (q) Income Taxes Deferred income taxes are recognized based on temporary differences between the financial statement and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using the statutory tax rates and laws expected to apply to taxable income in the years in which the temporary differences are expected to reverse. Valuation allowances are provided against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the timing of the temporary differences becoming deductible. Management considers, among other available information, scheduled reversals of deferred tax liabilities, projected future taxable income, and other matters in making this assessment. Income taxes are provided on undistributed earnings of foreign subsidiaries where such earnings are expected to be remitted to the U.S. parent company. The Company determines annually the amount of unremitted earnings of foreign subsidiaries to invest indefinitely in its non-U.S. operations. Unrecognized provisions for taxes on undistributed earnings of foreign subsidiaries, which are considered permanently invested, are not material to the Company's consolidated financial position or results of operations. (r) Legal Fees The Company accrues estimated future legal fees associated with outstanding litigation. Liabilities for loss contingencies arising from claims, assessments, litigation and other sources are recorded when it is probable that a liability has been incurred and the amount of the claim assessment or damages can be reasonably estimated. 43