Rosetta Stone 2014 Annual Report Download - page 96
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Table of Contents
German Federal Supreme Court has denied Rosetta Stone GmbH's further appeal but has not yet issued its written decision denying further appeal.
Rosetta Stone GmbH expects that damages will be awarded to Langenscheidt based on the finding of trademark infringement. However, at this point,
the Company cannot predict the amount of damages which Langenscheidt will be awarded nor when any damages will be required to be paid. The Company
has concluded that Rosetta Stone GmbH will be required to pay court costs and opposing counsel fees and Langenscheidt has filed a Motion for Attorneys’
Fees to which Rosetta Stone GmbH has objected. The Company has recorded a liability of $0.3 million as of December 31, 2014 related to the court costs and
opposing counsel fees. The Company will continue to incur legal fees and other costs in connection with the resolution of this case.
From time to time, the Company has been subject to various claims and legal actions in the ordinary course of its business. The Company is not
currently involved in any legal proceeding the ultimate outcome of which, in its judgment based on information currently available, would have a material
impact on its business, financial condition or results of operations.
The Company is managed in three operating segments—North America Consumer, ROW Consumer and Global Enterprise & Education. These
segments also represent the Company's reportable segments. Segment contribution includes segment revenue and expenses incurred directly by the segment,
including material costs, service costs, customer care and coaching costs, sales and marketing expenses. The Company does not allocate expenses beneficial
to all segments, which include certain general and administrative expenses, facilities and communication expenses, purchasing expenses and manufacturing
support and logistic expenses. These expenses are included in the unallocated expenses section of the table presented below. Revenue from transactions
between the Company's operating segments is not material.
With the exception of goodwill, the Company does not identify or allocate its assets by operating segment. Consequently, the Company does not
present assets or liabilities by operating segment.
In connection with the reorganization and realignment of the Company's business focus (as discussed in Note 21), management is evaluating the way in
which it will manage the business on a prospective basis. Accordingly, the Company's operating segments, reportable segments and reporting units may
change in the future.
F-39