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Table of Contents
Content Acquisition
Fiscal Year Ended January 31, FY 2010 to
FY 2011
$ Change
FY 2011 to
FY 2012
$ Change
2010 2011 2012
(in thousands)
Content acquisition $ 32,946 $ 69,357 $ 148,708 $ 36,411 $ 79,351
2011 Compared to 2012. Content acquisition expenses increased $79.4 million due to increased royalty payments driven by increased listener hours,
higher royalty rates due to scheduled rate increases and higher revenue.
2010 Compared to 2011. Content acquisition expenses increased $36.4 million reflecting higher royalty payments driven by a higher volume of listener
hours, higher royalty rates due to scheduled rate increases and higher revenue.
Other Income (Expense)
Fiscal Year Ended January 31, FY 2010 to
FY 2011
$ Change
FY 2011 to
FY 2012
$ Change
2010 2011 2012
(in thousands)
Interest income $62 $31 $59 $ (31) $28
Interest expense (898) (612) (616) 286 (4)
Other income (expense) (458) (728) (4,485) (270) (3,757)
Total other income (expense) $ (1,294) $ (1,309) $ (5,042) $ (15) $ (3,733)
2011 Compared to 2012. Total other income (expense) increased $3.7 million primarily driven by a $3.6 million increase in expenses due to the
increase in the fair value of our preferred stock warrants liability.
2010 Compared to 2011. Total other income (expense) remained largely flat as an expense increase of $0.6 million related to the change in the fair
value of our convertible preferred stock warrant liability was offset by $0.6 million due to lower interest charges on royalty payments in fiscal 2011 compared
to fiscal 2010.
Provision for Income Taxes
2011 Compared to 2012. The state income tax provision decreased by $59,000 from $134,000 to $75,000 as a result of generating tax losses during
fiscal year 2012.
2010 Compared to 2011. The state income tax provision increased by $0.1 million as a result of taxable income that was recognized in certain states.
The state taxable income was primarily generated as a result of certain states disallowing bonus depreciation and the utilization of net operating loss
carryovers.
Liquidity and Capital Resources
As of January 31, 2012 we had cash, cash equivalents and short-term investments totaling $90.6 million, which consisted of cash and money market
funds held at major financial institutions, debt instruments of the U.S. government and its agencies, commercial paper and investment-grade corporate debt
securities. In connection with our IPO in June 2011, we received aggregate proceeds of $94.5 million which included the exercise of the underwriters'
overallotment option, net of underwriters' discounts and commissions but before deducting offering expenses of $3.9 million. We used approximately $31.0
million of these proceeds to pay accrued dividends on our preferred stock, which was converted to common stock in connection with the IPO. Prior to our
IPO, we financed our operations primarily through private sales of equity and, to a lesser extent, from borrowings. Our principal uses of cash during the fiscal
year ending January 31, 2012 were funding our operations, debt service payments, as described below, and capital expenditures.
50