TiVo 2003 Annual Report Download - page 31

Table of Contents
consolidate with or into another person or entity; create, incur, assume or be liable for indebtedness (other than certain types of permitted indebtedness,
including existing and subordinated debt and debt to trade creditors incurred in the ordinary course of business); create, incur or allow any lien on any of our
property or assign any right to receive income except for certain permitted liens; make investments; pay dividends; or make distributions; and contains a
requirement that we maintain certain financial ratios. At January 31, 2004, we were in compliance with these covenants and had zero amounts outstanding
under the line of credit. The line of credit terminates and all borrowings are due on June 30, 2004, but may be terminated earlier by us without penalty upon
written notice and prompt repayment of all amounts borrowed.
Contractual Obligations
As of January 31, 2004, we had contractual obligations to make the following cash payments:
Payments by Period
Contractual Obligations
Total
Less than
1 year 1-3 years 4-5 years
Over
5 years
(In thousands)
Operating leases $ 10,069 $ 3,233 $ 6,836 $ — —
Purchase obligations 9,307 9,307 — — —
Long-term convertible notes payable at face value 10,450 — 10,450 — —
Coupon interest on long-term convertible notes payable 2,249 731 1,518 — —
Total contractual cash obligations $ 32,075 $ 13,271 $ 18,804 $ — $ —
Other commercial commitments as of January 31, 2004, were as follows:
Total
Less than
1 year 1-3 years 4-5 years
Over
5 years
(In thousands)
Standby letter of credit $ 477 $ — $ 477 $ — $ —
Total commercial commitments $ 477 $ — $ 477 $ — $ —
Factors That May Affect Future Operating Results
The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we
currently deem immaterial may also affect our business.
We have incurred significant net losses and may never achieve profitability.
We have incurred significant net losses and have had substantial negative cash flows. During the fiscal years ended January 31, 2004, 2003, and 2002
our net loss attributable to common stockholders was ($32.0) million, ($82.3) million, and ($160.7) million, respectively. As of January 31, 2004, we had an
accumulated deficit of ($577.3) million. We expect to incur significant operating expenses over the next several years in connection with the continued
development and expansion of our business. As a result, we expect to continue to incur net losses for the foreseeable future. The size of these net losses
depends in part on our subscription revenues and on our expenses. We will need to generate significant additional revenues to achieve profitability.
Consequently, we may never achieve profitability, and even if we do, we may not sustain or increase profitability on a quarterly or annual basis in the future.
We face intense competition from a number of sources, which may impair our revenues, increase our subscription acquisition cost, and hinder
our ability to generate new subscriptions.
The DVR market is rapidly evolving and we expect to face significant competition. Moreover, the market for in-home entertainment is intensely
competitive and subject to rapid technological change. As a result of this intense competition, we could incur increased subscription acquisition cost that
could adversely affect our ability to reach sustained profitability in the future. If new technologies render the DVR market obsolete, we may be unable to
generate sufficient revenue to cover our expenses and obligations.
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