TiVo 2003 Annual Report Download - page 58

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Table of Contents
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over estimated useful lives as follows:
Furniture and fixtures 3-5 years
Computer and office equipment 3-5 years
Lab equipment 3 years
Leasehold improvements
The shorter of 7 years or the
life of the lease
Capitalized software 1-5 years
Maintenance and repair expenditures are expensed as incurred.
Capitalized Software
Costs of computer software to be sold, leased or otherwise marketed have been accounted for in accordance with SFAS No. 86, Accounting for the
Costs of Software to Be Sold, Leased, or Otherwise Marketed. The Company achieves technological feasibility upon development of a working model. The
period between the development of a working model and the release of the final product to its customers is short and, therefore, the development costs
incurred during this short period are immaterial and, as such, are not capitalized. The software acquired in connection with the acquisition of Strangeberry Inc.
had achieved technological feasibility as of the date of the acquisition, as a working model had existed for this product.
Deferred Rent and Other Long-Term Liabilities
Deferred rent and other long-term liabilities consist primarily of accrued rent resulting from the recognition of the long-term portion of rent and related
property taxes and insurance for the Company's vacant sales office (See Note 16. Commitments and Contingencies).
Revenue Recognition and Deferred Revenue
During the fiscal years ended January 31, 2004, 2003, and 2002 the Company generated service revenues from fees for providing the TiVo service to
consumers. The Company also generated technology revenues from providing licensing and engineering professional services to other entities that were
creating products that provide DVR functionality. In addition, in an effort to increase its subscription growth, the Company manufactured and distributed
TiVo branded DVRs. This effort resulted in revenues from the sale of hardware products that enable the TiVo service.
Revenues (before rebates, revenue share, and other payments to channel) for the fiscal years ended January 31, 2004, 2003, and 2002, respectively,
were as follows:
Fiscal Year Ended January 31,
2004
2003
2002
(In thousands)
Revenues
Service revenues $ 61,560 $ 39,261 $ 19,297
Technology revenues 15,797 20,909 100
Hardware revenues 72,882 45,620 —
Total revenues $ 150,239 $ 105,790 $ 19,397
Revenues from advertising and research services included in service revenues were not material during these periods. Two different customers, both
related parties, generated $5.8 million and $12.7 million of technology revenues, or 4% and 12% of total revenues for the fiscal years ended January 31, 2004
and 2003, respectively. For the fiscal years ended January 31, 2004 and 2003, one customer generated $28.3 million and $22.7 million of hardware revenues,
or 19% and 21% of total revenues, respectively.
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