TiVo 2005 Annual Report Download - page 54

Table of Contents
General and administrative expenses consist primarily of employee salaries and related expenses for executive, administrative, legal, accounting,
information technology systems, customer operations personnel, facility costs, and professional fees. General and administrative expenses, as a percentage of
net revenues increased 9% for the fiscal year ended January 31, 2006 as compared to the prior fiscal year, and in terms of absolute dollars increased 129%,
compared to the prior fiscal year. This increase was largely due to increased legal and consulting expenses in connection with our ongoing litigation. For the
fiscal year ended January 31, 2006 legal and consulting expenses increased $14.5 million largely due to ongoing litigation. Salaries and wages expense
increased by $4.0 million for the fiscal year ended January 31, 2006 due to an increase in regular headcount of 13 personnel, costs associated with transition
arrangements of highly compensated executives and adoption of the non-executive bonus plan as compared to the prior fiscal year. General and administrative
expenses for the fiscal year ended January 31, 2005 increased 2% compared to the same prior-year period. The increase was primarily due to salaries and
wages that increased 16%, or $1.1 million compared to the same prior-year period primarily due to an increase in accounting and information system
headcount of 20 employees. In connection with our ongoing lawsuits, we have expensed $1.3 million for the fiscal year ended January 31, 2005 for legal
expenses in connection with the Sony patent infringement case. We expect to continue to incur legal expenses for all pending lawsuits, including material
amounts related to the EchoStar Communications patent infringement cases in the future.
Interest income. Interest income resulting from cash and cash equivalents held in interest bearing accounts and short-term investments for the fiscal
year ended January 31, 2006 was $3.1 million, or approximately double the $1.5 million from the prior fiscal year. The increase was a result of an increase to
3.3% in the average interest rate earned in the fiscal year ended January 31, 2006 from 1.4% in the prior fiscal year.
Interest income resulting from cash and cash equivalents held in interest bearing accounts and short-term investments for the fiscal year ended
January 31, 2005 was approximately triple the $498,000 of the prior fiscal year. The increase was a result of significantly higher levels of cash during the
year.
Interest expense and other. Interest expense and other for the fiscal year ended January 31, 2006 was $14,000, as compared to $5.5 million from the
prior fiscal year. This decrease was largely due to no outstanding convertible notes payable during fiscal year 2006.
For fiscal year ended January 31, 2005 and 2004, interest expense and other primarily consists of cash and non-cash charges related to interest expense
paid for coupon interest expense on the convertible notes and interest expense paid to our consumer electronics manufacturers according to negotiated
deferred payment schedules. Interest expense and other for the fiscal year ended January 31, 2005 decreased 43% from the prior fiscal year primarily due to
fewer convertible notes payable that were due interest payments.
Fiscal Year Ended January 31,
2006 2005 2004
(In thousands, except percentages)
Total cash interest expense 14 608 1,443
Total non-cash interest expense — 4,854 8,139
Total interest expense 14 5,462 9,582
Total other expenses — (3) 5
Total interest expense and other 14 5,459 9,587
Change from same prior-year period -100% -43% -65%
Provision for income taxes. Income tax expense for the fiscal year ended January 31, 2006, 2005, and 2004 was primarily due to franchise taxes paid to
various states and foreign withholding taxes.
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