TiVo 2007 Annual Report Download - page 50

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Table of Contents
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, "Noncontrolling Interests in Consolidated Financial
Statements, an amendment of ARB No. 51" (SFAS 160). The standard changes the accounting for noncontrolling (minority) interests in consolidated financial
statements including the requirements to classify noncontrolling interests as a component of consolidated stockholders' equity, to identify earnings attributable
to noncontrolling interests reported as part of consolidated earnings, and to measure gain or loss on the deconsolidated subsidiary based upon the fair value of
the noncontrolling equity investment. Additionally, SFAS 160 revises the accounting for both increases and decreases in a parent's controlling ownership
interest. SFAS 160 is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The adoption of SFAS 160 is not expected
to have a significant impact on TiVo's consolidated financial statements or financial position.
In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised), "Business Combinations" (SFAS 141R). The
standard changes the accounting for business combinations by requiring that an acquiring entity measure and recognize identifiable assets acquired and
liabilities assumed at the acquisition date fair value with limited exceptions. The changes include the treatment of acquisition-related transaction costs, the
valuation of any noncontrolling interest at acquisition date fair value, the recording of acquired contingent liabilities at acquisition date fair value and the
subsequent re-measurement of such liabilities after the acquisition date, the recognition of capitalized in-process research and development, the accounting for
acquisition-related restructuring cost accruals subsequent to the acquisition date, and the recognition of changes in the acquirer's income tax valuation
allowance. SFAS 141R is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The adoption of SFAS 141R is not
expected to have a significant impact on Company's consolidated financial statements or financial position, but the nature and magnitude of the specific
effects will depend upon the nature, terms and size of the acquisitions the Company consummates after the effective date.
Results of Operations
Net Revenues. Our net revenues for the fiscal years ended January 31, 2008, 2007, and 2006 as a percentage of total net revenues were as follows:
Fiscal Year Ended January 31,
2008 2007 2006
(In thousands, except percentages)
Service revenues $ 211,496 78% $ 198,924 77% $ 167,194 85%
Technology revenues $ 19,382 7% $ 18,409 7% $ 2,797 1%
Hardware revenues $ 41,798 15% $ 41,588 16% $ 28,138 14%
Net revenues $ 272,676 100% $ 258,921 100% $ 198,129 100%
Change from same prior-year period 5% 31% 15%
Service Revenues. The increase in Service revenues from fiscal year 2007 to 2008 was due to net additions of TiVo-Owned subscriptions, which were
generally added at a higher service plan rates during fiscal years 2008 and 2007. During this fiscal year ended January 31, 2008, we achieved higher
TiVo-Owned average revenues per subscription as compared to the same prior year. Additionally, we recognized $1.1 million of DIRECTV revenues
deferred from the fiscal year ended January 31, 2007. These fees were previously deferred for DIRECTV's use on development work to enhance their
subscriber's TiVo user experience, but expired unused on January 31, 2008. These increases were offset by MSOs/Broadcasters-related service revenues
which decreased from the prior year by approximately $4.8 million due primarily to churn in our DIRECTV subscription base, which is a trend we
expect to continue. The increase in service revenue was also partially offset by our decision to extend the period we use to recognize product lifetime
subscriptions, as described in our Critical Accounting Estimates under "Recognition Period for Product Lifetime Subscriptions Revenues". This change
resulted in a reduction of service revenues of $2.5 million for the quarter and fiscal year ended January 31, 2008. The increase in Service revenues from
fiscal year ended January 31, 2006 as compared to fiscal year ended January 31, 2007 was primarily due to the year- over-year growth in our TiVo-
Owned subscription base. During the fiscal year ended January 31, 2007 we added 235,000 TiVo-Owned net subscriptions bringing the total installed
base to over 4.4 million as of January 31, 2007.
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