TiVo 2007 Annual Report Download - page 57

Table of Contents
Operating Lease Obligations The Company's corporate headquarters consists of two buildings located in Alviso, California, which are used for
administrative, sales and marketing, customer service, and product research and development activities. Additionally, we have sales offices in New York City,
New York and Chicago, Illinois.
Our other commercial commitment as of January 31, 2008, was our standby letter of credit issued to the landlord of our Alviso, California offices in the
amount shown below:
Total
Less
than 1
year 1-3 years 3-5 years
Over 5
years
(In thousands)
Standby letter of credit $ 402 $ 75 $ 327 $ — $ —
Total contractual obligations $ 402 $ 75 $ 327 $ — $ —
Off-Balance Sheet Arrangements
As part of our ongoing business, we generally do not engage in transactions that generate relationships with unconsolidated entities or financial
partnerships, such as entities often referred to as structured finance or special purpose entities. Accordingly, our operating results, financial condition, and
cash flows are not generally subject to off-balance sheet risks associated with these types of arrangements. We did not have any material off-balance sheet
arrangements at January 31, 2008.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. We do not use derivative financial instruments in
our investment portfolio and we conduct transactions in U.S. dollars. We currently invest the majority of our cash in money market funds and maintain them
with a financial institutions with a high credit rating. We also invest in commercial paper and auction rate securities. We do not invest in mortgage backed
securities. As part of our cash management process, we perform periodic evaluations of the relative credit ratings of issuers of these securities. We have not
experienced any credit losses on our cash, cash equivalents, or short-term investments. Our investment portfolio only includes instruments with original
maturities of less than one year (with the exception of auction rate securities as discussed below) held for investment purposes, not trading purposes. Due to
the short-term nature of our cash equivalents and short-term investments, we do not anticipate any material effect on our portfolio due to fluctuations in
interest rates.
As of January 31, 2008, we held approximately $16.6 million of investments, classified as current assets, with an auction reset feature (auction rate
securities). In February 2008 we liquidated our investments in auction rate securities except for $5.0 million of our auction rate securities that were part of
failed auctions from February 14, 2008 through March 31, 2008. We believe we will be able to liquidate this remaining investment in auction rate securities
without material loss within the next year, primarily due to the government guarantee of the underlying securities. Based on our expected operating cash
flows, and our other sources or cash, we do not anticipate the potential lack of liquidity on these investments will affect our ability to execute our current
business plan.
The table below presents principal amounts and related weighted average interest rates for our cash and cash equivalents and short-term investments as
of January 31, 2008 and 2007, respectively.
Twelve Months Ended January 31,
2008 2007
(In thousands, except percentages)
Cash and cash equivalents and short-term investments (in thousands) $ 99,106 $ 128,765
Average interest rate 5.26% 4.97%
Although payments under the operating lease for our facility are tied to market indices, we are not exposed to material interest rate risk associated with
the operating lease.
55