TiVo 2009 Annual Report Download

Download and view the complete annual report

Please find the complete 2009 TiVo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 159

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159

TIVO INC (TIVO)
10-K
Annual report pursuant to section 13 and 15(d)
Filed on 03/31/2010
Filed Period 01/31/2010

Table of contents

  • Page 1
    TIVO INC (TIVO) 10-K Annual report pursuant to section 13 and 15(d) Filed on 03/31/2010 Filed Period 01/31/2010

  • Page 2
    ... on July 31, 2009, the last business day of the registrant's most recently completed second fiscal quarter, was approximately $912.1 million (based on the closing sales price of the registrant's common stock on that date as reported in the Nasdaq Global Market). Shares of the registrant's common...

  • Page 3
    DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates by reference certain information from the registrant's definitive proxy statement (the "Proxy Statement") for the 2010 Annual Meeting of Shareholders to be filed on or before May 31, 2010.

  • Page 4
    ... Issuer Purchases of Equity Securities Item 6. Selected Financial Data Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes...

  • Page 5
    ... expected future service and technology revenues and future TiVo-Owned and multiple system operators (MSOs)/ Broadcasters average revenue per subscription; our expectations of the growth in the future digital video recorder ("DVR") market generally, and the high definition market specifically; our...

  • Page 6
    ... related to changes in the cost of our hardware revenues and the reasons for changes in the volume of DVRs sold to retailers; our ability to fund operations, capital expenditures, and working capital needs during the next year; our ability to raise additional capital through the financial markets...

  • Page 7
    ...retailers and direct through our on-line store at TiVo.com. Licensing of Technology to Television Service Providers. We also work with satellite and cable television providers, including DIRECTV and Comcast, and in the future, Cox, Virgin Media, and RCN, who pay us recurring monthly fees in order to...

  • Page 8
    ... TiVo-enabled DVRs and in the future TiVo-enabled set-top boxes and connected consumer electronics can support analog cable, digital cable, satellite, over-the-air broadcast television, and streaming and downloaded broadband video content, including standard definition and high definition television...

  • Page 9
    ... the TiVo service. Increase Audience Research Capabilities and Revenue. We offer advertisers, advertising agencies and television networks second-by-second reporting on television program and commercial viewership in our subscribers' homes. We make this available via several products including: Stop...

  • Page 10
    ...file system, a high-performance transactional database, an integrated security system, and application components such as media management and user interface. We have enhanced the client software to support multiple services and applications, such as receipt of broadband video content, digital music...

  • Page 11
    ...develop a TiVo-branded software solution for deployment on Comcast's DVR platforms, which would enable the ® ® TiVo user interface and DVR application, which includes features, such as WishList searches, and Season Pass recordings. In addition, we agreed to develop an advertising management system...

  • Page 12
    ...DVRs in the Best Buy retail channel commencing with the launch of our new TiVo Premiere box. In return TiVo has agreed to provide Best Buy with an on-going promotional presence on the TiVo service as well as continued revenue share payments in connection with the number of TiVo service subscriptions...

  • Page 13
    ... to the TiVo service directly to consumers who have purchased a TiVo-enabled DVR. To drive sales while managing costs, we have shared marketing expenses with key retailers, and in some cases, we have offered to share a portion of the subscription revenues. We currently manufacture and sell two high...

  • Page 14
    ...DVRs that enable the TiVo service. This long lead time requires us to make component purchasing and inventory decisions well in advance of our peak selling periods. We offer our individual end-users who purchase from TiVo.com a 30-day money back guarantee. We typically do not offer a right of return...

  • Page 15
    ... satellite operators including Dish (formerly "EchoStar"), DIRECTV, Comcast, Time Warner, Verizon, and AT&T. These products typically combine television reception with DVR functionality; most of these products include multiple tuners, high definition recording, and in some cases multi-room viewing...

  • Page 16
    ...-by-second viewership information based on data from digital cable set-top boxes and satellite set-top boxes. The type of research we provide is a discretionary purchase. If advertisers, advertising agencies, and television networks perceive the information provided by these companies to be more...

  • Page 17
    ... degree from Columbia Law School. Anna Brunelle was named Chief Financial Officer in September 2008 and is responsible for financial operations including accounting, tax, treasury, purchasing, internal audit, financial reporting and planning. Ms. Brunelle joined TiVo in April 2005 and served as Vice...

  • Page 18
    ... Vice President, TiVo Platform Business from February 2004 until April 2005, and Senior Vice President and General Manager, Service Provider and Advertising Products Division from April 2005 to November 2009. Prior to joining TiVo, Mr. Klugman was CEO of PointsBeyond.com, an internet-portal start-up...

  • Page 19
    ... from a number of sources, which may impair our revenues, increase our subscription acquisition costs, and hinder our ability to generate new subscriptions. The DVR and advanced television solutions market is rapidly evolving, and we face significant competition. Moreover, the market for in-home...

  • Page 20
    ... other advertising media such as print, radio, television, internet, Video on Demand, and other emerging advertising platforms for a share of advertisers' total advertising budgets. If advertisers do not perceive digital video recording services, in general, and TiVo specifically, as an effective...

  • Page 21
    ... to cease manufacturing DVRs that enable the TiVo service, our retailers to stop selling the product or us to cease providing our service, or all of the above, which would eliminate our ability to generate revenues. Under our agreements with many of our manufacturing and licensing partners, we are...

  • Page 22
    ... Programs"). The complaint alleges that TiVo and Humax have infringed, contributorily infringed and/or actively induced infringement of the patents by making, using, selling or importing digital video recording devices, digital video recording device software and/or personal television services...

  • Page 23
    ... the digital video recorder industry to obtain copyright or other licenses. Lawsuits or other actions taken by these types of organizations or companies could make it more difficult for us to introduce new services, delay widespread consumer acceptance of our products and services, restrict our use...

  • Page 24
    ... cable and satellite television, movie rentals, pay-per-view, Video on Demand, and mail-order DVD services. See also "We face intense competition from a number of sources, which may impair our revenues, increase our subscription acquisition costs, and hinder our ability to generate new subscriptions...

  • Page 25
    ... in a cost-effective manner with these television providers as well as attract and retain customers, in which case, our business, financial condition and results of operations could be harmed. We are currently only able to offer a high definition DVR that has access to digital cable signals. Only...

  • Page 26
    .../VOD-based video, time-shifting of linear television, transfer of recorded programs to portable devices, access to web based and broadband delivered content not available through traditional cable and satellite operators, and therefore may not value the benefits of the TiVo service and products. We...

  • Page 27
    ... is available. The lack of an analog signal being transmitted by the cable operator means that the DVR would only be able to use one tuner to record television although we do currently offer to our customers high definition digital video recorders, the TiVo Premiere box and the TiVo Premiere XL box...

  • Page 28
    ... network operators, electronic commerce companies, and consumer electronics manufacturers. In each of these examples, a small number of large companies dominate a major portion of the market and may be reluctant to work with us to develop new products and services for digital video recorders...

  • Page 29
    ... engineering services agreements with our customers, such as Comcast, Cox, DIRECTV, and Virgin Media. These types of contracts are typically long-term and complex. The engineering services we agree to provide may be essential to the functionality of the licensed software or such software may involve...

  • Page 30
    ...will help us obtain subscriptions, broaden market acceptance of digital video recorders, and increase our future revenues. If these expectations are not met, we may be unable to generate sufficient revenue to cover our expenses and obligations. We advertise, market, and sell our services directly to...

  • Page 31
    ... were ordered to remove features from our DVRs, we may experience increased difficulty in marketing the TiVo service and related TiVo-enabled DVRs and may suffer reduced revenues as a result. Entertainment companies, networks, or video distributors may claim that our advertising products or features...

  • Page 32
    ... in a consolidated securities class action lawsuit filed in the U.S. District Court for the Southern District of New York. This class action was brought on behalf of a purported class of purchasers of the Company's common stock from October 31, 1999, the time of its initial public offering, through...

  • Page 33
    ... us to change our business. The delivery of television programming, access to television signals by consumer electronics devices, and the collection of viewing information from subscriptions via the TiVo service and a DVR represent a relatively new category in the television and home entertainment...

  • Page 34
    ...-alone digital video recorder boxes. This and future energy regulations could potentially make it more costly for us to design, manufacture, and sell our DVRs to our customers thus harming the growth of our business. Additionally, as our business grows and we expand our employed and contracted work...

  • Page 35
    ... In addition, were we to change our critical accounting estimates, including the timing of recognition of revenue from our product lifetime subscriptions, our results of operations could be significantly impacted. Negative conditions in the global credit markets may impair the liquidity of a portion...

  • Page 36
    ... customer. Privacy concerns, however, could create uncertainty in the marketplace for digital video recording and for our products and services. Changes in our privacy policy could reduce demand for the TiVo service, increase the cost of doing business as a result of litigation costs or increased...

  • Page 37
    ... In connection with our manufacturing operations, we maintain a finished goods inventory of the DVR units we produce throughout the year. Due to the seasonality in our business and our long-lead time product development and manufacturing cycles, we need to make forecasts of demand and commit...

  • Page 38
    ... cause customer service and customer relations problems. Correcting errors in our software or fixing defects in our products requires significant time and resources, which could delay product releases and affect market acceptance of the TiVo service. Any delivery by us of products or upgrades with...

  • Page 39
    ... that may affect our annual operating results include demand for TiVo-enabled DVRs and the TiVo service; the timing and introduction of new services and features on the TiVo service; seasonality and other consumer and advertising trends; changes in revenue sharing arrangements with our strategic...

  • Page 40
    ... and new subscriptions to the TiVo service have been disproportionately high during the holiday shopping season when compared to other times of the year. If we are unable to accurately forecast and respond to consumer demand for our products, our reputation and brand will suffer and the market price...

  • Page 41
    ... total office space. Our current facilities lease obligations are subject to periodic increases and we believe that our existing facilities are well maintained and in good operating condition. The Company also has operating leases for sales and administrative office space in New York City, New York...

  • Page 42
    ... infringed this patent by making, selling, offering to sell and/or selling digital video recording devices, digital video recording device software, and/or personal television services in the United States. On April 13, 2006, the jury rendered a verdict in favor of the Company in the amount of...

  • Page 43
    ... by making, using, selling or importing digital video recording devices, digital video recording device software and/or personal television services in the United States that allegedly infringe the patents, and that such infringement is willful and ongoing. Under the terms of the Company's agreement...

  • Page 44
    ... in connection with this litigation. Securities Litigation. The Company and certain of its officers and directors (TiVo defendants) were originally named as defendants in a consolidated securities class action lawsuit filed in the United States District Court for the Southern District of New York...

  • Page 45
    ..."), with the Company named as a nominal defendant, in the U.S. District Court for the Western District of Washington alleging violations of Section 16(b) in connection with the Company's initial public offering and associated transactions in the Company's stock in the six month period following the...

  • Page 46
    ...the symbol "TIVO" since September 30, 1999. Prior to that time, there was no public trading market for our common stock. The following table sets forth, for the periods indicated, the high and low sales prices of our common stock as reported by the Nasdaq Global Market, on any trading day during the...

  • Page 47
    ... plans of the Company is incorporated by reference to the Company's Proxy Statement for its 2010 Annual Meeting of stockholders. The definitive Proxy Statement will be filed within 120 days of the end of the fiscal year ended January 31, 2010. Recent Sales of Unregistered Securities None Purchases...

  • Page 48
    ... fiscal years ended January 31, 2010, 2009, 2008, 2007, and 2006, respectively, have been derived from our consolidated financial statements audited by KPMG LLP, independent registered public accounting firm. These historical results are not necessarily indicative of the results of operations to be...

  • Page 49
    ... of Operations Data: Revenues Service revenues Technology revenues Hardware revenues Net revenues Cost and Expenses Cost of service revenues Cost of technology revenues Cost of hardware revenues Research and development Sales and marketing Sales and marketing, subscription acquisition costs General...

  • Page 50
    ... of service revenues of $1.7 million related to the prospective change as of November 1, 2008 in estimated life of the product lifetime subscriptions from 54 months to 60 months. The third quarter of fiscal year ended January 31, 2009 results of operations includes a benefit of $1.4 million in cost...

  • Page 51
    ... anticipate near-term increases in our sales and marketing, subscription acquisition costs as we begin marketing these new products in an effort to ensure that consumers understand the unique qualities and benefits provided by the TiVo service and our next generation TiVo Premiere boxes. We believe...

  • Page 52
    ... the new HD DIRECTV DVRs with TiVo service in the future and our distribution deals such as Comcast, Virgin, and Cox are still in development and/or the early phases of deployment. Key Business Metrics Management periodically reviews certain key business metrics in order to evaluate our operations...

  • Page 53
    ... committed to pay for the TiVo service and (ii) service is not canceled. We count product lifetime subscriptions in our subscription base until both of the following conditions are met: (i) the period we use to recognize product lifetime subscription revenues ends; and (ii) the related DVR has not...

  • Page 54
    ... only available through cable and some telecommunications providers) and a switched digital adapter if necessary. Subscription Acquisition Cost or SAC. Management reviews this metric, and believes it may be useful to investors, in order to evaluate trends in the efficiency of our marketing programs...

  • Page 55
    ... manage these costs. For the fiscal year ending January 31, 2011, we expect to have decreased subscription acquisition costs. We believe this improvement will predominately be driven by lower hardware costs on our new TiVo Premiere boxes; however, we expect to increase our sales and marketing...

  • Page 56
    ... in service revenues associated with a reporting error on the part of DIRECTV. During the quarter ended October 31, 2009, we were informed by DIRECTV that it had overreported TiVo subscriptions to us for approximately the past 18 months. In accordance with TiVo's accounting policies, TiVo recorded...

  • Page 57
    ... Subscriptions Revenues. From time-to-time TiVo has offered for general sale a product lifetime subscription option for the life of the DVR for a one-time, prepaid payment. During the first quarter of fiscal year ended January 31, 2007, we discontinued general sale of the product lifetime service...

  • Page 58
    ...at lower of cost or market and to reserve for products or materials which are not forecasted to be used. We also record accruals for charges that represent management's estimate of our exposure to the contract manufacturer for excess non-cancelable purchase commitments. Although we make every effort...

  • Page 59
    .../ Broadcaster service revenues includes a one-time reduction of $1.8 million (primarily related to prior quarters) recorded during the quarter ended October 31, 2009, as we were informed by DIRECTV that it had over-reported TiVo subscriptions to us for approximately the past 18 months. Based on our...

  • Page 60
    ... selling price due to the introduction of our TiVo HD DVR, which was not available until the end of the quarter ended July 31, 2007. Additionally, our rebates and revenue share costs, which are netted against our hardware revenues, declined during the year as we did not offer rebates on our TiVo HD...

  • Page 61
    ...the Comcast development work and the methodology used to recognize revenues related to this work. During fiscal year ended January 31, 2008, we recognized revenues and costs for the initial development of TiVo service software and TiVo Interactive Advertising Management System based on a zero profit...

  • Page 62
    ... in cost of hardware as the cost to produce our new TiVo Premiere boxes are lower than our previous HD DVR offerings and we expect this to positively benefit subscription acquisition costs. During the fiscal year ended January 31, 2009 we sold approximately 71,000 fewer TiVo DVR's as compared to...

  • Page 63
    ... in public relations expenses of $733,000. For fiscal year 2011, we anticipate increased sales and marketing expenses as we increase our sales channel support as we transition to selling our new TiVo Premiere boxes. Sales and marketing, subscription acquisition costs. Twelve Months Ended January...

  • Page 64
    ... primarily from the proceeds from the sale of equity securities and funds generated from operations. Our cash resources are subject, in part, to the amount and timing of cash received from our subscriptions, licensing and engineering services customers, and hardware customers. As of January 31, 2010...

  • Page 65
    ...million compared to a loss of $(31.6) million in the prior fiscal year. In October 2008 TiVo received EchoStar litigation proceeds and related interest of $104.6 million, less tax expense of $1.3 million and further improvements in operating cash flows of $31.9 million. Net Cash Provided by (Used in...

  • Page 66
    .... We purchase components from a variety of suppliers and use several contract manufacturers to provide manufacturing services for our products. During the normal course of business, in order to manage manufacturing lead times and help assure adequate component supply, we enter into agreements with...

  • Page 67
    ... not be required to sell these ARS prior to recovery. Based on our expected operating cash flows, and our other sources of cash, we do not anticipate the potential lack of liquidity on these investments will materially affect our ability to execute our current business plan. The table below presents...

  • Page 68
    ...annual report on Form 10-K. The unaudited quarterly results of our consolidated operations for our two most recent fiscal years are incorporated herein by reference under Item 6. "Selected Financial Data." Index to Consolidated Financial Statements Reports of Independent Registered Public Accounting...

  • Page 69
    ... Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders TiVo Inc.: We have audited the accompanying consolidated balance sheets of TiVo Inc. and subsidiaries (the Company) as of January 31, 2010 and 2009, and the related consolidated statements of operations...

  • Page 70
    ... express an opinion on the Company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable...

  • Page 71
    ... per share and share amounts) January 31, 2010 January 31, 2009 ASSETS CURRENT ASSETS Cash and cash equivalents Short-term investments Accounts receivable, net of allowance for doubtful accounts of $409 and $770 Inventories Prepaid expenses and other, current Total current assets LONG-TERM ASSETS...

  • Page 72
    ... of service revenues (1) Cost of technology revenues (1) Cost of hardware revenues Total cost of revenues Gross margin Research and development (1) Sales and marketing (1) Sales and marketing, subscription acquisition costs General and administrative (1) Litigation proceeds Total operating expenses...

  • Page 73
    ... stock based compensation expense, net Net income Unrealized loss on marketable securities Comprehensive income BALANCE JANUARY 31, 2009 Issuance of common stock related to exercise of common stock options Issuance of common stock related to employee stock purchase plan Issuance of restricted shares...

  • Page 74
    ... of trade credits Allowance for doubtful accounts Changes in assets and liabilities: Accounts receivable Inventories Prepaid expenses and other Accounts payable Accrued liabilities Deferred revenue Deferred rent and other long-term liabilities Net cash provided by (used in) operating activities...

  • Page 75
    ... including digital cable signals in connection with CableCARD and switched digital technologies; dependence on its relationships with third-party service providers such as Comcast and Seven/Hybrid TV (Australia and New Zealand) and in the future DIRECTV, Cox, and Virgin Media (U.K.) for subscription...

  • Page 76
    ... on securities classified as available-for-sale are included in interest income in the consolidated statements of operations. Receivables Accounts receivable consist primarily of receivables from retailers, cable and satellite companies, as well as individual consumers and relate to our subscription...

  • Page 77
    ..., the Company generates hardware revenues from the sale of hardware products that enable the TiVo service. As of January 31, 2010, TiVo had approximately $356,000 of deferred costs related to long-term supply arrangements and are classified on our consolidated balance sheet as prepaid expenses and...

  • Page 78
    ...period. End users have the right to cancel their subscription within 30 days of subscription activation for a full refund. TiVo establishes allowances for expected subscription cancellations. Also included in service revenues are fees received from multiple system operators ("MSO"s), such as Comcast...

  • Page 79
    ...Company sells the DVR and service directly to end-users through bundled sales programs through the TiVo website. Under these bundled programs, the customer receives a DVR and commits to a minimum subscription period of one to three years or product lifetime and has the option to either pay a monthly...

  • Page 80
    ...TiVo DVRs and service subscriptions. Decreases in demand for the Company's products and services, particularly during the critical holiday selling season, could have an adverse impact on its operating results and financial condition. Uncertainty and adverse changes in the economy could also increase...

  • Page 81
    ... their agreement with TiVo or otherwise fails to perform their obligations in a timely manner, the Company may be delayed or prevented from commercializing its products and services. Recent Accounting Pronouncements During the three months ended July 31, 2009, TiVo adopted a new accounting principle...

  • Page 82
    ... Insurance Corporation's Temporary Liquidity Guarantee program ("TLGP"). Other Investment Securities TiVo has an investment in a private company where the Company's ownership is less than 20% and TiVo does not have significant influence. The investment is accounted for under the cost method. 78

  • Page 83
    ... gains and losses related to the Company's investments in marketable securities designated as available-forsale: As of January 31, 2010 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses (in thousands) Fair Value Certificate of deposit Commercial paper Corporate debt securities US agency...

  • Page 84
    ... paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The Company's financial...

  • Page 85
    ... that were applied to the pricing model were based on market conditions and rates for comparable or similar term asset-backed securities as well as other fixed income securities. TiVo also has a direct investment in a privately-held company accounted for under the cost method, which is periodically...

  • Page 86
    ...fiscal year 2008, the Company entered into a barter transaction, exchanging TiVo Series2 standard definition DVR inventory with a net book value of $2,774,000 for barter credits that are redeemable for a percentage of future purchases of advertising media and other services from certain vendors. The...

  • Page 87
    ...for subscriptions Other Total accrued liabilities 9. RESTRUCTURING CHARGES $ $ 12,084 - 2,481 2,814 7,407 24,786 $ $ 10,229 23 2,740 3,120 8,942 25,054 During the fourth quarter of fiscal year 2009, the Company's management initiated a restructuring plan to reduce operational expenses through...

  • Page 88
    ... limited warranty period, consumers are offered a no-charge exchange for TiVo-enabled DVRs returned due to product defect, within 90 days from the date of consumer purchase. Thereafter, consumers may exchange a TiVo-enabled DVR with a product defect for a charge. As of January 31, 2010 and 2009, the...

  • Page 89
    ... infringed this patent by making, selling, offering to sell and/or selling digital video recording devices, digital video recording device software, and/or personal television services in the United States. On April 13, 2006, the jury rendered a verdict in favor of the Company in the amount of...

  • Page 90
    ... by making, using, selling or importing digital video recording devices, digital video recording device software and/or personal television services in the United States that allegedly infringe the patents, and that such infringement is willful and ongoing. Under the terms of the Company's agreement...

  • Page 91
    ... in connection with this litigation. Securities Litigation. The Company and certain of its officers and directors ("TiVo defendants") were originally named as defendants in a consolidated securities class action lawsuit filed in the United States District Court for the Southern District of New York...

  • Page 92
    ..."), with the Company named as a nominal defendant, in the U.S. District Court for the Western District of Washington alleging violations of Section 16(b) in connection with the Company's initial public offering and associated transactions in the Company's stock in the six month period following the...

  • Page 93
    ...the Original lease. The letter of credit is to remain in effect the entire term of the lease, but the amount does decrease over time. The Company also has operating leases for sales and administrative office space in New York City, New York and Chicago, Illinois. Rent expense is recognized using the...

  • Page 94
    ...grant date, based on continued director service. If the director's service terminates, options expire 90 days from the date the director's service terminated. The number of shares authorized for option grants under the Directors' Plan is 1,400,000, subject to an annual increase of 100,000 shares. As...

  • Page 95
    ...15% of their base compensation. The Company offers the common stock purchase rights to eligible employees, generally all full-time employees who have been employed for at least 10 days. This plan allows for common stock purchase rights to be granted to employees of TiVo at a price equal to the lower...

  • Page 96
    ... Stock Award Activity A summary of the stock options activity and related information for the twelve months ended January 31, 2010, 2009, and 2008 is as follows: WeightedAverage Exercise Price WeightedAverage Remaining Contractual Term Shares (in thousands) Aggregate Intrinsic Value (in thousands...

  • Page 97
    ...7.53 7.05 7.51 7.77 During fiscal years 2009, and 2008, the Company had a performance-based plan that grants restricted stock to specified manager-level employees based on the attainment of specified goals. The number of awards issued for the fiscal year ended January 31, 2008 was determined in the...

  • Page 98
    ... its holder to purchase, at the Right's then-current exercise price, a number of the acquiring company's common shares having a market value at that time of twice the Right's exercise price. The dividend distribution to establish the new Rights Plan was paid to stockholders of record on January 31...

  • Page 99
    ...follows: Fiscal Year Ended January 31, 2010 2009 (In thousands) 2008 Cost of service revenues Cost of technology revenues Research and development Sales and marketing General and administrative Stock-based compensation expense before income taxes Income tax benefit Total stock-based compensation 95...

  • Page 100
    ... twelve months ended January 31, 2010, 2009, and 2008, respectively. The Company presents excess tax benefits from the exercise of stock options, if any, as financing cash flows rather than operating cash flows. As of January 31, 2010, $12.0 million of total unrecognized compensation cost related to...

  • Page 101
    ... portions of the Company's deferred tax assets are presented below: Fiscal Year Ended January 31, 2010 2009 (in thousands) Deferred tax assets: Net operating loss carryforwards Research and alternative minimum tax credits Deferred revenue and rent Capitalized research Stock based compensation Other...

  • Page 102
    ...the Company's deferred tax assets being fully offset by a valuation allowance. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Fiscal Year Ended January 31, 2010 (in thousands) 2009 Beginning Balance Additions based on tax positions related to current...

  • Page 103
    ... and penalties related to uncertain tax positions in income tax expense, if applicable. The Company accrued approximately $4,000 of interest or penalties related to unrecognized tax benefits recorded through January 31, 2010. The Company or one of its subsidiaries files income tax returns in the...

  • Page 104
    ... a TiVo service software solution for deployment on Comcast's DVR platforms. In addition, the Company agreed to develop a TiVo Interactive Advertising Management System for deployment on Comcast platforms to enable the provision of local and national advertising to Comcast subscribers. The initial...

  • Page 105
    ... software for the Comcast DVR platforms and to enable such software on other Comcast DVR platforms, including Cisco DVRs. The Company was recognizing revenues and costs for the initial development of TiVo service software and TiVo Interactive Advertising Management System based on a zero profit...

  • Page 106
    ... our costs. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or...

  • Page 107
    ... Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of January 31, 2010. Management reviewed the results of its assessment with our Audit Committee. KPMG LLP, an independent registered public accounting firm, which...

  • Page 108
    ...and any other principal accounting officer, and any other person performing similar functions, including the nature of the waiver and the name of the officer to whom the waiver was granted, in the "Investor Relations" section of our website at www.tivo.com. Audit Committee. The information under the...

  • Page 109
    ...of the Series B Junior Participating Preferred Stock of TiVo (incorporated by reference to Exhibit 4.2 of the registrant's Current Report on Form 8-K/A filed on January 19, 2001). Form of Indemnification Agreement between TiVo Inc. and its officers and directors (incorporated by reference to Exhibit...

  • Page 110
    ...Quarterly Report on Form 10-Q filed on September 9, 2008). Form of Senior Vice President Change of Control Terms and Conditions Agreement (filed herewith). Form of Vice President Change of Control Terms and Conditions Agreement (filed herewith). Marketing Agreement between DIRECTV, Inc. and TiVo Inc...

  • Page 111
    ... 10.1 of the registrant's Quarterly Report on Form 10-Q filed on June 9, 2009). Amended and Restated Services Agreement, dated as of March 31, 2005, between TiVo Inc. and DIRECTV, Inc. (incorporated by reference to Exhibit 10.30 of the registrant's Annual Report on Form 10-K filed on April 15, 2005...

  • Page 112
    ... Master Marketing and Development Agreement, effective as of July 7, 2009, between TiVo Inc. and Best Buy Stores, L.P. (incorporated by reference to Exhibit 10.4 of the registrant's Quarterly Report on Form 10-Q filed on September 9, 2009). TiVo Interactive Program Guide License Agreement, effective...

  • Page 113
    ... to Exhibit 10.73 of the registrant's Annual Report on Form 10-K filed on April 14, 2006). Second Amendment to the Licensing and Marketing Agreement, effective as of October 23, 2006, between TiVo Inc., Comcast STB Software DVR, LLC, and Comcast Corporation (incorporated by reference to Exhibit 10...

  • Page 114
    ...'s Current Report on Form 8-K filed on March 31, 2009). Independent Registered Public Accounting Firm's Consent (filed herewith). Power of Attorney (see signature page) of this Annual Report on Form 10-K and incorporated herein by reference. Certification of Thomas Rogers, Chief Executive Officer of...

  • Page 115
    ...Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized. Date: March 31, 2010 TIVO INC. /S/ THOMAS ROGERS Thomas Rogers Chief Executive Officer 111

  • Page 116
    ... his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting...

  • Page 117
    ... effect on the date of this Agreement) is subject to a change of control as determined by the Board in its sole discretion, or (c) such time as BlackRock reports or is required to report on Schedule 13D (or any successor or comparable report) its beneficial ownership of Common Shares of the Company...

  • Page 118
    ... expressly set forth herein, the Rights Agreement shall remain in full force and effect and be otherwise unaffected hereby. 3. This Third Amendment may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original and all such counterparts shall together...

  • Page 119
    IN WITNESS WHEREOF, the parties have executed this Third Amendment as of the date first written above. TIVO INC. /s/ Thomas Rogers By: Name: Thomas Rogers Title: CEO & President WELLS FARGO SHAREOWNER SERVICES /s/ Patti Boyd By: Name: Patti Boyd Title: Assistant Vice President Date: January 26, 2010

  • Page 120
    ... Amendment") is dated as of March 23, 2010, between TiVo Inc., a Delaware corporation (the "Company"), and Wells Fargo Shareowner Services (the "Rights Agent"), and amends the Rights Agreement, dated as of January 16, 2001, between the Company and the Rights Agent, as amended by the First Amendment...

  • Page 121
    ... effect on the date of this Agreement) is subject to a change of control as determined by the Board in its sole discretion, or (c) such time as BlackRock reports or is required to report on Schedule 13D (or any successor or comparable report) its Beneficial Ownership of Common Shares of the Company...

  • Page 122
    ... (ii) soliciting or being solicited for, or tendering or receiving, tenders of securities in a public tender or exchange offer made pursuant to, and in accordance with, Section 14(d) of the Exchange Act by means of a tender offer statement filed on Schedule TO." 3. Section 1.3 is hereby amended and...

  • Page 123
    ... that, for the purposes of the definition of Synthetic Equity Position, the term "derivative security" shall also include any security or instrument that would not otherwise constitute a "derivative security" as a result of any feature that would make any conversion, exercise or similar right...

  • Page 124
    ... of such Person's Affiliates or Associates) in connection therewith, if, prior to such Person becoming an Acquiring Person, the Board has approved such merger or other acquisition agreement, or such tender, voting or support agreement. No Person who is an officer, director or employee of an Exempt...

  • Page 125
    IN WITNESS WHEREOF, the parties have executed this Fourth Amendment as of the date first written above. TIVO INC. /s/ Thomas Rogers By: Name: Thomas Rogers Title: CEO & President WELLS FARGO SHAREOWNER SERVICES /s/ Patti Boyd By: Name: Patti Boyd Title: Assistant Vice President 6

  • Page 126
    Exhibit 10.17 [SVP Version] Change of Control Terms and Conditions TiVo Inc. (the "Corporation") considers it essential to the best interests of its shareholders to foster the continuous employment of the Corporation's key management personnel. In this regard, the Corporation's Board of Directors (...

  • Page 127
    ... of Directors has changed; (vi) an acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored...

  • Page 128
    ... position immediately prior to the Change in Control); (b) the Corporation's reduction of your annual base salary or bonus opportunity, each as in effect on the date hereof or as the same may be increased from time to time; (c) the relocation of the Corporation's offices at which you are principally...

  • Page 129
    ... pay to you any portion of your then current compensation or any portion of an installment of deferred compensation under any deferred compensation program of the Corporation, in each case within seven (7) days of the date such compensation is due; (e) the Corporation's failure to continue in effect...

  • Page 130
    ... (18) full months following the date of the Payment Termination or (ii) the first day of your eligibility to participate in a comparable group health plan maintained by a subsequent employer, the Corporation shall pay for and provide you and your dependents with the same medical benefits coverage to...

  • Page 131
    ..."), no later than fifty (50) days following the date of your Payment Termination and you must not revoke the Release during any period permitted under applicable law. Such Release shall specifically relate to all of your rights and claims in existence at the time of such execution but shall exclude...

  • Page 132
    ... customers, employees, business methods, public relations methods, organization, procedures or finances, including, without limitation, information of or relating to customer lists, product lists, product road maps, technology specifications or other information related to the products and services...

  • Page 133
    ...measure in money the ...not use ... account for and pay ...signed by you and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of or compliance with, any condition or provision of this Agreement to be performed...

  • Page 134
    ... quarterly. (iii) Expenses, Legal Fees. The Corporation shall pay, or reimburse you for, all administrative fees and costs, and all arbitrator's fees and expenses incurred by you in connection with any Dispute arising out of or related to this Agreement. The Corporation shall pay, or reimburse you...

  • Page 135
    ... of your benefits shall not be provided to you prior to the earlier of (a) the expiration of the six-month period measured from the date of your Separation from Service with the Corporation or (b) the date of your death. Upon the first business day following the expiration of the applicable Code...

  • Page 136
    If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Corporation the enclosed copy of this letter, which shall then constitute our agreement on this subject. Sincerely, TIVO INC. By: Its: Agreed and Accepted, this day of , 20 . 11

  • Page 137
    Exhibit 10.18 [VP Version] Change of Control Terms and Conditions TiVo Inc. (the "Corporation") considers it essential to the best interests of its shareholders to foster the continuous employment of the Corporation's key management personnel. In this regard, the Corporation's Board of Directors (...

  • Page 138
    ... of Directors has changed; (vi) an acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored...

  • Page 139
    ...your position (in each case as compared to your responsibilities, duties or position immediately prior to the Change in Control); (b) the Corporation's reduction of your annual base salary or bonus opportunity, each as in effect on the date hereof or as the same may be increased from time to time; 3

  • Page 140
    ... Corporation's offices at which you are principally employed is increased by more than fifty (50) miles; (d) the Corporation's failure to pay to you any portion of your then current compensation or any portion of an installment of deferred compensation under any deferred compensation program of the...

  • Page 141
    ... (12) full months following the date of the Payment Termination or (ii) the first day of your eligibility to participate in a comparable group health plan maintained by a subsequent employer, the Corporation shall pay for and provide you and your dependents with the same medical benefits coverage to...

  • Page 142
    ..."), no later than fifty (50) days following the date of your Payment Termination and you must not revoke the Release during any period permitted under applicable law. Such Release shall specifically relate to all of your rights and claims in existence at the time of such execution but shall exclude...

  • Page 143
    ... customers, employees, business methods, public relations methods, organization, procedures or finances, including, without limitation, information of or relating to customer lists, product lists, product road maps, technology specifications or other information related to the products and services...

  • Page 144
    ...measure in money the ...not use ... account for and pay ...signed by you and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of or compliance with, any condition or provision of this Agreement to be performed...

  • Page 145
    ... quarterly. (iii) Expenses, Legal Fees. The Corporation shall pay, or reimburse you for, all administrative fees and costs, and all arbitrator's fees and expenses incurred by you in connection with any Dispute arising out of or related to this Agreement. The Corporation shall pay, or reimburse you...

  • Page 146
    ... of your benefits shall not be provided to you prior to the earlier of (a) the expiration of the six-month period measured from the date of your Separation from Service with the Corporation or (b) the date of your death. Upon the first business day following the expiration of the applicable Code...

  • Page 147
    If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Corporation the enclosed copy of this letter, which shall then constitute our agreement on this subject. Sincerely, TIVO INC. By: Its: Agreed and Accepted, this day of , 20 . 11

  • Page 148
    ... to receive any allowances, abatements or other financial concessions granted with respect to the Original Premises unless such concessions are expressly provided for herein with respect to the Expansion Space. (b) The Expansion Effective Date shall be delayed to the extent that Landlord fails to...

  • Page 149
    ... Expansion Effective Date and ending on the Expansion Space Termination Date, Tenant's Share for the Expansion Space with respect to (i) Operating Expenses, Tax Expenses and Common Area Utility Costs shall be 3.97% of the Park and (ii) Utility Expenses shall be shall be 22.99% of Building B. During...

  • Page 150
    ...rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement on such fair market determination within ten (10) days following the expiration of Tenant's Review Period (the "Outside Agreement Date"), then the Extension Option shall be void and of no force or effect, unless...

  • Page 151
    ... that the new Base Rent is not established prior to end of the Expansion Space Term, the Base Rent immediately payable for the Expansion Space at the commencement of the Option Term shall be the Base Rent determined by Landlord. Notwithstanding the above, once the fair market rental is determined...

  • Page 152
    ... shall have the right to convert the existing meeting room within the Expansion Space into a kitchen, and all such work to so convert the existing meeting room within the Expansion Space into a kitchen shall be deemed an "Alteration" under the Original Lease and subject to the terms and conditions...

  • Page 153
    EXHIBIT "A" EXPANSION SPACE [diagram] EXHIBIT "A" -1-

  • Page 154
    EXHIBIT "B" FURNITURE 50 cubicles 2 conference room tables 1 office chair 3 white boards EXHIBIT "B" -1-

  • Page 155
    ... 31, 2010 and 2009, and the related consolidated statements of operations, stockholders' equity and comprehensive income/loss, and cash flows for each of the years in the three-year period ended January 31, 2010, and the effectiveness of internal control over financial reporting as of January 31...

  • Page 156
    ...presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and Disclosed in this report any change in the registrant's internal control over financial reporting that occurred...

  • Page 157
    Exhibit 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Anna Brunelle, certify that: 1. 2. 3. 4. I have reviewed this annual report on Form 10-K of TiVo Inc.; Based on my knowledge, this report does not contain any untrue statement of a ...

  • Page 158
    ...-Oxley Act of 2002 In connection with the TiVo Inc. (the "Company") Annual Report on Form 10-K for the year ending January 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas Rogers, Chief Executive Officer of the Company, certify pursuant to 18...

  • Page 159
    ...-Oxley Act of 2002 In connection with the TiVo Inc. (the "Company") Annual Report on Form 10-K for the year ending January 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Anna Brunelle, Chief Financial Officer of the Company, certify pursuant to 18...