TiVo 2009 Annual Report Download - page 34

Table of Contents
Our business could be adversely impacted in the event of a natural disaster.
Our corporate headquarters is located in Alviso, California which is where the overwhelming majority of our employees work. Our primary servers are
located nearby in San Jose, California. Alviso and San Jose lay near the San Andreas Fault, among other known and unknown faults, a major source of
earthquake activity in California. In the event of an earthquake or similar natural disaster, our ability to continue operations could be adversely affected and
our business could be harmed.
Legislation, laws or regulations relating to environmental issues, employment matters, and unclaimed property may adversely impact our
business in the future.
It is possible that future proposed environmental regulations on consumer electronic devices, such as DVRs and set-top boxes, may regulate and
increase the production, manufacture, use, and disposal costs incurred by us and our customers. For example, the Energy Independence and Security Act of
2007 directs the Department of Energy to prescribe labeling or other disclosure requirements for the energy use of stand-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 force, employment laws and regulations will have an increasing
impact on our ability to manage and grow our work-force. Regulations and laws relating to the status of contractors, classification and related benefits for
exempt and non-exempt employees all may adversely impact our business if we are unable to properly manage and comply with federal, state, and local laws.
Furthermore, as part of our regular business activities now, and in the past, we engage in the issuance of gift subscriptions and the marketing of rebate
offers related to the sale of our products and services. It is possible that money received by us for the sale of gift subscriptions or related to our past rebate
offers could be subject to state and federal escheat, or unclaimed property, laws in the future. If this were the case, our business could be adversely impacted.
If we fail to comply with the laws and regulations relating to the collection of sales tax and payment of income taxes in the various States in
which we do business, we could be exposed to unexpected costs, expenses, penalties, and fees as a result of our noncompliance in which case our
business could be harmed.
As our business grows and expands, we have started to do business in an increasing number of states nationally. By engaging in business activities in
these states, we become subject to their various laws and regulations, including requirements to collect sales tax from our sales within those states and the
payment of income taxes on revenue generated from activities in those states. The laws and regulations governing the collection of sales tax and payment of
income taxes are numerous, complex, and vary between states. If we fail to comply with these laws and regulations requiring the collection of sales tax and
payment of income taxes in one or more states where we do business, we could be subject to significant costs, expenses, penalties, and fees in which case our
business could be harmed.
Compliance with federal securities laws and regulations is costly.
The federal securities laws and regulations, including the corporate governance and other requirements of the Sarbanes-Oxley Act of 2002 impose
complex and continually changing regulatory requirements on our operations and reporting. These requirements impose comprehensive reporting and
disclosure requirements, set stricter independence and financial expertise standards for audit committee members, and impose civil and criminal penalties for
companies, their chief executive officers, chief financial officers and directors for securities law violations. These requirements have increased and will
continue to increase our legal compliance costs, increase the difficulty and expense in obtaining director and officer liability insurance, and make it harder for
us to attract and retain qualified members of our Board of Directors and/or qualified executive officers. Such developments could harm our results of
operations and divert management's attention from business operations.
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