TiVo 2009 Annual Report Download - page 93

Table of Contents
Other. In April 2008, the Attorney General of Missouri served TiVo Inc. with an investigative demand subpoena seeking information as to whether the
Company has engaged in any unlawful merchandising practices in connection with its rebate program in the State of Missouri. The Company cooperated with
the investigation and has not had further contact with the Attorney General of Missouri regarding this investigation since July 2008. Should there be an
adverse outcome, the Company's business could be harmed. No loss is considered probable or estimable at this time.
The Company is involved in numerous lawsuits and receives numerous threats of litigation in the ordinary course of its business. The Company
assesses potential liabilities in connection with these lawsuits and threatened lawsuits and accrues an estimated loss for these loss contingencies if both of the
following conditions are met: information available prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at
the date of the financial statements and the amount of loss can be reasonably estimated. As of January 31, 2010, the Company has not accrued any liability for
any lawsuits filed against the Company, as the conditions for accrual have not been met. The Company expenses legal costs as they are incurred.
Facilities Leases
The Company's corporate headquarters, which houses our administrative, sales and marketing, customer service and product development activities, is
located in Alviso, California, under a lease that expires on January 31, 2017, and is comprised of two buildings totaling 127,124 square feet of office space
and part of another building under a lease that expires on April 1, 2012 totaling 11,985 square feet of space for a grand total of 139,109 square feet. On
May 15, 2009, the Company entered into the Second Amendment to the Lease Agreement. Under the Amendment, the Company extended for an additional
seven years, from February 1, 2010 to January 31, 2017, the original Lease Agreement. Under the terms of the Second Amendment, monthly rent is
approximately $140,000 with built-in base rent escalations periodically throughout the lease term. Additionally, the Company entered into the Third
Amendment to the Lease Agreement on February 17, 2010 for additional square footage in another building at the same location. Under the terms of the Third
Amendment, additional monthly rent is approximately $13,000 with built-in base rent escalations periodically throughout the lease term. Both leases are
classified as operating leases.
Additionally, the Company delivered a letter of credit totaling $477,000, to the landlord as collateral for performance by the Company of all of its
obligations under 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 straight-line method over the lease term and for fiscal years ended January 31, 2010, 2009, and 2008 was $2.3
million, $2.3 million, and $2.1 million, respectively. Operating lease cash payments for the fiscal years ended January 31, 2010, 2009, and 2008 were $3.5
million, $3.0 million, and $3.1 million, respectively. Future minimum operating lease payments as of January 31, 2010, are as follows:
Fiscal Year Ending January 31, Lease Payments
(In thousands)
2011 $ 2,210
2012 1,921
2013 1,858
2014 1,907
2015 1,983
Thereafter 4,195
Total $ 14,074
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