TiVo 2015 Annual Report Download - page 40

Table of Contents
Selling, general and administrative
Selling expenses are comprised primarily of employee
- related costs, including travel costs, advertising costs and an allocation of overhead and
facilities costs. General and administrative expenses are comprised primarily of employee - related costs, including travel costs, corporate accounting, tax and
legal fees and an allocation of overhead and facilities costs.
The increase in Selling, general and administrative expenses during the year ended December 31, 2015 was primarily due to $4.3 million of costs
incurred in 2015 related to a contested proxy election, $3.5 million of higher employee - related costs, a $1.8 million increase in franchise taxes, a $0.6 million
increase in bad debt expense and the prior year including the reimbursement of $0.8 million in legal fees related to a previously settled case. In addition,
Selling, general and administrative expenses were reduced during the years ended December 31, 2015 and 2014 by $0.9 million and $2.7 million, respectively,
from changes in the estimated Veveo contingent consideration liability. The increase in employee costs related to the major service provider license
renewals and the expansion of our patent strategy group more than offset reductions in employee costs due to our cost saving initiatives.
Amortization of intangible assets
For the year ended December 31, 2015 , Amortization of intangible assets decreased from the prior year primarily due to certain intangible assets
related to past acquisitions becoming fully amortized during the period. This decrease was partially offset by additional amortization related to the Veveo
acquisition in February 2014 and the acquisition of a patent portfolio in July 2014.
Restructuring and asset impairment charges
In conjunction with the disposition of the Rovi Entertainment Store, DivX and MainConcept businesses and our narrowed business focus on
discovery, in 2014 we conducted a review of our remaining product development, sales, data operations and general and administrative functions to identify
potential cost efficiencies. As a result of this analysis, we took cost reduction actions that resulted in charges of
$2.2 million and $10.9 million during the
years ended December 31, 2015 and 2014, respectively. Amounts recorded during the year ended December 31, 2015 represent adjustments to the amounts
originally recorded in connection with the 2014 restructuring actions.
Gain on sale of patents
During the years ended December 31, 2015 and 2014, we recorded gains from the sale of patents. We anticipate selling additional patents in the
future as we continue to look for additional ways to monetize patents we hold that are outside our core discovery portfolio.
Interest expense
For the year ended December 31, 2015 , Interest expense decreased compared to the prior year primarily due to a lower effective interest rate on the
2020 Convertible Notes compared to the 2040 Convertible Notes as well as a decrease in average debt outstanding.
Interest income and other, net
For the year ended
December 31, 2015 , the decrease in Interest income and other, net was primarily due to the release of a $1.2 million contingent
liability in 2014 that was acquired in a prior acquisition and a $0.6 million decline in equity income from our joint venture in Japan.
Loss on interest rate swaps
We have not designated any of our interest rate swaps as hedges for accounting purposes and therefore changes in the fair value of our interest
rate swaps are not offset by changes in the fair value of the related hedged item in our Consolidated Statements of Operations (see Note 9 to the
Consolidated Financial Statements included in Part IV of this Annual Report on Form 10 - K , which is incorporated herein by reference). We generally utilize
interest rate swaps to convert the interest rate on a portion of our floating interest rate loans to a fixed interest rate. Under the terms of our interest rate
swaps, we generally receive a floating rate of interest and pay a fixed rate of interest. When there is an increase in expected future London Interbank
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