TiVo 2015 Annual Report Download - page 41

Table of Contents
Offering Rate ("LIBOR"), we generally will have a gain when adjusting our interest rate swaps to fair value. When there is a decrease in expected future
LIBOR, we generally will have a loss when adjusting our interest rate swaps to fair value.
Loss on debt extinguishment and Loss on debt modification
During the year ended
December 31, 2015 , we redeemed $291.0 million in principal of our 2040 Convertible Notes for cash, made voluntary principal
prepayments that extinguished Term Loan Facility A and elected to terminate our Revolving Facility. As a result of these actions, we recognized a Loss on
debt extinguishment of $2.8 million for the year ended December 31, 2015 .
The July 2014 issuance of the Senior Secured Credit Facility and the subsequent repayment of a previous credit facility were accounted for
partially as a debt extinguishment and partially as a debt modification. Creditors in the previous credit facility that elected not to participate in the Senior
Secured Credit Facility were extinguished. The Consolidated Statements of Operations for the year ended
December 31, 2014 includes a $5.2 million Loss on
debt extinguishment related to unamortized debt issuance costs and unamortized debt discount for those creditors. Additionally, debt issuance costs of
$3.8 million related to the issuance of the Senior Secured Credit Facility to creditors from the previous credit facility were recognized as a Loss on debt
modification in the Consolidated Statements of Operations for the year ended December 31, 2014 .
Income tax expense
Due to our significant net operating loss carryforward and a valuation allowance applied against a significant portion of our deferred tax assets,
foreign withholding taxes are the primary driver of our Income tax expense
.
We recorded Income tax expense for the year ended December 31, 2015 of $13.8 million , which primarily consists of $14.3 million of foreign
withholding taxes, a $2.1 million increase in net deferred tax liabilities, $1.2 million of foreign income taxes and $0.7 million of state income taxes, which
reflects the settlement of the Company's 2008 California tax return, which were partially offset by a $4.5 million reduction in reserves for unrecognized tax
benefits. On December 18, 2015, the Protecting Americans from Tax Hikes Act of 2015 was signed into law which, among other provisions, retroactively
extended the U.S. federal research and development tax credit for the year ended
December 31, 2015 , resulting in the generation of a research and
development tax credit of $ 1.3 million which was recognized in the fourth quarter of 2015. The research and development tax credit created a tax attribute to
which we applied a full valuation allowance.
We recorded Income tax expense for the year ended
December 31, 2014 of $19.7 million which primarily consists of $17.2 million of foreign
withholding taxes, $3.7 million related to previously unrecognized tax benefits, $1.1 million of state income taxes and $0.9 million of foreign income taxes,
partially offset by $2.0 million from the change in deferred tax liabilities and $1.2 million of foreign deferred tax asset adjustments.
Loss from discontinued operations, net of tax
The loss from discontinued operations for the year ended December 31, 2014 is primarily due to the loss on the sale of the DivX, MainConcept and
Nowtilus businesses.
Segment Results
We report segment information in the same way management internally organizes the business for assessing performance and making decisions
regarding the allocation of resources to the business units. The terms Adjusted Operating Expenses and Adjusted EBITDA in the following discussion use
the definitions provided in Note 14 of the Consolidated Financial Statements included in Part IV of this Annual Report on Form 10
- K , which is incorporated
herein by reference.
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