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Table of Contents
million
increase in revenue from our Product segment. For additional details on the changes in revenue, see the discussion of our segment results below.
Cost of revenues, excluding amortization of intangible assets
For the year ended
December 31, 2014
,
Cost of revenues, excluding amortization of intangible assets increased from the prior year primarily due to
the international expansion of our Metadata offering and an increase in professional services. These increases were partially offset by a $4.2 million
decrease in patent litigation and prosecution costs.
Research and development
For the year ended
December 31, 2014
,
Research and development expenses decreased from the prior year primarily due to a $7.6 million decrease
in stock compensation expense, partially offset by a $4.5 million increase in consulting and other employee compensation expenses primarily related to the
development of our cloud
-
based platform and advanced search and recommendation services. The decrease in stock compensation expense in 2014 was
driven by our actual forfeitures exceeding our forfeiture estimate, primarily due to our restructuring actions, and a decrease in the number of stock options
granted in recent years.
Selling, general and administrative
For the year ended
December 31, 2014
,
Selling, general and administrative expenses decreased from the prior year primarily due to a $6.9 million
decrease in stock compensation expense, a $2.7 million reduction in our contingent consideration liability related to the Veveo acquisition, a $2.1 million
decrease in marketing programs and a $1.0 million decrease in corporate legal expenses, partially offset by a $3.5 million increase in consulting expenses
related to planning for license renewals with Time Warner Cable, DIRECTV, Comcast and EchoStar. In 2014, legal expenses benefited from a $0.8 million
reimbursement of legal fees related to a previously settled case. The decrease in stock compensation expense in 2014 was driven by our actual forfeitures
exceeding our forfeiture estimate, primarily due to our restructuring actions, and a decrease in the number of stock options granted in recent years.
Depreciation
For the year ended
December 31, 2014
,
Depreciation increased from the prior year primarily due to an increase in average property and equipment
balances.
Amortization of intangible assets
For the year ended
December 31, 2014
,
Amortization of intangible assets increased from the prior year primarily due 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 and 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 Restructuring and asset impairment charges of
$10.9
million
in 2014.
During 2013, we continued the review of our operations that began in the third quarter of 2012. As a result of this analysis, we took additional cost
reduction actions, which resulted in Restructuring and asset impairment charges of
$7.6 million
in 2013.
Gain on sale of patents
During the year ended
December 31, 2014
, we recorded a gain of
$0.5 million
from a patent sale.
Interest expense
For the year ended
December 31, 2014
,
Interest expense decreased compared to the prior year primarily due to a decrease in average debt
outstanding.
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