TiVo Nets $490M From Settlement With Google and Cisco

Settlement Also Resolves Pending Litigation with Time Warner Cable 6/07/2013 4:44 AM Eastern

TiVo announced Friday that it will receive an upfront lump-sum payment of $490 million to settle pending patent litigation with Google’s Motorola Mobility unit and Cisco Systems, while also settling its pending litigation with Time Warner Cable.

TiVo said it will recognize a portion of the payment as past damages during the second quarter, “and the remainder over time.” TiVo expects to  provide more information on that timing of that revenue recognition in its second quarter earnings report.

With the latest settlement figure factored in, TiVo said it has been awarded roughly $1.6 billion in awards and settlements. TiVo has raked in more than $1 billion from past settlements with Dish Network, AT&T and Verizon Communications.

As part of the settlement announced Friday, TiVo has also agreed to enter into certain patent licensing arrangements with Google, Cisco, and Arris, which acquired the Motorola Home division from Google earlier this year.  TiVo, Motorola, Cisco, and Time Warner Cable also agreed to dismiss all pending litigation between the companies.

"We're pleased with the outcome of this case and to see that these claims have been settled," a Time Warner Cable spokesman said, in a statement.

“Cisco is pleased to have entered into a settlement and patent licensing agreement with TiVo that resolves the litigation and avoids the uncertainties of a trial," Cisco said, in a statement issued Friday.

It was not immediately known how much of the $490 million owed to TiVo will be paid individually by Google and Cisco. Per a condition of its acquisition of Motorola Home from Google, Arris is responsible for no more than $50 million in damages and royalties linked to the TiVo lawsuit.

TiVo also announced that its board has authorized a doubling of TiVo’s stock repurchase plan – from $100 million to $200 million – and has extended the plan for an additional two years, until Aug. 29, 2015. TiVo said the move means it will have over $160 million of unused stock repurchase authorization.

"We are pleased to reach an agreement that brings our pending litigation to an end and further underscores the significant value our distribution partners derive from TiVo's technological innovations and our shareholders derive from our investments in protecting TiVo's intellectual property," said Tom Rogers, CEO and president of TiVo, in a statement. "Further, this settlement significantly enhances our already strong balance sheet, bringing our cash position to over $1 billion before inclusion of future expected payments of at least $400 million from prior settlements. We intend to use our significant capital resources to drive shareholder value, including more aggressively returning capital to shareholders under our newly increased share repurchase authorization and we will be increasing the size of our 10B5-1 trading plan as soon as permissible."

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