Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 28, 2014 | Jun. 30, 2013 |
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'RNWK | ' | ' |
Entity Registrant Name | 'REALNETWORKS INC | ' | ' |
Entity Central Index Key | '0001046327 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 35,835,900 | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Public Float | ' | ' | $172 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $151,235 | $163,198 |
Short-term investments | 74,920 | 108,216 |
Trade accounts receivable, net of allowances | 24,613 | 30,754 |
Deferred costs, current portion | 1,601 | 825 |
Deferred tax assets, current portion | 306 | 2,869 |
Prepaid expenses and other current assets | 9,124 | 17,002 |
Total current assets | 261,799 | 322,864 |
Equipment, software, and leasehold improvements, at cost: | ' | ' |
Equipment and software | 86,721 | 98,041 |
Leasehold improvements | 3,482 | 22,767 |
Total equipment, software, and leasehold improvements, at cost | 90,203 | 120,808 |
Less accumulated depreciation and amortization | 67,031 | 91,492 |
Net equipment, software, and leasehold improvements | 23,172 | 29,316 |
Restricted cash equivalents and investments | 3,000 | 10,000 |
Equity method investment | 12,473 | 19,204 |
Available for sale securities | 7,181 | 34,334 |
Other assets | 2,332 | 3,153 |
Deferred costs, non-current portion | 946 | 531 |
Deferred tax assets, net, non-current portion | 1,409 | 4,911 |
Other intangible assets, net | 12,993 | 3,275 |
Goodwill | 17,476 | 6,309 |
Total assets | 342,781 | 433,897 |
Current liabilities: | ' | ' |
Accounts payable | 19,987 | 19,013 |
Accrued and other current liabilities | 42,792 | 57,530 |
Deferred revenue, current portion | 7,498 | 8,675 |
Total current liabilities | 70,277 | 85,218 |
Deferred revenue, non-current portion | 166 | 169 |
Deferred rent | 1,318 | 2,250 |
Deferred tax liabilities, net, non-current portion | 1,556 | 432 |
Other long-term liabilities | 483 | 3,100 |
Total liabilities | 73,800 | 91,169 |
Commitments and contingencies | ' | ' |
Preferred stock, $0.001 par value, no shares issued and outstanding: | ' | ' |
Common stock, $0.001 par value authorized 250,000 shares; issued and outstanding 35,833 shares in 2013 and 35,324 shares in 2012 | 36 | 35 |
Additional paid-in capital | 610,167 | 603,770 |
Accumulated other comprehensive loss | -47,695 | -26,540 |
Retained deficit | -293,527 | -234,537 |
Total shareholders’ equity | 268,981 | 342,728 |
Total liabilities and shareholders’ equity | 342,781 | 433,897 |
Preferred stock, Series A | ' | ' |
Preferred stock, $0.001 par value, no shares issued and outstanding: | ' | ' |
Preferred stock | 0 | 0 |
Preferred stock, Undesignated series | ' | ' |
Preferred stock, $0.001 par value, no shares issued and outstanding: | ' | ' |
Preferred stock | $0 | $0 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized | 250,000 | 250,000 |
Common stock, issued | 35,833 | 35,324 |
Common stock, outstanding | 35,833 | 35,324 |
Preferred stock, Series A | ' | ' |
Preferred stock, authorized | 200 | 200 |
Preferred stock, Undesignated series | ' | ' |
Preferred stock, authorized | 59,800 | 59,800 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | |||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Net revenue | $206,196 | [1] | $258,842 | [1] | $335,686 | [1] |
Cost of revenue | 79,091 | [2] | 103,731 | [2] | 126,637 | [2] |
Impairment of deferred costs | 0 | 0 | 19,962 | |||
Gross profit | 127,105 | 155,111 | 189,087 | |||
Sale of patents and other technology assets, net of costs | 0 | 116,353 | 0 | |||
Operating expenses: | ' | ' | ' | |||
Research and development | 60,880 | 63,194 | 70,212 | |||
Sales and marketing | 80,011 | 90,301 | 111,300 | |||
General and administrative | 36,643 | 43,891 | 37,181 | |||
Restructuring and other charges | 5,765 | 15,225 | 8,650 | |||
Lease exit and related charges (gains) | 3,089 | 3,290 | -646 | |||
Loss on litigation settlements | 11,525 | 0 | 0 | |||
Total operating expenses | 197,913 | 215,901 | 226,697 | |||
Operating (loss) income | -70,808 | 55,563 | -37,610 | |||
Other income (expenses): | ' | ' | ' | |||
Interest income, net | 1,133 | 1,192 | 1,552 | |||
Gain on sale of equity and other investments, net | 21,389 | 5,072 | 0 | |||
Equity in net loss of Rhapsody investment | -6,268 | -5,709 | -7,898 | |||
Other income (expense), net | 467 | 1,241 | -473 | |||
Total other income (expenses), net | 16,721 | 1,796 | -6,819 | |||
Income (loss) before income taxes | -54,087 | 57,359 | -44,429 | |||
Income tax expense (benefit) | 4,903 | 12,518 | -17,329 | |||
Net income (loss) attributable to common shareholders | -58,990 | 44,841 | -27,100 | |||
Basic net income (loss) per share available to common shareholders (in dollars per share) | ($1.66) | [3] | $1.29 | [3] | ($0.79) | |
Diluted net income (loss) per share available to common shareholders (in dollars per share) | ($1.66) | [3] | $1.28 | [3] | ($0.79) | |
Shares used to compute basic net income (loss) per share | 35,553 | 34,873 | 34,185 | |||
Shares used to compute diluted net income (loss) per share | 35,553 | 35,122 | 34,185 | |||
Comprehensive income (loss): | ' | ' | ' | |||
Unrealized investment holding gains (losses), net of reclassification adjustments | -20,288 | -633 | 9,459 | |||
Foreign currency translation adjustments, net of reclassification adjustments | -867 | -1,023 | -1,800 | |||
Total other comprehensive income (loss) | -21,155 | -1,656 | 7,659 | |||
Net income (loss) attributable to common shareholders | -58,990 | 44,841 | -27,100 | |||
Comprehensive income (loss) | ($80,145) | $43,185 | ($19,441) | |||
[1] | December 31, 2012Â December 31, 2011Â December 31, 2010Components of Cost of Revenue License Fees8,538Â 11,689Â 17,794Service Revenue70,553Â 92,042Â 108,843Net Revenue Costs79,091Â 103,731Â 126,637 | |||||
[2] | December 31, 2013Â December 31, 2012Â December 31, 2011Components of Revenue License Fees43,709Â 56,640Â 69,644Service Revenue162,487Â 202,202Â 266,042Net Revenue206,196Â 258,842Â 335,686 | |||||
[3] | The sum of the quarterly net income per share amounts will not necessarily equal net income per share for the year due to the use of weighted average quarterly shares and the effects of rounding. |
CONSOLIDATED_STATEMENTS_OF_OPE1
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Components of net revenue: | ' | ' | ' | |||
License fees | $43,709 | $56,640 | $69,644 | |||
Service revenue | 162,487 | 202,202 | 266,042 | |||
Net revenue | 206,196 | [1] | 258,842 | [1] | 335,686 | [1] |
Components of cost of revenue: | ' | ' | ' | |||
License fees | 8,538 | 11,689 | 17,794 | |||
Service revenue | 70,553 | 92,042 | 108,843 | |||
Cost of revenue | $79,091 | [2] | $103,731 | [2] | $126,637 | [2] |
[1] | December 31, 2012Â December 31, 2011Â December 31, 2010Components of Cost of Revenue License Fees8,538Â 11,689Â 17,794Service Revenue70,553Â 92,042Â 108,843Net Revenue Costs79,091Â 103,731Â 126,637 | |||||
[2] | December 31, 2013Â December 31, 2012Â December 31, 2011Components of Revenue License Fees43,709Â 56,640Â 69,644Service Revenue162,487Â 202,202Â 266,042Net Revenue206,196Â 258,842Â 335,686 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income (loss) | ($58,990) | $44,841 | ($27,100) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' | ' |
Depreciation and amortization | 18,748 | 16,959 | 16,895 |
Stock-based compensation | 7,468 | 8,123 | 11,747 |
Loss (gain) on asset disposal | 0 | 2,509 | -62 |
Equity in net loss of Rhapsody | 6,268 | 5,709 | 7,898 |
Excess tax benefit from stock option exercises | 0 | 0 | -74 |
Lease exit and related charges (gains) | 1,421 | 3,290 | -646 |
Deferred income taxes, net | 676 | 20,324 | -23,985 |
Gain on sale of patent and other technology assets, net of costs of $3,647 | 0 | -116,353 | 0 |
Gain on sale of equity and other investments, net | -21,389 | -5,072 | 0 |
Realized translation gain | -571 | -1,966 | 0 |
Other | 51 | 0 | 114 |
Net change in certain operating assets and liabilities: | ' | ' | ' |
Trade accounts receivable | 8,442 | 11,163 | 6,835 |
Prepaid expenses and other assets | 8,112 | -986 | 43,169 |
Accounts payable | 321 | 549 | -14,601 |
Accrued and other liabilities | -20,436 | -22,403 | -20,898 |
Net cash provided by (used in) operating activities | -49,879 | -33,313 | -708 |
Cash flows from investing activities: | ' | ' | ' |
Purchases of equipment, software, and leasehold improvements | -7,727 | -7,170 | -9,873 |
Proceeds from sale of patents and other technology assets, net of costs of $3,647 | 0 | 116,353 | 0 |
Proceeds from sale of equity and other investments | 29,153 | 7,261 | 0 |
Purchases of short-term investments | -131,690 | -116,963 | -96,841 |
Proceeds from sales and maturities of short-term investments | 164,986 | 87,487 | 116,405 |
Decrease in restricted cash equivalents and investments | 10,000 | 167 | 0 |
Increase in restricted cash equivalents and investments | -3,000 | 0 | -179 |
Acquisitions of businesses, net of cash acquired | -22,480 | 0 | -2,888 |
Net cash provided by (used in) investing activities | 39,242 | 87,135 | 6,624 |
Cash flows from financing activities: | ' | ' | ' |
Proceeds from issuance of common stock (stock options and stock purchase plan) | 594 | 3,802 | 3,177 |
Common stock cash dividend paid | 0 | 0 | -136,793 |
Tax payments from shares withheld upon vesting of restricted stock | -1,201 | -995 | 0 |
Excess tax benefit from stock option exercises | 0 | 0 | 74 |
Payment of contingent consideration | -828 | 0 | 0 |
Net cash provided by (used in) financing activities | -1,435 | 2,807 | -133,542 |
Effect of exchange rate changes on cash and cash equivalents | 109 | 236 | -2,059 |
Net increase (decrease) in cash and cash equivalents | -11,963 | 56,865 | -129,685 |
Cash and cash equivalents, beginning of year | 163,198 | 106,333 | 236,018 |
Cash and cash equivalents, end of year | 151,235 | 163,198 | 106,333 |
Supplemental disclosure of cash flow information: | ' | ' | ' |
Cash received from income tax refunds | 8,405 | 456 | 10,166 |
Cash paid for income taxes | 4,600 | 3,296 | 6,284 |
Non-cash investing activities: | ' | ' | ' |
Increase (decrease) in accrued purchases of equipment, software, and leasehold improvements | $335 | $212 | $0 |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Costs related to gain on sale of patent and other technology assets, net of costs | $0 | $3,647 | $0 |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND NONCONTROLLING INTEREST (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Deficit) |
In Thousands, unless otherwise specified | |||||
Balances at Dec. 31, 2010 | $425,239 | $34 | $710,026 | ($32,543) | ($252,278) |
Balances (shares) at Dec. 31, 2010 | ' | 34,021 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock | 3,029 | ' | 3,029 | ' | ' |
Share of Rhapsody equity transactions | 3,113 | ' | 3,113 | ' | ' |
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares (shares) | ' | 401 | ' | ' | ' |
Common Stock cash dividend paid | -136,793 | ' | -136,793 | ' | ' |
Stock-based compensation | 11,747 | ' | 11,747 | ' | ' |
Other comprehensive income (loss) | 7,659 | ' | ' | 7,659 | ' |
Net income (loss) | -27,100 | ' | ' | ' | -27,100 |
Balances at Dec. 31, 2011 | 286,894 | 34 | 591,122 | -24,884 | -279,378 |
Balances (shares) at Dec. 31, 2011 | ' | 34,422 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock | 2,808 | 1 | 2,807 | ' | ' |
Share of Rhapsody equity transactions | 1,718 | ' | 1,718 | ' | ' |
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares (shares) | ' | 902 | ' | ' | ' |
Stock-based compensation | 8,123 | ' | 8,123 | ' | ' |
Other comprehensive income (loss) | -1,656 | ' | ' | -1,656 | ' |
Net income (loss) | 44,841 | ' | ' | ' | 44,841 |
Balances at Dec. 31, 2012 | 342,728 | 35 | 603,770 | -26,540 | -234,537 |
Balances (shares) at Dec. 31, 2012 | ' | 35,324 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares, net of tax payments from shares withheld upon vesting of restricted stock | -607 | 1 | -608 | ' | ' |
Share of Rhapsody equity transactions | -463 | ' | -463 | ' | ' |
Common stock issued for exercise of stock options, employee stock purchase plan, and vesting of restricted shares (shares) | ' | 509 | ' | ' | ' |
Stock-based compensation | 7,468 | ' | 7,468 | ' | ' |
Other comprehensive income (loss) | -21,155 | ' | ' | -21,155 | ' |
Net income (loss) | -58,990 | ' | ' | ' | -58,990 |
Balances at Dec. 31, 2013 | $268,981 | $36 | $610,167 | ($47,695) | ($293,527) |
Balances (shares) at Dec. 31, 2013 | ' | 35,833 | ' | ' | ' |
Description_of_Business_and_Su
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
Description of Business and Summary of Significant Accounting Policies | ' | |
Description of Business and Summary of Significant Accounting Policies | ||
Description of Business. RealNetworks, Inc. and subsidiaries is a leading global provider of network-delivered digital media applications and services that make it easy to manage, play and share digital media. The Company also develops and markets software products and services that enable the creation, distribution and consumption of digital media, including audio and video. | ||
Inherent in our business are various risks and uncertainties, including a limited history of certain of our product and service offerings. RealNetworks' success will depend on the acceptance of our technology, products and services and the ability to generate related revenue. | ||
In this Annual Report on Form 10-K for the year ended December 31, 2013 (10-K), RealNetworks, Inc. and subsidiaries is referred to as “RealNetworks”, the “Company”, “we”, “us”, or “our”. | ||
Basis of Presentation. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. | ||
The consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the periods presented. Operating results for the year ended December 31, 2013 are not necessarily indicative of the results that may be expected for any subsequent periods. | ||
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In addition, current economic conditions may require the use of additional estimates, and certain estimates we currently make are subject to a greater degree of uncertainty as a result of the current economic conditions. | ||
2012 Sale of Patents and Other Technology Assets to Intel Corporation. In the second quarter of 2012, we completed the sale of certain patents, patent applications and related rights held by us, and certain of our assets relating to our next generation video codec technologies to Intel Corporation (Intel) pursuant to an Asset Purchase Agreement. Intel acquired the assets for a gross cash purchase price of $120.0 million. In addition, pursuant to the license agreement, (the “License Agreement”), between Intel and the Company, Intel granted us a non-exclusive, royalty-free, fully paid up, irrevocable (except as set forth in the License Agreement) and worldwide license (without the right to grant sublicenses) to use the patent assets we sold to Intel in connection with our businesses. The transferability of the License Agreement is limited in the event of a change of control or character of the Company, as set forth in the License Agreement. The proceeds, net of related direct costs, of $116.4 million were recorded as a gain in the statement of operations. | ||
2011 Special Dividend and Reverse Stock Split. In 2011, the Company’s Board of Directors approved the payment of a special cash dividend of $1.00 per common share (total cash payment of $136.8 million) and a one-for-four reverse stock split of our common stock. All information related to common stock, stock options, restricted stock units and earnings per share was retroactively adjusted in 2011 to give effect to the special cash dividend and the reverse stock split. | ||
Reclassifications. Certain reclassifications have been made to the 2012 and 2011 consolidated financial statements to conform to the 2013 presentation. These reclassifications had no effect on our consolidated financial position, results of operations, or cash flows. | ||
Cash and Cash Equivalents, Short-Term Investments, and Available-for-Sale Securities. We consider all short-term investments with a remaining contractual maturity at date of purchase of three months or less to be cash equivalents. | ||
We have classified as available-for-sale all marketable debt and equity securities for which there is determinable fair market value and there are no restrictions on our ability to sell. Available-for-sale securities are carried at fair value, based on quoted market prices, with unrealized gains and losses reported in accumulated other comprehensive income (loss) (AOCI) in shareholders' equity, net of any applicable income taxes. Investments with remaining contractual maturities of five years or less are classified as short-term because the investments are marketable and highly liquid, and we have the ability to utilize them for current operations. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in other income (expense), net. Realized and unrealized gains and losses on available-for-sale securities are determined using the specific identification method. | ||
Trade Accounts Receivable. Trade accounts receivable consist of amounts due from customers and do not bear interest. The allowance for doubtful accounts and sales returns is our best estimate of the amount of probable credit losses and returns in our existing accounts receivable. We determine the allowances based on analysis of historical bad debts, customer concentrations, customer credit-worthiness, return history and current economic trends. We review the allowances for doubtful accounts and sales returns quarterly. Past due balances over 90 days and specified other balances are reviewed individually for collectability. All other balances are reviewed on an aggregate basis. Account balances are written off against the allowance after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. We do not have any off-balance sheet credit exposure related to our customers. | ||
Concentration of Credit Risk. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. Short-term investments consist of U.S. government and government agency securities, corporate notes and bonds, and municipal securities. We derive a portion of our revenue from a large number of individual consumers spread globally. We also derive revenue from several large customers. If the financial condition or results of operations of any one of the large customers deteriorates substantially, our operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. We do not generally require collateral and we maintain an allowance for estimated credit losses on customer accounts when considered necessary. | ||
Depreciation and Amortization. Depreciation of equipment, software, and amortization of leasehold improvements are computed using the straight-line method over the lesser of the estimated useful lives of the assets or the related lease term. The useful life of equipment and software is generally three to five years. | ||
Depreciation and amortization expense of these assets during the years ended December 31, 2013, 2012, and 2011 was $14.3 million, $12.9 million, and $12.8 million, respectively. | ||
Equity Method Investments. We use the equity method in circumstances where we have the ability to exert significant influence, but not control, over an investee or joint venture. We initially record our investment based on a fair value analysis of the investment. | ||
We record our percentage interest in the investee's recorded income or loss and changes in the investee's capital under this method, which will increase or decrease the reported value of our investment. We record investee losses up to the aggregate amount of the investment. | ||
We evaluate impairment of an investment accounted for under the equity method if events and circumstances warrant. An impairment charge would be recorded if a decline in value of an equity investment below its carrying amount were determined to be other than temporary. In determining if a decline is other than temporary, we consider factors such as the length of time and extent to which the fair value of the investment has been less than the carrying amount of the investee or joint venture, the near-term and longer-term operating and financial prospects of the investee or joint venture and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery. | ||
Deferred Costs. We defer certain costs on projects for service revenues and system sales. Deferred costs consist primarily of direct and incremental costs to customize and install systems, as defined in individual customer contracts, including costs to acquire hardware and software from third parties and payroll and related costs for employees and other third parties. Deferred costs are capitalized during the implementation period. | ||
We recognize such costs as a component of cost of revenue, the timing of which is dependent upon the revenue recognition policy by contract. At each balance sheet date, we review deferred costs to ensure they are ultimately recoverable. Any anticipated losses on uncompleted contracts are recognized when evidence indicates the estimated total cost of a contract exceeds its estimated total revenue or if actual deferred costs exceed contractual revenue. Assessing the recoverability of deferred costs is based on significant assumptions and estimates, including future revenue and cost of sales. Significant or sustained decreases in revenue or increases in cost of sales in future periods could result in impairments of deferred project costs and prepaid royalty advances. We cannot accurately predict the amount and timing of any such impairments. Should the value of deferred project costs or prepaid royalty advances become impaired, we would record the appropriate charge, which could have a material adverse effect on our financial condition or results of operations. | ||
As of December 31, 2011, we determined that the total estimated costs associated with certain projects exceeded the total estimated revenues expected to be recognized on those projects. As a result, in 2011 we impaired $16.7 million in deferred project costs and an additional $3.3 million of equipment and software assets that related solely to these projects. The $20.0 million charge in 2011 was included in impairment of deferred costs in the accompanying consolidated statements of operations and comprehensive income (loss). No such charges were incurred in 2013 or 2012. | ||
Definite-Lived Tangible and Intangible Assets. Definite-lived tangible assets include equipment, software and leasehold improvements, and are depreciated/amortized over their useful lives, as described above. Definite-lived intangible assets consist primarily of the fair value of customer agreements and contracts, and developed technology acquired in business combinations. These assets are amortized on a straight line basis over one to eleven years, which approximates their estimated useful lives. | ||
We review these assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. If the carrying amount of an asset group is not recoverable, an impairment loss is recognized based on the excess of the carrying amount of the asset group over its estimated fair value, which is generally determined as the present value of estimated future cash flows. The impairment analysis is based on significant assumptions of future results made by us, including operating and cash flow projections. Significant or sustained declines in future revenue or cash flows, or adverse changes in our business climate, among other factors, could result in the need to record an impairment charge in future periods. | ||
Goodwill. We test goodwill for impairment on an annual basis, in our fourth quarter, or more frequently if circumstances indicate reporting unit carrying values may exceed their fair values. Circumstances that may indicate a reporting unit's carrying value exceeds its fair value include, but are not limited to: poor economic performance relative to historical or projected future operating results; significant negative industry, economic or company specific trends; changes in the manner of our use of the assets or the plans for our business; and loss of key personnel. | ||
When evaluating goodwill for impairment, based upon our annual test or due to changes in circumstances described above, we first perform a qualitative assessment to determine if the fair value of a reporting unit is more likely than not less than the reporting unit's carrying amount including goodwill. If this assessment indicates it is more likely than not, we then compare the carrying value of the reporting unit to the estimated fair value of the reporting unit. If the carrying value of the reporting unit exceeds the estimated fair value, we then calculate the implied estimated fair value of goodwill for the reporting unit and compare it to the carrying amount of goodwill for the reporting unit. If the carrying amount of goodwill exceeds the implied estimated fair value, an impairment charge to current operations is recorded to reduce the carrying value to implied estimated value. Significant judgment is required in determining the reporting units and assessing fair value of the reporting units. | ||
Indefinite-Lived Intangible Assets. We evaluate indefinite-lived intangible assets (primarily tradenames and trademarks) for impairment on an annual basis, in the fourth quarter, or more frequently if an event occurs or changes in circumstances indicate that impairment may exist. When evaluating indefinite-lived intangible assets for impairment, we may first perform a qualitative assessment to determine if the fair value of the intangible assets is more likely than not greater than its carrying amount. If we do not perform a qualitative assessment or if the fair value of the intangible assets is not more likely than not greater than its carrying amount, we calculate the estimated fair value of the intangible assets. If the carrying amount of the intangible assets exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the implied estimated fair value. Significant judgment is required in assessing fair value of the indefinite-lived intangible assets. | ||
Fair Value. We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized at fair value in the financial statements on a recurring basis. Fair value is the price that would be received from selling an asset or paid in transfering a liability in an orderly transaction between market participants at the measurement date. Our fair value measurements consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. | ||
The fair value is determined based on three levels of inputs: | ||
• | Level 1: Quoted prices in active markets for identical assets or liabilities | |
• | Level 2: Directly or indirectly observed inputs for the asset or liability, including quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active | |
• | Level 3: Significant unobservable inputs that reflect our own estimates of assumptions that market participants would use | |
Research and Development. Costs incurred in research and development are expensed as incurred. Software development costs are capitalized when a product’s technological feasibility has been established through the date the product is available for general release to customers. Other than internal use software, we have not capitalized any software development costs, as technological feasibility is generally not established until a working model is completed, at which time substantially all development is complete. | ||
Revenue Recognition. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Physical products are considered delivered to the customer once they have been shipped and title and risk of loss have been transferred. For online sales, the products or services are considered delivered at the time the products or services are made available, digitally, to the end user. | ||
In most arrangements, we contract directly with end user customers, and are the primary obligor. In such arrangements, we recognize revenue on a gross basis. In some cases, we utilize third-party distributors to sell products or services directly to end user customers. In such instances, we recognize revenue on a net basis. | ||
In our direct to consumer business, we derive revenue through (1) subscriptions of our SuperPass product and our games offerings, (2) sales of content downloads, software and licenses and (3) the sale of advertising and the distribution of third-party products on our websites and in our games. | ||
Consumer subscription products are paid in advance, typically for monthly, quarterly or annual duration. Subscription revenue is recognized ratably over the related subscription time period. Revenue from sales of content downloads, software and licenses is recognized at the time the product is made available, digitally, to the end user. Revenue generated from advertising on our websites and from advertising and the distribution of third-party products included in our products is recognized as revenue at the time of delivery. | ||
We also generate revenue through business-to-business channels by providing services within our Mobile Entertainment segment enabling mobile carriers to deliver audio and video content to their customers and by selling software licenses and products and related support and other services. Revenue generated from services provided to mobile carriers that enable the delivery of audio and video content to their customers is recognized as the services are provided. Setup fees to build these services are recognized ratably upon launch of the service over the remaining expected term of the service. | ||
Non-software revenue arrangements containing multiple elements are divided into separate units of accounting, after being evaluated for specific criteria. If the criteria for separation are met, revenue is allocated to the individual units using the relative fair value method. If the criteria are not met, the elements are treated as one unit of accounting and revenue recognition is delayed until all elements have been delivered. In the case of revenue arrangements containing software, elements are divided into separate units of accounting only when vendor-specific objective evidence has been established. In cases where vendor-specific objective evidence has not been established, undelivered elements are combined into one unit of accounting and are not recognized in revenue until all elements have been delivered. | ||
Advertising Expenses. We expense the cost of advertising and promoting our products as incurred. These costs are included in sales and marketing expense and totaled $30.6 million in 2013, $31.7 million in 2012 and $35.7 million in 2011. | ||
Foreign Currency. The functional currency of the Company’s foreign subsidiaries is the currency of the country in which the subsidiary operates. Assets and liabilities of foreign operations are translated into U.S. dollars using rates of exchange in effect at the end of the reporting period. The net gain or loss resulting from translation is shown as translation adjustment and included in AOCI in shareholders’ equity. Income and expense accounts are translated into U.S. dollars using average rates of exchange. Gains and losses from foreign currency transactions are included in the consolidated statements of operations. | ||
Derivative Financial Instruments. We conduct business internationally in several currencies and thus we are exposed to adverse movements in foreign currency exchange rates. A portion of these risks may be managed through the use of financial derivatives, but fluctuations in foreign exchange rates could impact our results of operations and financial position. Our foreign currency risk management program reduces, but does not entirely eliminate, the impact of currency exchange rate movements. | ||
Generally, our practice is to manage foreign currency risk for the majority of material short-term intercompany balances through the use of foreign currency forward contracts. These contracts require us to exchange currencies at rates agreed upon at the contract’s inception. Because the impact of movements in currency exchange rates on forward contracts offsets the related impact on the short-term intercompany balances, these financial instruments help alleviate the risk that might otherwise result from certain changes in currency exchange rates. We do not designate foreign exchange forward contracts related to short-term intercompany accounts as hedges and, accordingly, adjust these instruments to fair value through our results of operations. However, we may periodically hedge a portion of our foreign exchange exposures associated with material firmly committed transactions and long-term investments. | ||
All derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated a hedge, then depending on the nature of the hedge, changes in fair value will either be recorded immediately in results of operations, or be recognized in AOCI until the hedged item is recognized in results of operations. | ||
We had nominal amounts of derivatives outstanding at either December 31, 2013 or 2012. | ||
Accounting for Taxes Collected from Customers. Our revenues are reported net of sales and other transaction taxes that are collected from customers and remitted to taxing authorities. | ||
Income Taxes. We compute income taxes using the asset and liability method, under which deferred income taxes are provided for temporary differences between financial reporting basis and tax basis of our assets and liabilities and operating loss and tax credit carryforwards. We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the appropriate taxing jurisdictions. Adjustments to the valuation allowance could be required in the future if we estimate that the amount of deferred tax assets to be realized is more or less than the net amount we have recorded. Any increase or decrease in the valuation allowance could have the effect of increasing or decreasing the income tax provision in the statement of operations. | ||
Deferred tax assets and liabilities and operating loss and tax credit carryforwards are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and operating loss and tax credit carryforwards are expected to be recovered or settled. | ||
We file numerous consolidated and separate income tax returns in the U.S. including federal, state and local, as well as foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal income tax examinations for tax years before 2008 or state, local, or foreign income tax examinations for years before 1993. RealNetworks, Inc. and/or subsidiaries are under audit by various states and foreign jurisdictions for certain tax years subsequent to 1993. | ||
We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We recognize accrued interest and penalties related to uncertain tax positions as a component of income tax expense. | ||
Stock-Based Compensation. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is the vesting period. We use the Black-Scholes option-pricing model or other appropriate valuation models to determine the fair value of stock-based option awards. The fair value of restricted stock awards is based on the closing market price of our common stock on the award date. For performance-based awards, expense is recognized when it is probable the performance goal will be achieved, however if the likelihood becomes improbable, that expense is reversed. We recognize the compensation cost for awards on a straight-line basis for the entire award, over the applicable vesting period. For our employee stock purchase plan, compensation expense is measured based on the discount the employee is entitled to upon purchase. | ||
The valuation models for stock-based option awards require various highly judgmental assumptions including volatility in our common stock price and expected option life. If any of the assumptions used in the valuation models change significantly, stock-based compensation expense for new awards may differ materially in the future from the amounts recorded in the consolidated statements of operations. For all awards, we also estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates and ultimately record stock-based compensation expense only for those awards that vest. | ||
Net Income Per Share. Basic net income (loss) per share (EPS) available to common shareholders is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS available to common shareholders is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common and dilutive potential common shares outstanding during the period. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Changes and Error Corrections [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
There have been no recent accounting pronouncements or changes in accounting pronouncements during the year ended December 31, 2013 to be implemented that are of significance or potential significance to RealNetworks. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2013 | |
Business Combinations [Abstract] | ' |
Acquisitions | ' |
Acquisitions | |
In the quarter ended June 30, 2013, we acquired 100% of the voting interests in Slingo, Inc., a social casino games company based in the U.S., for total cash consideration of $15.6 million. The tangible assets and liabilities recognized, which are not significant, along with the intangible assets and liabilities recognized, are all reported within the Games segment. The identifiable intangible assets associated with the acquisition totaled $8.0 million. Of this total, $4.5 million is related to tradenames and trademarks determined to have indefinite useful lives and will be evaluated annually in our fourth quarter for impairment, or more frequently, if circumstances indicate an impairment may exist. The remaining $3.5 million includes developed game technology and existing customer relationships with finite lives, and will be amortized over their useful lives. We recorded a net deferred tax liability of $2.7 million related to the intangible assets acquired. Goodwill totaling $9.9 million has been recorded, representing the excess of purchase consideration over the fair value of net acquired assets, and is primarily related to the assembled workforce and expected synergies in the rapidly growing social casino games market. The goodwill is not deductible for income tax purposes. For the twelve months ended December 31, 2013, the amount of revenue and income (loss) before income taxes from this acquired business was not significant. We expect this acquisition to enhance our footprint in the social casino games arena. | |
In the quarter ended September 30, 2013, we acquired 100% of the voting interests in Muzicall Limited, a ringback tone company based in London, for total cash consideration of $6.7 million. The tangible and intangible assets and liabilities recognized are reported in the Mobile Entertainment segment. The identifiable intangible assets associated with the acquisition totaled $5.4 million, and include tradenames and trademarks, developed technology, user base and carrier relationships. All identifiable intangible assets from this acquisition have finite lives, and will be amortized over their useful lives. We recorded a net deferred tax asset of $3.4 million related to the assets acquired, and a full valuation allowance. Goodwill totaling $1.3 million was recorded, representing the excess of purchase consideration over the fair value of net acquired assets, and is primarily related to the assembled workforce and expected synergies in the ringback tone industry. The goodwill is not deductible for income tax purposes. For the twelve months ended December 31, 2013, the amount of revenue and income (loss) before income taxes from this acquired business was not significant. This acquisition is intended to accelerate our growth initiatives within the Mobile Entertainment segment. |
Rhapsody_Joint_Venture
Rhapsody Joint Venture | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ' | ||||||||||||
Rhapsody Joint Venture | ' | ||||||||||||
Rhapsody Joint Venture | |||||||||||||
As of December 31, 2013 we owned approximately 45% of the issued and outstanding stock of Rhapsody and account for our investment using the equity method of accounting. | |||||||||||||
Rhapsody was initially formed in 2007 as a joint venture between RealNetworks and MTV Networks, a division of Viacom International Inc. (MTVN), to own and operate a business-to-consumer digital audio music service known as Rhapsody. Prior to March 31, 2010, we held a 51% interest in Rhapsody and MTVN owned the remaining 49%. On March 31, 2010, restructuring transactions involving Rhapsody were completed, and as a result, effective March 31, 2010 RealNetworks owned approximately 47% of Rhapsody. Subsequent to the restructuring transaction, we have accounted for our investment in Rhapsody using the equity method of accounting. | |||||||||||||
As part of the restructuring transaction, RealNetworks contributed $18.0 million in cash, the Rhapsody brand and certain other assets, including content licenses, in exchange for shares of convertible preferred stock of Rhapsody, carrying a $10.0 million preference upon certain liquidation events. | |||||||||||||
Subsequent to the restructuring transaction, RealNetworks provided certain operational transition services to Rhapsody. These transition services were completed in 2013, and are discussed further in Note 19, Related Party Transactions. | |||||||||||||
In 2012 Rhapsody issued common stock as consideration for acquisitions it made. As RealNetworks did not acquire any additional Rhapsody common stock as part of Rhapsody's transactions, our equity interest decreased from approximately 47% in 2011 to approximately 45% in 2012, and we recorded a dilution gain totaling $1.7 million, which increased our carrying amount for Rhapsody by the same amount. Our policy is to record the gain in equity, as a component of Additional paid in capital. | |||||||||||||
As of December 31, 2013 the carrying value of our investment in Rhapsody was $12.5 million. | |||||||||||||
We recorded our share of losses in the operations of Rhapsody of $6.3 million, $5.7 million, and $7.9 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
Summarized financial information for Rhapsody, which represents 100% of their financial information, is as follows (in thousands): | |||||||||||||
Year ended December 31, | Year ended December 31, | Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||||
Net revenue | $ | 140,596 | $ | 143,674 | $ | 127,184 | |||||||
Gross profit | 34,141 | 36,260 | 39,137 | ||||||||||
Net loss | (14,663 | ) | (12,228 | ) | (13,580 | ) | |||||||
As of December 31, 2013 | As of December 31, 2012 | ||||||||||||
Current assets | $ | 31,245 | $ | 34,035 | |||||||||
Non-current assets | 17,305 | 19,688 | |||||||||||
Current liabilities | 46,458 | 36,756 | |||||||||||
Non-current liabilities | — | — | |||||||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||
Fair Value Measurements | ' | |||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||
Items Measured at Fair Value on a Recurring Basis | ||||||||||||||||||||
The following tables present information about our financial assets that have been measured at fair value on a recurring basis as of December 31, 2013 and December 31, 2012, and indicates the fair value hierarchy of the valuation inputs utilized to determine fair value (in thousands). | ||||||||||||||||||||
Fair Value Measurements as of | Amortized Cost as of | |||||||||||||||||||
December 31, 2013 | 31-Dec-13 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||
Cash | $ | 46,978 | $ | — | $ | — | $ | 46,978 | $ | 46,978 | ||||||||||
Money market funds | 1 | 26,913 | — | 26,914 | 26,914 | |||||||||||||||
Corporate notes and bonds | — | 77,043 | — | 77,043 | 77,044 | |||||||||||||||
U.S. government agency securities | — | 300 | — | 300 | 300 | |||||||||||||||
Total cash and cash equivalents | 46,979 | 104,256 | — | 151,235 | 151,236 | |||||||||||||||
Short-term investments: | ||||||||||||||||||||
Corporate notes and bonds | — | 59,766 | — | 59,766 | 59,713 | |||||||||||||||
U.S. government agency securities | 14,077 | 1,077 | — | 15,154 | 15,159 | |||||||||||||||
Total short-term investments | 14,077 | 60,843 | — | 74,920 | 74,872 | |||||||||||||||
Restricted cash equivalents and investments | — | 3,000 | — | 3,000 | 3,000 | |||||||||||||||
Equity investments in publicly traded securities | 7,181 | — | — | 7,181 | 842 | |||||||||||||||
Total | $ | 68,237 | $ | 168,099 | $ | — | $ | 236,336 | $ | 229,950 | ||||||||||
Fair Value Measurements as of | Amortized Cost as of | |||||||||||||||||||
December 31, 2012 | 31-Dec-12 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||
Cash | $ | 71,283 | $ | — | $ | — | $ | 71,283 | $ | 71,283 | ||||||||||
Money market funds | — | 10,680 | — | 10,680 | 10,680 | |||||||||||||||
Corporate notes and bonds | — | 81,235 | — | 81,235 | 81,237 | |||||||||||||||
Total cash and cash equivalents | 71,283 | 91,915 | — | 163,198 | 163,200 | |||||||||||||||
Short-term investments: | ||||||||||||||||||||
Corporate notes and bonds | — | 65,502 | — | 65,502 | 65,426 | |||||||||||||||
U.S. government agency securities | 42,113 | 601 | — | 42,714 | 42,693 | |||||||||||||||
Total short-term investments | 42,113 | 66,103 | — | 108,216 | 108,119 | |||||||||||||||
Restricted cash equivalents and investments | — | 10,000 | — | 10,000 | 10,000 | |||||||||||||||
Equity investments in publicly traded securities | 34,334 | — | — | 34,334 | 8,609 | |||||||||||||||
Total | $ | 147,730 | $ | 168,018 | $ | — | $ | 315,748 | $ | 289,928 | ||||||||||
Restricted cash equivalents and investments amounts as of December 31, 2013, and December 31, 2012 relate to cash pledged as collateral against a letter of credit in connection with a lease agreement. | ||||||||||||||||||||
Realized gains or losses on sales of short-term investment securities for 2013, 2012, and 2011 were not significant. Gross unrealized gains and gross unrealized losses on short-term investment securities as of December 31, 2013 and December 31, 2012 were not significant. | ||||||||||||||||||||
Investments with remaining contractual maturities of five years or less are classified as short-term because the investments are marketable and highly liquid, and we have the ability to utilize them for current operations. Contractual maturities of short-term investments as of December 31, 2013 (in thousands): | ||||||||||||||||||||
Estimated | ||||||||||||||||||||
Fair Value | ||||||||||||||||||||
Within one year | $ | 47,693 | ||||||||||||||||||
Between one year and five years | 27,227 | |||||||||||||||||||
Total short-term investments | $ | 74,920 | ||||||||||||||||||
Our equity investments in publicly traded companies as of December 31, 2013 consisted of J-Stream Inc., a Japanese media services company. As of December 31, 2012, this balance consisted of J-Stream Inc., and LoEn Entertainment, Inc., a Korean digital music distribution company. These equity investments are accounted for as available for sale. | ||||||||||||||||||||
In November 2013 we sold all of our remaining shares of common stock in LoEn for cash proceeds of $29.2 million, net of transaction costs, and recorded a pretax gain on sale of $21.4 million in Other income (expense), net, in the consolidated statement of operations. | ||||||||||||||||||||
For the year ended December 31, 2012 we sold a portion of the LoEn shares we held, resulting in cash proceeds of $6.4 million and a pre-tax gain of $4.3 million. | ||||||||||||||||||||
Items Measured at Fair Value on a Non-recurring Basis | ||||||||||||||||||||
Certain of our assets and liabilities are measured at estimated fair value on a non-recurring basis, using Level 3 inputs. These instruments are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). See Note 1, Description of Business and Summary of Significant Accounting Policies - Deferred Costs, for a discussion of the 2011 impairment charges related to deferred project costs. See Note 11, Lease Exit and Related Charges, for a discussion of the losses related to reductions in the use of RealNetworks' office space. |
Allowance_for_Doubtful_Account
Allowance for Doubtful Accounts Receivable and Sales Returns | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Receivables [Abstract] | ' | ||||||||||||
Allowance for Doubtful Accounts Receivable and Sales Returns | ' | ||||||||||||
Note 6. | Allowance for Doubtful Accounts Receivable and Sales Returns | ||||||||||||
Activity in the allowance for doubtful accounts receivable (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 1,010 | $ | 1,445 | $ | 1,529 | |||||||
Addition (reduction) to allowance | (2 | ) | 76 | 693 | |||||||||
Amounts written off | (83 | ) | (529 | ) | (742 | ) | |||||||
Effects of foreign currency translation | 41 | 18 | (35 | ) | |||||||||
Balance, end of year | $ | 966 | $ | 1,010 | $ | 1,445 | |||||||
Activity in the allowance for sales returns (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 653 | $ | 668 | $ | 1,039 | |||||||
Addition (reduction) to allowance | (64 | ) | 153 | 939 | |||||||||
Amounts written off | (21 | ) | (168 | ) | (1,311 | ) | |||||||
Effects of foreign currency translation | 1 | — | 1 | ||||||||||
Balance, end of year | $ | 569 | $ | 653 | $ | 668 | |||||||
Total, Allowance for Doubtful Accounts Receivable and Sales Returns | $ | 1,535 | $ | 1,663 | $ | 2,113 | |||||||
One customer accounted for 17% of trade accounts receivable as of December 31, 2013. No one customer accounted for more than 10% of trade accounts receivable as of December 31, 2012. | |||||||||||||
One customer accounted for approximately 13% or $27.0 million, of consolidated revenue during the year ended December 31, 2013. The revenue from this customer is reflected in our RealPlayer Group and Games segments. One other customer accounted for approximately 13% or $26.4 million, of consolidated revenue during the year ended December 31, 2013, in our Mobile Entertainment segment. One customer accounted for 11%, or $27.7 million, of total revenue during the year ended December 31, 2012, in our RealPlayer and Games segments. No one customer accounted for more than 10% of total revenue during the year ended December 31, 2011. |
Other_Intangible_Assets
Other Intangible Assets | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||||
Other Intangible Assets | ' | |||||||||||||||||||||||||
Note 7. | Other Intangible Assets | |||||||||||||||||||||||||
Other intangible assets (in thousands): | ||||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | |||||||||||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||||||||||||
Amortizing intangible assets: | ||||||||||||||||||||||||||
Customer relationships | $ | 35,156 | $ | 31,262 | $ | 3,894 | $ | 30,831 | $ | 28,211 | $ | 2,620 | ||||||||||||||
Developed technology | 29,097 | 25,039 | 4,058 | 24,532 | 23,885 | 647 | ||||||||||||||||||||
Patents, trademarks and tradenames | 4,021 | 3,627 | 394 | — | — | — | ||||||||||||||||||||
Service contracts | 5,679 | 5,532 | 147 | 5,467 | 5,459 | 8 | ||||||||||||||||||||
73,953 | 65,460 | 8,493 | 60,830 | 57,555 | 3,275 | |||||||||||||||||||||
Non-amortizing intangible assets: | ||||||||||||||||||||||||||
Trademarks and tradenames | 4,500 | — | 4,500 | — | — | — | ||||||||||||||||||||
Total | $ | 78,453 | $ | 65,460 | $ | 12,993 | $ | 60,830 | $ | 57,555 | $ | 3,275 | ||||||||||||||
For current year increases in other intangible assets, see Note 3, Acquisitions, for details on our acquisitions of Slingo, a social casino games business, in the quarter ended June 30, 2013, and Muzicall, a ringback tone business, in the quarter ended September 30, 2013. | ||||||||||||||||||||||||||
Amortization expense related to other intangible assets during the years ended December 31, 2013, 2012, and 2011 was $4.4 million, $4.1 million, and $4.1 million, respectively. | ||||||||||||||||||||||||||
As of December 31, 2013, estimated future amortization of other intangible assets was (in thousands): | ||||||||||||||||||||||||||
2014 | $ | 3,131 | ||||||||||||||||||||||||
2015 | 2,165 | |||||||||||||||||||||||||
2016 | 1,489 | |||||||||||||||||||||||||
2017 | 695 | |||||||||||||||||||||||||
2018 | 193 | |||||||||||||||||||||||||
Thereafter | 820 | |||||||||||||||||||||||||
Total | $ | 8,493 | ||||||||||||||||||||||||
No impairments of other intangible assets were recognized in 2013, 2012 or 2011. |
Goodwill
Goodwill | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||
Goodwill | ' | ||||||||
Note 8. | Goodwill | ||||||||
Changes in goodwill (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Balance, beginning of year | |||||||||
Goodwill | $ | 316,962 | $ | 316,851 | |||||
Accumulated impairment losses | (310,653 | ) | (310,653 | ) | |||||
6,309 | 6,198 | ||||||||
Increases due to current year acquisitions | 11,463 | — | |||||||
Effects of foreign currency translation | (296 | ) | 111 | ||||||
11,167 | 111 | ||||||||
Balance, end of year | |||||||||
Goodwill | 328,129 | 316,962 | |||||||
Accumulated impairment losses | (310,653 | ) | (310,653 | ) | |||||
$ | 17,476 | $ | 6,309 | ||||||
Goodwill by segment (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
RealPlayer Group | $ | 580 | $ | 580 | |||||
Mobile Entertainment | 2,119 | 779 | |||||||
Games | 14,777 | 4,950 | |||||||
Total goodwill | $ | 17,476 | $ | 6,309 | |||||
For current year increases in goodwill, see Note 3, Acquisitions, for details on our acquisitions of Slingo, a social casino games business, in the quarter ended June 30, 2013, and Muzicall, a ringback tone business, in the quarter ended September 30, 2013. | |||||||||
No impairments of goodwill were recorded in 2013, 2012, or 2011. |
Accrued_and_Other_Current_Liab
Accrued and Other Current Liabilities | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued and Other Current Liabilities | ' | |||||||
Note 9. | Accrued and Other Current Liabilities | |||||||
Accrued and other current liabilities (in thousands): | ||||||||
31-Dec-13 | 31-Dec-12 | |||||||
Royalties and other fulfillment costs | $ | 16,467 | $ | 19,435 | ||||
Employee compensation, commissions and benefits | 10,060 | 13,368 | ||||||
Sales, VAT and other taxes payable | 7,237 | 10,959 | ||||||
Deferred tax liabilities—current | 899 | 3,894 | ||||||
Accrued lease exit and related charges | 254 | 2,463 | ||||||
Other | 7,875 | 7,411 | ||||||
Total accrued and other current liabilities | $ | 42,792 | $ | 57,530 | ||||
Restructuring_Charges
Restructuring Charges | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Restructuring Charges | ' | ||||||||||||
Note 10. | Restructuring Charges | ||||||||||||
Restructuring and other charges in 2013, 2012 and 2011 consist of costs associated with the ongoing reorganization of our business operations and focus on aligning our operating expenses with our revenue profile. The expense amounts in all three years primarily relate to severance costs due to workforce reductions. | |||||||||||||
In the third quarter of 2012, we announced the elimination of approximately 160 positions worldwide, which was concluded as of the second quarter of 2013. In the second half of 2013, we incurred additional restructuring charges for additional headcount reductions resulting from the termination of certain SaaS contracts. We expect this activity to be complete during the first half of 2014. These costs are classified as Employee Separation Costs in the table below. | |||||||||||||
In addition, we also incurred restructuring charges during 2013 related to the relocation of our Seattle headquarters totaling $1.8 million, which is classified as Asset Related and Other Costs in the table below. Of this amount, $0.3 million was unpaid at December 31, 2013. For details on other costs associated with the termination of our Seattle headquarters lease see Note 11, Lease exit and related charges. | |||||||||||||
Details of restructuring charges for the years ended December 31, 2013, 2012, and 2011 are shown in the table below (in thousands): | |||||||||||||
By Type of Cost | |||||||||||||
Employee Separation Costs | Contract Assignment Costs | Asset Related and Other Costs | Total | ||||||||||
Costs incurred and charged to expense for the year ended December 31, 2013 | $ | 3,961 | $ | — | $ | 1,804 | $ | 5,765 | |||||
Costs incurred and charged to expense for the year ended December 31, 2012 | $ | 9,052 | $ | 3,629 | $ | 2,544 | $ | 15,225 | |||||
Costs incurred and charged to expense for the year ended December 31, 2011 | $ | 7,739 | $ | — | $ | 911 | $ | 8,650 | |||||
Changes to the accrued restructuring liability for 2013 (in thousands): | |||||||||||||
By Type of Cost | |||||||||||||
Employee Separation Costs | Contract Assignment Costs | Total | |||||||||||
Accrued liability as of December 31, 2012 | $ | 731 | $ | 1,700 | $ | 2,431 | |||||||
Costs incurred and charged to expense for the year ended December 31, 2013 | 3,961 | — | 3,961 | ||||||||||
Cash payments | (3,936 | ) | (1,700 | ) | (5,636 | ) | |||||||
Accrued liability as of December 31, 2013 | $ | 756 | $ | — | $ | 756 | |||||||
The amount accrued at December 31, 2013 for employee separation includes costs for those employees who were separated in the year ended December 31, 2013 and are expected to be paid out in the first quarter of 2014. This accrued liability is included within the Accrued and other current liabilities line item on the Consolidated Balance Sheets. |
Loss_on_Exit_and_Related_Charg
Loss on Exit and Related Charges | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Disclosure Changes To Accrued Loss On Excess Office Facilities [Abstract] | ' | ||||||||||
Loss on Exit and Related Charges | ' | ||||||||||
Note 11. | Lease Exit and Related Charges | ||||||||||
As a result of the reduction in use of RealNetworks' office space, primarily in our former corporate headquarters in Seattle, Washington, and certain other locations, losses have been recognized representing rent and contractual operating expenses over the remaining life of the leases, and related write-downs of leasehold improvements to their estimated fair value. | |||||||||||
In the second quarter of 2013, we entered into a new lease in a new location for our Seattle headquarters and concurrently entered into an amendment to our then-current headquarters office lease that provided for an early termination of such lease. | |||||||||||
The new Seattle building lease is for an initial term of 11 years and commenced on August 15, 2013. We have the option to extend the lease for two additional five-year terms, with certain increases in base rent. | |||||||||||
The amendment to our former headquarters office lease provided for an early termination of such lease effective in three stages, with the termination of a majority of the premises on August 31, 2013, and the final stage being complete by December 31, 2013. Prior to the execution of the amendment, the lease had been scheduled to expire in September 2014. In the year ended December 31, 2013, in connection with the early termination of the lease, we paid the landlord $6.5 million in fees. The initial payment of $3.2 million was expensed and paid within the second quarter of 2013, and is therefore not included in the rollforward below. The subsequent payments of $3.3 million were accrued in the second quarter of 2013 and subsequently paid in the second half of 2013, and are included in the rollforward of the accrued loss below. | |||||||||||
Changes to the accrued loss on excess office facilities (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Accrued loss, beginning of year | $ | 4,213 | $ | 2,747 | $ | 4,524 | |||||
Additions and adjustments to the lease loss accrual, including sublease income estimate revision, and related asset write-downs | 1,421 | 3,290 | (646 | ) | |||||||
Less write-down of leasehold improvements | — | (496 | ) | — | |||||||
Less amounts paid, net of sublease income | (5,380 | ) | (1,328 | ) | (1,131 | ) | |||||
Accrued loss, end of year | 254 | 4,213 | 2,747 | ||||||||
Less current portion (included in Accrued and other current liabilities) | (254 | ) | (2,463 | ) | (596 | ) | |||||
Accrued loss, non-current portion (included in Other long term liabilities) | $ | — | $ | 1,750 | $ | 2,151 | |||||
Shareholders_Equity
Shareholders’ Equity | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Equity [Abstract] | ' | |||||||||||||
Shareholders’ Equity | ' | |||||||||||||
Note 12. | Shareholders’ Equity | |||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||
Changes in components of accumulated other comprehensive income (in thousands): | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Investments | ||||||||||||||
Accumulated other comprehensive income (loss), beginning of period | $ | 26,685 | $ | 27,318 | $ | 17,859 | ||||||||
Unrealized gains (losses), net of tax effects of $(54), $0 and $0 | 2,121 | 3,313 | 9,459 | |||||||||||
Reclassification adjustments for losses (gains) included in other income (expense), net of tax effects of $(800), $0 and $0 | (22,409 | ) | (3,946 | ) | — | |||||||||
Net current period other comprehensive income | (20,288 | ) | (633 | ) | 9,459 | |||||||||
Accumulated other comprehensive income (loss) balance, end of period | $ | 6,397 | $ | 26,685 | $ | 27,318 | ||||||||
Foreign currency translation | ||||||||||||||
Accumulated other comprehensive income (loss), beginning of period | $ | (53,225 | ) | $ | (52,202 | ) | $ | (50,402 | ) | |||||
Translation adjustments | (296 | ) | 943 | (1,800 | ) | |||||||||
Reclassification adjustments for losses (gains) included in other income (expense) | (571 | ) | (1,966 | ) | — | |||||||||
Net current period other comprehensive income | (867 | ) | (1,023 | ) | (1,800 | ) | ||||||||
Accumulated other comprehensive income (loss) balance, end of period | $ | (54,092 | ) | $ | (53,225 | ) | $ | (52,202 | ) | |||||
Total accumulated other comprehensive income (loss), end of period | $ | (47,695 | ) | $ | (26,540 | ) | $ | (24,884 | ) | |||||
Preferred Stock. Each share of Series A preferred stock entitles the holder to one thousand votes and dividends equal to one thousand times the aggregate per share amount of dividends declared on the common stock. There are no shares of Series A preferred stock outstanding. | ||||||||||||||
Undesignated preferred stock will have rights and preferences that are determinable by the Board of Directors when determination of a new series of preferred stock has been established. |
Employee_Stock_and_Benefit_Pla
Employee Stock and Benefit Plans | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||
Employee Stock and Benefit Plans | ' | ||||||||||||
Note 13. | Employee Stock and Benefit Plans | ||||||||||||
Equity Compensation Plans. Under our equity incentive plans we may grant various types of equity awards to employees and Directors. We have granted time-vest and performance-vest stock options and time-vest and performance-vest restricted stock. Generally, options vest based on continuous employment, over a four-year period. The options generally expire in either seven or ten years from the date of grant and are exercisable at the market value of the common stock at the grant date. Time-vest restricted stock awards generally vest based on continuous employment over a two or four-year period. Performance-based awards vest if the specified performance targets are met and the grantee remains employed over the required period. The performance targets for these awards are generally based on the achievement of company-specific financial results. For performance-based awards, expense is recognized when it is probable the performance goal will be achieved. | |||||||||||||
We issue new shares of common stock upon exercise of stock options and the vesting of restricted stock. As of December 31, 2013 there were 2.4 million shares of common stock authorized for future equity awards. Each restricted stock unit granted reduces and each restricted stock unit forfeited or canceled increases the shares available for future grant by a factor of 1.6 shares. We also have an employee stock purchase plan, under which 0.5 million shares of common stock are authorized for future issuance as of December 31, 2013. | |||||||||||||
Stock-based compensation expense recognized in our consolidated statements of operations includes amounts related to stock options, restricted stock, and employee stock purchase plans and was as follows (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Total stock-based compensation expense | $ | 7,468 | $ | 8,123 | $ | 11,747 | |||||||
The total stock-based compensation amounts disclosed above are recorded in their respective line items within operating expenses in the consolidated statement of operations, including amounts that are reported in Restructuring and other charges. No stock-based compensation was capitalized as part of the cost of an asset as of December 31, 2013, 2012, or 2011. As of December 31, 2013, we had $12.1 million of total unrecognized compensation cost, net of estimated forfeitures, related to stock awards. The unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately three years. | |||||||||||||
As discussed in Note 1, Description of Business and Summary of Significant Accounting Policies - Stock-Based Compensation, the valuation models for stock option awards require various highly judgmental assumptions. The assumption for the expected term of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, including the contractual terms, vesting schedules, and expectations of future employee behavior. Expected stock price volatility is based on historical volatility of our common stock for the related expected term. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with a term equivalent to the expected term of the stock options. Notwithstanding the special cash dividend of $1.00 per share paid on our common stock during the quarter ended September 30, 2011, the dividend yield is estimated at zero because we do not currently anticipate paying dividends in the foreseeable future. | |||||||||||||
The fair value of options granted was determined using the Black-Scholes model and used the following weighted average assumptions: | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Expected dividend yield | — | % | — | % | — | % | |||||||
Risk-free interest rate | 0.86 | % | 0.5 | % | 1.31 | % | |||||||
Expected term (years) | 4.3 | 4.2 | 4 | ||||||||||
Volatility | 48 | % | 58 | % | 54 | % | |||||||
Restricted stock unit and award activity was as follows (shares are in thousands): | |||||||||||||
Shares | Weighted Average Grant Date Fair Value Per Share | Total Grant Date Fair Value of Vested Awards (000's) | |||||||||||
Nonvested shares, December 31, 2010 | 87 | $ | 12.04 | ||||||||||
Granted | 520 | 9.4 | |||||||||||
Vested | (94 | ) | 11.58 | $ | 1,078 | ||||||||
Forfeited/Canceled | (50 | ) | 9.59 | ||||||||||
Nonvested shares, December 31, 2011 | 463 | $ | 9.42 | ||||||||||
Granted | 1,536 | 8.7 | |||||||||||
Vested | (437 | ) | 9.47 | $ | 4,106 | ||||||||
Forfeited/Canceled | (313 | ) | 9.42 | ||||||||||
Nonvested shares, December 31, 2012 | 1,249 | $ | 8.52 | ||||||||||
Granted | 232 | 7.18 | |||||||||||
Vested | (581 | ) | 9.13 | $ | 4,438 | ||||||||
Forfeited/Canceled | (410 | ) | 7.74 | ||||||||||
Nonvested shares, December 31, 2013 | 490 | $ | 7.8 | ||||||||||
At December 31, 2013 the aggregate intrinsic value of restricted stock awards was $3.7 million and the weighted average remaining contractual term was approximately 1 year. | |||||||||||||
Stock option activity (shares are in thousands): | |||||||||||||
Options Outstanding | Weighted Average Grant Date Fair Value | ||||||||||||
Number | Weighted | ||||||||||||
of Shares | Average | ||||||||||||
Exercise Price | |||||||||||||
Outstanding, December 31, 2010 | 5,559 | $ | 19.68 | ||||||||||
Options granted at common stock price | 2,250 | 9.54 | $ | 5.08 | |||||||||
Options exercised | (210 | ) | 10.57 | ||||||||||
Options cancelled | (1,234 | ) | 14.72 | ||||||||||
Outstanding, December 31, 2011 | 6,365 | $ | 14.24 | ||||||||||
Options granted at common stock price | 1,422 | 8.29 | $ | 3.71 | |||||||||
Options exercised | (466 | ) | 6.61 | ||||||||||
Options cancelled | (2,787 | ) | 12.76 | ||||||||||
Outstanding, December 31, 2012 | 4,534 | $ | 14.07 | ||||||||||
Options granted at common stock price | 3,578 | 7.56 | $ | 2.93 | |||||||||
Options exercised | (24 | ) | 5.56 | ||||||||||
Options cancelled | (1,463 | ) | 15.76 | ||||||||||
Outstanding, December 31, 2013 | 6,625 | $ | 10.21 | ||||||||||
Exercisable, December 31, 2013 | 2,293 | $ | 14.82 | ||||||||||
Vested and expected to vest, December 31, 2013 | 5,353 | $ | 10.81 | ||||||||||
As of December 31, 2013, the weighted average remaining contractual life of the options was as follows: outstanding options 5.4 years; exercisable options 3.4 years; and vested and expected to vest options 5.1 years. | |||||||||||||
As of December 31, 2013, the aggregate intrinsic value of the options was as follows: outstanding options $0.7 million; exercisable options $0.2 million; and vested and expected to vest options $0.6 million. | |||||||||||||
The aggregate intrinsic value of stock options exercised in 2013, 2012 and 2011 was $0.1 million, $1.0 million and $0.3 million. | |||||||||||||
Employee Stock Purchase Plan. Our Employee Stock Purchase Plan (ESPP) allows an eligible employee to purchase shares of our common stock at a price equal to 85 percent of the fair market value of the common stock at the end of the semi-annual offering periods, subject to certain limitations. Under the ESPP, 71,600, 102,700, and 110,000 shares were purchased during the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
Retirement Savings Plan. We have a salary deferral plan (401(k) Plan) that covers substantially all employees. Eligible employees may contribute a portion of their eligible compensation to the plan up to limits stated in the plan documents, not to exceed the dollar amounts set by applicable laws. During the years ended December 31, 2013, 2012, and 2011, we matched 50% of the first three percent of participating employees’ contributions, and contributed $0.8 million, $1.0 million, and $1.1 million, respectively, in matching contributions. We can terminate the matching contributions at our discretion. We have no other post-employment or post-retirement benefit plans. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Income Taxes | ' | ||||||||||||
Note 14. | Income Taxes | ||||||||||||
Components of income (loss) before income taxes (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States operations | $ | (50,032 | ) | $ | 59,807 | $ | (50,100 | ) | |||||
Foreign operations | (4,055 | ) | (2,448 | ) | 5,671 | ||||||||
Income (loss) before income taxes | $ | (54,087 | ) | $ | 57,359 | $ | (44,429 | ) | |||||
Components of income tax expense (benefit) (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
United States federal | $ | 2,460 | $ | 1,372 | $ | 422 | |||||||
State and local | 61 | (2,957 | ) | 920 | |||||||||
Foreign | 1,706 | (6,221 | ) | 5,314 | |||||||||
Total current | 4,227 | (7,806 | ) | 6,656 | |||||||||
Deferred: | |||||||||||||
United States federal | (1,890 | ) | 22,029 | (22,006 | ) | ||||||||
State and local | 51 | 556 | (555 | ) | |||||||||
Foreign | 2,515 | (2,261 | ) | (1,424 | ) | ||||||||
Total deferred | 676 | 20,324 | (23,985 | ) | |||||||||
Total income tax expense (benefit) | $ | 4,903 | $ | 12,518 | $ | (17,329 | ) | ||||||
Income tax expense differs from “expected” income tax expense (computed by applying the U.S. federal income tax rate of 35%) due to the following (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States federal tax expense (benefit) at statutory rate | $ | (18,930 | ) | $ | 20,076 | $ | (15,550 | ) | |||||
State taxes, net of United States federal tax benefit | (841 | ) | (1,098 | ) | 1,320 | ||||||||
Change in valuation allowance | 25,046 | 2,136 | (9,119 | ) | |||||||||
Non-deductible stock compensation | 415 | 341 | 571 | ||||||||||
Impact of non-U.S. jurisdictional tax rate difference | 487 | 313 | (368 | ) | |||||||||
Research and development tax credit | (1,632 | ) | (1,923 | ) | (1,372 | ) | |||||||
Transfer pricing adjustment | — | — | 2,426 | ||||||||||
Increase (reversal) of unrecognized tax benefits | 671 | (7,826 | ) | 2,100 | |||||||||
Non-U.S. withholding tax | 1,805 | 471 | 275 | ||||||||||
Other | (2,118 | ) | 28 | 2,388 | |||||||||
Total income tax expense (benefit) | $ | 4,903 | $ | 12,518 | $ | (17,329 | ) | ||||||
Net deferred tax assets are comprised of the following (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
United States federal net operating loss carryforwards | $ | 41,612 | $ | 16,581 | |||||||||
Deferred expenses | 7,166 | 8,461 | |||||||||||
Research and development tax credit carryforwards | 23,079 | 22,101 | |||||||||||
Alternative minimum tax credit carryforward | 3,561 | 3,698 | |||||||||||
Net unrealized loss on investments | 109 | 95 | |||||||||||
Accrued loss on excess office facilities | 54 | 1,340 | |||||||||||
Stock-based compensation | 12,225 | 13,639 | |||||||||||
State net operating loss carryforwards | 7,392 | 3,109 | |||||||||||
Foreign net operating loss carryforwards | 37,594 | 31,087 | |||||||||||
Deferred revenue | 128 | 357 | |||||||||||
Equipment, software, and leasehold improvements | 2,736 | 5,042 | |||||||||||
Intangibles | 27 | 64 | |||||||||||
Other | 4,489 | 7,769 | |||||||||||
Gross deferred tax assets | 140,172 | 113,343 | |||||||||||
Less valuation allowance | 128,865 | 90,799 | |||||||||||
Gross deferred tax assets, net of valuation allowance | $ | 11,307 | $ | 22,544 | |||||||||
Deferred tax liabilities: | |||||||||||||
Other intangible assets | $ | (3,761 | ) | $ | (688 | ) | |||||||
Net unrealized gains and basis differences on investments | (6,912 | ) | (16,538 | ) | |||||||||
Other | (560 | ) | (787 | ) | |||||||||
Prepaid expenses | (814 | ) | (1,076 | ) | |||||||||
Gross deferred tax liabilities | (12,047 | ) | (19,089 | ) | |||||||||
Net deferred tax assets (liabilities) | $ | (740 | ) | $ | 3,455 | ||||||||
Income tax receivables were $0.4 million and $8.4 million at December 31, 2013 and 2012, respectively. | |||||||||||||
In 2013, we continued to provide a valuation allowance on the deferred tax assets that we believe are not more likely than not to be realized. The net change in valuation allowance was a $38.1 million increase and an $8.8 million decrease during the years ended December 31, 2013 and 2012, respectively. | |||||||||||||
We maintain a valuation allowance of $128.9 million for our deferred tax assets due to uncertainty regarding their realization as of December 31, 2013. The net increase in the valuation allowance since December 31, 2012 of $38.1 million was the result of a $30.6 million increase in current year deferred tax assets for which the Company maintains a valuation allowance on, and a $7.5 million increase due to valuation allowances placed on certain non-U.S. deferred tax assets because it is not more likely than not that the deferred tax asset will be realized. | |||||||||||||
RealNetworks' U.S. federal net operating loss carryforwards totaled $118.9 million and $47.4 million at December 31, 2013 and 2012, respectively. The increase is mainly due to the current year U.S. taxable loss. The remaining net operating loss carryforwards as of December 31, 2013 are from the U.S. taxable losses in 2010 and 2011 and from acquired subsidiaries that are limited under Internal Revenue Code Section 382. These net operating loss carryforwards expire between 2024 and 2033. | |||||||||||||
RealNetworks' alternative minimum tax credit carryforward decreased from $3.7 million as of December 31, 2012 to $3.6 million as of December 31, 2013. The alternative minimum tax credit can be carried forward indefinitely. | |||||||||||||
RealNetworks' U.S. federal research and development tax credit carryforward totaled $23.1 million and $22.1 million at December 31, 2013 and 2012, respectively. The research and development credit carryforwards expire between 2020 and 2033. | |||||||||||||
As of December 31, 2013 and 2012, we had $4.5 million and $4.0 million of unrecognized tax benefits, respectively. The increase in unrecognized tax benefits is due to federal research & development tax credit carryforwards. The total amount of unrecognized tax benefits that would affect our effective tax rate if recognized was $0.4 million in each of the years ended December 31, 2013 and 2012. | |||||||||||||
As of December 31, 2013 and December 31, 2012, we had approximately $0.1 million and $0.1 million of accrued interest and penalties related to uncertain tax positions, respectively. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision. We currently anticipate the expiration of the statute of limitations within the next twelve months that may decrease the Company's total unrecognized tax benefit by an amount up to $0.9 million. | |||||||||||||
Reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 3,978 | $ | 16,721 | $ | 14,033 | |||||||
Increases related to prior year tax positions | — | 416 | — | ||||||||||
Decreases related to prior year tax positions | (125 | ) | (94 | ) | (768 | ) | |||||||
Settlements with taxing authorities | — | (13,065 | ) | — | |||||||||
Increases related to current year tax positions | 652 | — | 3,518 | ||||||||||
Expiration of the statute of limitations | — | — | (62 | ) | |||||||||
Balance, end of year | $ | 4,505 | $ | 3,978 | $ | 16,721 | |||||||
Earnings_Loss_Per_Share
Earnings (Loss) Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Earnings Per Share | ' | ||||||||||||
Note 15. | Earnings (Loss) Per Share | ||||||||||||
Basic and diluted net income (loss) per share (EPS) available to common shareholders (in thousands, except per share data): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Net income (loss) available to common shareholders | $ | (58,990 | ) | $ | 44,841 | $ | (27,100 | ) | |||||
Weighted average common shares outstanding used to compute basic EPS | 35,553 | 34,873 | 34,185 | ||||||||||
Dilutive effect of stock based awards | — | 249 | — | ||||||||||
Weighted average common shares outstanding used to compute diluted EPS | 35,553 | 35,122 | 34,185 | ||||||||||
Basic EPS | $ | (1.66 | ) | $ | 1.29 | $ | (0.79 | ) | |||||
Diluted EPS | $ | (1.66 | ) | $ | 1.28 | $ | (0.79 | ) | |||||
Approximately 4.6 million, 5.1 million, and 4.3 million shares of potentially issuable shares from stock awards were excluded from the calculation of diluted EPS for the years ended December 31, 2013, 2012, and 2011, respectively, because of their antidilutive effect. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies | ' | ||||
Note 16. | Commitments and Contingencies | ||||
Commitments. We have commitments for future payments related to office facilities leases. We lease office facilities under various operating leases expiring through 2024. Future minimum payments as of December 31, 2013 are as follows (in thousands): | |||||
Office | |||||
Leases | |||||
2014 | $ | 7,947 | |||
2015 | 6,185 | ||||
2016 | 5,277 | ||||
2017 | 3,625 | ||||
2018 | 2,722 | ||||
Thereafter | 19,114 | ||||
Total minimum payments | $ | 44,870 | |||
Of the total office lease future minimum payments, $0.3 million is recorded in accrued lease exit and related charges at December 31, 2013. | |||||
Rent expense during the years ended December 31, 2013, 2012, and 2011, was $8.3 million, $9.1 million, and $9.2 million, respectively. These amounts are net of sublease income of $0.8 million in the year ended December 31, 2013, and $1.0 million in each of the years ended December 31, 2012, and 2011. | |||||
Litigation. In October 2013, we executed settlement agreements relating to certain of our outstanding litigation matters; specifically, the matters brought against us by VoiceAge Corporation and Callertone Innovations, Inc., which are more fully described below. During the fourth quarter of 2013 we paid an aggregate of $11.5 million, representing our total obligation under these settlements. | |||||
On July 3, 2012, a lawsuit was filed against us by VoiceAge Corporation in the Supreme Court of the State of New York, wherein VoiceAge asserted that we had breached our payment obligations under the terms of a patent license agreement between us and VoiceAge in respect of distribution of specified codec technology, and sought a material amount of damages. We removed the proceedings to New York federal court, and discovery took place from January 4 to May 15, 2013. In June 2013, VoiceAge submitted a motion for summary judgment, which was denied by the Supreme Court of the State of New York on August 5, 2013. On October 24, 2013, we executed a settlement agreement with VoiceAge to settle and dismiss with prejudice all outstanding claims in the lawsuit. | |||||
On October 28, 2011 and November 1, 2011, respectively, two lawsuits were filed by Callertone Innovations, LLC in the U.S. District Court for the District of Delaware. The first lawsuit was against T-Mobile USA, Inc. and the second lawsuit was against MetroPCS Wireless, Inc. and MetroPCS Communications, Inc., which we collectively refer to as MetroPCS. The lawsuits alleged that T-Mobile and MetroPCS, respectively, infringed Callertone’s patents by providing ringback tone services. We agreed to indemnify each of T-Mobile and MetroPCS against the claims based on an indemnity that was claimed to be owed by us. The respective complaint was served on T-Mobile on January 16, 2012 and on MetroPCS on January 14, 2012. We filed our answers to each complaint on April 9, 2012. In each matter, we disputed the plaintiff’s allegations regarding both the validity of its patents and its claims of infringement against T-Mobile and MetroPCS, respectively. A claims construction hearing was held on September 6, 2013. On October 21, 2013, we executed a settlement agreement with Callertone to settle and dismiss with prejudice all outstanding claims in each of the lawsuits. | |||||
On April 25, 2007, a lawsuit was filed by Greenville Communications, LLC in Greenville, Mississippi against a number of cell phone carriers, including our partners T-Mobile USA, Inc. and Alltel Corporation, alleging that they infringed Greenville's patents by providing ringback tone services. We agreed to indemnify T-Mobile and Alltel against the claims based on an indemnity that was claimed to be owed by us. On May 10, 2012, the District Court issued a non-infringement judgment that was favorable to us and the other defendants. On December 4, 2012, Greenville appealed the claims construction order and the judgment, and the defendants filed a reply brief on January 28, 2013. On May 17, 2013, the U.S. Court of Appeals for the Federal Circuit affirmed the judgment of non-infringement of the District Court. In June 2013, Greenville filed a petition for re-hearing with the U.S. Court of Appeals, which was ultimately denied. | |||||
Although the matters described above have been either completed or settled, we could in the future become subject to legal proceedings, governmental investigations and claims in the ordinary course of business, including employment claims, contract-related claims, and claims of alleged infringement of third-party patents, trademarks and other intellectual property rights. Such claims, even if not meritorious, could force us to expend significant financial and managerial resources. In addition, given the broad distribution of some of our consumer products, any individual claim related to those products could give rise to liabilities that may be material to us. In the event of a determination adverse to us, we may incur substantial monetary liability, and/or be required to change our business practices. Either of these could have a material adverse effect on our consolidated financial statements. |
Guarantees
Guarantees | 12 Months Ended | |
Dec. 31, 2013 | ||
Guarantees [Abstract] | ' | |
Guarantees | ' | |
Note 17. | Guarantees | |
In the ordinary course of business, RealNetworks is subject to potential obligations for standard warranty and indemnification provisions that are contained within many of our customer license and service agreements. Our warranty provisions are consistent with those prevalent in our industry, and we do not have a history of incurring losses on warranties; therefore, we do not maintain accruals for warranty-related obligations. With regard to indemnification provisions, nearly all of our carrier contracts obligate us to indemnify our carrier customers for certain liabilities that may be incurred by them. We have in the past received claims for indemnification from some of our carrier customers. See Note 16, Commitments and Contingencies, for a discussion of current indemnification claims. | ||
As discussed in Note 1, Description of Business and Summary of Significant Accounting Policies, we sold certain patents and other technology assets to Intel in the second quarter of 2012. We have specific obligations to indemnify Intel for breaches of the representations and warranties that we made and covenants that we agreed to in the asset purchase agreement executed in connection with the transaction, and for certain potential future intellectual property infringement claims brought by third parties against Intel. The amount of any potential liabilities related to our indemnification obligations to Intel will not be determined until a claim has been made, but we are obligated to indemnify Intel up to the amount of the gross purchase price that we received in the sale. |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Segment Information | ' | ||||||||||||
Note 18. | Segment Information | ||||||||||||
In the first quarter of 2013 we reorganized the management of our businesses and as a result, we now report the following three segments: (1) RealPlayer Group, which includes sales of our RealPlayer media player software and related products, such as the distribution of third party software products, advertising on RealPlayer websites, and sales of RealPlayer Plus software licenses to consumers, sales of intellectual property licenses, and consumer subscriptions such as SuperPass and our recently launched RealPlayer Cloud service; (2) Mobile Entertainment, which includes our SaaS services, systems integration, and professional services to mobile carriers, and sales of technology licenses of our software products such as Helix; and (3) Games, which includes all our games-related businesses, including sales of games licenses, online games subscription services, advertising on games sites and social network sites, microtransactions from online and social games, and sales of mobile games. | |||||||||||||
In addition, beginning in the first quarter of 2013 we now also allocate certain corporate expenses which are directly attributable to supporting the business to our reportable segments, rather than reporting those expenses as corporate items. These corporate expenses include but are not limited to a portion of finance, legal, human resources and headquarters facilities. Remaining expenses, which are not directly attributable to supporting the business, are reported as corporate items. All restructuring, lease exit and related charges, and, for 2013, the loss on litigation settlements, are reported as corporate items. In 2012, the sale of patent and other technology assets, net of costs, was reported as a corporate item. The historical financial information presented has been recast to reflect the new segments and the new corporate expense presentation. | |||||||||||||
RealNetworks reports the three reportable segments based on factors such as how we manage our operations and how our Chief Operating Decision Maker reviews results. Our Chief Operating Decision Maker is considered to be the CEO Staff (CEOS), which includes the interim Chief Executive Officer, Chief Financial Officer, President, General Counsel and certain Senior Vice Presidents. The CEOS reviews financial information presented on both a consolidated basis and on a business segment basis. The accounting policies used to derive segment results are the same as those described in Note 1, Description of Business and Summary of Significant Accounting Policies. | |||||||||||||
Segment results for the years ended December 31, 2013, 2012 and 2011 were as follows (in thousands): | |||||||||||||
RealPlayer Group | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revenue | $ | 75,206 | $ | 91,469 | $ | 102,378 | |||||||
Cost of revenue | 16,220 | 21,544 | 21,534 | ||||||||||
Impairment of deferred costs | — | — | 633 | ||||||||||
Gross profit | 58,986 | 69,925 | 80,211 | ||||||||||
Operating expenses | 60,484 | 55,223 | 59,829 | ||||||||||
Operating income (loss) | $ | (1,498 | ) | $ | 14,702 | $ | 20,382 | ||||||
Mobile Entertainment | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revenue | $ | 81,181 | $ | 100,318 | $ | 135,452 | |||||||
Cost of revenue | 47,608 | 57,670 | 74,524 | ||||||||||
Impairment of deferred costs | — | — | 19,329 | ||||||||||
Gross profit | 33,573 | 42,648 | 41,599 | ||||||||||
Operating expenses | 35,839 | 52,614 | 61,921 | ||||||||||
Operating income (loss) | $ | (2,266 | ) | $ | (9,966 | ) | $ | (20,322 | ) | ||||
Games | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Total revenue | $ | 49,809 | $ | 67,055 | $ | 97,856 | |||||||
Cost of revenue | 13,359 | 21,828 | 30,835 | ||||||||||
Gross profit | 36,450 | 45,227 | 67,021 | ||||||||||
Operating expenses | 47,177 | 51,890 | 62,595 | ||||||||||
Operating income (loss) | $ | (10,727 | ) | $ | (6,663 | ) | $ | 4,426 | |||||
Corporate | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Cost of revenue | $ | 1,904 | $ | 2,689 | $ | (256 | ) | ||||||
Gain on sale of patents and other technology assets, net of costs | — | 116,353 | — | ||||||||||
Operating expenses | 54,413 | 56,174 | 42,352 | ||||||||||
Operating income (loss) | $ | (56,317 | ) | $ | 57,490 | $ | (42,096 | ) | |||||
Our customers consist primarily of consumers and corporations located in the U.S., Europe, Republic of Korea and various foreign countries (Rest of the World). Revenue by geographic region (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States | $ | 90,250 | $ | 117,844 | $ | 162,720 | |||||||
Europe | 38,155 | 56,473 | 74,602 | ||||||||||
Republic of Korea | 46,601 | 40,467 | 44,261 | ||||||||||
Rest of the World | 31,190 | 44,058 | 54,103 | ||||||||||
Total | $ | 206,196 | $ | 258,842 | $ | 335,686 | |||||||
Long-lived assets (consists of equipment, software, leasehold improvements, other intangible assets, and goodwill) by geographic region (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States | $ | 40,347 | $ | 27,915 | $ | 38,543 | |||||||
Europe | 8,280 | 2,350 | 2,949 | ||||||||||
Republic of Korea | 936 | 2,463 | 4,063 | ||||||||||
Rest of the World | 4,078 | 6,172 | 5,286 | ||||||||||
Total long-lived assets | $ | 53,641 | $ | 38,900 | $ | 50,841 | |||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | |
Dec. 31, 2013 | ||
Related Party Transactions [Abstract] | ' | |
Related Party Transactions | ' | |
Note 19. | Related Party Transactions | |
Transactions with Rhapsody. See Note 4, Rhapsody Joint Venture, for details on the 2010 restructuring transaction involving Rhapsody. Subsequent to the restructuring transaction, we were obligated to provide Rhapsody with certain support services. These support services, which included information technology and limited operational support provided directly to Rhapsody, were completed in 2013. The amount of these and other support service costs were based on various measures depending on the service provided, including vendor fees, an allocation of fixed costs and time employees spent on providing services to Rhapsody. RealNetworks allocates the cost of providing these support services and records such allocation as a reduction to the related expense in the period for which it was incurred. During the years ended December 31, 2013, 2012, and 2011 we charged Rhapsody $0.5 million, $0.8 million, and $2.2 million, respectively, for the support services. | ||
Transactions with LoEn Entertainment, Inc. In 2008, RealNetworks acquired, at market prices, approximately 11% of the common shares of LoEn Entertainment, Inc., whose shares are traded on the Korean Securities Dealers Automated Quotations. In November 2013, we sold all of our remaining shares of common stock in LoEn, which equaled approximately 9% of the outstanding shares as of September 30, 2013, as discussed in more detail in Note 5, Fair Value Measurements. Our investment in LoEn was treated as an available for sale investment and was marked-to-market each period with resulting unrealized gains or losses recognized in accumulated other comprehensive income/loss. During the years ended December 31, 2013, 2012, and 2011, we recorded revenue from LoEn of $26.4 million, $18.1 million and $20.3 million, respectively. Revenue consisted primarily of sales of application service provider services, which include sales of ringback tones, music on demand, video on demand, and intercarrier messaging services. |
Quarterly_Information_Unaudite
Quarterly Information (Unaudited) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||||||
Quarterly Information (Unaudited) | ' | ||||||||||||||||||||
Note 20. | Quarterly Information (Unaudited) | ||||||||||||||||||||
The following table summarizes the unaudited statement of operations for each quarter of 2013 and 2012 (in thousands, except per share data): | |||||||||||||||||||||
Total | Dec. 31 (3) | Sept. 30 | June 30 (2) | Mar. 31 | |||||||||||||||||
2013 | |||||||||||||||||||||
Net revenue | $ | 206,196 | $ | 50,595 | $ | 48,958 | $ | 49,850 | $ | 56,793 | |||||||||||
Gross profit | 127,105 | 30,519 | 29,968 | 30,331 | 36,287 | ||||||||||||||||
Operating (loss) income | (70,808 | ) | (14,441 | ) | (28,437 | ) | (16,504 | ) | (11,426 | ) | |||||||||||
Net income (loss) attributable to common shareholders | (58,990 | ) | 2,530 | (31,375 | ) | (18,471 | ) | (11,674 | ) | ||||||||||||
Basic net income (loss) per share available to common shareholders(1) | (1.66 | ) | 0.07 | (0.88 | ) | (0.52 | ) | (0.33 | ) | ||||||||||||
Diluted net income (loss) per share available to common shareholders(1) | (1.66 | ) | 0.07 | (0.88 | ) | (0.52 | ) | (0.33 | ) | ||||||||||||
2012 | |||||||||||||||||||||
Net revenue | $ | 258,842 | $ | 67,264 | $ | 59,088 | $ | 65,526 | $ | 66,964 | |||||||||||
Gross profit | 155,111 | 42,166 | 33,844 | 39,564 | 39,537 | ||||||||||||||||
Operating (loss) income | 55,563 | (6,888 | ) | (23,175 | ) | 104,168 | (18,542 | ) | |||||||||||||
Net income (loss) attributable to common shareholders | 44,841 | 3,073 | (22,214 | ) | 80,997 | (17,015 | ) | ||||||||||||||
Basic net income (loss) per share available to common shareholders(1) | 1.29 | 0.09 | (0.63 | ) | 2.33 | (0.49 | ) | ||||||||||||||
Diluted net income (loss) per share available to common shareholders(1) | 1.28 | 0.09 | (0.63 | ) | 2.32 | (0.49 | ) | ||||||||||||||
-1 | The sum of the quarterly net income per share amounts will not necessarily equal net income per share for the year due to the use of weighted average quarterly shares and the effects of rounding. | ||||||||||||||||||||
-2 | In the quarter ended June 30, 2012, we recognized a net gain of $117.9 million from the sale to Intel of certain patents, patent applications, and related rights. The net gain for the full year 2012 totaled $116.4 million. See Note 1, Description of Business and Summary of Significant Accounting Policies, for additional details. | ||||||||||||||||||||
-3 | In the quarter ended December 31, 2013, we sold our remaining shares of common stock in LoEn Entertainment for a net gain of $21.4 million, as described in further detail in Note 5. | ||||||||||||||||||||
Description_of_Business_and_Su1
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
Description of Business | ' | |
Description of Business. RealNetworks, Inc. and subsidiaries is a leading global provider of network-delivered digital media applications and services that make it easy to manage, play and share digital media. The Company also develops and markets software products and services that enable the creation, distribution and consumption of digital media, including audio and video. | ||
Inherent in our business are various risks and uncertainties, including a limited history of certain of our product and service offerings. RealNetworks' success will depend on the acceptance of our technology, products and services and the ability to generate related revenue. | ||
In this Annual Report on Form 10-K for the year ended December 31, 2013 (10-K), RealNetworks, Inc. and subsidiaries is referred to as “RealNetworks”, the “Company”, “we”, “us”, or “our”. | ||
Basis of Presentation | ' | |
Basis of Presentation. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. | ||
The consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the periods presented. Operating results for the year ended December 31, 2013 are not necessarily indicative of the results that may be expected for any subsequent periods. | ||
Use of Estimates | ' | |
Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In addition, current economic conditions may require the use of additional estimates, and certain estimates we currently make are subject to a greater degree of uncertainty as a result of the current economic conditions. | ||
2012 Sale of Patents and Other Technology Assets to Intel Corporation | ' | |
2012 Sale of Patents and Other Technology Assets to Intel Corporation. In the second quarter of 2012, we completed the sale of certain patents, patent applications and related rights held by us, and certain of our assets relating to our next generation video codec technologies to Intel Corporation (Intel) pursuant to an Asset Purchase Agreement. Intel acquired the assets for a gross cash purchase price of $120.0 million. In addition, pursuant to the license agreement, (the “License Agreement”), between Intel and the Company, Intel granted us a non-exclusive, royalty-free, fully paid up, irrevocable (except as set forth in the License Agreement) and worldwide license (without the right to grant sublicenses) to use the patent assets we sold to Intel in connection with our businesses. The transferability of the License Agreement is limited in the event of a change of control or character of the Company, as set forth in the License Agreement. | ||
2011 Special Dividend and Reverse Stock Split | ' | |
2011 Special Dividend and Reverse Stock Split. In 2011, the Company’s Board of Directors approved the payment of a special cash dividend of $1.00 per common share (total cash payment of $136.8 million) and a one-for-four reverse stock split of our common stock. All information related to common stock, stock options, restricted stock units and earnings per share was retroactively adjusted in 2011 to give effect to the special cash dividend and the reverse stock split. | ||
Reclassifications | ' | |
Reclassifications. Certain reclassifications have been made to the 2012 and 2011 consolidated financial statements to conform to the 2013 presentation. These reclassifications had no effect on our consolidated financial position, results of operations, or cash flows. | ||
Cash and, Cash Equivalents, and Short-Term Investments, and Available-for-Sale Securities | ' | |
Cash and Cash Equivalents, Short-Term Investments, and Available-for-Sale Securities. We consider all short-term investments with a remaining contractual maturity at date of purchase of three months or less to be cash equivalents. | ||
We have classified as available-for-sale all marketable debt and equity securities for which there is determinable fair market value and there are no restrictions on our ability to sell. Available-for-sale securities are carried at fair value, based on quoted market prices, with unrealized gains and losses reported in accumulated other comprehensive income (loss) (AOCI) in shareholders' equity, net of any applicable income taxes. Investments with remaining contractual maturities of five years or less are classified as short-term because the investments are marketable and highly liquid, and we have the ability to utilize them for current operations. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in other income (expense), net. Realized and unrealized gains and losses on available-for-sale securities are determined using the specific identification method. | ||
Trade Accounts Receivable | ' | |
Trade Accounts Receivable. Trade accounts receivable consist of amounts due from customers and do not bear interest. The allowance for doubtful accounts and sales returns is our best estimate of the amount of probable credit losses and returns in our existing accounts receivable. We determine the allowances based on analysis of historical bad debts, customer concentrations, customer credit-worthiness, return history and current economic trends. We review the allowances for doubtful accounts and sales returns quarterly. Past due balances over 90 days and specified other balances are reviewed individually for collectability. All other balances are reviewed on an aggregate basis. Account balances are written off against the allowance after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. We do not have any off-balance sheet credit exposure related to our customers. | ||
Concentration of Credit Risk | ' | |
Concentration of Credit Risk. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. Short-term investments consist of U.S. government and government agency securities, corporate notes and bonds, and municipal securities. We derive a portion of our revenue from a large number of individual consumers spread globally. We also derive revenue from several large customers. If the financial condition or results of operations of any one of the large customers deteriorates substantially, our operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. We do not generally require collateral and we maintain an allowance for estimated credit losses on customer accounts when considered necessary. | ||
Depreciation and Amortization | ' | |
Depreciation and Amortization. Depreciation of equipment, software, and amortization of leasehold improvements are computed using the straight-line method over the lesser of the estimated useful lives of the assets or the related lease term. The useful life of equipment and software is generally three to five years. | ||
Depreciation and amortization expense of these assets during the years ended December 31, 2013, 2012, and 2011 was $14.3 million, $12.9 million, and $12.8 million, respectively. | ||
Valuation of Equity Method Investments | ' | |
Equity Method Investments. We use the equity method in circumstances where we have the ability to exert significant influence, but not control, over an investee or joint venture. We initially record our investment based on a fair value analysis of the investment. | ||
We record our percentage interest in the investee's recorded income or loss and changes in the investee's capital under this method, which will increase or decrease the reported value of our investment. We record investee losses up to the aggregate amount of the investment. | ||
We evaluate impairment of an investment accounted for under the equity method if events and circumstances warrant. An impairment charge would be recorded if a decline in value of an equity investment below its carrying amount were determined to be other than temporary. In determining if a decline is other than temporary, we consider factors such as the length of time and extent to which the fair value of the investment has been less than the carrying amount of the investee or joint venture, the near-term and longer-term operating and financial prospects of the investee or joint venture and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery. | ||
Deferred Costs | ' | |
Deferred Costs. We defer certain costs on projects for service revenues and system sales. Deferred costs consist primarily of direct and incremental costs to customize and install systems, as defined in individual customer contracts, including costs to acquire hardware and software from third parties and payroll and related costs for employees and other third parties. Deferred costs are capitalized during the implementation period. | ||
We recognize such costs as a component of cost of revenue, the timing of which is dependent upon the revenue recognition policy by contract. At each balance sheet date, we review deferred costs to ensure they are ultimately recoverable. Any anticipated losses on uncompleted contracts are recognized when evidence indicates the estimated total cost of a contract exceeds its estimated total revenue or if actual deferred costs exceed contractual revenue. Assessing the recoverability of deferred costs is based on significant assumptions and estimates, including future revenue and cost of sales. Significant or sustained decreases in revenue or increases in cost of sales in future periods could result in impairments of deferred project costs and prepaid royalty advances. We cannot accurately predict the amount and timing of any such impairments. Should the value of deferred project costs or prepaid royalty advances become impaired, we would record the appropriate charge, which could have a material adverse effect on our financial condition or results of operations. | ||
As of December 31, 2011, we determined that the total estimated costs associated with certain projects exceeded the total estimated revenues expected to be recognized on those projects. As a result, in 2011 we impaired $16.7 million in deferred project costs and an additional $3.3 million of equipment and software assets that related solely to these projects. The $20.0 million charge in 2011 was included in impairment of deferred costs in the accompanying consolidated statements of operations and comprehensive income (loss). No such charges were incurred in 2013 or 2012. | ||
Other Definite-Lived Intangible Assets | ' | |
Definite-Lived Tangible and Intangible Assets. Definite-lived tangible assets include equipment, software and leasehold improvements, and are depreciated/amortized over their useful lives, as described above. Definite-lived intangible assets consist primarily of the fair value of customer agreements and contracts, and developed technology acquired in business combinations. These assets are amortized on a straight line basis over one to eleven years, which approximates their estimated useful lives. | ||
We review these assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. If the carrying amount of an asset group is not recoverable, an impairment loss is recognized based on the excess of the carrying amount of the asset group over its estimated fair value, which is generally determined as the present value of estimated future cash flows. The impairment analysis is based on significant assumptions of future results made by us, including operating and cash flow projections. Significant or sustained declines in future revenue or cash flows, or adverse changes in our business climate, among other factors, could result in the need to record an impairment charge in future periods. | ||
Goodwill | ' | |
Goodwill. We test goodwill for impairment on an annual basis, in our fourth quarter, or more frequently if circumstances indicate reporting unit carrying values may exceed their fair values. Circumstances that may indicate a reporting unit's carrying value exceeds its fair value include, but are not limited to: poor economic performance relative to historical or projected future operating results; significant negative industry, economic or company specific trends; changes in the manner of our use of the assets or the plans for our business; and loss of key personnel. | ||
When evaluating goodwill for impairment, based upon our annual test or due to changes in circumstances described above, we first perform a qualitative assessment to determine if the fair value of a reporting unit is more likely than not less than the reporting unit's carrying amount including goodwill. If this assessment indicates it is more likely than not, we then compare the carrying value of the reporting unit to the estimated fair value of the reporting unit. If the carrying value of the reporting unit exceeds the estimated fair value, we then calculate the implied estimated fair value of goodwill for the reporting unit and compare it to the carrying amount of goodwill for the reporting unit. If the carrying amount of goodwill exceeds the implied estimated fair value, an impairment charge to current operations is recorded to reduce the carrying value to implied estimated value. Significant judgment is required in determining the reporting units and assessing fair value of the reporting units. | ||
Indefinite-Lived Intangible Assets | ' | |
Indefinite-Lived Intangible Assets. We evaluate indefinite-lived intangible assets (primarily tradenames and trademarks) for impairment on an annual basis, in the fourth quarter, or more frequently if an event occurs or changes in circumstances indicate that impairment may exist. When evaluating indefinite-lived intangible assets for impairment, we may first perform a qualitative assessment to determine if the fair value of the intangible assets is more likely than not greater than its carrying amount. If we do not perform a qualitative assessment or if the fair value of the intangible assets is not more likely than not greater than its carrying amount, we calculate the estimated fair value of the intangible assets. If the carrying amount of the intangible assets exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the implied estimated fair value. Significant judgment is required in assessing fair value of the indefinite-lived intangible assets. | ||
Fair Value of Financial Instruments | ' | |
Fair Value. We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized at fair value in the financial statements on a recurring basis. Fair value is the price that would be received from selling an asset or paid in transfering a liability in an orderly transaction between market participants at the measurement date. Our fair value measurements consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. | ||
The fair value is determined based on three levels of inputs: | ||
• | Level 1: Quoted prices in active markets for identical assets or liabilities | |
• | Level 2: Directly or indirectly observed inputs for the asset or liability, including quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active | |
• | Level 3: Significant unobservable inputs that reflect our own estimates of assumptions that market participants would use | |
Research and Development | ' | |
Research and Development. Costs incurred in research and development are expensed as incurred. Software development costs are capitalized when a product’s technological feasibility has been established through the date the product is available for general release to customers. Other than internal use software, we have not capitalized any software development costs, as technological feasibility is generally not established until a working model is completed, at which time substantially all development is complete. | ||
Revenue Recognition | ' | |
Revenue Recognition. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Physical products are considered delivered to the customer once they have been shipped and title and risk of loss have been transferred. For online sales, the products or services are considered delivered at the time the products or services are made available, digitally, to the end user. | ||
In most arrangements, we contract directly with end user customers, and are the primary obligor. In such arrangements, we recognize revenue on a gross basis. In some cases, we utilize third-party distributors to sell products or services directly to end user customers. In such instances, we recognize revenue on a net basis. | ||
In our direct to consumer business, we derive revenue through (1) subscriptions of our SuperPass product and our games offerings, (2) sales of content downloads, software and licenses and (3) the sale of advertising and the distribution of third-party products on our websites and in our games. | ||
Consumer subscription products are paid in advance, typically for monthly, quarterly or annual duration. Subscription revenue is recognized ratably over the related subscription time period. Revenue from sales of content downloads, software and licenses is recognized at the time the product is made available, digitally, to the end user. Revenue generated from advertising on our websites and from advertising and the distribution of third-party products included in our products is recognized as revenue at the time of delivery. | ||
We also generate revenue through business-to-business channels by providing services within our Mobile Entertainment segment enabling mobile carriers to deliver audio and video content to their customers and by selling software licenses and products and related support and other services. Revenue generated from services provided to mobile carriers that enable the delivery of audio and video content to their customers is recognized as the services are provided. Setup fees to build these services are recognized ratably upon launch of the service over the remaining expected term of the service. | ||
Non-software revenue arrangements containing multiple elements are divided into separate units of accounting, after being evaluated for specific criteria. If the criteria for separation are met, revenue is allocated to the individual units using the relative fair value method. If the criteria are not met, the elements are treated as one unit of accounting and revenue recognition is delayed until all elements have been delivered. In the case of revenue arrangements containing software, elements are divided into separate units of accounting only when vendor-specific objective evidence has been established. In cases where vendor-specific objective evidence has not been established, undelivered elements are combined into one unit of accounting and are not recognized in revenue until all elements have been delivered. | ||
Advertising Expenses | ' | |
Advertising Expenses. We expense the cost of advertising and promoting our products as incurred. | ||
Foreign Currency | ' | |
Foreign Currency. The functional currency of the Company’s foreign subsidiaries is the currency of the country in which the subsidiary operates. Assets and liabilities of foreign operations are translated into U.S. dollars using rates of exchange in effect at the end of the reporting period. The net gain or loss resulting from translation is shown as translation adjustment and included in AOCI in shareholders’ equity. Income and expense accounts are translated into U.S. dollars using average rates of exchange. Gains and losses from foreign currency transactions are included in the consolidated statements of operations. | ||
Derivative Financial Instruments | ' | |
Derivative Financial Instruments. We conduct business internationally in several currencies and thus we are exposed to adverse movements in foreign currency exchange rates. A portion of these risks may be managed through the use of financial derivatives, but fluctuations in foreign exchange rates could impact our results of operations and financial position. Our foreign currency risk management program reduces, but does not entirely eliminate, the impact of currency exchange rate movements. | ||
Generally, our practice is to manage foreign currency risk for the majority of material short-term intercompany balances through the use of foreign currency forward contracts. These contracts require us to exchange currencies at rates agreed upon at the contract’s inception. Because the impact of movements in currency exchange rates on forward contracts offsets the related impact on the short-term intercompany balances, these financial instruments help alleviate the risk that might otherwise result from certain changes in currency exchange rates. We do not designate foreign exchange forward contracts related to short-term intercompany accounts as hedges and, accordingly, adjust these instruments to fair value through our results of operations. However, we may periodically hedge a portion of our foreign exchange exposures associated with material firmly committed transactions and long-term investments. | ||
All derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated a hedge, then depending on the nature of the hedge, changes in fair value will either be recorded immediately in results of operations, or be recognized in AOCI until the hedged item is recognized in results of operations. | ||
Accounting for Taxes Collected from Customers | ' | |
Accounting for Taxes Collected from Customers. Our revenues are reported net of sales and other transaction taxes that are collected from customers and remitted to taxing authorities. | ||
Income Taxes | ' | |
Income Taxes. We compute income taxes using the asset and liability method, under which deferred income taxes are provided for temporary differences between financial reporting basis and tax basis of our assets and liabilities and operating loss and tax credit carryforwards. We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the appropriate taxing jurisdictions. Adjustments to the valuation allowance could be required in the future if we estimate that the amount of deferred tax assets to be realized is more or less than the net amount we have recorded. Any increase or decrease in the valuation allowance could have the effect of increasing or decreasing the income tax provision in the statement of operations. | ||
Deferred tax assets and liabilities and operating loss and tax credit carryforwards are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and operating loss and tax credit carryforwards are expected to be recovered or settled. | ||
We file numerous consolidated and separate income tax returns in the U.S. including federal, state and local, as well as foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal income tax examinations for tax years before 2008 or state, local, or foreign income tax examinations for years before 1993. RealNetworks, Inc. and/or subsidiaries are under audit by various states and foreign jurisdictions for certain tax years subsequent to 1993. | ||
We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We recognize accrued interest and penalties related to uncertain tax positions as a component of income tax expense. | ||
Stock-Based Compensation | ' | |
Stock-Based Compensation. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is the vesting period. We use the Black-Scholes option-pricing model or other appropriate valuation models to determine the fair value of stock-based option awards. The fair value of restricted stock awards is based on the closing market price of our common stock on the award date. For performance-based awards, expense is recognized when it is probable the performance goal will be achieved, however if the likelihood becomes improbable, that expense is reversed. We recognize the compensation cost for awards on a straight-line basis for the entire award, over the applicable vesting period. For our employee stock purchase plan, compensation expense is measured based on the discount the employee is entitled to upon purchase. | ||
The valuation models for stock-based option awards require various highly judgmental assumptions including volatility in our common stock price and expected option life. If any of the assumptions used in the valuation models change significantly, stock-based compensation expense for new awards may differ materially in the future from the amounts recorded in the consolidated statements of operations. For all awards, we also estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates and ultimately record stock-based compensation expense only for those awards that vest. | ||
Net Income Per Share | ' | |
Net Income Per Share. Basic net income (loss) per share (EPS) available to common shareholders is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS available to common shareholders is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common and dilutive potential common shares outstanding during the period. |
Rhapsody_Joint_Venture_Tables
Rhapsody Joint Venture (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ' | ||||||||||||
Summarized Financial Operating Information for Rhapsody | ' | ||||||||||||
Summarized financial information for Rhapsody, which represents 100% of their financial information, is as follows (in thousands): | |||||||||||||
Year ended December 31, | Year ended December 31, | Year ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||||
Net revenue | $ | 140,596 | $ | 143,674 | $ | 127,184 | |||||||
Gross profit | 34,141 | 36,260 | 39,137 | ||||||||||
Net loss | (14,663 | ) | (12,228 | ) | (13,580 | ) | |||||||
As of December 31, 2013 | As of December 31, 2012 | ||||||||||||
Current assets | $ | 31,245 | $ | 34,035 | |||||||||
Non-current assets | 17,305 | 19,688 | |||||||||||
Current liabilities | 46,458 | 36,756 | |||||||||||
Non-current liabilities | — | — | |||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||||
Financial Assets Measured at Fair Value on a Recurring Basis | ' | |||||||||||||||||||
The following tables present information about our financial assets that have been measured at fair value on a recurring basis as of December 31, 2013 and December 31, 2012, and indicates the fair value hierarchy of the valuation inputs utilized to determine fair value (in thousands). | ||||||||||||||||||||
Fair Value Measurements as of | Amortized Cost as of | |||||||||||||||||||
December 31, 2013 | 31-Dec-13 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||
Cash | $ | 46,978 | $ | — | $ | — | $ | 46,978 | $ | 46,978 | ||||||||||
Money market funds | 1 | 26,913 | — | 26,914 | 26,914 | |||||||||||||||
Corporate notes and bonds | — | 77,043 | — | 77,043 | 77,044 | |||||||||||||||
U.S. government agency securities | — | 300 | — | 300 | 300 | |||||||||||||||
Total cash and cash equivalents | 46,979 | 104,256 | — | 151,235 | 151,236 | |||||||||||||||
Short-term investments: | ||||||||||||||||||||
Corporate notes and bonds | — | 59,766 | — | 59,766 | 59,713 | |||||||||||||||
U.S. government agency securities | 14,077 | 1,077 | — | 15,154 | 15,159 | |||||||||||||||
Total short-term investments | 14,077 | 60,843 | — | 74,920 | 74,872 | |||||||||||||||
Restricted cash equivalents and investments | — | 3,000 | — | 3,000 | 3,000 | |||||||||||||||
Equity investments in publicly traded securities | 7,181 | — | — | 7,181 | 842 | |||||||||||||||
Total | $ | 68,237 | $ | 168,099 | $ | — | $ | 236,336 | $ | 229,950 | ||||||||||
Fair Value Measurements as of | Amortized Cost as of | |||||||||||||||||||
December 31, 2012 | 31-Dec-12 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||
Cash | $ | 71,283 | $ | — | $ | — | $ | 71,283 | $ | 71,283 | ||||||||||
Money market funds | — | 10,680 | — | 10,680 | 10,680 | |||||||||||||||
Corporate notes and bonds | — | 81,235 | — | 81,235 | 81,237 | |||||||||||||||
Total cash and cash equivalents | 71,283 | 91,915 | — | 163,198 | 163,200 | |||||||||||||||
Short-term investments: | ||||||||||||||||||||
Corporate notes and bonds | — | 65,502 | — | 65,502 | 65,426 | |||||||||||||||
U.S. government agency securities | 42,113 | 601 | — | 42,714 | 42,693 | |||||||||||||||
Total short-term investments | 42,113 | 66,103 | — | 108,216 | 108,119 | |||||||||||||||
Restricted cash equivalents and investments | — | 10,000 | — | 10,000 | 10,000 | |||||||||||||||
Equity investments in publicly traded securities | 34,334 | — | — | 34,334 | 8,609 | |||||||||||||||
Total | $ | 147,730 | $ | 168,018 | $ | — | $ | 315,748 | $ | 289,928 | ||||||||||
Contractual Maturities of Short-term Investments | ' | |||||||||||||||||||
Contractual maturities of short-term investments as of December 31, 2013 (in thousands): | ||||||||||||||||||||
Estimated | ||||||||||||||||||||
Fair Value | ||||||||||||||||||||
Within one year | $ | 47,693 | ||||||||||||||||||
Between one year and five years | 27,227 | |||||||||||||||||||
Total short-term investments | $ | 74,920 | ||||||||||||||||||
Allowance_for_Doubtful_Account1
Allowance for Doubtful Accounts Receivable and Sales Returns (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Receivables [Abstract] | ' | ||||||||||||
Activity in Allowance for Doubtful Accounts Receivable and Sales Returns | ' | ||||||||||||
Activity in the allowance for doubtful accounts receivable (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 1,010 | $ | 1,445 | $ | 1,529 | |||||||
Addition (reduction) to allowance | (2 | ) | 76 | 693 | |||||||||
Amounts written off | (83 | ) | (529 | ) | (742 | ) | |||||||
Effects of foreign currency translation | 41 | 18 | (35 | ) | |||||||||
Balance, end of year | $ | 966 | $ | 1,010 | $ | 1,445 | |||||||
Activity in the allowance for sales returns (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 653 | $ | 668 | $ | 1,039 | |||||||
Addition (reduction) to allowance | (64 | ) | 153 | 939 | |||||||||
Amounts written off | (21 | ) | (168 | ) | (1,311 | ) | |||||||
Effects of foreign currency translation | 1 | — | 1 | ||||||||||
Balance, end of year | $ | 569 | $ | 653 | $ | 668 | |||||||
Total, Allowance for Doubtful Accounts Receivable and Sales Returns | $ | 1,535 | $ | 1,663 | $ | 2,113 | |||||||
Other_Intangible_Assets_Tables
Other Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||||
Other Intangible Assets | ' | |||||||||||||||||||||||||
Other intangible assets (in thousands): | ||||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | |||||||||||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||||||||||||
Amortizing intangible assets: | ||||||||||||||||||||||||||
Customer relationships | $ | 35,156 | $ | 31,262 | $ | 3,894 | $ | 30,831 | $ | 28,211 | $ | 2,620 | ||||||||||||||
Developed technology | 29,097 | 25,039 | 4,058 | 24,532 | 23,885 | 647 | ||||||||||||||||||||
Patents, trademarks and tradenames | 4,021 | 3,627 | 394 | — | — | — | ||||||||||||||||||||
Service contracts | 5,679 | 5,532 | 147 | 5,467 | 5,459 | 8 | ||||||||||||||||||||
73,953 | 65,460 | 8,493 | 60,830 | 57,555 | 3,275 | |||||||||||||||||||||
Non-amortizing intangible assets: | ||||||||||||||||||||||||||
Trademarks and tradenames | 4,500 | — | 4,500 | — | — | — | ||||||||||||||||||||
Total | $ | 78,453 | $ | 65,460 | $ | 12,993 | $ | 60,830 | $ | 57,555 | $ | 3,275 | ||||||||||||||
Schedule of Expected Amortization Expense | ' | |||||||||||||||||||||||||
As of December 31, 2013, estimated future amortization of other intangible assets was (in thousands): | ||||||||||||||||||||||||||
2014 | $ | 3,131 | ||||||||||||||||||||||||
2015 | 2,165 | |||||||||||||||||||||||||
2016 | 1,489 | |||||||||||||||||||||||||
2017 | 695 | |||||||||||||||||||||||||
2018 | 193 | |||||||||||||||||||||||||
Thereafter | 820 | |||||||||||||||||||||||||
Total | $ | 8,493 | ||||||||||||||||||||||||
No impairments of other intangible assets were recognized in 2013, 2012 or 2011. |
Goodwill_Tables
Goodwill (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||
Changes in Goodwill | ' | ||||||||
Changes in goodwill (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Balance, beginning of year | |||||||||
Goodwill | $ | 316,962 | $ | 316,851 | |||||
Accumulated impairment losses | (310,653 | ) | (310,653 | ) | |||||
6,309 | 6,198 | ||||||||
Increases due to current year acquisitions | 11,463 | — | |||||||
Effects of foreign currency translation | (296 | ) | 111 | ||||||
11,167 | 111 | ||||||||
Balance, end of year | |||||||||
Goodwill | 328,129 | 316,962 | |||||||
Accumulated impairment losses | (310,653 | ) | (310,653 | ) | |||||
$ | 17,476 | $ | 6,309 | ||||||
Goodwill Assigned by Segments | ' | ||||||||
Goodwill by segment (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
RealPlayer Group | $ | 580 | $ | 580 | |||||
Mobile Entertainment | 2,119 | 779 | |||||||
Games | 14,777 | 4,950 | |||||||
Total goodwill | $ | 17,476 | $ | 6,309 | |||||
Accrued_and_Other_Current_Liab1
Accrued and Other Current Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued and Other Liabilities | ' | |||||||
Accrued and other current liabilities (in thousands): | ||||||||
31-Dec-13 | 31-Dec-12 | |||||||
Royalties and other fulfillment costs | $ | 16,467 | $ | 19,435 | ||||
Employee compensation, commissions and benefits | 10,060 | 13,368 | ||||||
Sales, VAT and other taxes payable | 7,237 | 10,959 | ||||||
Deferred tax liabilities—current | 899 | 3,894 | ||||||
Accrued lease exit and related charges | 254 | 2,463 | ||||||
Other | 7,875 | 7,411 | ||||||
Total accrued and other current liabilities | $ | 42,792 | $ | 57,530 | ||||
Restructuring_Charges_Tables
Restructuring Charges (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Schedule of Restructuring Charges by Type of Cost | ' | ||||||||||||
By Type of Cost | |||||||||||||
Employee Separation Costs | Contract Assignment Costs | Asset Related and Other Costs | Total | ||||||||||
Costs incurred and charged to expense for the year ended December 31, 2013 | $ | 3,961 | $ | — | $ | 1,804 | $ | 5,765 | |||||
Costs incurred and charged to expense for the year ended December 31, 2012 | $ | 9,052 | $ | 3,629 | $ | 2,544 | $ | 15,225 | |||||
Costs incurred and charged to expense for the year ended December 31, 2011 | $ | 7,739 | $ | — | $ | 911 | $ | 8,650 | |||||
Changes to the accrued restructuring liability for 2013 (in thousands): | |||||||||||||
By Type of Cost | |||||||||||||
Employee Separation Costs | Contract Assignment Costs | Total | |||||||||||
Accrued liability as of December 31, 2012 | $ | 731 | $ | 1,700 | $ | 2,431 | |||||||
Costs incurred and charged to expense for the year ended December 31, 2013 | 3,961 | — | 3,961 | ||||||||||
Cash payments | (3,936 | ) | (1,700 | ) | (5,636 | ) | |||||||
Accrued liability as of December 31, 2013 | $ | 756 | $ | — | $ | 756 | |||||||
Loss_on_Exit_and_Related_Charg1
Loss on Exit and Related Charges (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Disclosure Changes To Accrued Loss On Excess Office Facilities [Abstract] | ' | ||||||||||
Changes to Accrued Loss on Excess Office Facilities | ' | ||||||||||
Changes to the accrued loss on excess office facilities (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Accrued loss, beginning of year | $ | 4,213 | $ | 2,747 | $ | 4,524 | |||||
Additions and adjustments to the lease loss accrual, including sublease income estimate revision, and related asset write-downs | 1,421 | 3,290 | (646 | ) | |||||||
Less write-down of leasehold improvements | — | (496 | ) | — | |||||||
Less amounts paid, net of sublease income | (5,380 | ) | (1,328 | ) | (1,131 | ) | |||||
Accrued loss, end of year | 254 | 4,213 | 2,747 | ||||||||
Less current portion (included in Accrued and other current liabilities) | (254 | ) | (2,463 | ) | (596 | ) | |||||
Accrued loss, non-current portion (included in Other long term liabilities) | $ | — | $ | 1,750 | $ | 2,151 | |||||
Shareholders_Equity_Tables
Shareholders’ Equity (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Equity [Abstract] | ' | |||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||
Changes in components of accumulated other comprehensive income (in thousands): | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Investments | ||||||||||||||
Accumulated other comprehensive income (loss), beginning of period | $ | 26,685 | $ | 27,318 | $ | 17,859 | ||||||||
Unrealized gains (losses), net of tax effects of $(54), $0 and $0 | 2,121 | 3,313 | 9,459 | |||||||||||
Reclassification adjustments for losses (gains) included in other income (expense), net of tax effects of $(800), $0 and $0 | (22,409 | ) | (3,946 | ) | — | |||||||||
Net current period other comprehensive income | (20,288 | ) | (633 | ) | 9,459 | |||||||||
Accumulated other comprehensive income (loss) balance, end of period | $ | 6,397 | $ | 26,685 | $ | 27,318 | ||||||||
Foreign currency translation | ||||||||||||||
Accumulated other comprehensive income (loss), beginning of period | $ | (53,225 | ) | $ | (52,202 | ) | $ | (50,402 | ) | |||||
Translation adjustments | (296 | ) | 943 | (1,800 | ) | |||||||||
Reclassification adjustments for losses (gains) included in other income (expense) | (571 | ) | (1,966 | ) | — | |||||||||
Net current period other comprehensive income | (867 | ) | (1,023 | ) | (1,800 | ) | ||||||||
Accumulated other comprehensive income (loss) balance, end of period | $ | (54,092 | ) | $ | (53,225 | ) | $ | (52,202 | ) | |||||
Total accumulated other comprehensive income (loss), end of period | $ | (47,695 | ) | $ | (26,540 | ) | $ | (24,884 | ) | |||||
Employee_Stock_and_Benefit_Pla1
Employee Stock and Benefit Plans (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||
Schedule of Total Stock-based Compensation Expense | ' | ||||||||||||
Stock-based compensation expense recognized in our consolidated statements of operations includes amounts related to stock options, restricted stock, and employee stock purchase plans and was as follows (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Total stock-based compensation expense | $ | 7,468 | $ | 8,123 | $ | 11,747 | |||||||
Weighted-Average Assumptions Used to Determine Fair Value of Options Granted | ' | ||||||||||||
The fair value of options granted was determined using the Black-Scholes model and used the following weighted average assumptions: | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Expected dividend yield | — | % | — | % | — | % | |||||||
Risk-free interest rate | 0.86 | % | 0.5 | % | 1.31 | % | |||||||
Expected term (years) | 4.3 | 4.2 | 4 | ||||||||||
Volatility | 48 | % | 58 | % | 54 | % | |||||||
Schedule of Nonvested Restricted Stock Units Activity | ' | ||||||||||||
Restricted stock unit and award activity was as follows (shares are in thousands): | |||||||||||||
Shares | Weighted Average Grant Date Fair Value Per Share | Total Grant Date Fair Value of Vested Awards (000's) | |||||||||||
Nonvested shares, December 31, 2010 | 87 | $ | 12.04 | ||||||||||
Granted | 520 | 9.4 | |||||||||||
Vested | (94 | ) | 11.58 | $ | 1,078 | ||||||||
Forfeited/Canceled | (50 | ) | 9.59 | ||||||||||
Nonvested shares, December 31, 2011 | 463 | $ | 9.42 | ||||||||||
Granted | 1,536 | 8.7 | |||||||||||
Vested | (437 | ) | 9.47 | $ | 4,106 | ||||||||
Forfeited/Canceled | (313 | ) | 9.42 | ||||||||||
Nonvested shares, December 31, 2012 | 1,249 | $ | 8.52 | ||||||||||
Granted | 232 | 7.18 | |||||||||||
Vested | (581 | ) | 9.13 | $ | 4,438 | ||||||||
Forfeited/Canceled | (410 | ) | 7.74 | ||||||||||
Nonvested shares, December 31, 2013 | 490 | $ | 7.8 | ||||||||||
Schedule of Stock Options and Restricted Stock Units Activity | ' | ||||||||||||
Stock option activity (shares are in thousands): | |||||||||||||
Options Outstanding | Weighted Average Grant Date Fair Value | ||||||||||||
Number | Weighted | ||||||||||||
of Shares | Average | ||||||||||||
Exercise Price | |||||||||||||
Outstanding, December 31, 2010 | 5,559 | $ | 19.68 | ||||||||||
Options granted at common stock price | 2,250 | 9.54 | $ | 5.08 | |||||||||
Options exercised | (210 | ) | 10.57 | ||||||||||
Options cancelled | (1,234 | ) | 14.72 | ||||||||||
Outstanding, December 31, 2011 | 6,365 | $ | 14.24 | ||||||||||
Options granted at common stock price | 1,422 | 8.29 | $ | 3.71 | |||||||||
Options exercised | (466 | ) | 6.61 | ||||||||||
Options cancelled | (2,787 | ) | 12.76 | ||||||||||
Outstanding, December 31, 2012 | 4,534 | $ | 14.07 | ||||||||||
Options granted at common stock price | 3,578 | 7.56 | $ | 2.93 | |||||||||
Options exercised | (24 | ) | 5.56 | ||||||||||
Options cancelled | (1,463 | ) | 15.76 | ||||||||||
Outstanding, December 31, 2013 | 6,625 | $ | 10.21 | ||||||||||
Exercisable, December 31, 2013 | 2,293 | $ | 14.82 | ||||||||||
Vested and expected to vest, December 31, 2013 | 5,353 | $ | 10.81 | ||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Schedule of Components of Income (Loss) Before Income Taxes | ' | ||||||||||||
Components of income (loss) before income taxes (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States operations | $ | (50,032 | ) | $ | 59,807 | $ | (50,100 | ) | |||||
Foreign operations | (4,055 | ) | (2,448 | ) | 5,671 | ||||||||
Income (loss) before income taxes | $ | (54,087 | ) | $ | 57,359 | $ | (44,429 | ) | |||||
Schedule of Components of Income Tax Expense (Benefit) | ' | ||||||||||||
Components of income tax expense (benefit) (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
United States federal | $ | 2,460 | $ | 1,372 | $ | 422 | |||||||
State and local | 61 | (2,957 | ) | 920 | |||||||||
Foreign | 1,706 | (6,221 | ) | 5,314 | |||||||||
Total current | 4,227 | (7,806 | ) | 6,656 | |||||||||
Deferred: | |||||||||||||
United States federal | (1,890 | ) | 22,029 | (22,006 | ) | ||||||||
State and local | 51 | 556 | (555 | ) | |||||||||
Foreign | 2,515 | (2,261 | ) | (1,424 | ) | ||||||||
Total deferred | 676 | 20,324 | (23,985 | ) | |||||||||
Total income tax expense (benefit) | $ | 4,903 | $ | 12,518 | $ | (17,329 | ) | ||||||
Schedule of Effective Income Tax Rate Reconciliation | ' | ||||||||||||
Income tax expense differs from “expected” income tax expense (computed by applying the U.S. federal income tax rate of 35%) due to the following (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States federal tax expense (benefit) at statutory rate | $ | (18,930 | ) | $ | 20,076 | $ | (15,550 | ) | |||||
State taxes, net of United States federal tax benefit | (841 | ) | (1,098 | ) | 1,320 | ||||||||
Change in valuation allowance | 25,046 | 2,136 | (9,119 | ) | |||||||||
Non-deductible stock compensation | 415 | 341 | 571 | ||||||||||
Impact of non-U.S. jurisdictional tax rate difference | 487 | 313 | (368 | ) | |||||||||
Research and development tax credit | (1,632 | ) | (1,923 | ) | (1,372 | ) | |||||||
Transfer pricing adjustment | — | — | 2,426 | ||||||||||
Increase (reversal) of unrecognized tax benefits | 671 | (7,826 | ) | 2,100 | |||||||||
Non-U.S. withholding tax | 1,805 | 471 | 275 | ||||||||||
Other | (2,118 | ) | 28 | 2,388 | |||||||||
Total income tax expense (benefit) | $ | 4,903 | $ | 12,518 | $ | (17,329 | ) | ||||||
Schedule of Net Deferred Tax Assets | ' | ||||||||||||
Net deferred tax assets are comprised of the following (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
United States federal net operating loss carryforwards | $ | 41,612 | $ | 16,581 | |||||||||
Deferred expenses | 7,166 | 8,461 | |||||||||||
Research and development tax credit carryforwards | 23,079 | 22,101 | |||||||||||
Alternative minimum tax credit carryforward | 3,561 | 3,698 | |||||||||||
Net unrealized loss on investments | 109 | 95 | |||||||||||
Accrued loss on excess office facilities | 54 | 1,340 | |||||||||||
Stock-based compensation | 12,225 | 13,639 | |||||||||||
State net operating loss carryforwards | 7,392 | 3,109 | |||||||||||
Foreign net operating loss carryforwards | 37,594 | 31,087 | |||||||||||
Deferred revenue | 128 | 357 | |||||||||||
Equipment, software, and leasehold improvements | 2,736 | 5,042 | |||||||||||
Intangibles | 27 | 64 | |||||||||||
Other | 4,489 | 7,769 | |||||||||||
Gross deferred tax assets | 140,172 | 113,343 | |||||||||||
Less valuation allowance | 128,865 | 90,799 | |||||||||||
Gross deferred tax assets, net of valuation allowance | $ | 11,307 | $ | 22,544 | |||||||||
Deferred tax liabilities: | |||||||||||||
Other intangible assets | $ | (3,761 | ) | $ | (688 | ) | |||||||
Net unrealized gains and basis differences on investments | (6,912 | ) | (16,538 | ) | |||||||||
Other | (560 | ) | (787 | ) | |||||||||
Prepaid expenses | (814 | ) | (1,076 | ) | |||||||||
Gross deferred tax liabilities | (12,047 | ) | (19,089 | ) | |||||||||
Net deferred tax assets (liabilities) | $ | (740 | ) | $ | 3,455 | ||||||||
Schedule of Unrecognized Tax Benefits | ' | ||||||||||||
Reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Balance, beginning of year | $ | 3,978 | $ | 16,721 | $ | 14,033 | |||||||
Increases related to prior year tax positions | — | 416 | — | ||||||||||
Decreases related to prior year tax positions | (125 | ) | (94 | ) | (768 | ) | |||||||
Settlements with taxing authorities | — | (13,065 | ) | — | |||||||||
Increases related to current year tax positions | 652 | — | 3,518 | ||||||||||
Expiration of the statute of limitations | — | — | (62 | ) | |||||||||
Balance, end of year | $ | 4,505 | $ | 3,978 | $ | 16,721 | |||||||
Earnings_Loss_Per_Share_Tables
Earnings (Loss) Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Calculation of Basic and Diluted Earnings Per Share | ' | ||||||||||||
Basic and diluted net income (loss) per share (EPS) available to common shareholders (in thousands, except per share data): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Net income (loss) available to common shareholders | $ | (58,990 | ) | $ | 44,841 | $ | (27,100 | ) | |||||
Weighted average common shares outstanding used to compute basic EPS | 35,553 | 34,873 | 34,185 | ||||||||||
Dilutive effect of stock based awards | — | 249 | — | ||||||||||
Weighted average common shares outstanding used to compute diluted EPS | 35,553 | 35,122 | 34,185 | ||||||||||
Basic EPS | $ | (1.66 | ) | $ | 1.29 | $ | (0.79 | ) | |||||
Diluted EPS | $ | (1.66 | ) | $ | 1.28 | $ | (0.79 | ) | |||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of Future Minimum Payments | ' | ||||
Future minimum payments as of December 31, 2013 are as follows (in thousands): | |||||
Office | |||||
Leases | |||||
2014 | $ | 7,947 | |||
2015 | 6,185 | ||||
2016 | 5,277 | ||||
2017 | 3,625 | ||||
2018 | 2,722 | ||||
Thereafter | 19,114 | ||||
Total minimum payments | $ | 44,870 | |||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Segment Results | ' | ||||||||||||
Segment results for the years ended December 31, 2013, 2012 and 2011 were as follows (in thousands): | |||||||||||||
RealPlayer Group | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revenue | $ | 75,206 | $ | 91,469 | $ | 102,378 | |||||||
Cost of revenue | 16,220 | 21,544 | 21,534 | ||||||||||
Impairment of deferred costs | — | — | 633 | ||||||||||
Gross profit | 58,986 | 69,925 | 80,211 | ||||||||||
Operating expenses | 60,484 | 55,223 | 59,829 | ||||||||||
Operating income (loss) | $ | (1,498 | ) | $ | 14,702 | $ | 20,382 | ||||||
Mobile Entertainment | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Revenue | $ | 81,181 | $ | 100,318 | $ | 135,452 | |||||||
Cost of revenue | 47,608 | 57,670 | 74,524 | ||||||||||
Impairment of deferred costs | — | — | 19,329 | ||||||||||
Gross profit | 33,573 | 42,648 | 41,599 | ||||||||||
Operating expenses | 35,839 | 52,614 | 61,921 | ||||||||||
Operating income (loss) | $ | (2,266 | ) | $ | (9,966 | ) | $ | (20,322 | ) | ||||
Games | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Total revenue | $ | 49,809 | $ | 67,055 | $ | 97,856 | |||||||
Cost of revenue | 13,359 | 21,828 | 30,835 | ||||||||||
Gross profit | 36,450 | 45,227 | 67,021 | ||||||||||
Operating expenses | 47,177 | 51,890 | 62,595 | ||||||||||
Operating income (loss) | $ | (10,727 | ) | $ | (6,663 | ) | $ | 4,426 | |||||
Corporate | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Cost of revenue | $ | 1,904 | $ | 2,689 | $ | (256 | ) | ||||||
Gain on sale of patents and other technology assets, net of costs | — | 116,353 | — | ||||||||||
Operating expenses | 54,413 | 56,174 | 42,352 | ||||||||||
Operating income (loss) | $ | (56,317 | ) | $ | 57,490 | $ | (42,096 | ) | |||||
Revenue by Geographic Region | ' | ||||||||||||
customers consist primarily of consumers and corporations located in the U.S., Europe, Republic of Korea and various foreign countries (Rest of the World). Revenue by geographic region (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States | $ | 90,250 | $ | 117,844 | $ | 162,720 | |||||||
Europe | 38,155 | 56,473 | 74,602 | ||||||||||
Republic of Korea | 46,601 | 40,467 | 44,261 | ||||||||||
Rest of the World | 31,190 | 44,058 | 54,103 | ||||||||||
Total | $ | 206,196 | $ | 258,842 | $ | 335,686 | |||||||
Long-Lived Assets by Geographic Region | ' | ||||||||||||
Long-lived assets (consists of equipment, software, leasehold improvements, other intangible assets, and goodwill) by geographic region (in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
United States | $ | 40,347 | $ | 27,915 | $ | 38,543 | |||||||
Europe | 8,280 | 2,350 | 2,949 | ||||||||||
Republic of Korea | 936 | 2,463 | 4,063 | ||||||||||
Rest of the World | 4,078 | 6,172 | 5,286 | ||||||||||
Total long-lived assets | $ | 53,641 | $ | 38,900 | $ | 50,841 | |||||||
Quarterly_Information_Unaudite1
Quarterly Information (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||||||
Schedule of Quarterly Financial Information | ' | ||||||||||||||||||||
The following table summarizes the unaudited statement of operations for each quarter of 2013 and 2012 (in thousands, except per share data): | |||||||||||||||||||||
Total | Dec. 31 (3) | Sept. 30 | June 30 (2) | Mar. 31 | |||||||||||||||||
2013 | |||||||||||||||||||||
Net revenue | $ | 206,196 | $ | 50,595 | $ | 48,958 | $ | 49,850 | $ | 56,793 | |||||||||||
Gross profit | 127,105 | 30,519 | 29,968 | 30,331 | 36,287 | ||||||||||||||||
Operating (loss) income | (70,808 | ) | (14,441 | ) | (28,437 | ) | (16,504 | ) | (11,426 | ) | |||||||||||
Net income (loss) attributable to common shareholders | (58,990 | ) | 2,530 | (31,375 | ) | (18,471 | ) | (11,674 | ) | ||||||||||||
Basic net income (loss) per share available to common shareholders(1) | (1.66 | ) | 0.07 | (0.88 | ) | (0.52 | ) | (0.33 | ) | ||||||||||||
Diluted net income (loss) per share available to common shareholders(1) | (1.66 | ) | 0.07 | (0.88 | ) | (0.52 | ) | (0.33 | ) | ||||||||||||
2012 | |||||||||||||||||||||
Net revenue | $ | 258,842 | $ | 67,264 | $ | 59,088 | $ | 65,526 | $ | 66,964 | |||||||||||
Gross profit | 155,111 | 42,166 | 33,844 | 39,564 | 39,537 | ||||||||||||||||
Operating (loss) income | 55,563 | (6,888 | ) | (23,175 | ) | 104,168 | (18,542 | ) | |||||||||||||
Net income (loss) attributable to common shareholders | 44,841 | 3,073 | (22,214 | ) | 80,997 | (17,015 | ) | ||||||||||||||
Basic net income (loss) per share available to common shareholders(1) | 1.29 | 0.09 | (0.63 | ) | 2.33 | (0.49 | ) | ||||||||||||||
Diluted net income (loss) per share available to common shareholders(1) | 1.28 | 0.09 | (0.63 | ) | 2.32 | (0.49 | ) | ||||||||||||||
-1 | The sum of the quarterly net income per share amounts will not necessarily equal net income per share for the year due to the use of weighted average quarterly shares and the effects of rounding. | ||||||||||||||||||||
-2 | In the quarter ended June 30, 2012, we recognized a net gain of $117.9 million from the sale to Intel of certain patents, patent applications, and related rights. The net gain for the full year 2012 totaled $116.4 million. See Note 1, Description of Business and Summary of Significant Accounting Policies, for additional details. | ||||||||||||||||||||
-3 | In the quarter ended December 31, 2013, we sold our remaining shares of common stock in LoEn Entertainment for a net gain of $21.4 million, as described in further detail in Note 5. |
Description_of_Business_and_Su2
Description of Business and Summary of Significant Accounting Policies (Narrative) (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jan. 26, 2012 | Aug. 23, 2011 | Jul. 27, 2011 | Jun. 30, 2012 | Mar. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
2012 Sale of Patents and Other Technology Assets to Intel Corporation | ' | ' | ' | ' | ' | ' | ' | ' |
Sale of patents and other technology assets | $120,000,000 | ' | ' | ' | ' | ' | ' | ' |
Net gain on sale of other investments | ' | ' | ' | 117,900,000 | ' | ' | 116,400,000 | ' |
2011 Special Dividend and Reverse Stock Split | ' | ' | ' | ' | ' | ' | ' | ' |
Special cash dividend, declared | ' | ' | $1 | ' | ' | ' | ' | ' |
Payment of special dividend | ' | 136,800,000 | ' | ' | ' | 0 | 0 | 136,793,000 |
Reverse stock split, conversion ratio | ' | 0.25 | ' | ' | ' | ' | ' | ' |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation expense | ' | ' | ' | ' | ' | 14,300,000 | 12,900,000 | 12,800,000 |
Deferred Costs | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of ongoing project, deferred costs | ' | ' | ' | ' | 16,700,000 | ' | ' | ' |
Impairment of ongoing project, equipment and software assets | ' | ' | ' | ' | 3,300,000 | ' | ' | ' |
Impairment of deferred costs | ' | ' | ' | ' | 20,000,000 | ' | ' | ' |
Advertising Expense | ' | ' | ' | ' | ' | ' | ' | ' |
Advertising expense | ' | ' | ' | ' | ' | $30,600,000 | $31,700,000 | $35,700,000 |
Other Intangible Assets | Minimum | ' | ' | ' | ' | ' | ' | ' | ' |
Other Intangible Assets | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible asset, useful life | ' | ' | ' | ' | ' | '1 year | ' | ' |
Other Intangible Assets | Maximum | ' | ' | ' | ' | ' | ' | ' | ' |
Other Intangible Assets | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible asset, useful life | ' | ' | ' | ' | ' | '11 years | ' | ' |
Equipment and Software | Minimum | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' |
Useful life | ' | ' | ' | ' | ' | '3 years | ' | ' |
Equipment and Software | Maximum | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' |
Useful life | ' | ' | ' | ' | ' | '5 years | ' | ' |
Acquisitions_Details
Acquisitions (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 |
Slingo, Inc | Muzicall Ltd [Member] | Tradenames and Trademarks | Tradenames and Trademarks | Tradenames and Trademarks | Developed Technology, tradenames and trademarks and customer relationships [Member] | Developed Technology and Customer Relationships | ||||
Slingo, Inc | Slingo, Inc | Slingo, Inc | Muzicall Ltd [Member] | Slingo, Inc | ||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of voting interests acquired | ' | ' | ' | 100.00% | 100.00% | ' | ' | ' | ' | ' |
Payments to acquire businesses | ' | ' | ' | $15,600,000 | $6,700,000 | ' | ' | ' | ' | ' |
Intangible assets acquired | ' | ' | ' | 8,000,000 | ' | ' | ' | ' | ' | ' |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | ' | ' | ' | ' | ' | 4,500,000 | 4,500,000 | 0 | ' | ' |
Finite-lived intangibles acquired | ' | ' | ' | ' | ' | ' | ' | ' | 5,400,000 | 3,500,000 |
Deferred tax assets | ' | ' | ' | ' | 3,400,000 | ' | ' | ' | ' | ' |
Deferred tax liability | ' | ' | ' | 2,700,000 | ' | ' | ' | ' | ' | ' |
Goodwill | $17,476,000 | $6,309,000 | $6,198,000 | $9,900,000 | $1,300,000 | ' | ' | ' | ' | ' |
Rhapsody_Joint_Venture_Additio
Rhapsody Joint Venture (Additional Information) (Detail) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 31, 2010 | Dec. 31, 2013 | Mar. 31, 2010 | Mar. 31, 2010 | |
Rhapsody America LLC | Rhapsody America LLC | Rhapsody America LLC | Rhapsody America LLC | ||||
Before Capital Restructuring | MTV Networks | ||||||
Before Capital Restructuring | |||||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership interest in Rhapsody | ' | ' | ' | ' | ' | 51.00% | 49.00% |
Percentage of ownership interest in Rhapsody | ' | ' | ' | 47.00% | 45.00% | ' | ' |
Share of Rhapsody equity transactions | ($463,000) | $1,718,000 | $3,113,000 | ' | $1,700,000 | ' | ' |
Payments for restructuring | 5,636,000 | ' | ' | 18,000,000 | ' | ' | ' |
Liquidation preference | ' | ' | ' | ' | 10,000,000 | ' | ' |
Losses recorded in the operations of Rhapsody | 6,268,000 | 5,709,000 | 7,898,000 | ' | ' | ' | ' |
Carrying value of Rhapsody investment | $12,473,000 | $19,204,000 | ' | ' | ' | ' | ' |
Rhapsody_Joint_Venture_Summari
Rhapsody Joint Venture (Summarized Financial Information for Rhapsody) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Assets and Liabilities | ' | ' | ' |
Current assets | $31,245 | $34,035 | ' |
Non-current assets | 17,305 | 19,688 | ' |
Current liabilities | 46,458 | 36,756 | ' |
Non-current liabilities | 0 | 0 | ' |
Rhapsody America LLC | ' | ' | ' |
Gross Profit (Loss) | ' | ' | ' |
Net revenue | 140,596 | 143,674 | 127,184 |
Gross profit | 34,141 | 36,260 | 39,137 |
Net loss | ($14,663) | ($12,228) | ($13,580) |
Fair_Value_Measurements_Financ
Fair Value Measurements (Financial Assets Measured at Fair Value on a Recurring Basis) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Amortized Cost | $229,950 | $289,928 |
Financial assets fair value | 236,336 | 315,748 |
Cash and Cash Equivalents | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Amortized Cost | 151,236 | 163,200 |
Financial assets fair value | 151,235 | 163,198 |
Cash and Cash Equivalents | Cash | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Amortized Cost | 46,978 | 71,283 |
Financial assets fair value | 46,978 | 71,283 |
Cash and Cash Equivalents | Money market mutual funds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Amortized Cost | 26,914 | 10,680 |
Financial assets fair value | 26,914 | 10,680 |
Cash and Cash Equivalents | Corporate notes and bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Amortized Cost | 77,044 | 81,237 |
Financial assets fair value | 77,043 | 81,235 |
Cash and Cash Equivalents | U.S. government agency securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Amortized Cost | 300 | ' |
Financial assets fair value | 300 | ' |
Short-term Investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Amortized Cost | 74,872 | 108,119 |
Financial assets fair value | 74,920 | 108,216 |
Short-term Investments | Corporate notes and bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Amortized Cost | 59,713 | 65,426 |
Financial assets fair value | 59,766 | 65,502 |
Short-term Investments | U.S. government agency securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Amortized Cost | 15,159 | 42,693 |
Financial assets fair value | 15,154 | 42,714 |
Restricted cash equivalents and investments | Restricted cash equivalents and investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Amortized Cost | 3,000 | 10,000 |
Financial assets fair value | 3,000 | 10,000 |
Equity Investments | Equity Securities [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Amortized Cost | 842 | 8,609 |
Financial assets fair value | 7,181 | 34,334 |
Level 1 | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 68,237 | 147,730 |
Level 1 | Cash and Cash Equivalents | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 46,979 | 71,283 |
Level 1 | Cash and Cash Equivalents | Cash | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 46,978 | 71,283 |
Level 1 | Cash and Cash Equivalents | Money market mutual funds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 1 | 0 |
Level 1 | Cash and Cash Equivalents | Corporate notes and bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 1 | Cash and Cash Equivalents | U.S. government agency securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | ' |
Level 1 | Short-term Investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 14,077 | 42,113 |
Level 1 | Short-term Investments | Corporate notes and bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 1 | Short-term Investments | U.S. government agency securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 14,077 | 42,113 |
Level 1 | Restricted cash equivalents and investments | Restricted cash equivalents and investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 1 | Equity Investments | Equity Securities [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 7,181 | 34,334 |
Level 2 | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 168,099 | 168,018 |
Level 2 | Cash and Cash Equivalents | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 104,256 | 91,915 |
Level 2 | Cash and Cash Equivalents | Cash | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 2 | Cash and Cash Equivalents | Money market mutual funds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 26,913 | 10,680 |
Level 2 | Cash and Cash Equivalents | Corporate notes and bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 77,043 | 81,235 |
Level 2 | Cash and Cash Equivalents | U.S. government agency securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 300 | ' |
Level 2 | Short-term Investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 60,843 | 66,103 |
Level 2 | Short-term Investments | Corporate notes and bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 59,766 | 65,502 |
Level 2 | Short-term Investments | U.S. government agency securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 1,077 | 601 |
Level 2 | Restricted cash equivalents and investments | Restricted cash equivalents and investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 3,000 | 10,000 |
Level 2 | Equity Investments | Equity Securities [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 3 | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 3 | Cash and Cash Equivalents | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 3 | Cash and Cash Equivalents | Cash | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 3 | Cash and Cash Equivalents | Money market mutual funds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 3 | Cash and Cash Equivalents | Corporate notes and bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 3 | Cash and Cash Equivalents | U.S. government agency securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | ' |
Level 3 | Short-term Investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 3 | Short-term Investments | Corporate notes and bonds | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 3 | Short-term Investments | U.S. government agency securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 3 | Restricted cash equivalents and investments | Restricted cash equivalents and investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 0 | 0 |
Level 3 | Equity Investments | Equity Securities [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | $0 | $0 |
Fair_Value_Measurements_Shortt
Fair Value Measurements (Short-term Investments) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | $236,336 | $315,748 |
Short-term Investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 74,920 | 108,216 |
Estimated Fair Value | Short-term Investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 74,920 | ' |
Estimated Fair Value | Within one year | Short-term Investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | 47,693 | ' |
Estimated Fair Value | Between one year and five years | Short-term Investments | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Financial assets fair value | $27,227 | ' |
Fair_Value_Measurements_Additi
Fair Value Measurements (Additional Information) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' | ' |
Proceeds from sale of equity and other investments | ' | ($29,153) | ($7,261) | $0 |
Gain on sale of equity and other investments, net | 21,400 | 21,389 | 5,072 | 0 |
LoEn Entertainment, Inc | ' | ' | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' | ' |
Proceeds from sale of equity and other investments | -29,200 | ' | -6,400 | ' |
Gain on sale of equity and other investments, net | $21,400 | ' | $4,300 | ' |
Allowance_for_Doubtful_Account2
Allowance for Doubtful Accounts Receivable and Sales Returns (Activity in Allowance for Doubtful Accounts Receivable and Sales Returns) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' |
Ending Balance | $1,535 | $1,663 | $2,113 |
Allowance for Doubtful Accounts Receivable | ' | ' | ' |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' |
Beginning Balance | 1,010 | 1,445 | 1,529 |
Addition (reduction) to allowance | -2 | 76 | 693 |
Amounts written off | -83 | -529 | -742 |
Effects of foreign currency translation | 41 | 18 | -35 |
Ending Balance | 966 | 1,010 | 1,445 |
Allowance for Sales Returns | ' | ' | ' |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' |
Beginning Balance | 653 | 668 | 1,039 |
Addition (reduction) to allowance | -64 | 153 | 939 |
Amounts written off | -21 | -168 | -1,311 |
Effects of foreign currency translation | 1 | 0 | 1 |
Ending Balance | $569 | $653 | $668 |
Allowance_for_Doubtful_Account3
Allowance for Doubtful Accounts Receivable and Sales Returns (Additional Information) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Net revenue | $50,595 | $48,958 | $49,850 | [1] | $56,793 | $67,264 | [2] | $59,088 | $65,526 | [1] | $66,964 | $206,196 | [3] | $258,842 | [3] | $335,686 | [3] |
Revenue by Segment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Number of major customers | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 1 | ' | ||||||
RealPlayer Group | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Net revenue | ' | ' | ' | ' | ' | ' | ' | ' | 75,206 | 91,469 | 102,378 | ||||||
RealPlayer Group | Revenue by Segment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Percentage by major customer | ' | ' | ' | ' | ' | ' | ' | ' | 13.00% | 11.00% | ' | ||||||
Net revenue | ' | ' | ' | ' | ' | ' | ' | ' | 27,000 | 27,700 | ' | ||||||
Mobile Entertainment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Net revenue | ' | ' | ' | ' | ' | ' | ' | ' | 81,181 | 100,318 | 135,452 | ||||||
Mobile Entertainment | Revenue by Segment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Percentage by major customer | ' | ' | ' | ' | ' | ' | ' | ' | 13.00% | ' | ' | ||||||
Net revenue | ' | ' | ' | ' | ' | ' | ' | ' | $26,400 | ' | ' | ||||||
Company A [Member] | Accounts Receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Percentage by major customer | ' | ' | ' | ' | ' | ' | ' | ' | 17.00% | ' | ' | ||||||
[1] | In the quarter ended June 30, 2012, we recognized a net gain of $117.9 million from the sale to Intel of certain patents, patent applications, and related rights. The net gain for the full year 2012 totaled $116.4 million. See Note 1, Description of Business and Summary of Significant Accounting Policies, for additional details. | ||||||||||||||||
[2] | In the quarter ended December 31, 2013, we sold our remaining shares of common stock in LoEn Entertainment for a net gain of $21.4 million, as described in further detail in Note 5. | ||||||||||||||||
[3] | December 31, 2012Â December 31, 2011Â December 31, 2010Components of Cost of Revenue License Fees8,538Â 11,689Â 17,794Service Revenue70,553Â 92,042Â 108,843Net Revenue Costs79,091Â 103,731Â 126,637 |
Other_Intangible_Assets_Schedu
Other Intangible Assets (Schedule of Intangible Asset by Class) (Detail) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | ' | ' | ' |
Gross Amount | $73,953 | ' | $60,830 |
Accumulated Amortization | 65,460 | ' | 57,555 |
Other intangible assets, net | 12,993 | ' | 3,275 |
Net | 8,493 | ' | 3,275 |
Intangible Assets, Gross | 78,453 | ' | 60,830 |
Customer relationships | ' | ' | ' |
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | ' | ' | ' |
Gross Amount | 35,156 | ' | 30,831 |
Accumulated Amortization | 31,262 | ' | 28,211 |
Net | 3,894 | ' | 2,620 |
Developed technology | ' | ' | ' |
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | ' | ' | ' |
Gross Amount | 29,097 | ' | 24,532 |
Accumulated Amortization | 25,039 | ' | 23,885 |
Net | 4,058 | ' | 647 |
Patents, trademarks and tradenames | ' | ' | ' |
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | ' | ' | ' |
Gross Amount | 4,021 | ' | 0 |
Accumulated Amortization | 3,627 | ' | 0 |
Net | 394 | ' | 0 |
Service contracts | ' | ' | ' |
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | ' | ' | ' |
Gross Amount | 5,679 | ' | 5,467 |
Accumulated Amortization | 5,532 | ' | 5,459 |
Net | 147 | ' | 8 |
Tradenames and Trademarks | Slingo, Inc | ' | ' | ' |
Schedule of Finite-Lived Intangible Assets and Indefinite-lived intangible assets [Line Items] | ' | ' | ' |
Indefinite-Lived Intangible Assets | $4,500 | $4,500 | $0 |
Other_Intangible_Assets_Additi
Other Intangible Assets (Additional Information and Expected Amortization) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' | ' |
Amortization expense | $4,400,000 | $4,100,000 | $4,100,000 |
Amortization Expense, Fiscal Year Maturity [Abstract] | ' | ' | ' |
2014 | 3,131,000 | ' | ' |
2015 | 2,165,000 | ' | ' |
2016 | 1,489,000 | ' | ' |
2017 | 695,000 | ' | ' |
2018 | 193,000 | ' | ' |
Thereafter | 820,000 | ' | ' |
Net | $8,493,000 | $3,275,000 | ' |
Goodwill_Changes_in_Goodwill_D
Goodwill (Changes in Goodwill) (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Roll Forward] | ' | ' |
Balance, beginning of year, Goodwill, gross | $316,962 | $316,851 |
Balance, beginning of year, Accumulated impairment lossses | -310,653 | -310,653 |
Balance, beginning of year, Goodwill | 6,309 | 6,198 |
Increases due to current year acquisitions | 11,463 | 0 |
Effects of foreign currency translation | -296 | 111 |
Total goodwill increase (decrease) | 11,167 | 111 |
Balance, end of year, Goodwill, gross | 328,129 | 316,962 |
Balance, end of year, Accumulated impairment lossses | -310,653 | -310,653 |
Balance, end of year, Goodwill | $17,476 | $6,309 |
Goodwill_Goodwill_by_Segments_
Goodwill (Goodwill by Segments and Acquisition) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Goodwill [Line Items] | ' | ' | ' |
Goodwill | $17,476 | $6,309 | $6,198 |
RealPlayer Group | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Goodwill | 580 | 580 | ' |
Mobile Entertainment | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Goodwill | 2,119 | 779 | ' |
Games | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Goodwill | $14,777 | $4,950 | ' |
Accrued_and_Other_Current_Liab2
Accrued and Other Current Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Payables and Accruals [Abstract] | ' | ' | ' |
Royalties and other fulfillment costs | $16,467 | $19,435 | ' |
Employee compensation, commissions and benefits | 10,060 | 13,368 | ' |
Sales, VAT and other taxes payable | 7,237 | 10,959 | ' |
Deferred tax liabilities—current | 899 | 3,894 | ' |
Accrued lease exit and related charges | 254 | 2,463 | 596 |
Other | 7,875 | 7,411 | ' |
Total accrued and other current liabilities | $42,792 | $57,530 | ' |
Restructuring_Charges_Details
Restructuring Charges (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
position | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Number of positions eliminated | 160 | ' | ' |
Restructuring and other charges | $5,765,000 | $15,225,000 | $8,650,000 |
Costs incurred and charged to expense | 5,765,000 | 15,225,000 | 8,650,000 |
Unpaid Asset Related Restructuring Costs | 300,000 | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' | ' |
Accrued liability beginning balance | 2,431,000 | ' | ' |
Costs incurred and charged to expense for the year ended December 31, 2013 | 3,961,000 | ' | ' |
Cash payments | -5,636,000 | ' | ' |
Accrued liability ending balance | 756,000 | 2,431,000 | ' |
Employee Separation Costs | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Costs incurred and charged to expense | 3,961,000 | 9,052,000 | 7,739,000 |
Restructuring Reserve [Roll Forward] | ' | ' | ' |
Accrued liability beginning balance | 731,000 | ' | ' |
Costs incurred and charged to expense for the year ended December 31, 2013 | 3,961,000 | ' | ' |
Cash payments | -3,936,000 | ' | ' |
Accrued liability ending balance | 756,000 | 731,000 | ' |
Contract Assignment Costs | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Costs incurred and charged to expense | 0 | 3,629,000 | 0 |
Restructuring Reserve [Roll Forward] | ' | ' | ' |
Accrued liability beginning balance | 1,700,000 | ' | ' |
Costs incurred and charged to expense for the year ended December 31, 2013 | 0 | ' | ' |
Cash payments | -1,700,000 | ' | ' |
Accrued liability ending balance | 0 | 1,700,000 | ' |
Asset Related and Other Costs | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Costs incurred and charged to expense | $1,804,000 | $2,544,000 | $911,000 |
Loss_on_Exit_and_Related_Charg2
Loss on Exit and Related Charges (Changes to Accrued Loss on Excess Office Facilities) (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
term | |||||
stage | |||||
Disclosure Changes To Accrued Loss On Excess Office Facilities [Abstract] | ' | ' | ' | ' | ' |
Leases term | ' | ' | '11 years | ' | ' |
Number of extensions on lease | ' | ' | 2 | ' | ' |
Lease extension term | ' | ' | '5 years | ' | ' |
Number of stages on early termination | ' | ' | 3 | ' | ' |
Cash paid for contract termination fees | $3,200,000 | $3,300,000 | $6,500,000 | ' | ' |
Accrued Loss on Excess Office Facilities [Roll Forward] | ' | ' | ' | ' | ' |
Accrued loss, beginning of year | ' | ' | 4,213,000 | 2,747,000 | 4,524,000 |
Additions and adjustments to the lease loss accrual, including sublease income estimate revision, and related asset write-downs | ' | ' | 1,421,000 | 3,290,000 | -646,000 |
Less write-down of leasehold improvements | ' | ' | 0 | -496,000 | 0 |
Less amounts paid, net of sublease income | ' | ' | -5,380,000 | -1,328,000 | -1,131,000 |
Accrued loss, end of year | ' | 254,000 | 254,000 | 4,213,000 | 2,747,000 |
Less current portion (included in Accrued and other current liabilities) | ' | -254,000 | -254,000 | -2,463,000 | -596,000 |
Accrued loss, non-current portion | ' | $0 | $0 | $1,750,000 | $2,151,000 |
Shareholders_Equity_Accumulate
Shareholders’ Equity (Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' | ' |
Accumulated other comprehensive loss, beginning of period | ($26,540,000) | ($24,884,000) | ' |
Unrealized investment holding gains (losses), net of reclassification adjustments | -20,288,000 | -633,000 | 9,459,000 |
Net current period other comprehensive income | -21,155,000 | -1,656,000 | 7,659,000 |
Accumulated other comprehensive loss, end of period | -47,695,000 | -26,540,000 | -24,884,000 |
Investments | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' | ' |
Accumulated other comprehensive loss, beginning of period | 26,685,000 | 27,318,000 | 17,859,000 |
Unrealized investment holding gains (losses), net of reclassification adjustments | 2,121,000 | 3,313,000 | 9,459,000 |
Reclassification adjustments for losses (gains) included in other income (expense), net of tax | -22,409,000 | -3,946,000 | 0 |
Net current period other comprehensive income | -20,288,000 | -633,000 | 9,459,000 |
Accumulated other comprehensive loss, end of period | 6,397,000 | 26,685,000 | 27,318,000 |
Accumulated Other Comprehensive Income (Loss), Tax [Abstract] | ' | ' | ' |
Unrealized gains (losses), tax effects | -54 | 0 | 0 |
Reclassification adjustments for losses (gains) included in other income (expense), tax effects | -800 | 0 | 0 |
Foreign currency translation | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' | ' |
Accumulated other comprehensive loss, beginning of period | -53,225,000 | -52,202,000 | -50,402,000 |
Translation adjustments, net of tax effects of $0 and $0 | -296,000 | 943,000 | -1,800,000 |
Reclassification adjustments for losses (gains) included in other income (expense), net of tax | -571,000 | -1,966,000 | 0 |
Net current period other comprehensive income | -867,000 | -1,023,000 | -1,800,000 |
Accumulated other comprehensive loss, end of period | ($54,092,000) | ($53,225,000) | ($52,202,000) |
Shareholders_Equity_Details
Shareholders’ Equity (Details) (Preferred stock, Series A) | Dec. 31, 2013 | Oct. 16, 1988 |
vote | ||
Preferred stock, Series A | ' | ' |
Class of Stock [Line Items] | ' | ' |
Number of votes available | 1,000 | ' |
Dividends declared | 0.001 | 0.001 |
Employee_Stock_and_Benefit_Pla2
Employee Stock and Benefit Plans (Equity Compensation Plans Narrative) (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
Share data in Millions, except Per Share data, unless otherwise specified | Sep. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Stock reserved for future issuance | ' | 2.4 | ' | ' |
Capital shares reserved for future issuance | ' | 0.5 | ' | ' |
Total stock-based compensation expense | ' | $7,468,000 | $8,123,000 | $11,747,000 |
Total unrecognized compensation cost | ' | $12,100,000 | ' | ' |
Total unrecognized compensation cost, expected recognition period (in years) | ' | '3 years | ' | ' |
Cash dividend (in dollars per share) | $1 | ' | ' | ' |
Stock Options | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Vesting period | ' | '4 years | ' | ' |
Stock Options | Minimum | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Expiration period | ' | '7 years | ' | ' |
Stock Options | Maximum | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Expiration period | ' | '10 years | ' | ' |
Restricted Stock | Minimum | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Vesting period | ' | '2 years | ' | ' |
Restricted Stock | Maximum | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Vesting period | ' | '4 years | ' | ' |
2005 Plan | Restricted Stock Unit | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Factor for increase | ' | 1.6 | ' | ' |
Employee_Stock_and_Benefit_Pla3
Employee Stock and Benefit Plans (Weighted-Average Assumptions Used to Determine Fair Value of Options Granted) (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 0.86% | 0.50% | 1.31% |
Expected term | '4 years 3 months | '4 years 2 months | '4 years |
Volatility | 48.00% | 58.00% | 54.00% |
Employee_Stock_and_Benefit_Pla4
Employee Stock and Benefit Plans (Restricted Stock Unit and Award Activity) (Details) (Restricted Stock Unit, USD $) | 12 Months Ended | ||
Share data in Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Restricted Stock Unit | ' | ' | ' |
Number of Shares [Roll Forward] | ' | ' | ' |
Nonvested shares, beginning of year (in shares) | 1,249 | 463 | 87 |
Granted (in shares) | 232 | 1,536 | 520 |
Vested (in shares) | -581 | -437 | -94 |
Forfeited/Canceled (in shares) | -410 | -313 | -50 |
Nonvested shares, end of year (in shares) | 490 | 1,249 | 463 |
Weighted Average Grant Date Fair Value [Roll Forward] | ' | ' | ' |
Nonvested shares, beginning of year (in dollars per share) | $8.52 | $9.42 | $12.04 |
Granted (in dollars per share) | $7.18 | $8.70 | $9.40 |
Vested (in dollars per share) | $9.13 | $9.47 | $11.58 |
Forfeited/Canceled (in dollars per share) | $7.74 | $9.42 | $9.59 |
Nonvested shares, beginning of year (in dollars per share) | $7.80 | $8.52 | $9.42 |
Total Fair Value of Vested Awards | ' | ' | ' |
Total fair value of vested awards | $4,438 | $4,106 | $1,078 |
Additional Information | ' | ' | ' |
Aggregate intrinsic value, outstanding | $3,700,000 | ' | ' |
Weighted average remaining contractual term | '1 year | ' | ' |
Employee_Stock_and_Benefit_Pla5
Employee Stock and Benefit Plans (Stock Option Activity) (Details) (Stock Options, USD $) | 12 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stock Options | ' | ' | ' |
Options Outstanding, Number of Shares [Roll Forward] | ' | ' | ' |
Number of shares, beginning balance | 4,534 | 6,365 | 5,559 |
Number of shares, Options granted at common stock price | 3,578 | 1,422 | 2,250 |
Number of shares, Options exercised | -24 | -466 | -210 |
Number of shares, Options cancelled | -1,463 | -2,787 | -1,234 |
Number of shares, ending balance | 6,625 | 4,534 | 6,365 |
Number of shares, Exercisable | 2,293 | ' | ' |
Number of shares, Vested and expected to vest | 5,353 | ' | ' |
Options Outstanding, Weighted Average Exercise Price [Roll Forward] | ' | ' | ' |
Weighted average exercise price, beginning balance | $14.07 | $14.24 | $19.68 |
Weighted average exercise price, Options granted at common stock price | $7.56 | $8.29 | $9.54 |
Weighted average exercise price, Options exercised | $5.56 | $6.61 | $10.57 |
Weighted average exercise price, Options cancelled | $15.76 | $12.76 | $14.72 |
Weighted average exercise price, ending balance | $10.21 | $14.07 | $14.24 |
Weighted average exercise price, exercisbale | $14.82 | ' | ' |
Weighted average exercise price, vested and expected to vest | $10.81 | ' | ' |
Weighted Average Fair Value Grant | ' | ' | ' |
Weighted average fair value grant, Options granted at common stock prrice | $2.93 | $3.71 | $5.08 |
Options, Additional Information | ' | ' | ' |
Weighted average remaining contractual life, outstanding | '5 years 4 months 18 days | ' | ' |
Weighted average remaining contractual life, exercisable | '3 years 4 months 12 days | ' | ' |
Weighted average remaining contractual life, vested and expected to vest | '5 years 1 month 24 days | ' | ' |
Intrinsic value, options outstanding | $0.70 | ' | ' |
Intrinsic value, options exercisable | 0.2 | ' | ' |
Intrinsic value, options vested and expected to vest | 0.6 | ' | ' |
Intrinsic value, options exercised | $0.10 | $1 | $0.30 |
Employee_Stock_and_Benefit_Pla6
Employee Stock and Benefit Plans (Employee Stock Purchase Plan Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' |
Discount from market price percentage from ofering date | 85.00% | ' | ' |
Shares purchased under ESPP | 71,600 | 102,700 | 110,000 |
Employee_Stock_and_Benefit_Pla7
Employee Stock and Benefit Plans (Retirement Savings Plan Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' |
Matching contribution percentage | 50.00% | ' | ' |
Maximum contributions per employee percentage | 3.00% | ' | ' |
Contribution amount | $0.80 | $1 | $1.10 |
Income_Taxes_Components_of_Inc
Income Taxes (Components of Income (Loss) Before Income Taxes) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income (Loss) from Continuing Operations [Abstract] | ' | ' | ' |
United States operations | ($50,032) | $59,807 | ($50,100) |
Foreign operations | -4,055 | -2,448 | 5,671 |
Income (loss) before income taxes | ($54,087) | $57,359 | ($44,429) |
Income_Taxes_Components_of_Inc1
Income Taxes (Components of Income Tax Expense (Benefit)) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current: | ' | ' | ' |
United States federal | $2,460 | $1,372 | $422 |
State and local | 61 | -2,957 | 920 |
Foreign | 1,706 | -6,221 | 5,314 |
Total current | 4,227 | -7,806 | 6,656 |
Deferred: | ' | ' | ' |
United States federal | -1,890 | 22,029 | -22,006 |
State and local | 51 | 556 | -555 |
Foreign | 2,515 | -2,261 | -1,424 |
Total deferred | 676 | 20,324 | -23,985 |
Total income tax expense (benefit) | $4,903 | $12,518 | ($17,329) |
Income_Taxes_Income_Tax_Rate_R
Income Taxes (Income Tax Rate Reconciliation) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Disclosure [Abstract] | ' | ' | ' |
U.S. federal income tax rate | 35.00% | 35.00% | 35.00% |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | ' | ' | ' |
United States federal tax expense (benefit) at statutory rate | ($18,930) | $20,076 | ($15,550) |
State taxes, net of United States federal tax benefit | -841 | -1,098 | 1,320 |
Change in valuation allowance | 25,046 | 2,136 | -9,119 |
Non-deductible stock compensation | 415 | 341 | 571 |
Impact of non-U.S. jurisdictional tax rate difference | 487 | 313 | -368 |
Research and development tax credit | -1,632 | -1,923 | -1,372 |
Transfer pricing adjustment | 0 | 0 | 2,426 |
Increase (reversal) of unrecognized tax benefits | 671 | -7,826 | 2,100 |
Non-U.S. withholding tax | 1,805 | 471 | 275 |
Other | -2,118 | 28 | 2,388 |
Total income tax expense (benefit) | $4,903 | $12,518 | ($17,329) |
Income_Taxes_Net_Deferred_Tax_
Income Taxes (Net Deferred Tax Assets) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred Tax Assets [Abstract] | ' | ' |
United States federal net operating loss carryforwards | $41,612 | $16,581 |
Deferred expenses | 7,166 | 8,461 |
Research and development tax credit carryforwards | 23,079 | 22,101 |
Alternative minimum tax credit carryforward | 3,561 | 3,698 |
Net unrealized loss on investments | 109 | 95 |
Accrued loss on excess office facilities | 54 | 1,340 |
Stock-based compensation | 12,225 | 13,639 |
State net operating loss carryforwards | 7,392 | 3,109 |
Foreign net operating loss carryforwards | 37,594 | 31,087 |
Deferred revenue | 128 | 357 |
Equipment, software, and leasehold improvements | 2,736 | 5,042 |
Intangibles | 27 | 64 |
Other | 4,489 | 7,769 |
Gross deferred tax assets | 140,172 | 113,343 |
Less valuation allowance | 128,865 | 90,799 |
Gross deferred tax assets, net of valuation allowance | 11,307 | 22,544 |
Deferred Tax Liabilities [Abstract] | ' | ' |
Other intangible assets | -3,761 | -688 |
Net unrealized gains and basis differences on investments | -6,912 | -16,538 |
Other | -560 | -787 |
Prepaid expenses | -814 | -1,076 |
Gross deferred tax liabilities | -12,047 | -19,089 |
Net deferred tax assets (liabilities) | ($740) | $3,455 |
Income_Taxes_Schedule_of_Unrec
Income Taxes (Schedule of Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ' | ' | ' |
Balance, beginning of year | $3,978 | $16,721 | $14,033 |
Increases related to prior year tax positions | 0 | 416 | 0 |
Decreases related to prior year tax positions | -125 | -94 | -768 |
Settlements with taxing authorities | 0 | -13,065 | 0 |
Increases related to current year tax positions | 652 | 0 | 3,518 |
Expiration of the statute of limitations | 0 | 0 | -62 |
Balance, end of year | $4,505 | $3,978 | $16,721 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Income Tax [Line Items] | ' | ' | ' | ' |
Income tax receivables | $400,000 | $8,400,000 | ' | ' |
Valuation Allowance [Abstract] | ' | ' | ' | ' |
Valuation allowance | 128,865,000 | 90,799,000 | ' | ' |
Change in valuation allowance | 38,100,000 | 8,800,000 | ' | ' |
Increase from current deferred tax assets | 30,600,000 | ' | ' | ' |
Increase due to valuation allowance | 7,500,000 | ' | ' | ' |
Alternative minimum tax credit carryforward | 3,561,000 | 3,698,000 | ' | ' |
Research and development tax credit carryforwards | 23,079,000 | 22,101,000 | ' | ' |
Income Tax Uncertainties [Abstract] | ' | ' | ' | ' |
Unrecognized tax benefits | 4,505,000 | 3,978,000 | 16,721,000 | 14,033,000 |
Unrecognized tax benefits that would impact effective tax rate | 400,000 | 400,000 | ' | ' |
Decrease in unrecognized tax benefits | 900,000 | ' | ' | ' |
Income Tax Examination [Abstract] | ' | ' | ' | ' |
Accrued interest and penalties related to uncertain tax positions | 100,000 | 100,000 | ' | ' |
Internal Revenue Service (IRS) | ' | ' | ' | ' |
Valuation Allowance [Abstract] | ' | ' | ' | ' |
Operating loss carryforwards | $118,900,000 | $47,400,000 | ' | ' |
Earnings_Loss_Per_Share_Detail
Earnings (Loss) Per Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||||
Earnings Per Share [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Net income (loss) | $2,530 | [1] | ($31,375) | ($18,471) | [2] | ($11,674) | $3,073 | [1] | ($22,214) | $80,997 | [2] | ($17,015) | ($58,990) | $44,841 | ($27,100) | ||||||
Weighted average common shares outstanding used to compute basic EPS | ' | ' | ' | ' | ' | ' | ' | ' | 35,553,000 | 34,873,000 | 34,185,000 | ||||||||||
Dilutive effect of stock based awards | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 249,000 | 0 | ||||||||||
Weighted average common shares outstanding used to compute diluted EPS | ' | ' | ' | ' | ' | ' | ' | ' | 35,553,000 | 35,122,000 | 34,185,000 | ||||||||||
Basic EPS (in dollars per share) | $0.07 | [1],[3] | ($0.88) | [3] | ($0.52) | [2],[3] | ($0.33) | [3] | $0.09 | [1],[3] | ($0.63) | [3] | $2.33 | [2],[3] | ($0.49) | [3] | ($1.66) | [3] | $1.29 | [3] | ($0.79) |
Diluted EPS (in dollars per share) | $0.07 | [1],[3] | ($0.88) | [3] | ($0.52) | [2],[3] | ($0.33) | [3] | $0.09 | [1],[3] | ($0.63) | [3] | $2.32 | [2],[3] | ($0.49) | [3] | ($1.66) | [3] | $1.28 | [3] | ($0.79) |
Shares of common stock excluded from the calculation of diluted net income per share because of antidilutive effect | ' | ' | ' | ' | ' | ' | ' | ' | 4,600,000 | 5,100,000 | 4,300,000 | ||||||||||
[1] | In the quarter ended December 31, 2013, we sold our remaining shares of common stock in LoEn Entertainment for a net gain of $21.4 million, as described in further detail in Note 5. | ||||||||||||||||||||
[2] | In the quarter ended June 30, 2012, we recognized a net gain of $117.9 million from the sale to Intel of certain patents, patent applications, and related rights. The net gain for the full year 2012 totaled $116.4 million. See Note 1, Description of Business and Summary of Significant Accounting Policies, for additional details. | ||||||||||||||||||||
[3] | The sum of the quarterly net income per share amounts will not necessarily equal net income per share for the year due to the use of weighted average quarterly shares and the effects of rounding. |
Commitments_and_Contingencies_1
Commitments and Contingencies (Commitments) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Office Leases | ' | ' | ' |
2014 | $7,947,000 | ' | ' |
2015 | 6,185,000 | ' | ' |
2016 | 5,277,000 | ' | ' |
2017 | 3,625,000 | ' | ' |
2018 | 2,722,000 | ' | ' |
Thereafter | 19,114,000 | ' | ' |
Total minimum payments | 44,870,000 | ' | ' |
Rent expense | 8,300,000 | 9,100,000 | 9,200,000 |
Sublease income | 800,000 | 1,000,000 | 1,000,000 |
Accrued Loss on Excess Office Facilities | ' | ' | ' |
Office Leases | ' | ' | ' |
Total minimum payments | $300,000 | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Litigation) (Details) (VoiceAge Corporation and Callertone Innovations, Inc., USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
VoiceAge Corporation and Callertone Innovations, Inc. | ' |
Commitments and Contingencies Disclosure [Line Items] | ' |
Payments for litigation | $11.50 |
Segment_Information_Narrative_
Segment Information (Narrative) (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Segment | |
Segment Reporting [Abstract] | ' |
Number of reporting segments | 3 |
Segment_Information_Segment_Re
Segment Information (Segment Results) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Revenue | $50,595 | $48,958 | $49,850 | [1] | $56,793 | $67,264 | [2] | $59,088 | $65,526 | [1] | $66,964 | $206,196 | [3] | $258,842 | [3] | $335,686 | [3] | |
Cost of revenue | ' | ' | ' | ' | ' | ' | ' | ' | 79,091 | [4] | 103,731 | [4] | 126,637 | [4] | ||||
Impairment of deferred costs | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 19,962 | |||||||
Gain on sale of patent and other technology assets, net of costs | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 116,353 | 0 | |||||||
Gross profit | 30,519 | [2] | 29,968 | 30,331 | [1] | 36,287 | 42,166 | [2] | 33,844 | 39,564 | [1] | 39,537 | 127,105 | 155,111 | 189,087 | |||
Operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 197,913 | 215,901 | 226,697 | |||||||
Operating (loss) income | -14,441 | [2] | -28,437 | -16,504 | [1] | -11,426 | -6,888 | [2] | -23,175 | 104,168 | [1] | -18,542 | -70,808 | 55,563 | -37,610 | |||
RealPlayer Group | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 75,206 | 91,469 | 102,378 | |||||||
Cost of revenue | ' | ' | ' | ' | ' | ' | ' | ' | 16,220 | 21,544 | 21,534 | |||||||
Impairment of deferred costs | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 633 | |||||||
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 58,986 | 69,925 | 80,211 | |||||||
Operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 60,484 | 55,223 | 59,829 | |||||||
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -1,498 | 14,702 | 20,382 | |||||||
Mobile Entertainment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 81,181 | 100,318 | 135,452 | |||||||
Cost of revenue | ' | ' | ' | ' | ' | ' | ' | ' | 47,608 | 57,670 | 74,524 | |||||||
Impairment of deferred costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 19,329 | |||||||
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 33,573 | 42,648 | 41,599 | |||||||
Operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 35,839 | 52,614 | 61,921 | |||||||
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -2,266 | -9,966 | -20,322 | |||||||
Games | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 49,809 | 67,055 | 97,856 | |||||||
Cost of revenue | ' | ' | ' | ' | ' | ' | ' | ' | 13,359 | 21,828 | 30,835 | |||||||
Gross profit | ' | ' | ' | ' | ' | ' | ' | ' | 36,450 | 45,227 | 67,021 | |||||||
Operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 47,177 | 51,890 | 62,595 | |||||||
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | -10,727 | -6,663 | 4,426 | |||||||
Corporate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Cost of revenue | ' | ' | ' | ' | ' | ' | ' | ' | 1,904 | 2,689 | -256 | |||||||
Gain on sale of patent and other technology assets, net of costs | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 116,353 | 0 | |||||||
Operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | 54,413 | 56,174 | 42,352 | |||||||
Operating (loss) income | ' | ' | ' | ' | ' | ' | ' | ' | ($56,317) | $57,490 | ($42,096) | |||||||
[1] | In the quarter ended June 30, 2012, we recognized a net gain of $117.9 million from the sale to Intel of certain patents, patent applications, and related rights. The net gain for the full year 2012 totaled $116.4 million. See Note 1, Description of Business and Summary of Significant Accounting Policies, for additional details. | |||||||||||||||||
[2] | In the quarter ended December 31, 2013, we sold our remaining shares of common stock in LoEn Entertainment for a net gain of $21.4 million, as described in further detail in Note 5. | |||||||||||||||||
[3] | December 31, 2012Â December 31, 2011Â December 31, 2010Components of Cost of Revenue License Fees8,538Â 11,689Â 17,794Service Revenue70,553Â 92,042Â 108,843Net Revenue Costs79,091Â 103,731Â 126,637 | |||||||||||||||||
[4] | December 31, 2013Â December 31, 2012Â December 31, 2011Components of Revenue License Fees43,709Â 56,640Â 69,644Service Revenue162,487Â 202,202Â 266,042Net Revenue206,196Â 258,842Â 335,686 |
Segment_Information_Revenue_by
Segment Information (Revenue by Geographic Region) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||
Geographic Reporting Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Revenue | $50,595 | $48,958 | $49,850 | [1] | $56,793 | $67,264 | [2] | $59,088 | $65,526 | [1] | $66,964 | $206,196 | [3] | $258,842 | [3] | $335,686 | [3] |
United States | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Geographic Reporting Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 90,250 | 117,844 | 162,720 | ||||||
Europe | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Geographic Reporting Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 38,155 | 56,473 | 74,602 | ||||||
Republic of Korea | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Geographic Reporting Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 46,601 | 40,467 | 44,261 | ||||||
Rest of World | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Geographic Reporting Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | $31,190 | $44,058 | $54,103 | ||||||
[1] | In the quarter ended June 30, 2012, we recognized a net gain of $117.9 million from the sale to Intel of certain patents, patent applications, and related rights. The net gain for the full year 2012 totaled $116.4 million. See Note 1, Description of Business and Summary of Significant Accounting Policies, for additional details. | ||||||||||||||||
[2] | In the quarter ended December 31, 2013, we sold our remaining shares of common stock in LoEn Entertainment for a net gain of $21.4 million, as described in further detail in Note 5. | ||||||||||||||||
[3] | December 31, 2012Â December 31, 2011Â December 31, 2010Components of Cost of Revenue License Fees8,538Â 11,689Â 17,794Service Revenue70,553Â 92,042Â 108,843Net Revenue Costs79,091Â 103,731Â 126,637 |
Segment_Information_LongLived_
Segment Information (Long-Lived Assets by Geographic Region) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' | ' |
Long-lived assets | $53,641 | $38,900 | $50,841 |
United States | ' | ' | ' |
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' | ' |
Long-lived assets | 40,347 | 27,915 | 38,543 |
Europe | ' | ' | ' |
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' | ' |
Long-lived assets | 8,280 | 2,350 | 2,949 |
Republic of Korea | ' | ' | ' |
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' | ' |
Long-lived assets | 936 | 2,463 | 4,063 |
Rest of World | ' | ' | ' |
Long-Lived Assets by Geographical Areas [Line Items] | ' | ' | ' |
Long-lived assets | $4,078 | $6,172 | $5,286 |
Related_Party_Transactions_Add
Related Party Transactions (Additional Information) (Detail) (USD $) | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2008 |
LoEn Entertainment, Inc | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' |
Revenue from related party | $26.40 | $18.10 | $20.30 | ' | ' |
Percentage of acquire outstanding shares of LoEn Entertainment, Inc. | ' | ' | ' | 9.00% | 11.00% |
Rhapsody America LLC | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' |
Revenue from related party | $0.50 | $0.80 | $2.20 | ' | ' |
Quarterly_Information_Unaudite2
Quarterly Information (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Net revenue | $50,595,000 | $48,958,000 | $49,850,000 | [1] | $56,793,000 | $67,264,000 | [2] | $59,088,000 | $65,526,000 | [1] | $66,964,000 | $206,196,000 | [3] | $258,842,000 | [3] | $335,686,000 | [3] | |||||
Gross profit | 30,519,000 | [2] | 29,968,000 | 30,331,000 | [1] | 36,287,000 | 42,166,000 | [2] | 33,844,000 | 39,564,000 | [1] | 39,537,000 | 127,105,000 | 155,111,000 | 189,087,000 | |||||||
Operating (loss) income | -14,441,000 | [2] | -28,437,000 | -16,504,000 | [1] | -11,426,000 | -6,888,000 | [2] | -23,175,000 | 104,168,000 | [1] | -18,542,000 | -70,808,000 | 55,563,000 | -37,610,000 | |||||||
Net income (loss) | 2,530,000 | [2] | -31,375,000 | -18,471,000 | [1] | -11,674,000 | 3,073,000 | [2] | -22,214,000 | 80,997,000 | [1] | -17,015,000 | -58,990,000 | 44,841,000 | -27,100,000 | |||||||
Basic net income (loss) per share available to common shareholders (in dollars per share) | $0.07 | [2],[4] | ($0.88) | [4] | ($0.52) | [1],[4] | ($0.33) | [4] | $0.09 | [2],[4] | ($0.63) | [4] | $2.33 | [1],[4] | ($0.49) | [4] | ($1.66) | [4] | $1.29 | [4] | ($0.79) | |
Diluted net income (loss) per share available to common shareholders (in dollars per share) | $0.07 | [2],[4] | ($0.88) | [4] | ($0.52) | [1],[4] | ($0.33) | [4] | $0.09 | [2],[4] | ($0.63) | [4] | $2.32 | [1],[4] | ($0.49) | [4] | ($1.66) | [4] | $1.28 | [4] | ($0.79) | |
Net gain on sale of other investments | ' | ' | ' | ' | ' | ' | 117,900,000 | ' | ' | 116,400,000 | ' | |||||||||||
Gain on sale of equity and other investments, net | $21,400,000 | ' | ' | ' | ' | ' | ' | ' | $21,389,000 | $5,072,000 | $0 | |||||||||||
[1] | In the quarter ended June 30, 2012, we recognized a net gain of $117.9 million from the sale to Intel of certain patents, patent applications, and related rights. The net gain for the full year 2012 totaled $116.4 million. See Note 1, Description of Business and Summary of Significant Accounting Policies, for additional details. | |||||||||||||||||||||
[2] | In the quarter ended December 31, 2013, we sold our remaining shares of common stock in LoEn Entertainment for a net gain of $21.4 million, as described in further detail in Note 5. | |||||||||||||||||||||
[3] | December 31, 2012Â December 31, 2011Â December 31, 2010Components of Cost of Revenue License Fees8,538Â 11,689Â 17,794Service Revenue70,553Â 92,042Â 108,843Net Revenue Costs79,091Â 103,731Â 126,637 | |||||||||||||||||||||
[4] | The sum of the quarterly net income per share amounts will not necessarily equal net income per share for the year due to the use of weighted average quarterly shares and the effects of rounding. |