Deferred Revenue
We have entered into multiple-element arrangements for products and services with customers including Time Warner Cable,Essel Group (which operates the DishTV network in India), EchoStar’s DISH Network, UnitedGlobalCom (or UGC, asubsidiary of Liberty Global), Innovative Systems, FOXTEL, Austar and Comcast. Portions of the amounts that we have invoicedto Essel Group, EchoStar, UGC, Innovative Systems, FOXTEL and Austar under those arrangements have been deferred and willbe included as revenue over time in our middleware and integrated technologies business. Portions of those amounts that we haveinvoiced to Comcast under our agreement with Comcast will be included as revenue over time in our applications business. Thearrangements with these customers include maintenance and support, for which vendor specific objective evidence, or VSOE, offair value did not exist at the time the respective agreement was signed with each customer. In addition, several of thesearrangements provide for the delivery of specified future products, for which such evidence of fair value also did not exist. Allrevenues under arrangements for which we are obligated to provide specified future products are initially deferred. Upon finaldelivery of all specified products under each arrangement, recognition will then depend on whether or not VSOE of fair value formaintenance and support exists. In instances where VSOE of fair value for maintenance and support still does not exist, we willgenerally recognize all revenues from the arrangement either over the remaining contractual period of support or over theremaining period during which maintenance and support is expected to be provided. In instances where VSOE of fair value formaintenance and support exists, we will generally recognize the maintenance and support revenues over the remaining period ifthe related maintenance and support will be provided and all other deferred revenues upon the final delivery.
As of June 30, 2007, we recorded $32.8 million in deferred revenue compared with $25.6 million at the end of 2006. Of thattotal deferred amount at June 30, 2007, $23.4 million, or 71%, was deferred as a result of the arrangements with Essel Group,EchoStar, UGC, Innovative Systems, FOXTEL, Austar, and Comcast described in the preceding paragraphs. The remaining$9.4 million, or 29%, of our deferred revenue as of June 30, 2007 was principally attributable to maintenance and support andprofessional services arrangements with other customers, which are typically short-term in nature.
Based on our current estimates of final delivery for all specified products, we expect the following recognition of the$23.4 million of deferred revenue at June 30, 2007 resulting from the Essel Group, EchoStar, UGC, Innovative Systems,FOXTEL, Austar, and Comcast arrangements (in millions):
sec filing Q2
over +/- 2 weken Q3 cijfers