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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________
FORM 10
-
K
(Mark One)
For the fiscal year ended
December 31, 2015
or
For the transition period from to
Commission file number: 000
-
53413
Rovi Corporation
(Exact name of registrant as specified in its charter)
(408) 562-8400
(Registrant's telephone number, including area code)
_____________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act. Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the
registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large
accelerated filer,accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act:
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
The aggregate market value of voting and non-voting common equity held by non-affiliates of the Registrant was approximately $869.9 million as of June 30, 2015
, based
on the closing price on the NASDAQ Global Select Market reported for such date. This calculation does not reflect a determination that certain persons are affiliates of the
Registrant for any other purpose. The number of shares of the Registrant's Common Stock outstanding on February 5, 2016
was
83,146,924 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrants definitive Proxy Statement related to the 2016 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within
TIVO 10-K 12/31/2015
Section 1: 10-K (10-K)
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Delaware
(State or other jurisdiction of
incorporation or organization)
2830 De La Cruz Boulevard, Santa Clara, CA 95050
(Address of principal executive offices, including zip code)
Title of Each Class
Name of Exchange on Which Registered
Common Stock, $0.001 Par Value
The NASDAQ Global Select Market
Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
(Do not check if a smaller reporting company)

Table of contents

  • Page 1
    ...Common Stock outstanding on February 5, 2016 was 83,146,924 shares. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's definitive Proxy Statement related to the 2016 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within Smaller reporting company...

  • Page 2
    120 days after December 31, 2015, are incorporated by reference into Part III of this Annual Report on Form 10-K.

  • Page 3
    ... DATA CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES CONTROLS AND PROCEDURES OTHER INFORMATION 32 35 36 53 54 54 55 56 PART III ITEM 10. ITEM 11. ITEM 12. ITEM 13. ITEM 14. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE EXECUTIVE COMPENSATION SECURITY...

  • Page 4
    ... and insight products that service providers can use to unlock the usage patterns and behaviors of pay TV subscribers. Our products are supported by a broad portfolio of licensable technology patents, covering many aspects of content discovery, digital video recording ("DVR"), video on demand ("VOD...

  • Page 5
    ..., advertisers and consumption device manufacturers, driving new business models, increasing competition among existing marketplace participants and introducing new marketplace participants. Distributors such as pay TV providers, internet video services, retailers, and others are seeking ways to...

  • Page 6
    ... players, CD and DVD drives, PVRs, game consoles, mobile devices, media streaming devices, digital set-top boxes and other connected media devices. • Webscale Companies including search engines, social networks, media service and online retailers. • Content Owners and Advertisers including media...

  • Page 7
    ... cable and satellite television channels, VOD services, and internet-enabled services. The IPG is evolving from a guide for linear television content, to a guide for all the digital content to which consumers have access to in and out of the home across the multiple devices they use. Our discovery...

  • Page 8
    ... digital terminal adapters ("DTAs") in cable homes has become an important step to cost effectively enable additional TV services by supporting cable operators' efforts to remove analog channels in order to reclaim bandwidth. The Rovi DTA Guide includes such features as TV listing by time, program...

  • Page 9
    ... schedules, listings and web content linking services. Our data can be sold standalone or as a complement to another product such as an IPG or search and recommendation services. Customers typically pay us a monthly or quarterly fee for the rights to use the data, receive regular updates and...

  • Page 10
    ... add products and services or churn based on viewing behaviors and subscription information. It uses viewer data and billing records to model and evaluate potential subscriber behaviors, which can help identify cross-selling and up-selling opportunities and focus marketing efforts. Rovi Advertising...

  • Page 11
    ... operate the internet-based services needed to power the Rovi FanTV platform. This includes data delivery, search, recommendation, advertising, device management and media recognition. • We provide broadcast delivery of television line-up data and advertising to TVs and set-top boxes enabled with...

  • Page 12
    ...could use an IPG built directly into a TV to access and operate their cable subscriptions and not need to purchase or rent a set-top box from the cable operator. Although FCC regulations no longer prohibit multi-channel video service providers from deploying navigation devices with combined security...

  • Page 13
    ...affect companies conducting business on the internet. In addition, because of the increasing popularity of the internet and the growth of online services, laws relating to user privacy, freedom of expression, content, advertising, accessibility, network neutrality, information security and IP rights...

  • Page 14
    ... Vice President, Corporate Development & Strategy, and President, Cloud Solutions Business at ARRIS Group, Inc., a telecommunications equipment manufacturing company, from April 2013 to November 2013. From October 2010 to April 2013 when ARRIS acquired Motorola Mobility's Home business from Google...

  • Page 15
    ... existing or new competitors, the result could be price reductions, fewer customers and loss of market share, any of which could result in less revenue and harm our business. Our IPGs face competition from companies that produce and market program guides as well as television schedule information...

  • Page 16
    ...to deliver our IPG data to some of the CE devices that include our IPG. Further, our national data network provides customized and localized listings to our IPG service for pay TV and licensees of our data used in third party IPGs for pay TV. In addition, we purchase certain Metadata from commercial...

  • Page 17
    ...fee. Purchases of new CE devices, including television sets, integrated satellite receiver decoders, DVRs, DVD recorders, personal computers and internet appliances are largely discretionary and may be adversely impacted by increasing market saturation, durability of products in the marketplace, new...

  • Page 18
    ... be issued in all countries where products or services incorporating our technologies can be sold. We have filed applications to expand our patent claims and for improvement patents to extend the current periods of patent coverage. However, expiration of some of our patents may harm our business. If...

  • Page 19
    ... the Company cannot predict the impact of the Leahy-Smith Act at this time, these changes or potential changes could increase the costs and uncertainties surrounding the prosecution of the Company's patent applications and adversely affect the Company's ability to protect its IP. Consumer rights...

  • Page 20
    ... the business of powering the discovery and enjoyment of digital entertainment, including over the internet. There has been, and we believe that there will continue to be, an increasing level of litigation to determine the applicability of current laws to, and impact of new technologies on, the use...

  • Page 21
    ...and plan future business activities, they may delay, decrease or cancel purchases of our solutions or reduce production of their products. As many of our solutions are licensed on a per-unit fee basis and the pricing for future flat fee agreements may be predicated on the then most recent unit sales...

  • Page 22
    ... to make payments on and to refinance our indebtedness will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may be unable to maintain a level of cash...

  • Page 23
    ..., any failure to comply with standards set by credit card companies relating to privacy or data collection, any failure to conform the privacy policy to changing aspects of our business or applicable law, or any existing or new legislation regarding privacy issues could impact our data collection...

  • Page 24
    ... maintain licensing relationships with companies in related business fields, including: • pay TV operators; • operators of entertainment content distributors, including PPV and VOD networks; • consumer electronics, digital PPV/VOD set-top hardware manufacturers, DVD hardware manufacturers and...

  • Page 25
    ..., products and services developed may not be introduced in a timely manner or in advance of our competitors' comparable offerings and may not achieve the broad market acceptance necessary to generate significant revenues. The markets for our advertising platform may not develop and we may fail in...

  • Page 26
    ..., including personal computers, DVD players and recorders, Blu-ray players, digital still cameras, digital camcorders, portable media players, digital TVs, home media centers, set-top boxes, video game consoles, MP3 devices, multi-media storage devices, mobile tablets and smartphones. We depend...

  • Page 27
    ...; • the pace at which our analog and older products sales decline compared to the pace at which our digital and new product revenues grow, and • adverse changes in the level of economic activity in the U.S. or other major economies in which we do business as a result of the threat of terrorism...

  • Page 28
    ... foreign currency exchange rates. Our business could be materially adversely affected if foreign markets do not continue to develop, if we do not receive additional orders to supply our technologies, products or services for use by foreign pay TV operators, CE manufacturers and PPV/VOD providers or...

  • Page 29
    ... our customers' product performance. Any such defects, errors, or unintended performance problems in existing or new products or services, and any inability to meet customer expectations in a timely manner, could result in loss of revenue or market share, failure to achieve market acceptance...

  • Page 30
    ... and public networks. Any compromise of our ability to store or transmit such information and data securely or reliably, and any costs associated with preventing or eliminating such problems, could harm our business. Storage and online transmissions are subject to a number of security and stability...

  • Page 31
    ...future sales of products, licenses of technology or provision of services, particularly because we may be unable to go back to customers to collect sales taxes for past sales and would likely have to pay such taxes out of our own funds. The price of our common stock may be volatile. The market price...

  • Page 32
    ...; changes in tax law or the interpretation of tax laws; and general market conditions. Announcements by satellite television operators, cable television operators, major content providers or others regarding CE business or pay TV operator combinations, evolving industry standards, consumer rights...

  • Page 33
    ... We also lease space for sales, marketing and technical personnel in Golden, Colorado; Ann Arbor, Michigan; New York, New York; Plano, Texas; London and Maidenhead, United Kingdom; Shanghai, China; Tokyo, Japan and Seoul, South Korea. Our primary locations for product development are Burbank, Santa...

  • Page 34
    ... AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders The common stock of Rovi Corporation is listed on the NASDAQ Global Select Market under the symbol "ROVI". The following table sets forth, for the periods indicated, the reported high and low intraday sales prices for the...

  • Page 35
    ...three months ended December 31, 2015, there were no sales of unregistered securities. Issuer Purchases of Equity Securities Rovi may choose to repurchase shares under its ongoing repurchase program when sufficient liquidity exists, the shares are trading at a discount relative to estimated intrinsic...

  • Page 36
    ... table provides information about Company purchases of its common stock during the three months ended December 31, 2015 (in thousands, except per share amounts): Total Number of Shares Purchased (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate...

  • Page 37
    ... and Analysis of Financial Condition and Results of Operations" included in Part II and the Consolidated Financial Statements and notes thereto included in Part IV of this Annual Report on Form 10-K, which are incorporated by reference herein. Year Ended December 31, 2015 2014 2013 2012 2011...

  • Page 38
    ... the year ended December 31, 2015, 27% of revenue was from our contracts with AT&T Inc. (including DIRECTV), Comcast and Time Warner Cable. In September 2015, the Company's contract with Time Warner Cable was extended to March 2016 and in December 2015, our contract with AT&T (including DIRECTV) was...

  • Page 39
    ... costs. For the year ended December 31, 2015, Research and development expenses decreased compared to the prior year as decreases in spending on our Metadata operations and legacy products were partially offset by increased investments to support our cloud-based platforms and analytics services...

  • Page 40
    ...Store, DivX and MainConcept businesses and our narrowed business focus on discovery, in 2014 we conducted a review of our remaining product development, sales, data operations and general and administrative functions to identify potential cost efficiencies. As a result of this analysis, we took cost...

  • Page 41
    ... the allocation of resources to the business units. The terms Adjusted Operating Expenses and Adjusted EBITDA in the following discussion use the definitions provided in Note 14 of the Consolidated Financial Statements included in Part IV of this Annual Report on Form 10-K, which is incorporated...

  • Page 42
    ...Latin American service provider which benefited revenue in 2014, offset in part by an increase in advertising revenues. Advertising revenue growth in 2015 was partially offset by agreements with a major pay TV provider during 2015 and 2014 to report its advertising sales to us on a more timely basis...

  • Page 43
    ... offset by increased investments to support our cloud-based platforms and analytics services. Corporate Corporate costs for the year ended December 31, 2015 compared to the prior year were as follows (dollars in thousands): Year Ended December 31, 2015 2014 Change $ Change % Adjusted Operating...

  • Page 44
    ... of the Rovi Entertainment Store and DivX and MainConcept businesses and our narrowed business focus on discovery, in 2014 we conducted a review of our remaining product development, sales, data operations and general and administrative functions to identify potential cost efficiencies. As...

  • Page 45
    ... December 31, 2014 is primarily due to the loss on the sale of the DivX, MainConcept and Nowtilus businesses. Discontinued operations for the year ended December 31, 2013, includes the DivX and MainConcept businesses, the Rovi Entertainment Store business, the Consumer Web business, the Nowtilus...

  • Page 46
    ... of our Passport and xD guide products for deployment in multiple countries with a major Latin American service provider contributed to the IPG product revenue growth. The growth in IPG advertising revenue was partially due to a major Pay TV provider agreeing to report its advertising sales to us on...

  • Page 47
    ... income tax payments, in addition to investments in future growth opportunities and share repurchases for at least the next twelve months. Our access to capital markets may be constrained and our cost of borrowing may increase under certain business, market and economic conditions; however, our use...

  • Page 48
    ...and the release of deferred purchase price payments related to previous acquisitions. In addition, we used $154.5 million to repurchase shares of our common stock and received $8.8 million from the exercise of employee stock options and sales of stock through our employee stock purchase plan. During...

  • Page 49
    ... conversion price on each applicable trading day; • during the five business day period after any ten consecutive trading day period in which the trading price per $1,000 of principal of 2020 Convertible Notes for each trading day was less than 98% of the product of the last reported sale price of...

  • Page 50
    ... customary terms and covenants, including certain events of default after which the 2020 Convertible Notes may be due and payable immediately. Senior Secured Credit Facility On July 2, 2014, we, as parent guarantor, and two of our wholly-owned subsidiaries, Rovi Solutions Corporation and Rovi Guides...

  • Page 51
    ...based on the number of units shipped or number of subscribers, we generally recognize revenue from licensing technology on a perunit shipped model with CE manufacturers or a per-subscriber model with service providers. The recognition of revenues from per-unit license fees is based on units reported...

  • Page 52
    ... providers, CE manufacturers and online portals among others. We generally receive a monthly or quarterly fee from our licensees for the right to use the Metadata, receive regular updates to the Metadata and integrate the Metadata into their own service. We recognize revenue on a straight-line basis...

  • Page 53
    ...-Based Compensation We recognize the grant date fair value of equity-based awards as compensation on a straight-line basis over the requisite service period of the award. We estimate the fair value of stock options and employee stock purchase plan shares using the Black-Scholes-Merton option pricing...

  • Page 54
    ...the difference between a tax position taken or expected to be taken in a tax return and the benefit recognized for financial reporting purposes, when we believe it is not more-likely-than-not that the tax position will be sustained on examination by the taxing authority based on the technical merits...

  • Page 55
    ... currency exchange rates and security prices that could impact our financial position, results of operations or cash flows. Our risk management strategy with respect to these market risks may include the use of derivative financial instruments. We use derivative contracts only to manage existing...

  • Page 56
    ... will increase as the price of our common stock increases. In connection with the offering of the 2020 Convertible Notes, we purchased call options and sold warrants with respect to our common stock. The options are expected to offset the potential dilution with respect to the issuance of shares of...

  • Page 57
    ... term is defined under Exchange Act Rule 13a-15(e). Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K. Management's Report...

  • Page 58
    ... in Internal Control Over Financial Reporting During the quarter ended December 31, 2015, there have been no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, these controls. ITEM 9B. OTHER INFORMATION None. 56

  • Page 59
    ... because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, Rovi Corporation and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the...

  • Page 60
    ...EXECUTIVE COMPENSATION Information for this item is incorporated herein by reference to our definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the close of our year ended December 31, 2015. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS...

  • Page 61
    ..., as amended, on July 15, 2009 Amended and restated Bylaws of Rovi Corporation (as amended and restated on February 11, 2014) Form of Common Stock Certificate Form 8-K Filing Date 5/5/08 Exhibit Number 2.1 Filed Herewith 2.02 8-K 2/24/14 2.1 2.03 8-K 12/08/14 2.1 3.01 3.02 4.01 10...

  • Page 62
    ... Incorporated by Reference Exhibit Number 4.02 Exhibit Description Credit Agreement, dated as of July 2, 2014, among Rovi Guides, Inc. and Rovi Solutions Corporation, as borrowers, Rovi Corporation, as parent guarantor, the subsidiary guarantors, the lenders from time to time party thereto, Morgan...

  • Page 63
    ... entered into by Rovi Corporation with each of its directors and executive officers Form of Executive Severance and Arbitration Agreement ** List of subsidiaries Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm Certification of Chief Executive Officer pursuant to Section...

  • Page 64
    Table of Contents ** Management contract or compensatory plan or arrangement. *** Furnished herewith. 62

  • Page 65
    ... by the undersigned thereunto duly authorized on this 11th day of February, 2016. ROVI CORPORATION By: /s/ Thomas Carson Thomas Carson President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons...

  • Page 66
    Table of Contents ROVI CORPORATION CONSOLIDATED FINANCIAL STATEMENTS PAGE Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Loss Consolidated Statements of Stockholders' Equity ...

  • Page 67
    ... with the standards of the Public Company Accounting Oversight Board (United States), Rovi Corporation and subsidiaries' internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring...

  • Page 68
    Table of Contents ROVI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) December 31, 2015 2014 ASSETS Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, net Prepaid expenses and other current assets Total...

  • Page 69
    ... of Contents ROVI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Year Ended December 31, 2015 2014 2013 Revenues Costs and expenses: Cost of revenues, excluding amortization of intangible assets Research and development Selling, general...

  • Page 70
    Table of Contents ROVI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands) Year Ended December 31, 2015 2014 2013 Net loss Other comprehensive loss, net of tax: Foreign currency translation adjustment Unrealized (losses) gains on marketable securities Other ...

  • Page 71
    ...) Common stock Shares Balances as of December 31, 2012 Net loss Other comprehensive loss Issuance of common stock on exercise of options Issuance of common stock under employee stock purchase plan Issuance of restricted stock, net Equity-based compensation Tax cost associated with stock plans Stock...

  • Page 72
    ...for purchase of call options Payments for contingent consideration Payments for purchase of treasury stock Payments for withholding taxes related to net share settlement of restricted stock units Proceeds from exercise of options and employee stock purchase plan Net cash used in financing activities...

  • Page 73
    ... cash equivalents at end of period $ (52,893 ) 154,568 101,675 $ (1,919 ) 156,487 154,568 $ (128,865 ) 285,352 156,487 The accompanying notes are an integral part of these Consolidated Financial Statements. F- 7

  • Page 74
    ... and using data and analytics to monetize interactions across multiple entertainment platforms. The Company provides a broad set of content discovery solutions that are embedded in our customers' products and services to connect consumers with entertainment, including device embedded and cloud-based...

  • Page 75
    ... equivalents, marketable securities, accounts receivable and interest rate swaps. The Company maintains cash, cash equivalents and marketable securities with various high credit quality financial institutions. As part of its risk management processes, the Company performs periodic evaluations of the...

  • Page 76
    ... Accounts The Company performs ongoing credit evaluations of its customers. The Company reviews its accounts receivable by aging category to identify significant customers for potential collection issues and a specific allowance for doubtful accounts is recorded when warranted by specific customer...

  • Page 77
    ...Revenue arrangements with multiple deliverables are divided into separate units of accounting when the delivered item has value to the customer on a stand-alone basis. The Company allocates the total consideration among the various elements based on their relative selling price using vendor specific...

  • Page 78
    ...shipped or number of subscribers, the Company generally recognizes revenue from licensing technology on a per-unit shipped model with CE manufacturers or a per-subscriber model with service providers. The Company's recognition of revenues from per-unit license fees is based on units reported shipped...

  • Page 79
    ... Operations-Rovi Entertainment Store Video Delivery Solution The Company recognized service fees it received from retailers and others for operating their storefronts on a straight-line basis over the period it provided services. The Company recognized transaction revenue from the sale or...

  • Page 80
    ...currently evaluating the effect the amendments and transition alternatives will have on its Consolidated Financial Statements. (2) Acquisitions 2014 Acquisitions Fanhattan Acquisition On October 31, 2014, the Company acquired Fanhattan, Inc. ("Fanhattan"), and its cloud-based Fan TV branded products...

  • Page 81
    ..., 2014, the Company acquired Veveo Inc. ("Veveo") for $67.6 million in cash, plus up to an additional $7.0 million in contingent consideration if certain sales and engineering goals are met. Veveo is a provider of intuitive and personalized entertainment discovery solutions. In April 2015, a portion...

  • Page 82
    ...a software library that enabled the distribution of content across the internet and through recordable media, in either physical or streamed forms. On March 31, 2014, the Company sold its DivX and MainConcept businesses for $52.5 million in cash, plus up to $22.5 million in additional payments based...

  • Page 83
    ...claim against the Roxio Consumer Software business for the period prior to the business being sold. (4) Financial Statement Details Accounts receivable, net (in thousands) December 31, 2015 2014 Accounts receivable, gross Less: Allowance for doubtful accounts Accounts receivable, net Allowance for...

  • Page 84
    ... Property and equipment, net Accounts payable and accrued expenses (in thousands): $ 133,631 21,578 7,676 162,885 (127,901) $ 136,357 20,447 7,223 164,027 (126,800) $ 34,984 $ 37,227 December 31, 2015 2014 Accounts payable Accrued compensation and benefits Accrued interest Other...

  • Page 85
    ...of cash, cash equivalents and marketable securities by significant investment category as of December 31, 2015 and 2014 were as follows (in thousands): December 31, 2015 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash Cash equivalents - Money market funds Cash and cash equivalents...

  • Page 86
    ... 222,594 $ The Company uses valuation techniques that are based on observable and unobservable inputs to measure fair value. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs...

  • Page 87
    ... December 31, 2014 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets Cash and cash equivalents Money market funds Short-term marketable securities Corporate debt securities Foreign government obligations...

  • Page 88
    ...securities, is estimated using observable market-corroborated inputs, such as quoted prices in active markets for similar assets, obtained from a third party pricing service. The fair value of auction rate securities is estimated using a discounted cash flow analysis or other type of valuation model...

  • Page 89
    ...$ $ (1) The fair value of debt issued by the Company is estimated using quoted prices for the identical instrument in a market that is not active and considers interest rates currently available to companies of similar credit standing for similar terms and remaining maturities, and considering the...

  • Page 90
    ... of December 31, 2015 and 2014 consisted of the following (in thousands): December 31, 2015 WeightedAverage Remaining Useful Life Gross Accumulated Amortization Net Developed technology and patents Existing contracts and customer relationships Content databases and other Trademarks / Tradenames...

  • Page 91
    ...price on each applicable trading day; • during the five business day period after any ten consecutive trading day period in which the trading price per $1,000 of principal of 2020 Convertible Notes for each trading day was less than 98% of the product of the last reported sale price of the Company...

  • Page 92
    ... 31, 2015 2014 2013 Stated interest Amortization of debt discount Amortization of debt issue costs Total interest expense $ 1,423 $ 9,639 1,020 12,082 $ - $ - - - $ - - - - $ The Company incurred $9.3 million in transaction costs related to the issuance of the 2020 Convertible Notes which...

  • Page 93
    ... purchase the call options and received to sell the warrants were recorded in Additional paid-in capital in the Consolidated Balance Sheets. Senior Secured Credit Facility On July 2, 2014, the Company, as parent guarantor, and two of its wholly-owned subsidiaries, Rovi Solutions Corporation and Rovi...

  • Page 94
    ... the Company by the holders. Related to the 2040 Convertible Notes, the Consolidated Balance Sheets as of December 31, 2015 and 2014 included the following (in thousands): December 31, 2015 2014 Principal outstanding Less: Unamortized debt discount Less: Unamortized debt issue costs Carrying amount...

  • Page 95
    ... issues long-term debt denominated in U.S. dollars based on market conditions at the time of financing and may enter into interest rate swaps to achieve a primarily fixed interest rate. Alternatively, the Company may choose not to enter into interest rate swaps or may terminate a previously executed...

  • Page 96
    ... Effective Date Contract Maturity December 31, 2015 December 31, 2014 Interest Rate Paid Interest Rate Received 2040 Convertible Notes March 2010 November 2010 Senior Secured Credit Facility May 2012 May 2012 June 2013 September 2014 September 2014 January 2014 April 2014 January 2016 January 2016...

  • Page 97
    .... The number of shares used to calculate Basic EPS and Diluted EPS for the years ended December 31, 2015, 2014 and 2013 were as follows (in thousands): Year Ended December 31, 2015 2014 2013 Weighted average shares used to calculate Basic EPS Dilutive effect of equity-based compensation awards...

  • Page 98
    ... Company financial results) or a market condition (i.e., achieving a minimum relative Total Shareholder Return) as well as a three year service period which ends March 1, 2018. The number of shares to be issued on vesting could be up to 200% of the target number of performance-based restricted stock...

  • Page 99
    ... a market condition, the fair value per award is fixed at the grant date and the amount of compensation expense is not adjusted during the performance period based on changes in the level of achievement of the relative Total Shareholder Return metric. Employee Stock Purchase Plan The Company's 2008...

  • Page 100
    ... value is the difference between Rovi's closing stock price on the last trading day of the year and the exercise price of the option, multiplied by the number of in-the-money options. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2015, 2014 and 2013 was...

  • Page 101
    ... income tax State income tax, net of federal benefit Foreign income tax rate differential Foreign withholding tax Foreign return to provision adjustments Deemed repatriation of foreign income Change in unrecognized tax benefits Change in valuation allowance Equity-based compensation Tax settlements...

  • Page 102
    ... tax benefits and changes in unrecognized tax benefits for the years ended December 31, 2015, 2014 and 2013 were as follows (in thousands): Year Ended December 31, 2015 2014 2013 Balance at beginning of period Increases: Acquired companies Tax positions related to the current year Tax positions...

  • Page 103
    ... of deferred tax assets and deferred tax liabilities as of December 31, 2015 and 2014 were as follows (in thousands): December 31, 2015 2014 Deferred tax assets: Federal net operating losses Tax credit carryforwards Equity-based compensation Accrued liabilities Deferred revenue Debt amortization...

  • Page 104
    ...-channel video service providers (e.g., cable, satellite and internet-protocol television), consumer electronics ("CE") manufacturers, set-top box manufacturers and interactive television software and program guide providers in the online, over-the-top video and mobile phone businesses. The Product...

  • Page 105
    ...performance. Segment results for the years ended December 31, 2015, 2014 and 2013 were as follows (in thousands): Year Ended December 31, 2015 2014 2013 Intellectual Property Licensing Service Provider Consumer Electronics Revenues Adjusted Operating Expenses (1) Adjusted EBITDA (2) Product Service...

  • Page 106
    ... 65,622 155,567 537,390 $ $ $ Revenue by geography is predominately based on the end user's location. Other than the U.S. and Japan, no country accounted for 10% or more of revenue for the years ended December 31, 2015, 2014 and 2013. Property and equipment, net by geographic area as of December...

  • Page 107
    ...") an option (the "Option") to purchase certain shares of the Company's Common Stock (the "Optioned Shares") pursuant to the Rovi Corporation 2008 Equity Incentive Plan (the "Plan"), as follows: Date of Option Grant: (grant date) (shares) Number of Optioned Shares: Option Exercise Price: Earliest...

  • Page 108
    ... terms and conditions set forth in this Notice and the attached Agreement. ROVI CORPORATION Accepted by: OPTIONEE Name:_____ By: /s/ Thomas Carson Signature:_____ Title: President and CEO Date: Address: Address: 2830 De La Cruz Blvd Santa Clara, CA ATTACHMENTS: Nonstatutory Stock Option Agreement

  • Page 109
    ...READ CAREFULLY. Rovi Corporation, a Delaware corporation (the "Company") and the Optionee agree that the terms and conditions set forth herein shall apply to the stock options granted to the Optionee, on the date of grant, for the number of Optioned Shares and exercisable at the Option Price, all as...

  • Page 110
    ...transfer or by check of the Option Price for the Optioned Shares with respect to which this Option is exercised and any applicable withholding taxes in accordance with Section 8 below. If the Company's outstanding Common Stock is registered under Section 12 (g) of the Securities Exchange Act of 1934...

  • Page 111
    ... Optionee's compensation or (c) the Company may establish alternative procedures to ensure satisfaction of all applicable Withholding Obligations arising in connection with this Option. The Optionee will receive a cash refund for any payment of cash or fraction of a surrendered share not necessary...

  • Page 112
    ..., name, home address and telephone number, date of birth, social security number (or other identification number), salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, purchased...

  • Page 113
    ...) Exhibit 10.05 ROVI CORPORATION 2008 EQUITY INCENTIVE PLAN NOTICE OF RESTRICTED STOCK AWARD Rovi Corporation, (the "Company") hereby grants you, [employee name ] (the "Participant"), a Restricted Stock Award under the 2008 Equity Incentive Plan, as amended (the "Plan"). The date of this Notice of...

  • Page 114
    Title: President and CEO Address: 2830 De La Cruz Blvd Santa Clara, California Signature:_____ Date: Address: ATTACHMENT: Restricted Stock Award Agreement

  • Page 115
    ...absence and return to service to the Company and/or its Subsidiaries. The vesting schedule of the Option shall be extended by the length of the suspension. 3. Non-transferability of Restricted Stock Award and Shares. The Restricted Stock Award shall not be transferable (including by sale, assignment...

  • Page 116
    ...as of the date of his or her termination of service or employment. 7. Payment of Par Value. As a condition to the delivery to Participant of the shares of Stock subject to this Restricted Stock Award after such shares have vested, Participant authorizes the Company to deduct from compensation due to...

  • Page 117
    ... promptly deliver such stock powers to the Company. (c) When shares of Stock vest and the Company delivers to Participant certificates for shares of Stock, the Company also will return to Participant the stock powers related to such shares held by the Company. 11. Tax Withholding. (a) Participant is...

  • Page 118
    ... vested shares to pay the tax liability, (b) elect a "same day sale" option where the employee sells all of their vested shares of which a portion of the proceeds will be used to pay the tax liability, (c) the Company or the Employer has the right, and Participant in accepting this Restricted Stock...

  • Page 119
    ... addresses set forth in the Notice of Restricted Stock Award. Service of any such notice or other communication so made by mail shall be deemed complete on the date of actual delivery as shown by the addressee's registry or certification receipt or at the expiration of the third (3rd) business day...

  • Page 120
    ...hereby accepts the Restricted Stock Award subject to all of the terms and conditions set forth in this Notice and the attached Agreement. Rovi Corporation By: /s/ Thomas Carson Name:_____ Title: President and CEO Signature:_____ Address: 2830 De La Cruz Blvd Santa Clara, California Date: Accepted by...

  • Page 121
    ...that Participant maintains a Service Relationship at the time a change in control as defined herein occurs, the Board, or the board of directors of any corporation assuming the obligations of the Company hereunder, shall either (a) assume the outstanding Restricted Stock Award or make a substitution...

  • Page 122
    ...as of the date of his or her termination of service or employment. 7. Payment of Par Value. As a condition to the delivery to Participant of the shares of Stock subject to this Restricted Stock Award after such shares have vested, Participant authorizes the Company to deduct from compensation due to...

  • Page 123
    ... be predicted with certainty; (g) no claim or entitlement to compensation or damages arises from the termination of this Restricted Stock Award or diminution in value of this Restricted Stock Award or shares of Stock purchased under the Plan and Participant irrevocably releases the Company from...

  • Page 124
    ... vested shares to pay the tax liability, (b) elect a "same day sale" option where the employee sells all of their vested shares of which a portion of the proceeds will be used to pay the tax liability, (c) the Company or the Employer has the right, and Participant in accepting this Restricted Stock...

  • Page 125
    ... addresses set forth in the Notice of Restricted Stock Award. Service of any such notice or other communication so made by mail shall be deemed complete on the date of actual delivery as shown by the addressee's registry or certification receipt or at the expiration of the third (3rd) business day...

  • Page 126
    ...the terms and conditions set forth in this Notice and the attached Agreement. Rovi Corporation Accepted by: PARTICIPANT By: /s/ Thomas Carson Title: President and CEO Address: 2830 De La Cruz Blvd Santa Clara, California Name: _____ Signature:_____ Date: ATTACHMENT: Restricted Stock Award Agreement

  • Page 127
    ...that Participant maintains a Service Relationship at the time a change in control as defined herein occurs, the Board, or the board of directors of any corporation assuming the obligations of the Company hereunder, shall either (a) assume the outstanding Restricted Stock Award or make a substitution...

  • Page 128
    ...as of the date of his or her termination of service or employment. 7. Payment of Par Value. As a condition to the delivery to Participant of the shares of Stock subject to this Restricted Stock Award after such shares have vested, Participant authorizes the Company to deduct from compensation due to...

  • Page 129
    ... be predicted with certainty; (g) no claim or entitlement to compensation or damages arises from the termination of this Restricted Stock Award or diminution in value of this Restricted Stock Award or shares of Stock purchased under the Plan and Participant irrevocably releases the Company from...

  • Page 130
    ... vested shares to pay the tax liability, (b) elect a "same day sale" option where the employee sells all of their vested shares of which a portion of the proceeds will be used to pay the tax liability, (c) the Company or the Employer has the right, and Participant in accepting this Restricted Stock...

  • Page 131
    ... addresses set forth in the Notice of Restricted Stock Award. Service of any such notice or other communication so made by mail shall be deemed complete on the date of actual delivery as shown by the addressee's registry or certification receipt or at the expiration of the third (3rd) business day...

  • Page 132
    ...accepts the Restricted Stock Unit Grant subject to all of the terms and conditions set forth in this Notice and the attached Agreement. Rovi Corporation By: /s/ Thomas Carson Accepted by: PARTICIPANT Name:_____ Title: President and CEO Signature:_____ Address: 2830 De La Cruz Blvd Date: Santa Clara...

  • Page 133
    ...As of the Date of Grant, the Company will credit to a bookkeeping account maintained by the Company for Participant's benefit the number of Restricted Stock Units/shares of Common Stock subject to the award. This award was granted in consideration of your services to the Company. 2. Leave of Absence...

  • Page 134
    ... as of the date of his or her termination of service or employment. 7. Payment of Par Value. As a condition to the delivery to Participant of the shares of Stock subject to the Restricted Stock Units after such units have vested, Participant authorizes the Company to deduct from compensation due to...

  • Page 135
    ...cannot be predicted with certainty; (g) no claim or entitlement to compensation or damages arises from the termination of the Restricted Stock Units or diminution in value of the Restricted Stock Units or shares of Stock purchased under the Plan and Participant irrevocably releases the Company from...

  • Page 136
    ... occurring in connection with the Restricted Stock Units, the Employer will satisfy Tax Items by withholding, from the shares to be delivered to the Participant upon vesting, a number of shares having an aggregate fair market value sufficient to pay the Tax Items. The number of shares withheld to...

  • Page 137
    ... addresses set forth in the Notice of Restricted Stock Unit. Service of any such notice or other communication so made by mail shall be deemed complete on the date of actual delivery as shown by the addressee's registry or certification receipt or at the expiration of the third (3rd) business day...

  • Page 138
    ... Solutions LLC Snapstick Technologies PVT Ltd. TV Guide Affiliate Sales & Marketing, Inc. TV Guide Interactive Group, Inc. TV Guide Interactive, Inc. TV Guide International IPG, Inc. TV Guide International, Inc. TV Guide Media Sales, Inc. TV Guide Mobile Entertainment, Inc. TV Guide Online, Inc. TV...

  • Page 139
    ... management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 11, 2016 /s/ Thomas Carson Thomas Carson President and Chief Executive Officer (Back To Top) Section 10: EX-31.02 (EXHIBIT 31.02) Exhibit 31.02 CERTIFICATION...

  • Page 140
    ... 1350 CERTIFICATION In connection with the Annual Report of Rovi Corporation (the "Company") on Form 10-K for the period ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Thomas Carson certifies in his capacity as Chief Executive Officer...

  • Page 141
    ... 1350 CERTIFICATION In connection with the Annual Report of Rovi Corporation (the "Company") on Form 10-K for the period ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Peter C. Halt certifies in his capacity as Chief Financial Officer...