~~Level 3.~~ ~~Unobservable inputs for the asset or liability.~~


•	Level 1. Quoted prices in active markets for identical assets or liabilities.


•	Level 2. Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs.


•	Level 3. Unobservable inputs for the asset or liability.

The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2019 and 2018, ~~and 2017,~~ there were no transfers between levels of the fair value hierarchy.

Recurring Fair Value Measurements

Assets and liabilities reported at fair value on a recurring basis in the Condensed Consolidated Balance Sheets were classified in the fair value hierarchy as follows (in thousands):



	March 31, 2019								December 31, 2018
	Total			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Total			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets
Cash and cash equivalents
Money market funds	$	72,833		$	72,833	$	—		$	121,830		$	121,830	$	—
Short-term marketable securities
Corporate debt securities	94,979			—		94,979			90,753			—		90,753
U.S. Treasuries / Agencies	63,761			—		63,761			68,203			—		68,203
Prepaid expenses and other current assets
Interest rate swaps	—			—		—			173			—		173
Long-term marketable securities
Corporate debt securities	14,980			—		14,980			23,007			—		23,007
U.S. Treasuries / Agencies	40,077			—		40,077			50,200			—		50,200
Total Assets	$	286,630		$	72,833	$	213,797		$	354,166		$	121,830	$	232,336
Liabilities
Other long-term liabilities
Interest rate swaps	$	(4,465	)	$	—	$	(4,465	)	$	(3,012	)	$	—	$	(3,012	)
Total Liabilities	$	(4,465	)	$	—	$	(4,465	)	$	(3,012	)	$	—	$	(3,012	)

September 30, 2018
Total Quoted Prices in
Active Markets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Assets
Cash and cash equivalents
Money market funds $ 104,125
$ 104,125
$ —
$ —
Short-term marketable securities
Corporate debt securities 85,785
—
85,785
—
U.S. Treasuries / Agencies 76,288
—
76,288
—
Prepaid expenses and other current assets
Interest rate swaps 231
—
231
—
Long-term marketable securities
Corporate debt securities 29,564
—
29,564
—
U.S. Treasuries / Agencies 40,732
—
40,732
—
Other long-term assets
Interest rate swaps 440
—
440
—
Total Assets $ 337,165
$ 104,125
$ 233,040
$ —
Liabilities
Other long-term liabilities
Interest rate swaps $ (145 ) $ —
$ (145 ) $ —
Total Liabilities $ (145 ) $ —
$ (145 ) $ —

The Company's interest rate swaps are subject to master netting arrangements and have been presented on a net basis in the Condensed Consolidated Balance Sheets where applicable. As of September 30, 2018, interest rate swaps in an asset position with a fair value of $0.7 million that mature in 2021 were netted against interest rate swaps in a liability position with a fair value of $0.2 million~~that mature in 2021 in the Condensed Consolidated Balance Sheets and in the table above.~~

December 31, 2017
Total Quoted Prices in
Active Markets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Assets
Cash and cash equivalents
Money market funds $ 89,969
$ 89,969
$ —
$ —
Short-term marketable securities
Corporate debt securities 49,396
—
49,396
—
Foreign government obligations 2,245
—
2,245
—
U.S. Treasuries / Agencies 89,225
—
89,225
—
Long-term marketable securities

Auction rate securities 10,584
—
—
10,584
Corporate debt securities 53,001
—
53,001
—
U.S. Treasuries / Agencies 19,126
—
19,126
—
Total Assets $ 313,546
$ 89,969
$ 212,993
$ 10,584
Liabilities
Accounts payable and accrued expenses
Cubiware contingent consideration $ (2,234 ) $ —
$ —
$ (2,234 )
Other long-term liabilities
Interest rate swaps (9,735 ) —
(9,735 ) —
Total Liabilities $ (11,969 ) $ —
$ (9,735 ) $ (2,234 )

Rollforward of Level 3 Fair Value Measurements

Changes in the fair value of assets and liabilities classified in Level 3 of the fair value hierarchy were as follows (in thousands):



	Three Months Ended March 31, 2018
	Auction Rate Securities			Cubiware Contingent Consideration
Balance at beginning of period	$	10,584		$	(2,234	)
Sales	(10,715		)	—
Loss included in earnings	(85		)	(970		)
Unrealized loss reclassified on sale	216			—
Balance at end of period	$	—		$	(3,204	)

Three Months Ended September 30,
2018 2017
Cubiware Contingent Consideration Auction Rate Securities Cubiware Contingent Consideration
Balance at beginning of period $ (3,599 ) $ 10,584
$ (5,715 )
Settlements 1,874
—
2,650
Transfers out (a) 1,700
—
—
Gain (loss) included in earnings 25
—
(386 )
Balance at end of period $ —
$ 10,584
$ (3,451 )

Nine Months Ended September 30,
2018 2017
Auction Rate Securities Cubiware Contingent Consideration Auction Rate Securities Cubiware Contingent Consideration
Balance at beginning of period $ 10,584
$ (2,234 ) $ 10,368
$ (5,273 )
Sales (10,715 ) —
—
—
Settlements —
1,874
—
2,650
Transfers out (a) —
1,700
—
—
Gain (loss) included in earnings (85 ) (1,340 ) —
(828 )
Unrealized loss reclassified on sale 216
—
—
—
Unrealized gains included in other comprehensive income —
—
216
—
Balance at end of period $ —
$ —
$ 10,584
$ (3,451 )


~~(a)~~	~~During the three and nine months ended September 30, 2018, $1.7 million related to the Cubiware contingent consideration was reclassified to a contingent liability that is not measured at fair value.~~

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2018, the ~~Gain (loss)~~Loss included in earnings related to the Cubiware contingent consideration liability is included in Selling, general and administrative expense related to remeasurement of the liability as a ~~$0.1~~$0.9 million ~~gain and a $1.1 million~~ loss respectively, and in Interest expense related to accretion of the liability to future value of less than $0.1 million and $0.2 million, respectively. For the three and nine months ended September 30, 2017, the Gain (loss) included in earnings related to the Cubiware contingent consideration liability is included in Selling, general and administrative expense related to remeasurement of the liability as a $0.2 million and $0.3 million~~loss, respectively,~~ and in Interest expense related to accretion of the liability to future value of $0.1 ~~million and $0.5 million, respectively.~~million. During the year

ended December 31, 2018, the Cubiware contingent consideration was reclassified to a contingent liability that is not measured at fair value.

Valuation Techniques

The fair value of marketable ~~securities, other than auction rate~~ securities is estimated using observable market-corroborated inputs, such as quoted prices in active markets for similar assets or independent pricing vendors, obtained from a third-party pricing service.

The fair value of contingent consideration liabilities related to acquisitions is estimated utilizing a probability-weighted discounted cash flow analysis based on the terms of the underlying purchase agreement. The significant unobservable inputs used in calculating the fair value of contingent consideration liabilities related to acquisitions include financial performance scenarios, the probability of achieving those scenarios and the risk-adjusted discount rate.

The fair value of interest rate swaps is estimated using a discounted cash flow analysis that considers the expected future cash flows of each interest rate swap. This analysis reflects the contractual terms of the interest rate swap, including the remaining period to maturity, and uses market-corroborated inputs, including forward interest rate curves and implied interest rate volatilities. The fair value of an interest rate swap is estimated by netting the discounted future fixed cash payments against the discounted expected variable cash receipts. The variable cash receipts are estimated based on an expectation of future interest rates derived from forward interest rate curves. The fair value of an interest rate swap also incorporates credit valuation adjustments to reflect the nonperformance risk of the Company and the respective counterparty. In adjusting the fair value of its interest rate swaps for the effect of nonperformance risk, the Company considers the effect of its master netting agreements.

Other Fair Value Disclosures

The carrying amount and fair value of debt issued or assumed by the Company were as follows (in thousands):



	March 31, 2019				December 31, 2018
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
2020 Convertible Notes	$	330,481	$	326,456	$	326,640	$	316,538
2021 Convertible Notes	48		48		48		48
Term Loan Facility B	619,348		607,142		665,449		633,404
Total Long-term debt	$	949,877	$	933,646	$	992,137	$	949,990

September 30, 2018 December 31, 2017
Carrying Amount Fair Value (a) Carrying Amount Fair Value (a)
2020 Convertible Notes $ 322,849
$ 328,412
$ 311,766
$ 326,888
2021 Convertible Notes 48
48
48
48
Term Loan Facility B 666,904
668,574
671,281
679,722
Total Long-term debt $ 989,801
$ 997,034
$ 983,095
$ 1,006,658

(a)

The fair value of debt issued or assumed 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 considers the nonperformance risk of the Company. If reported at fair value in the Condensed Consolidated Balance Sheets, debt issued or assumed by the Company would be classified in Level 2 of the fair value hierarchy.

~~(8)~~(7) Goodwill and Intangible Assets, Net

Goodwill

Goodwill allocated to the reportable segments and changes in the carrying amount of goodwill by reportable segment were as follows (in thousands):



	Product			Intellectual Property Licensing		Total
December 31, 2018	$	253,011		$	1,291,332	$	1,544,343
Foreign currency translation	(37		)	—		(37		)
March 31, 2019	$	252,974		$	1,291,332	$	1,544,306

Product Intellectual Property Licensing Total
December 31, 2017 $ 521,895
$ 1,291,332
$ 1,813,227
Foreign currency translation (44 ) —
(44 )
September 30, 2018 $ 521,851
$ 1,291,332
$ 1,813,183

Goodwill at each reporting unit is evaluated for potential impairment annually, as of the beginning of the fourth quarter, and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable.

Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):



	March 31, 2019
	Gross		Accumulated Amortization			Net
Finite-lived intangible assets
Developed technology and patents	$	1,055,755	$	(787,790	)	$	267,965
Existing contracts and customer relationships	402,633		(200,807		)	201,826
Content databases and other	57,257		(51,333		)	5,924
Trademarks / Tradenames	8,300		(8,300		)	—
Total finite-lived intangible assets	1,523,945		(1,048,230		)	475,715
Indefinite-lived intangible assets
TiVo Tradename	14,000		—			14,000
Total intangible assets	$	1,537,945	$	(1,048,230	)	$	489,715

September 30, 2018
Gross Accumulated
Amortization Net
Finite-lived intangible assets
Developed technology and patents $ 1,034,085
$ (742,956 ) $ 291,129
Existing contracts and customer relationships 402,896
(190,692 ) 212,204
Content databases and other 57,157
(50,433 ) 6,724
Trademarks / Tradenames 8,300
(8,300 ) —
Total finite-lived intangible assets 1,502,438
(992,381 ) 510,057
Indefinite-lived intangible assets
TiVo Tradename 14,000
—
14,000
Total intangible assets $ 1,516,438
$ (992,381 ) $ 524,057



	December 31, 2018
	Gross		Accumulated Amortization			Net
Finite-lived intangible assets
Developed technology and patents	$	1,051,635	$	(765,221	)	$	286,414
Existing contracts and customer relationships	402,756		(195,752		)	207,004
Content databases and other	57,235		(50,883		)	6,352
Trademarks / Tradenames	8,300		(8,300		)	—
Total finite-lived intangible assets	1,519,926		(1,020,156		)	499,770
Indefinite-lived intangible assets
TiVo Tradename	14,000		—			14,000
Total intangible assets	$	1,533,926	$	(1,020,156	)	$	513,770

December 31, 2017
Gross Accumulated
Amortization Net
Finite-lived intangible assets
Developed technology and patents $ 1,034,458
$ (676,465 ) $ 357,993
Existing contracts and customer relationships 403,244
(139,289 ) 263,955
Content databases and other 57,053
(49,077 ) 7,976
Trademarks / Tradenames 8,300
(8,300 ) —
Total finite-lived intangible assets 1,503,055
(873,131 ) 629,924
Indefinite-lived intangible assets
TiVo Tradename 14,000
—
14,000
Total intangible assets $ 1,517,055
$ (873,131 ) $ 643,924

Patent ~~Acquisition~~Acquisitions

InDuring the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2019, the Company ~~purchased~~acquired a portfolio of patents for ~~$2.0~~$4.3 million in cash. The Company accounted for the patent portfolio ~~purchase~~acquired as an asset acquisition and is amortizing the purchase price over a weighted average period of ~~five~~ten years.

~~Future~~Estimated Amortization of Finite-Lived Intangible Assets

As of ~~September 30, 2018, future~~March 31, 2019, estimated amortization expense for finite-lived intangible assets was as follows (in thousands):



Remainder of 2019	$	83,917
2020	111,378
2021	68,609
2022	40,899
2023	23,740
Thereafter	147,172
Total	$	475,715

Remainder of 2018 $ 27,763
2019 109,855
2020 109,109
2021 66,341
2022 38,602
Thereafter 158,387
Total $ 510,057

~~(9)~~(8) Restructuring and Asset Impairment Charges

Components of Restructuring and asset impairment charges were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2018		2017		2018		2017		2019		2018
Facility-related costs	$	99	$	3,034	$	387	$	4,244	$	—	$	102
Severance costs	2,822		220		5,606		4,260		1,813		2,192
Share-based payments	—		456		2,575		2,374		—		2,252
Contract termination costs	—		—		—		4
Asset impairment	—		—		—		6,741
Restructuring and asset impairment charges	$	2,921	$	3,710	$	8,568	$	17,623	$	1,813	$	4,546

during any calendar quarter commencing after the calendar quarter ending on June 30, 2015 (and only during such calendar quarter), if the last reported sale price of TiVo Corporation's common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the 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 TiVo Corporation’s common stock and the conversion rate on each such trading day; or~~


•	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 TiVo Corporation’s common stock and the conversion rate on each such trading day; or

on the occurrence of specified corporate events.

On or after December 1, 2019 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert the 2020 Convertible Notes, in multiples of $1,000 of principal, at any time. In addition, during the 35-day trading period following a Merger Event, as defined in the 2015 Indenture, holders may convert the 2020 Convertible Notes, in multiples of $1,000 of principal.

On conversion, a holder will receive the conversion value of the 2020 Convertible Notes converted based on the conversion rate multiplied by the volume-weighted average price of TiVo Corporation’s common stock over a specified observation period. On conversion, Rovi will pay cash up to the aggregate principal of the 2020 Convertible Notes converted and deliver shares of TiVo Corporation’s common stock in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal of the 2020 Convertible Notes being converted.

The conversion rate is subject to adjustment in certain events, including certain events that constitute a "Make-Whole Fundamental Change" (as defined in the 2015 Indenture). In addition, if Rovi undergoes a "Fundamental Change" (as defined in the 2015 Indenture) prior to March 1, 2020, holders may require Rovi to repurchase for cash all or a portion of the 2020 Convertible Notes at a repurchase price equal to 100% of the principal of the repurchased 2020 Convertible Notes, plus accrued and unpaid interest. The conversion rate is also subject to customary anti-dilution adjustments.

The 2020 Convertible Notes are not redeemable prior to maturity by Rovi and no sinking fund is provided. The 2020 Convertible Notes are unsecured and do not contain financial covenants or restrictions on the payment of dividends, the incurrence of indebtedness or the repurchase of other securities by Rovi. The 2015 Indenture includes customary terms and covenants, including certain events of default after which the 2020 Convertible Notes may be due and payable immediately.

TiVo Corporation has separately accounted for the liability and equity components of the 2020 Convertible ~~Notes.~~Notes. The initial carrying amount of the liability component was calculated by estimating the value of the 2020 Convertible Notes using TiVo Corporation’s estimated non-convertible borrowing rate of 4.75% at the time the instrument was issued. The carrying amount of the equity component, representing the value of the conversion option, was determined by deducting the liability component from the principal of the 2020 Convertible ~~Notes.~~Notes. The difference between the principal of the 2020 Convertible Notes and the liability component is considered a debt discount which is being amortized to interest expense using the effective interest method over the expected term of the 2020 Convertible ~~Notes.~~Notes. The equity component of the 2020 Convertible Notes was recorded as a component of Additional paid-in capital in the Condensed Consolidated Balance Sheets

and will not be remeasured as long as it continues to meet the conditions for equity classification. ~~Related to the 2020 Convertible Notes, the Condensed Consolidated Balance Sheets included the following (in thousands):~~

September 30, 2018 December 31, 2017
Liability component
Principal outstanding $ 345,000
$ 345,000
Less: Unamortized debt discount (19,622 ) (29,499 )
Less: Unamortized debt issuance costs (2,529 ) (3,735 )
Carrying amount $ 322,849
$ 311,766

Equity component $ 63,854
$ 63,854

~~Components of interest expense related to the 2020 Convertible Notes included in the Condensed Consolidated Statements of Operations were as follows (in thousands):~~

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Stated interest $ 431
$ 431
$ 1,294
$ 1,294
Amortization of debt discount 3,331
3,179
9,877
9,428
Amortization of debt issuance costs 412
374
1,206
1,093
Total interest expense $ 4,174
$ 3,984
$ 12,377
$ 11,815

Rovi incurred $9.3 million in transaction costs related to the issuance of the 2020 Convertible Notes which were allocated to liability and equity components based on the relative amounts calculated for the 2020 Convertible Notes at the date of issuance. Transaction costs of $7.6 million attributable to the liability component were recorded in Long-term debt, less current portion in the Condensed Consolidated Balance Sheets and are being amortized to interest expense using the effective interest method over the expected term of the 2020 Convertible ~~Notes. Transaction costs of $1.7 million attributable~~Notes.

Related to the ~~equity component were recorded as a component~~2020 Convertible Notes, the Condensed Consolidated Balance Sheets included the following (in thousands):



	March 31, 2019			December 31, 2018
Liability component
Principal outstanding	$	345,000		$	345,000
Less: Unamortized debt discount	(12,844		)	(16,253		)
Less: Unamortized debt issuance costs	(1,675		)	(2,107		)
Carrying amount	$	330,481		$	326,640

Equity component	$	63,854		$	63,854

Components of ~~Additional paid-in capital~~interest expense related to the 2020 Convertible Notes included in the Condensed Consolidated ~~Balance Sheets.~~Statements of Operations were as follows (in thousands):



	Three Months Ended March 31,
	2019		2018
Stated interest	$	431	$	431
Amortization of debt discount	3,409		3,254
Amortization of debt issuance costs	432		392
Total interest expense	$	4,272	$	4,077

Purchased Call Options and Sold Warrants related to the 2020 Convertible Notes

Concurrent with the issuance of the 2020 Convertible Notes in 2015, Rovi ~~paid $64.8 million to purchase~~purchased call options with respect to its common stock. The call options gave TiVo Corporation the right, but not the obligation, to purchase up to 11.9 million shares of TiVo Corporation's common stock at an exercise price of $28.9044 per share, which corresponds to the initial conversion price of the 2020 Convertible Notes, and are exercisable by TiVo Corporation on conversion of the 2020 Convertible ~~Notes.~~Notes. The exercise price is subject to adjustment, including as a result of dividends paid by TiVo Corporation. As of ~~September 30, 2018,~~March 31, 2019, the call options give TiVo Corporation the right, but not the obligation, to purchase up to ~~12.9~~13.4 million shares of TiVo Corporation's common stock at an exercise price of ~~$26.7078~~$25.7248 per share. The call options are intended to reduce the potential dilution from conversion of the 2020 Convertible ~~Notes.~~Notes. The purchased call options are separate transactions from the 2020 Convertible Notes and holders of the 2020 Convertible Notes do not have any rights with respect to the purchased call options.

Concurrent with the issuance of the 2020 Convertible Notes in 2015, Rovi ~~received $31.3 million from the sale of~~sold warrants that provide the holder of the warrant the right, but not the obligation, to purchase up to 11.9 million shares of TiVo Corporation common stock at an exercise price of $40.1450 per share. The exercise price is subject to adjustment, including as a result of dividends paid by TiVo Corporation. As of ~~September 30, 2018, 12.5~~March 31, 2019, 12.8 million warrants were outstanding with an exercise price of ~~$37.0942~~$35.7289 per share. The warrants are exercisable beginning June 1, 2020 and can be settled in cash or shares at TiVo Corporation's election. The warrants were entered into to offset the cost of the purchased call options. The warrants are separate transactions from the 2020 Convertible Notes and holders of the 2020 Convertible Notes do not have any rights with respect to the warrants.

~~The amounts paid to purchase the call options and received to sell the warrants were recorded in Additional paid-in capital in the Condensed Consolidated Balance Sheets.~~

2021 Convertible Notes

TiVo Solutions issued $230.0 million in aggregate principal of 2.0% Convertible Senior Notes that mature October 1, 2021 (the ~~"2021~~"2021 Convertible ~~Notes"~~Notes") at par pursuant to an Indenture dated September 22, 2014 (as supplemented, "the 2014 Indenture"). The 2021 Convertible Notes bear interest at an annual rate of 2.0%, payable semi-annually in arrears on April 1 and October 1 of each year, commencing April 2015. On October 12, 2016, TiVo Solutions repaid $229.95 million of the par value of the ~~2021 Convertible Notes.~~

~~The~~ 2021 Convertible Notes.

The 2021 Convertible Notes were convertible at an initial conversion rate of 56.1073 shares of TiVo Solutions common stock per $1,000 principal of notes, which was equivalent to an initial conversion price of $17.8230 per share of TiVo Solutions common stock. Following the TiVo Acquisition, the 2021 Convertible Notes were convertible at a conversion rate of 21.6181 shares of TiVo Corporation common stock per $1,000 principal of notes and $154.30 per $1,000 principal of notes, which was equivalent to a conversion price of $39.12 per share of TiVo Corporation common stock. The conversion rate and conversion price are subject to adjustment pursuant to the 2014 Indenture, including as a result of dividends paid by TiVo Corporation. As of ~~September 30, 2018,~~March 31, 2019, the 2021 Convertible Notes are convertible at a conversion rate of ~~23.4025~~24.2739 shares of TiVo Corporation common stock per $1,000 principal of notes and $154.30 per $1,000 principal of notes, which is equivalent to a conversion price of ~~$36.1372~~$34.8399 per share of TiVo Corporation common stock.

TiVo Solutions can settle the 2021 Convertible Notes in cash, shares of common stock, or any combination thereof pursuant to the 2014 Indenture. Subject to certain exceptions, holders may require TiVo Solutions to repurchase, for cash, all or part of their 2021 Convertible Notes upon a “Fundamental Change” (as defined in the 2014 Indenture) at a price equal to 100% of the principal amount of the 2021 Convertible Notes being repurchased plus any accrued and unpaid interest up to, but excluding, the “Fundamental Change Repurchase Date” (as defined in the 2014 Indenture). In addition, on a “Make-Whole Fundamental Change” (as defined in the 2014 Indenture) prior to the maturity date of the 2021 Convertible Notes, TiVo Solutions will, in some cases, increase the conversion rate for a holder that elects to convert its 2021 Convertible Notes in connection with such Make-Whole Fundamental Change.

Senior Secured Credit Facility

Credit Agreement (the “Credit Agreement”). After the completion of the TiVo Acquisition, TiVo Corporation became a guarantor under the Credit Agreement. The Credit Agreement provided for a (i) five-year $125.0 million term loan A facility (“Term Loan Facility A”), (ii) seven-year $700.0 million term loan B facility (“Term Loan Facility B” and together with Term Loan Facility A, the “Term Loan Facility”) and (iii) five-year $175.0 million revolving credit facility (including a letter of credit sub-facility) (the "Revolving Facility” and together with the Term Loan Facility, the “Senior Secured Credit Facility”). In September 2015, Rovi made a voluntary principal prepayment to extinguish Term Loan Facility A and elected to terminate the Revolving Facility.

Prior to the refinancing described below, ~~loans~~Term Loan Facility B was amortizing in equal quarterly installments in an aggregate annual amount equal to 1% of the original principal amount thereof, with any remaining balance payable on the final maturity date of Term Loan Facility B. Loans under Term Loan Facility B bore interest, at the Company's option, at a rate equal to either ~~LIBOR,~~the London Interbank Offered Rate ("LIBOR"), plus an applicable margin equal to 3.00% per annum (subject to a 0.75% LIBOR floor) or the prime lending rate, plus an applicable margin equal to 2.00% per annum.

On January 26, 2017, TiVo Corporation, as parent guarantor, two of its wholly-owned subsidiaries, Rovi Solutions Corporation and Rovi Guides, Inc., as borrowers, and certain of TiVo Corporation’s other subsidiaries, as subsidiary guarantors, entered into Refinancing Agreement No. 1 with respect to Term Loan Facility B. ~~The $682.5 million in proceeds from Refinancing Agreement No. 1 was used to repay existing loans under Term Loan Facility B in full.~~ The borrowing terms for Refinancing Agreement No. 1 are substantially similar to the borrowing terms of Term Loan Facility B. However, loans under Refinancing Agreement No. 1 bear interest, at the borrower's option, at a rate equal to either LIBOR, plus an applicable margin equal to 2.50% per annum (subject to a 0.75% LIBOR floor) or the prime lending rate, plus an applicable margin equal to 1.50% per annum. Refinancing Agreement No. 1 ~~requires quarterly principal payments of $1.75 million through June 2021, with any remaining balance payable in July 2021. Refinancing Agreement No. 1~~ is part of the Senior Secured Credit Facility.

The refinancing of Term Loan Facility B resulted in a Loss on debt extinguishment of $0.1 million and a Loss on debt modification of $0.9 million for the nine months ended September 30, 2017. Creditors in Term Loan Facility B that elected not to participate in Refinancing Agreement No. 1 were extinguished. Creditors in Term Loan Facility B that elected to participate in Refinancing Agreement No. 1 and for which the present value of future cash flows was not substantially different were accounted for as a debt modification.

The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions. The Credit Agreement is secured by substantially all of the Company's assets. ~~The~~Annually, the Company may be required to make an additional principal payment on ~~the Term Loan Facility each February. This payment~~Refinancing Agreement No. 1, which is calculated as a percentage of the prior year's "Excess Cash Flow" as defined in the Credit Agreement. ~~No additional~~In February 2019, the Company made an Excess Cash Flow payment ~~was required~~of $46.6 million, which eliminated the remaining quarterly principal payments. The outstanding principal balance of Term Loan Facility B is due in July 2021.

The Company accounted for the Excess Cash Flow payment in February ~~2018.~~2019 as a partial debt extinguishment. During the three months ended March 31, 2019 the Company recognized a Loss on debt extinguishment of $0.2 million related to writing off the unamortized debt discount and issuance costs related to the Excess Cash Flow payment.

~~Debt Maturities~~Expected Principal Payments

As of ~~September 30, 2018,~~March 31, 2019, aggregate expected principal payments on long-term debt, including the current portion of long-term debt, were as follows (in thousands):



2019 (a)	$	345,000
2020	—
2021	621,960
Total	$	966,960

Remainder of 2018 $ 1,750
2019 (a) 352,000
2020 7,000
2021 654,548
Total $ 1,015,298


(a)	While the 2020 Convertible Notes ~~are~~ is scheduled to mature on March 1, 2020, future principal payments are presented based on the date the 2020 Convertible Notes can be freely converted by holders, which is December 1, 2019. However, the 2020 Convertible Notes may be converted by holders prior to December 1, 2019 in certain circumstances.

Interest Rate Swaps

The Company 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 an interest rate swap or may terminate a previously executed interest rate swap if it believes a larger proportion of floating-rate debt would be beneficial. The Company has not designated any of its interest rate swaps as hedges for accounting purposes. The Company records interest rate swaps in the Condensed Consolidated Balance Sheets at fair value with changes in fair value recorded as ~~Gain (loss)~~(Loss) gain on interest rate swaps in the Condensed Consolidated Statements of Operations. Amounts

are presented in the Condensed Consolidated Balance Sheets after considering the right of offset based on its master netting agreements. During the three months ended ~~September 30,~~March 31, 2019 and 2018, ~~and 2017,~~ the Company recorded a loss of $1.7 million and gains of $1.0 million and losses of $39.0 thousand, respectively, from adjusting its interest rate swaps to fair value. During the nine months ended September 30, 2018 and 2017, the Company recorded gains of $7.2 million and losses of $1.4$4.3 million, respectively, from adjusting its interest rate swaps to fair value.

Details of the Company's interest rate swaps as of ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 were as follows (dollars in thousands):



			Notional
Contract Inception	Contract Effective Date	Contract Maturity	March 31, 2019		December 31, 2018		Interest Rate Paid	Interest Rate Received
Senior Secured Credit Facility
June 2013	January 2016	March 2019	$	—	$	250,000	2.23%	One-month USD-LIBOR
September 2014	January 2016	July 2021	$	125,000	$	125,000	2.66%	One-month USD-LIBOR
September 2014	March 2017	July 2021	$	200,000	$	200,000	2.93%	One-month USD-LIBOR

(10) Leases

Adoption of New Lease Accounting Standard

The Company adopted the provisions of the new lease accounting standard described in Note 1 using the modified retrospective transition approach on January 1, 2019. As such, the new lease accounting standard was applied to contracts in effect as of December 31, 2018. Results for periods beginning after December 31, 2018 are presented in accordance with the new lease accounting standard, while prior period amounts were not restated and continue to be reported in accordance with the Company's previous lease accounting policies. On adoption, the Company recognized a $66.7 million Right-of-use asset and an $81.9 million Lease liability.

Practical Expedients and Exemptions

On adoption, the Company elected to apply the package of practical expedients permitted under the transition guidance within the new lease accounting standard, which among other things, allowed the Company to carryforward the historical lease classification. In addition, the Company elected to apply a practical expedient to combine the lease components and non-lease components into a single lease component. The Company also elected to apply a practical expedient to not measure or recognize right-of-use assets or lease liabilities for leases with a lease term of 12 months or less.

Lease Details

The Company has operating leases for corporate offices, data centers and certain equipment. As of March 31, 2019, leases have remaining terms of 1 year to 8 years. Certain leases include options to extend the lease term for up to 10 years and certain leases include options to terminate the leases up to 6 years after the effective date of the lease. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company subleases certain real estate to third parties. The sublease portfolio consists of operating leases for previously exited office space. Certain subleases include variable payments for operating costs. The subleases are generally co-terminus with the head lease, or shorter. Subleases do not include any residual value guarantees or restrictions or covenants imposed by the leases.

The components of operating lease cost were as follows (in thousands):

Notional
Contract Inception Contract Effective Date Contract Maturity September 30, 2018 December 31, 2017 Interest Rate Paid Interest Rate Received
Senior Secured Credit Facility
June 2013 January 2016 March 2019 $ 250,000
$ 250,000
2.23% One-month USD-LIBOR
September 2014 January 2016 July 2021 $ 125,000
$ 125,000
2.66% One-month USD-LIBOR
September 2014 March 2017 July 2021 $ 200,000
$ 200,000
2.93% One-month USD-LIBOR



Classification	Three Months Ended March 31, 2019
Fixed lease cost	$	4,493
Variable lease cost	1,381
Short-term lease cost	193
Less: Sublease income	(2,235		)
Total operating lease cost	$	3,832

Supplemental cash flow information related to leases was as follows (in thousands):



	Three Months Ended March 31, 2019
Operating cash flows:
Cash paid for amounts included in the measurement of operating Lease liabilities	$	4,895
Non-cash activity:
Right-of-use assets obtained in exchange for operating Lease liabilities, net	$	1,902

Supplemental balance sheet information related to operating leases was as follows (in thousands, except weighted average lease term and discount rate):



	March 31, 2019
Right-of-use assets	$	65,419

Lease liabilities - current	$	13,266
Lease liabilities - non current	66,927
Total Lease liabilities	$	80,193

Weighted average remaining lease term	6 years
Weighted average discount rate	6.51		%

Expected Lease Payments

As of March 31, 2019, aggregate expected lease payments were as follows (in thousands):



	Operating Lease Liabilities			Sublease Income			Net Operating Lease Payments
Remainder of 2019	$	13,324		$	(4,476	)	$	8,848
2020	17,727			(6,711		)	11,016
2021	16,585			(6,243		)	10,342
2022	13,126			(6,079		)	7,047
2023	11,110			(6,081		)	5,029
Thereafter	26,649			(13,470		)	13,179
Total lease payments	98,521			(43,060		)	55,461
Less: imputed interest	(18,328		)	—			(18,328		)
Total	$	80,193		$	(43,060	)	$	37,133

Leases Not Yet In Effect

In February 2019, the Company entered into an operating lease with a 10 year lease term that begins after March 31, 2019 for the lease of a corporate office, for which the Company expects to record a Right-of-use asset of approximately $4.5 million and a Lease liability of approximately $6.0 million at lease commencement. Simultaneous with the commencement of this lease, another of the Company’s leases is anticipated to be terminated and the Company expects to de-recognize a Right-of-use asset of approximately $0.8 million and a Lease liability of approximately $0.9 million.

(11) ~~Commitments and~~ Contingencies

~~Purchase Commitments~~

During the normal course of business, the Company orders finished goods from a third party with advanced lead times that allow the third party to procure component supplies necessary to satisfy the Company’s purchase orders. A significant portion of the Company’s purchase commitments consist of firm, non-cancelable and unconditional purchase commitments. In certain instances, the Company has the option to cancel, reschedule or adjust its purchase commitments based on business needs prior to the purchase order becoming non-cancelable. As of September 30, 2018, the Company had total purchase

~~commitments for finished-goods inventory of $4.4 million, of which $0.7 million was accrued in the Condensed Consolidated Balance Sheets.~~

Indemnifications

In the normal course of business, the Company provides indemnifications of varying scopes and amounts to certain of its licensees against claims made by third parties arising out of the use and / or incorporation of the Company's products, intellectual property, services and / or technologies into the licensees' products and services. TiVo Solutions has also indemnified certain customers and business partners for, among other things, the licensing of its products, the sale of its DVRs,

and the provision of engineering and consulting services. The Company’s obligation under its indemnification agreements with customer and business partners would arise in the event a third party filed a claim against one of the parties that was covered by the Company’s indemnification. Pursuant to these agreements, the Company may indemnify the other party for certain losses suffered or incurred by the indemnified party in connection with various types of claims, which may include, without limitation, intellectual property infringement, advertising and consumer disclosure laws, certain tax liabilities, negligence and intentional acts in the performance of services and violations of laws.

In some cases, the Company may receive tenders of defense and indemnity arising from products, intellectual property services and / or technologies that are no longer provided by the Company due to having divested certain assets, but which were previously licensed or provided by the Company.

The term of the Company's indemnification obligations is generally perpetual. The Company's indemnification obligations are typically limited to the cumulative amount paid to the Company by the licensee under the license agreement; however, some license agreements, including those with the Company's largest ~~MSO~~multiple system operator and digital broadcast satellite providers, have larger limits or do not specify a limit on amounts that may be payable under the indemnity arrangements.

The Company cannot reasonably estimate the possible range of losses that may be incurred pursuant to its indemnification obligations, if any. Variables affecting any such assessment include, but are not limited to: the nature of the claim asserted; the relative merits of the claim; the financial ability of the party suing the indemnified party to engage in protracted litigation; the number of parties seeking indemnification; the nature and amount of damages claimed by the party suing the indemnified party; and the willingness of such party to engage in settlement negotiations. Due to the nature of the Company's potential indemnity liability, the Condensed Consolidated Financial Statements could be materially adversely affected in a particular period by one or more of these indemnities.

Under certain circumstances, TiVo Solutions may seek to recover some or all amounts paid to an indemnified party from its insurers. TiVo Solutions does not have any assets held either as collateral or by third parties that, on the occurrence of an event requiring it to indemnify a customer, ~~that~~ could be obtained and liquidated to recover all or a portion of the amounts paid pursuant to its indemnification obligations.

Legal Proceedings

The Company may be involved in various lawsuits, claims and proceedings, including intellectual property, commercial, securities and employment matters that arise in the normal course of business. The Company accrues a liability when management believes information available prior to the issuance of the financial statements indicates it is probable a loss has been incurred as of the date of the financial statements and the amount of loss can be reasonably estimated. The Company adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Legal costs are expensed as incurred.

On June 15, 2011, TNS Media Research, LLC (d/b/a Kantar Media Audiences, or Kantar) brought a claim for declaratory judgment against TRA Global Inc. (which was acquired by TiVo Inc. in July 2012 and renamed TiVo Research and Analytics, Inc. or TiVo Research) in U.S. District Court alleging non-infringement of a TiVo Research patent, among other claims. TiVo Research responded by alleging affirmative defenses as well as counterclaims alleging infringement by Kantar of the TiVo Research patent at issue and one other patent. On February 22, 2016, the District Court granted Kantar's summary judgment motion on invalidity under Section 101 as to each of TiVo Research's asserted patent claims. On May 18, 2018, the District Court granted Kantar’s motion for attorneys' fees and expenses related to TiVo Research’s patent claims in this action. During the three months ended June 30, 2018, TiVo Research recorded a $4.5 million loss and agreed to transfer of ownership of the two patents at issue to Kantar as part of a settlement agreement. TiVo Research paid the settlement during the three and nine months ended September 30, 2018.

The Company believes it has recorded adequate provisions for any such ~~matters~~lawsuits, claims and proceedings and, as of ~~September 30, 2018,~~March 31, 2019, it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in the Condensed Consolidated Financial Statements. Based on its experience, the Company believes that damage amounts claimed in these matters are not meaningful indicators of potential liability. Some of the matters pending against the Company involve potential compensatory, punitive or treble damage claims or sanctions, that, if granted, could require the Company to pay damages or make other expenditures in amounts that could have a material adverse effect on its Condensed Consolidated Financial Statements. Given the inherent uncertainties of litigation, the ultimate outcome of the ongoing matters described herein cannot be predicted with certainty. While litigation is inherently unpredictable, the Company believes it has valid defenses with respect to the legal matters pending against it. Nevertheless, the Condensed Consolidated Financial Statements could be materially adversely affected in a particular period by the resolution of one or more of these contingencies.

(12) Stockholders' Equity

Earnings (Loss) Per Share

Basic earnings per share ("EPS") is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common shares and dilutive common share equivalents outstanding during the period, except for periods of a loss from continuing operations. In periods of a loss from continuing operations, no common share equivalents are included in Diluted EPS because their effect would be anti-dilutive.

The number of shares used to calculate Basic and Diluted EPS were as follows (in thousands):



	Three Months Ended March 31,
	2019	2018
Weighted average shares used in computing basic per share amounts	124,422	122,080
Dilutive effect of equity-based compensation awards	—	—
Weighted average shares used in computing diluted per share amounts	124,422	122,080

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Weighted average shares used in computing basic per share amounts 123,459
120,935
122,756
119,994
Dilutive effect of equity-based compensation awards —
—
—
—
Weighted average shares used in computing diluted per share amounts 123,459
120,935
122,756
119,994

Weighted average potential shares excluded from the calculation of Diluted EPS as their effect would have been anti-dilutive were as follows (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended March 31,
	2018	2017	2018	2017	2019	2018
Restricted awards	5,401	5,234	4,153	4,444	5,085	4,430
Stock options	1,907	2,544	2,238	3,004	1,290	2,311
2020 Convertible Notes (a)	12,918	12,294	12,918	12,294	13,411	12,584
2021 Convertible Notes (a)	1	1	1	1	1	1
Warrants related to 2020 Convertible Notes (a)	12,525	12,079	12,424	12,079	12,821	12,325
Weighted average potential shares excluded from the calculation of Diluted EPS	32,752	32,152	31,734	31,822	32,608	31,651

during any calendar quarter commencing after the calendar quarter ending on June 30, 2015 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the 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 our common stock and the conversion rate on each such trading day; or~~


•	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 our common stock and the conversion rate on each such trading day; or

on the occurrence of specified corporate events.

In addition, during the 35-day trading period following a Merger Event, as defined in the 2015 Indenture, holders may convert the 2020 Convertible Notes, in multiples of $1,000 of principal.

common stock in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal of the 2020 Convertible Notes being converted.

The conversion rate is subject to adjustment in certain events, including certain events that constitute a "Make-Whole Fundamental Change" (as defined in the 2015 Indenture). In addition, if we undergo a "Fundamental Change" (as defined in the 2015 Indenture) prior to March 1, 2020, holders may require Rovi to repurchase for cash all or a portion of the 2020 Convertible Notes at a repurchase price equal to 100% of the principal of the repurchased 2020 Convertible Notes, plus accrued and unpaid interest. The conversion rate is also subject to customary anti-dilution adjustments.

2021 Convertible Notes

TiVo Solutions issued $230.0 million in aggregate principal of 2.0% Convertible Senior Notes that mature October 1, 2021 (the ~~"2021~~"2021 Convertible ~~Notes"~~Notes") at par pursuant to an Indenture dated September 22, 2014 ("the 2014 Indenture"). On October 12, 2016, TiVo Solutions repaid $229.95 million of the par value of the ~~2021 Convertible Notes.~~

~~The~~ 2021 Convertible Notes.

Fundamental Change” (as defined in the 2014 Indenture) prior to the maturity date of the 2021 Convertible Notes, TiVo Solutions will, in some cases, increase the conversion rate for a holder that elects to convert its 2021 Convertible Notes in connection with such Make-Whole Fundamental Change.

Senior Secured Credit Facility

On July 2, 2014, Rovi Corporation, as parent guarantor, and two of its wholly-owned subsidiaries, Rovi Solutions Corporation and Rovi Guides, Inc., as borrowers, and certain of its other subsidiaries, as subsidiary guarantors, entered into a Credit Agreement (the “Credit Agreement”). After the completion of the TiVo Acquisition, TiVo Corporation became a guarantor under the Credit Agreement. The Credit Agreement provided for a (i) five-year $125.0 million term loan A facility (the “Term Loan Facility A”), (ii) seven-year $700.0 million term loan B facility (the “Term Loan Facility B” and together with Term Loan Facility A, the “Term Loan Facility”) and (iii) five-year $175.0 million revolving credit facility (including a letter of credit sub-facility) (the "Revolving Facility” and together with the Term Loan Facility, the “Senior Secured Credit Facility”). In September 2015, Rovi made a voluntary principal prepayment to extinguish Term Loan Facility A and elected to terminate the Revolving Facility.

Prior to the refinancing described below, Term Loan Facility B was amortizing in equal quarterly installments in an aggregate annual amount equal to 1% of the original principal amount thereof, with any remaining balance payable on the final maturity date of Term Loan Facility B. ~~Prior to the refinancing described below, loans~~Loans under Term Loan Facility B bore interest, at our option, at a rate equal to either LIBOR, plus an applicable margin equal to 3.00% per annum (subject to a 0.75% LIBOR floor) or the prime lending rate, plus an applicable margin equal to 2.00% per annum.

2.50% per annum (subject to a 0.75% LIBOR floor) or the prime lending rate, plus an applicable margin equal to 1.50% per annum. ~~Refinancing Agreement No. 1 requires quarterly principal payments of $1.75 million through June 2021, with any remaining balance payable in July 2021.~~ Refinancing Agreement No. 1 is part of the Senior Secured Credit Facility.

The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to us and our subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, dividends and other distributions. The Credit Agreement is secured by substantially all of the Company's assets. WeAnnually, we may be required to make an additional principal payment on Refinancing Agreement No. 1, ~~each February. This payment~~which is calculated as a percentage of the prior year's "Excess Cash Flow" as defined in the Credit Agreement. ~~No additional~~In February 2019, the Company made an Excess Cash Flow payment ~~was required~~of $46.6 million, which eliminated the remaining quarterly principal payments. The outstanding principal balance of Term Loan Facility B is due in ~~February 2018.~~July 2021.

Critical Accounting Policies and Estimates

The preparation of our Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the U.S. requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements and accompanying ~~notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~notes. Our estimates, assumptions and judgments are based on historical experience and various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amount of assets and liabilities that are not readily apparent from other sources. Making estimates, assumptions and judgments about future events is inherently unpredictable and is subject to significant uncertainties, some of which are beyond our control. Management believes the estimates, assumptions and judgments employed and resulting ~~amounts~~balances reported in the Condensed Consolidated Financial Statements are reasonable; however, actual results could differ materially.

On January 1, 2017, we adopted an amended accounting standard for revenue recognition. For additional information, see Note 1 and Note 5 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which are incorporated by reference herein. Other than the adoption of the amended revenue recognition guidance, thereThere have been no significant changes to our critical accounting policies and estimates as compared to those disclosed in "Critical Accounting Policies and Estimates" in Part II, Item 77. of our Annual Report on Form 10-K, which is incorporated by reference herein.

Contractual Obligations

For information about our contractual obligations, see "Contractual Obligations" in Part II, Item 7. of our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2018, which is incorporated by reference herein.

~~Revenue Recognition~~

~~General~~ Our contractual obligations have not changed materially since December 31, 2018.

Revenue is recognized when control of the promised goods or services is transferred to a customer in an amount that reflects the consideration we expect to receive in exchange for those goods or services, which may include various combinations of products and services which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities.Off-Balance Sheet Arrangements

Depending on the terms of the contract, a portion of the consideration received may be deferred because of a requirement to satisfy a future obligation. Stand-alone selling price for separate performance obligations is based on observable prices charged to customers for goods or services sold separately or the cost-plus-a-margin approach when observable prices are not available, considering overall pricing objectives.

~~Arrangements with Multiple Performance Obligations~~

Some of our contracts with customers contain multiple performance obligations. For these contracts, the individual performance obligations are separately accounted for if they are distinct. In an arrangement with multiple performance obligations, the transaction price is allocated among the separate performance obligations on a relative stand-alone selling price basis. The determination of stand-alone selling price considers market conditions, the size and scope of the contract, customer and geographic information, and other factors. The allocation of transaction price among performance obligations in a contract may impact the amount and timing of revenue recognized in the Condensed Consolidated Statements of Operations during a given period.

~~Contract Modifications~~

Contracts may be modified due to changes in contract specifications or customer requirements. Contract modifications occur when the change in terms either creates new enforceable rights and obligations or changes existing enforceable rights and obligations. The effect of a contract modification for goods and services that are not distinct in the context of the contract on the transaction price is recognized as an adjustment to revenue on a cumulative catch-up basis. Contract modifications that result in goods or services that are distinct from the previously existing contract are accounted for prospectively.

~~Variable Consideration~~

When a contract with a customer includes a variable transaction price, an estimate of the consideration to which we expect to be entitled to for transferring the promised goods or services is made at contract inception. Depending on the terms of the contract, variable consideration is estimated using either the expected value approach or the most likely value approach. Under either approach to estimating variable consideration, the estimate considers all information (historical, current and forecast) that is reasonably available at contract inception. The amount of variable consideration is estimated at contract inception and updated as additional information becomes available. The estimate of variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Subsequent changes in the transaction price resulting from changes in the estimate of variable consideration are allocated to the performance obligations in the contract on the same basis as at contract inception.

Certain payments to retailers and distributors, such as market development funds and revenue shares, are treated as a reduction of the transaction price, and therefore revenue, rather than Selling, general and administrative expense. The reduction of revenue is recognized at the later of when revenue is recognized for the transfer of the related goods or services to the customer or when we pay or promise to pay the consideration.

When variable consideration is in the form of a sales-based or usage-based royalty in exchange for a license of intellectual property, or when a license of intellectual property is the predominant item to which the variable consideration relates, revenue is recognized at the later of when the subsequent sale or usage occurs or the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied or partially satisfied.

~~Significant Judgments~~

Determining whether promises to transfer multiple goods and services in contracts with customers are considered distinct performance obligations that should be accounted for separately requires significant judgment, including related to the level of integration and interdependency between the performance obligations. In addition, judgment is necessary to allocate the transaction price to the distinct performance obligations, including whether there is a discount or significant financing component to be allocated based on the relative stand-alone selling price of the various performance obligations.

Significant judgment is required to determine the stand-alone selling price for each distinct performance obligation when an observable price is not available. In instances where stand-alone selling price is not directly observable, such as when we do not sell the good or service separately, the stand-alone selling price is determined using a range of inputs that includes market conditions and other observable inputs. More than one stand-alone selling price may exist for individual goods and services due to the stratification of those goods and services, considering attributes such as the size of the customer and geographic region.

Due to the nature of the work required to be performed on some performance obligations, significant judgment may be required to determine the transaction price. It is common for our license agreements to contain provisions that can either increase or decrease the transaction price. These variable amounts are generally estimated based on usage or the achievement of performance metrics. In addition to estimating variable consideration, significant judgment is necessary to identify forms of variable consideration, determine whether the variable consideration relates to a sales-based or usage-based royalty of intellectual property and the determination of whether and when to include estimates of variable consideration in the transaction price.

Some hardware products are sold with a right of return and in other circumstances, other credits or incentives may be provided such as consideration (sales incentives) given to customers or resellers, which are accounted for as variable consideration and recognized as a reduction to the revenue recognized. Estimates of returns, credits and incentives are made at contract inception and updated each reporting period.

In contracts where we do not host the TiVo service and that include engineering services that are essential to the functionality of the licensed technology or involve significant customization or modification of software, we recognize revenue as progress toward completion occurs using an input method based on the ratio of costs incurred to date to total estimated costs of the project. Significant judgment is required to estimate the remaining effort to complete the project. These estimates are reassessed throughout the term of the arrangement.

On an ongoing basis, management evaluates its estimates, inputs and assumptions related to revenue recognition. Using different estimates, inputs or assumptions may materially affect the reported amounts of assets and liabilities as of the date of the financial statements and the results of operations for the reporting period.

~~Nature of goods and services~~

~~The following is a discussion of the principal activities from which we generate revenue.~~

~~Patent Licensing Agreements~~

We license our discovery patent portfolio to traditional pay TV providers, virtual service providers, OTT video providers, CE manufacturers and others. We license our patented technology portfolio under two revenue models: (i) fixed fee licenses and (ii) per-unit royalty licenses.

Our long-term fixed-fee license agreements provide rights to future patented technologies over the term of the agreement that are highly interdependent or highly interrelated to the patented technologies provided at the inception of the agreement. We treat these rights as a single performance obligation with revenue recognized on a straight-line basis over the term of the fixed-fee license agreement.

At times, we enter into license agreements in which a licensee is released from past patent infringement claims and is granted a license to ship an unlimited number of units over a future period for a fixed fee. In these arrangements, we allocate the transaction price between the release for past patent infringement claims and the future license. In determining the stand-alone selling price of the release for past patent infringement claims and the future license, we consider such factors as the number of units shipped in the past and in what geographies these units where shipped, the number of units expected to be shipped in the future and in what geographies these units are expected to be shipped, as well as the licensing rate we generally

receive for units shipped in the same geographies. As the release from past patent infringement claims is generally satisfied at execution of the agreement, the transaction price allocated to the release from past patent infringement claims is generally recognized in the period the agreement is executed and the amount of transaction price allocated to the future license is recognized ratably over the future license term.

We recognize revenue from per-unit royalty licenses in the period in which the licensee's sales are estimated to have occurred, which results in an adjustment to revenue when actual sales are subsequently reported by the licensees, which is generally in the month or quarter following usage or shipment. We generally recognize revenue from per-unit royalty licenses on a per-subscriber per-month model for licenses with service providers and a per-unit shipped model for licenses with CE manufacturers.

~~Arrangements with Multiple System Operators for the TiVo Service~~

Our arrangements with multiple system operators ("MSOs") typically include software customization and set-up services, associated maintenance and support, limited training, post-contract support, TiVo-enabled digital video recorders ("DVRs"), non-DVR STBs and the TiVo service.

We have two types of arrangements with MSOs that include technology deployment and engineering services. In instances where we host the TiVo service, non-refundable payments received for customization and set-up services are deferred and recognized as revenue over the contractual term. The related cost of such services is capitalized to the extent it is deemed recoverable and amortized to cost of revenues over the same period as the related TiVo service revenue is recognized. We estimate the stand-alone selling prices for training, DVRs, non-DVR STBs and maintenance and support based on the price charged in stand-alone sales of the promised good or service. The stand-alone selling price for the TiVo service is determined considering the size of the MSO and expected volume of deployment, market conditions, competitive landscape, internal costs and total gross margin objectives. For a term license to the TiVo service, we receive license fees for the hosted TiVo service on either a per-subscriber per-month basis or a fixed fee. We recognize revenue from per-subscriber per-month licenses during the month the TiVo service is provided to the customer and recognizes revenue from fixed fee licenses ratably over the license period.

In arrangements where we do not host the TiVo service and that include engineering services that are essential to the functionality of the licensed technology or involve significant customization or modification of the software, we recognize revenue as progress toward completion is made using an input method based on the ratio of costs incurred to date to total estimated costs of the project. Project costs are primarily labor related to the specific activities required for the project. Costs related to general infrastructure or uncommitted platform development are not included in the project cost estimates and are expensed as incurred. Estimating project costs requires forecasting costs, tracking progress toward completion and projecting the remaining effort to complete the project. These estimates are reassessed throughout the term of the arrangement, and revisions to estimates are recognized on a cumulative catch-up basis when the changed conditions become known. Provisions for losses are recorded when estimates indicate it is probable that a loss will be incurred for the contract. We generally recognize revenue from license fees for the TiVo service that it does not host on a per-subscriber per-month basis due to the recognition constraint on intellectual property usage-based royalties.

~~Subscription Services~~

Subscription services revenues primarily consist of fees to provide customers with access to one or more of our hosted products such as our i-Guide IPG, advanced search and recommendations, metadata and analytics products, including routine customer support. We generally receive per-subscriber per-month fees for our i-Guide IPG and search and recommendations service and revenue is recorded in the month the customer uses the service. We generally receive a monthly or quarterly fee from its metadata or analytics licenses for the right to use its metadata or access its analytics platform and to receive regular updates. Revenue from our metadata and analytics service is recognized ratably over the subscription period.

~~Passport Software~~

We license our Passport IPG software to pay TV providers in North and South America. We generally receive per-subscriber per-month fees for licenses to the Passport IPG software and support. Due to the usage-based royalty provisions of the revenue recognition guidance, revenue is generally recognized in the month the customer uses the software.

~~Advertising~~

We generate advertising revenue through our IPGs. Advertising revenue is recognized when the related advertisement is provided. Advertising revenue is recorded net of agency commissions and revenue shares with service providers and CE manufacturers.

~~TiVo-enabled DVRs and TiVo Service~~

We sell TiVo-enabled DVRs and the related service directly to customers through sales programs via the TiVo.com website and license the sale of TiVo-enabled DVRs through a limited number of retailers. For sales through the TiVo.com website, the customer receives a DVR and commits to either a minimum subscription period of one year or for the lifetime of the DVR. After the initial subscription period, customers have various pricing options when they renew their subscription. Customers have the right to return the DVR within 30 days of purchase. Customers have the right to cancel their subscription to the TiVo service within 30 days of subscription activation for a full refund. For licensed sales of TiVo-enabled DVRs through retailers, the customer commits to either a minimum subscription period of one year or for the lifetime of the DVR.

The stand-alone selling price for the TiVo service is established based on stand-alone sales of the service and varies by the length of the service period. The stand-alone selling price of the DVR is determined based on the price for which we would sell the DVR without any service commitment from the customer.

The transaction price allocated to the DVR is recognized as revenue on delivery and the transaction price allocated to the TiVo service is recognized as revenue ratably over the service period. Subscription revenues from lifetime subscriptions are recognized ratably over the estimated useful life of the DVR associated with the subscription. The estimated useful life for a DVR depends on a number of assumptions, including, but not limited to, customer retention rates, the timing of new product introductions and historical experience. As of September 30, 2018, we recognize revenue for lifetime subscriptions over a 66-month period. We periodically reassess the estimated useful life of a DVR. When the actual useful life of the DVR materially differs from our estimate, the estimated useful life of the DVR is adjusted, which could result in the recognition of revenue over a longer or shorter period of time.

Shipping and handling costs associated with outbound freight after control of a DVR has transferred to a customer are accounted for as a fulfillment cost and are included in Cost of hardware revenues, excluding depreciation and amortization of intangible assets as incurred.

~~Contractual Obligations~~

As a result of TiVo Solutions' acquisition of Cubiware, certain payments contingent on the occurrence of specified events may be payable. The contingent payments include guaranteed payments of $9.0 million provided certain key individuals remained employed through May 2018 and additional cash earn-outs (not to exceed $14.4 million in aggregate) payable through May 2018 contingent on the achievement of certain revenue and earnings before interest, depreciation, income taxes and amortization targets for each of the twelve month periods following the date of TiVo Solutions' acquisition of Cubiware. During the nine months ended September 30, 2018, $5.5 million was paid related to the guaranteed payments and $1.9 million was paid related to the additional earn-out. As of September 30, 2018, total payments of $5.2 million have been earned, but remain unpaid pending the resolution of a matter for which the selling shareholders have an indemnification obligation to TiVo Solutions.

In the normal course of business, we order finished goods inventory with advanced lead times from a third party that allow the third party to procure inventory based on our purchase orders. As a result of a manufacturing outsourcing agreement that became effective during the nine months ended September 30, 2018, our unconditional purchase obligations as of September 30, 2018 were reduced to $4.4 million.

For information about our ~~contractual obligations,~~off-balance sheet arrangements, see ~~"Contractual Obligations"~~"Off-Balance Sheet Arrangements" in Part II, Item 77. of our Annual Report on Form 10-K for the year ended December 31, ~~2017, which is incorporated by reference herein. Other than the items described above, our contractual obligations have not changed materially since December 31, 2017.~~

~~Off-Balance Sheet Arrangements~~

~~For information about our off-balance sheet arrangements, see "Off-Balance Sheet Arrangements" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2017,~~2018, which is incorporated by reference herein. Since December 31, ~~2017,~~2018, we have not engaged in any material off-balance sheet arrangements, including the use of structured

finance vehicles, special purpose entities or variable interest entities.

Recent Accounting Pronouncements

For a summary of applicable recent accounting pronouncements, see Note 1 to the Condensed Consolidated Financial Statements included in Part I, Item 11. of this Quarterly Report on Form 10-Q, which is incorporated by reference herein.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, we are exposed to market risks, including those related to changes in interest rates, foreign currency exchange rates and security prices that could affect our financial position, results of operations or cash flows. For quantitative and qualitative disclosures about market risk, see Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2018, which is incorporated reference herein. Our exposure to market risk has not changed materially since December 31, ~~2017.~~2018.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with participation of management, including our Interim Chief Executive Officer and our Chief Financial Officer, of the

effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). In evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on their evaluation, our Interim Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

WeOther than certain controls implemented in connection with the adoption of the new lease accounting standard, we believe there have been no changes to our internal controls over financial reporting during the quarter ended ~~September 30, 2018,~~March 31, 2019, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. ~~OTHER INFORMATION~~

ITEM 1. LEGAL PROCEEDINGS

Information with respect to this item is contained in Note 11 to the Condensed Consolidated Financial Statements included in Part I, Item 11. of this Quarterly Report on Form 10-Q, which is incorporated by reference herein.

ITEM 1A. RISK FACTORS

Management believes that there have been no significant changes to the risk factors associated with our business as compared to those disclosed in Part 1, Item 1A1A. of our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2018, which is incorporated by reference ~~herein.~~herein, other than as described below.

Our plan to separate into two independent, publicly traded companies is subject to various risks and uncertainties and may not be completed in accordance with the expected plans or anticipated timeline, or at all, and will involve significant time, expense and management attention, any of which could negatively impact our businesses, financial condition, results of operations and prospects.

On May 9, 2019, we announced that our Board of Directors has unanimously approved a plan to separate our Product and IP Licensing businesses (the “Separation”). The Separation is expected to be completed through a dividend of newly issued shares of the common stock of a Company subsidiary that will hold the Product business (“ProductCo”). We currently intend that the Separation will be completed in a manner generally intended to qualify as tax-free to our stockholders for U.S. federal income tax purposes (the “Distribution”).

The Separation will be subject to customary closing conditions, including, among others, obtaining final approval from the TiVo Board of Directors, receipt of tax opinions, and the effectiveness of an applicable registration statement with the Securities and Exchange Commission.

Unanticipated developments, including difficulty in separating the assets and resources of our Product business from the rest of our assets and resources, changes to the competitive environment for the respective Product and IP Licensing businesses, possible delays in obtaining or failure to obtain tax opinions, an IRS ruling on the tax-free nature of the Distribution, regulatory or other approvals or clearances to approve or facilitate the Separation, including the Distribution, uncertainty in financial markets and other challenges in executing the Separation as planned, including addressing any impact of the Separation and the Distribution on our existing credit facilities and convertible notes, could delay or prevent the Distribution, or cause the Separation, including the Distribution, to occur on terms or conditions that are different or less favorable than expected.

We expect that the process of completing the Separation, including the Distribution, will be time-consuming and involve significant costs and expenses, which may be significantly higher than those currently anticipated and may not yield a discernible benefit if the Separation, including the Distribution, is not completed. Furthermore, the time and energy required of our senior management and other employees to plan and execute the Separation may lead to increased costs, negative effects on relationships with business partners, suppliers, and customers, and disruptions in operations, and may ultimately harm our businesses, financial condition and results of operations. We may also experience difficulty attracting, retaining and motivating employees during the pendency of the Separation, including the Distribution, which could also harm our businesses, financial condition, and results of operations.

If the Separation, including the Distribution, is completed, there is a further risk that the sum of the value of the two independent, publicly traded companies will be less than the value of the Company before the Separation. There is also a risk that we may not be able to achieve the full strategic, operational and financial benefits to us and our Product business that are anticipated to result from the Separation, including the Distribution, or that such benefits may be delayed or not occur at all.

This Quarterly Report on Form 10-Q does not constitute an offer to sell or a solicitation of an offer to buy securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

We may choose to repurchase shares under our ongoing repurchase program when sufficient liquidity exists, the shares are trading at a discount relative to estimated intrinsic value and there are no alternative investment opportunities expected to generate a higher risk-adjusted return on investment.

The following table provides information about the Company's purchases of its common stock during the three months ended ~~September 30, 2018~~March 31, 2019 (in thousands, except per share amounts):

Period Total Number of Shares Purchased (1) Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
July 2018 —
$ —
— $ 150,000
August 2018 —
$ —
— $ 150,000
September 2018 —
$ —
— $ 150,000
Total —
$ —
—



Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
January 2019	—	$	—	—	$	150,000
February 2019	—	$	—	—	$	150,000
March 2019	—	$	—	—	$	150,000
Total	—	$	—	—


(1)	Excludes shares withheld to satisfy minimum statutory tax withholding requirements in connection with the net share settlement of restricted ~~stock units.~~awards on vesting. During the three months ended ~~September 30, 2018,~~March 31, 2019, we withheld ~~0.2~~0.1 million shares of common stock to satisfy ~~$2.6~~$1.4 million of required withholding taxes.


(2)	On February 14, 2017, TiVo Corporation's Board of Directors approved an increase to its common stock repurchase program authorization to $150.0 million. The February 2017 authorization includes amounts which were outstanding under previously authorized share repurchase programs.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Incorporated by Reference
Exhibit Number Exhibit Description Company Form+
Filing
Date

Exhibit
Number
Filed Herewith
10.01
Form of Notice of Restricted Stock Unit/Restricted Stock Unit Agreement pursuant to Rovi 2008 Equity Incentive Plan**
X
10.02
Form of Notice of Restricted Stock Unit/Restricted Stock Unit Agreement pursuant to TiVo Corporation Titan Equity Incentive Plan**
X
10.03
2018 Senior Executive Company Incentive Plan**
X
10.04
Offer letter to Raghavendra Rau dated July 23, 2018**
8-K July 27, 2018 10.1
10.05
Executive Severance and Arbitration Agreement with Raghavendra Rau dated July 23, 2018**
8-K July 27, 2018 10.2
31.01
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.02
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.01
Certification of Chief Executive Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002
*
32.02
Certification of Chief Financial Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002
*
101.INS XBRL Instance Document X
101.SCH XBRL Taxonomy Extension Schema Document X
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB XBRL Taxonomy Extension Label Linkbase Document X
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document X



		Incorporated by Reference
Exhibit Number	Exhibit Description	Company Form	Filing Date	Exhibit Number	Filed Herewith
10.01	2019 Senior Executive Company Incentive Plan**		3/15/2019	10.1
31.01	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
31.02	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
32.01	Certification of Chief Executive Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002				*
32.02	Certification of Chief Financial Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002				*
101.INS	XBRL Instance Document				X
101.SCH	XBRL Taxonomy Extension Schema Document				X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document				X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				X


*	Furnished herewith.


**	Management contract or compensatory plan or arrangement.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



TIVO CORPORATION
Authorized Officer:
Date:	By:	/s/ Raghavendra Rau
~~November 7, 2018~~May 9, 2019		Raghavendra Rau
		Interim President and Chief Executive Officer

Principal Financial Officer:
Date:	By:	/s/ Peter C. Halt
~~November 7, 2018~~May 9, 2019		Peter C. Halt
		Chief Financial Officer

Principal Accounting Officer:
Date:	By:	/s/ Wesley Gutierrez
~~November 7, 2018~~May 9, 2019		Wesley Gutierrez
		Chief Accounting Officer and Treasurer

6146



Delaware		61-1793262
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
2160 Gold Street, San Jose, CACalifornia 95002
(Address of principal executive offices, including zip code)



Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o
Smaller reporting company o	Emerging growth company o



Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	TIVO	The Nasdaq Stock Market LLC



(in thousands)	Outstanding as of
Class	~~October 31, 2018~~April 30, 2019
Common Stock	~~123,927~~124,949


	September 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
ASSETS	(Unaudited)						(unaudited)
Current assets:
Cash and cash equivalents	$	149,655		$	128,965		$	113,182		$	161,955
Short-term marketable securities	162,073			140,866			158,739			158,956
Accounts receivable, net	173,749			180,768			156,470			152,866
Inventory	7,963			11,581			6,146			7,449
Prepaid expenses and other current assets	36,012			40,719			33,130			30,806
Total current assets	529,452			502,899			467,667			512,032
Long-term marketable securities	70,296			82,711			55,058			73,207
Property and equipment, net	50,689			55,244			51,301			53,586
Intangible assets, net	524,057			643,924			489,715			513,770
Goodwill	1,813,183			1,813,227			1,544,306			1,544,343
Right-of-use assets							65,419			—
Other long-term assets	57,104			65,673			63,152			63,365
Total assets	$	3,044,781		$	3,163,678		$	2,736,618		$	2,760,303

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	92,557		$	135,852		$	104,206		$	104,981
Unearned revenue	49,667			55,393			49,899			46,072
Current portion of long-term debt	7,000			7,000			330,481			373,361
Total current liabilities	149,224			198,245			484,586			524,414
Taxes payable, less current portion	4,694			3,947
Unearned revenue, less current portion	50,356			58,283			52,906			54,495
Long-term debt, less current portion	982,801			976,095			619,396			618,776
Deferred tax liabilities, net	51,150			50,356			44,498			45,030
Long-term lease liabilities							66,927			—
Other long-term liabilities	14,982			23,736			10,275			24,647
Total liabilities	1,253,207			1,310,662			1,278,588			1,267,362
Commitments and contingencies (Note 11)
Contingencies (Note 11)
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding	—			—			—			—
Common stock, $0.001 par value, 250,000 shares authorized; 125,629 shares issued and 123,875 shares outstanding as of September 30, 2018; and 123,385 shares issued and 122,116 shares outstanding as of December 31, 2017	126			123
Treasury stock, 1,754 shares and 1,269 shares as of September 30, 2018 and December 31, 2017, respectively, at cost	(31,495		)	(24,740		)
Common stock, $0.001 par value, 250,000 shares authorized; 126,841 shares issued and 124,895 shares outstanding as of March 31, 2019; and 125,781 shares issued and 123,975 shares outstanding as of December 31, 2018							127			126
Treasury stock, 1,946 shares and 1,806 shares as of March 31, 2019 and December 31, 2018, respectively, at cost							(33,521		)	(32,124		)
Additional paid-in capital	3,249,615			3,273,022			3,232,310			3,239,395
Accumulated other comprehensive loss	(4,297		)	(2,738		)	(3,655		)	(3,869		)
Accumulated deficit	(1,422,375		)	(1,392,651		)	(1,737,231		)	(1,710,587		)
Total stockholders’ equity	1,791,574			1,853,016			1,458,030			1,492,941
Total liabilities and stockholders’ equity	$	3,044,781		$	3,163,678		$	2,736,618		$	2,760,303



x	QUARTERLY 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



PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Loss	4
	Condensed Consolidated Statements of ~~Cash Flows~~Stockholders' Equity	5
	~~Notes to~~ Condensed Consolidated ~~Financial~~ Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4031
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5841
ITEM 4.	CONTROLS AND PROCEDURES	5841

PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	5943
ITEM 1A.	RISK FACTORS	5943
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	5944
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	5944
ITEM 4.	MINE SAFETY DISCLOSURES	5944
ITEM 5.	OTHER INFORMATION	5944
ITEM 6.	EXHIBITS	6045
	SIGNATURES	6146



	Common stock			Treasury stock					Additional paid-in capital			Accumulated other comprehensive loss			Accumulated deficit			Total stockholders’ equity
	Shares	Amount		Shares		Amount
Balance as of December 31, 2017	123,385	$	123	(1,269	)	$	(24,740	)	$	3,273,022		$	(2,738	)	$	(1,392,651	)	$	1,853,016
Cumulative effect adjustment															31,412			31,412
Net loss															(17,717		)	(17,717		)
Other comprehensive income, net of tax												992						992
Issuance of common stock under employee stock purchase plan	639	1							7,574									7,575
Issuance of restricted stock, net	365	—							—									—
Equity-based compensation									13,634									13,634
Dividends									(22,111		)				—			(22,111		)
Withholding taxes related to net share settlement of restricted awards				(196	)	(2,894		)										(2,894		)
Balance as of March 31, 2018	124,389	$	124	(1,465	)	$	(27,634	)	$	3,272,119		$	(1,746	)	$	(1,378,956	)	$	1,863,907



	September 30, 2018		December 31, 2017
Raw materials	$	1,042	$	1,846
Finished goods	6,921		9,735
Inventory	$	7,963	$	11,581



	September 30, 2018			December 31, 2017
Computer software and equipment	$	158,490		$	150,098
Leasehold improvements	45,303			44,981
Furniture and fixtures	9,971			9,137
Property and equipment, gross	213,764			204,216
Less: Accumulated depreciation and amortization	(163,075		)	(148,972		)
Property and equipment, net	$	50,689		$	55,244



	September 30, 2018		December 31, 2017
Accounts payable	$	10,828	$	10,517
Accrued compensation and benefits	33,566		47,886
Other accrued liabilities	48,163		77,449
Accounts payable and accrued expenses	$	92,557	$	135,852



				Contracts with Customers			Costs to Obtain Contracts with Customers			De-recognition of Prepaid Stored Value Product Liabilities
	December 31, 2017			Contracts with Customers			Costs to Obtain Contracts with Customers			De-recognition of Prepaid Stored Value Product Liabilities			January 1, 2018
Accounts receivable, net	$	180,768		$	24,177		$	—		$	—		$	204,945
Prepaid expenses and other current assets	40,719			(2,705		)	525			—			38,539
Other long-term assets	65,673			(4,419		)	819			—			62,073
Accounts payable and accrued expenses	(135,852		)	—			—			2,155			(133,697		)
Unearned revenue	(55,393		)	11,208			—			—			(44,185		)
Deferred tax liabilities, net	(50,356		)	(348		)	—			—			(50,704		)
Accumulated deficit	1,392,651			(27,913		)	(1,344		)	(2,155		)	1,361,239



	Three Months Ended September 30, 2018
	As Reported			As If Applying Prior Guidance			Effect of Change Higher/(Lower)
Total Revenues, net	$	164,709		$	170,868		$	(6,159	)
Cost of licensing, services and software revenues, excluding depreciation and amortization of intangible assets	40,749			41,512			(763		)
Selling, general and administrative	39,867			40,195			(328		)
Loss from continuing operations before income taxes	(18,223		)	(13,155		)	(5,068		)
Income tax expense	4,769			5,143			(374		)
Loss from continuing operations, net of tax	(22,992		)	(18,298		)	(4,694		)



	Nine Months Ended September 30, 2018
	As Reported			As If Applying Prior Guidance			Effect of Change Higher/(Lower)
Total Revenues, net	$	527,406		$	543,871		$	(16,465	)
Cost of licensing, services and software revenues, excluding depreciation and amortization of intangible assets	126,547			128,458			(1,911		)
Selling, general and administrative	133,906			134,232			(326		)
Loss from continuing operations before income taxes	(51,569		)	(37,341		)	(14,228		)
Income tax expense	13,305			14,460			(1,155		)
Loss from continuing operations, net of tax	(64,874		)	(51,801		)	(13,073		)



	Three Months Ended March 31,
	2019		2018
United States	$	107,838	$	118,935
United Kingdom	6,196		33,512
Rest of the world	44,201		37,390
Total Revenues, net	$	158,235	$	189,837



	March 31, 2019			December 31, 2018
Accounts receivable, gross	$	158,956		$	155,708
Less: Allowance for doubtful accounts	(2,486		)	(2,842		)
Accounts receivable, net	$	156,470		$	152,866


	September 30, 2018									March 31, 2019
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash	$	45,530	$	—	$	—		$	45,530	$	40,349	$	—	$	—		$	40,349
Cash equivalents - Money market funds	104,125		—		—			104,125		72,833		—		—			72,833
Cash and cash equivalents	$	149,655	$	—	$	—		$	149,655	$	113,182	$	—	$	—		$	113,182

Corporate debt securities	$	115,765	$	4	$	(420	)	$	115,349	$	110,015	$	46	$	(102	)	$	109,959
U.S. Treasuries / Agencies	117,298		—		(278		)	117,020		103,760		150		(72		)	103,838
Marketable securities	$	233,063	$	4	$	(698	)	$	232,369	$	213,775	$	196	$	(174	)	$	213,797
Cash, cash equivalents and marketable securities								$	382,024								$	326,979



	Amortized Cost		Fair Value
Due in less than 1 year	$	158,837	$	158,739
Due in 1-2 years	54,938		55,058
Total	$	213,775	$	213,797



Remainder of 2018	$	27,763
2019	109,855
2020	109,109
2021	66,341
2022	38,602
Thereafter	158,387
Total	$	510,057



	Balance at Beginning of Period		Restructuring Expense		Cash Settlements			Non-Cash Settlements		Other			Balance at End of Period
Severance costs	$	3,857	$	1,813	$	(2,471	)	$	—	$	(2	)	$	3,197
Total	$	3,857	$	1,813	$	(2,471	)	$	—	$	(2	)	$	3,197



				March 31, 2019				December 31, 2018
	Stated Interest Rate	Issue Date	Maturity Date	Outstanding Principal		Carrying Amount		Outstanding Principal		Carrying Amount
2020 Convertible Notes	0.500%	March 4, 2015	March 1, 2020	$	345,000	$	330,481	$	345,000	$	326,640
2021 Convertible Notes	2.000%	September 22, 2014	October 1, 2021	48		48		48		48
Term Loan Facility B	Variable	July 2, 2014	July 2, 2021	621,912		619,348		668,500		665,449
Total Long-term debt				$	966,960	949,877		$	1,013,548	992,137
Less: Current portion of long-term debt						330,481				373,361
Long-term debt, less current portion						$	619,396			$	618,776



Remainder of 2018	$	1,750
2019 (a)	352,000
2020	7,000
2021	654,548
Total	$	1,015,298



	Restricted Awards (In Thousands)		Weighted-Average Grant Date Fair Value
Outstanding as of beginning of period	5,350		$	14.26
Granted	504		$	8.58
Vested	(384	)	$	20.49
Forfeited	(336	)	$	15.52
Outstanding as of end of period	5,134		$	13.16



	Options (In Thousands)		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value (In Thousands)
Outstanding as of beginning of period	2,368		$	27.16
Forfeited and expired	(497	)	$	36.45
Outstanding as of end of period	1,871		$	24.69	1.2 years	$	—
Vested and expected to vest as of September 30, 2018	1,871		$	24.69	1.2 years	$	—
Exercisable as of September 30, 2018	1,825		$	24.71	1.2 years	$	—