UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________________

FORM 10-Q

(Mark One)



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2019~~March 31, 2020



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-37870

TiVo Corporation

(Exact name of registrant as specified in its charter)



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

(408) 519-9100

(Registrant's telephone number, including area code)

~~N/A~~

~~(Former name, former address and former fiscal year, if changed since last report)~~

Securities registered pursuant to Section 12(b) of the Act:



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
Common Stock, par value $0.001 per share	TIVO	(Nasdaq Global Select Market)
Series A Junior Participating Preferred Stock Purchase Rights	N/A	The Nasdaq Stock Market LLC
	N/A	(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:



Large accelerated filer	☑	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

~~Indicate the~~The number of shares ~~outstanding of each~~ of the ~~issuer's classes~~Registrant's Common Stock outstanding on April 30, 2020 was 127.7 million.

Table of ~~common stock, as of the latest practicable date.~~

Contents



~~(in thousands)~~	~~Outstanding as of~~
~~Class~~	~~July 26, 2019~~
~~Common Stock~~	~~125,779~~

TIVO CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS



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 Stockholders' Equity	5
	Condensed Consolidated Statements of Cash Flows	76
	Notes to Condensed Consolidated Financial Statements	87
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3330
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4641
ITEM 4.	CONTROLS AND PROCEDURES	4642

PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	4743
ITEM 1A.	RISK FACTORS	4743
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	4844
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	4844
ITEM 4.	MINE SAFETY DISCLOSURES	4844
ITEM 5.	OTHER INFORMATION	4844
ITEM 6.	EXHIBITS	4945
	SIGNATURES	5046

PART I. ~~FINANCIAL INFORMATION~~

ITEM 1. FINANCIAL STATEMENTS

TIVO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)


	June 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
ASSETS	(unaudited)						(Unaudited)
Current assets:
Cash and cash equivalents	$	147,334		$	161,955		$	108,519		$	373,719
Short-term marketable securities	114,183			158,956			—			51,293
Accounts receivable, net	177,813			152,866			164,618			158,016
Inventory	3,777			7,449			2,944			3,197
Prepaid expenses and other current assets	33,772			30,806			27,393			27,023
Total current assets	476,879			512,032			303,474			613,248
Long-term marketable securities	25,766			73,207
Property and equipment, net	50,971			53,586			43,706			48,264
Intangible assets, net	464,367			513,770			386,524			415,054
Goodwill	1,544,439			1,544,343			1,018,310			1,189,825
Right-of-use assets	62,645			—			56,405			59,888
Other long-term assets	61,440			63,365			56,183			56,293
Total assets	$	2,686,507		$	2,760,303		$	1,864,602		$	2,382,572

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	110,716		$	104,981		$	81,427		$	126,249
Unearned revenue	51,269			46,072			48,502			50,968
Current portion of long-term debt	285,914			373,361			66,450			343,035
Total current liabilities	447,899			524,414			196,379			520,252
Unearned revenue, less current portion	51,896			54,495			37,292			39,879
Long-term debt, less current portion	619,670			618,776			625,867			642,504
Deferred tax liabilities, net	43,959			45,030			29,603			34,231
Long-term lease liabilities	63,898			—			58,303			61,603
Other long-term liabilities	13,318			24,647			14,596			10,420
Total liabilities	1,240,640			1,267,362			962,040			1,308,889
Contingencies (Note 11)
Contingencies (Note 9)
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; 127,313 shares issued and 125,156 shares outstanding as of June 30, 2019; and 125,781 shares issued and 123,975 shares outstanding as of December 31, 2018	127			126
Treasury stock, 2,157 shares and 1,806 shares as of June 30, 2019 and December 31, 2018, respectively, at cost	(35,219		)	(32,124		)
Common stock, $0.001 par value, 250,000 shares authorized; 130,290 shares issued and 127,654 shares outstanding as of March 31, 2020; and 129,216 shares issued and 126,666 shares outstanding as of December 31, 2019							130			129
Treasury stock, 2,636 shares and 2,550 shares as of March 31, 2020 and December 31, 2019, respectively, at cost							(38,819		)	(38,176		)
Additional paid-in capital	3,230,303			3,239,395			3,247,562			3,235,996
Accumulated other comprehensive loss	(2,573		)	(3,869		)	(5,021		)	(3,612		)
Accumulated deficit	(1,746,771		)	(1,710,587		)	(2,301,290		)	(2,120,654		)
Total stockholders’ equity	1,445,867			1,492,941			902,562			1,073,683
Total liabilities and stockholders’ equity	$	2,686,507		$	2,760,303		$	1,864,602		$	2,382,572

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

TIVO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2019			2018			2019			2018			2020			2019
Revenues, net:
Licensing, services and software	$	174,496		$	169,554		$	330,657		$	355,712		$	157,238		$	156,161
Hardware	1,676			3,306			3,750			6,985			2,623			2,074
Total Revenues, net	176,172			172,860			334,407			362,697			159,861			158,235
Costs and expenses:
Cost of licensing, services and software revenues, excluding depreciation and amortization of intangible assets	35,786			42,583			75,219			85,798			37,396			39,433
Cost of hardware revenues, excluding depreciation and amortization of intangible assets	5,768			4,989			9,861			10,040			5,022			4,093
Research and development	38,202			43,411			79,583			91,841			33,744			41,381
Selling, general and administrative	47,600			42,957			93,593			94,039			35,897			45,993
Depreciation	5,327			5,773			10,691			10,914			4,968			5,364
Amortization of intangible assets	28,184			40,809			56,362			82,221			28,142			28,178
Restructuring and asset impairment charges	2,676			1,101			4,489			5,647			739			1,813
Goodwill impairment													171,572			—
Total costs and expenses	163,543			181,623			329,798			380,500			317,480			166,255
Operating income (loss)	12,629			(8,763		)	4,609			(17,803		)
Operating loss													(157,619		)	(8,020		)
Interest expense	(12,475		)	(12,171		)	(24,636		)	(23,805		)	(17,049		)	(12,161		)
Interest income and other, net	1,515			544			3,290			2,110			187			1,775
(Loss) gain on interest rate swaps	(3,364		)	1,841			(5,085		)	6,152
Loss on interest rate swaps													(5,119		)	(1,721		)
Loss on debt extinguishment	(101		)	—			(300		)	—			—			(199		)
Loss from continuing operations before income taxes	(1,796		)	(18,549		)	(22,122		)	(33,346		)
Income tax expense	7,744			4,319			14,062			8,536
Loss from continuing operations, net of tax	(9,540		)	(22,868		)	(36,184		)	(41,882		)
Income from discontinued operations, net of tax	—			2,298			—			3,595
Loss before income taxes													(179,600		)	(20,326		)
Income tax (benefit) expense													(416		)	6,318
Net loss	$	(9,540	)	$	(20,570	)	$	(36,184	)	$	(38,287	)	$	(179,184	)	$	(26,644	)

Basic loss per share:
Continuing operations	$	(0.08	)	$	(0.19	)	$	(0.29	)	$	(0.34	)
Discontinued operations	—			0.02			—			0.03
Basic loss per share	$	(0.08	)	$	(0.17	)	$	(0.29	)	$	(0.31	)	$	(1.41	)	$	(0.21	)
Weighted average shares used in computing basic per share amounts	124,960			122,713			124,692			122,399			127,124			124,422

Diluted loss per share:
Continuing operations	$	(0.08	)	$	(0.19	)	$	(0.29	)	$	(0.34	)
Discontinued operations	—			0.02			—			0.03
Diluted loss per share	$	(0.08	)	$	(0.17	)	$	(0.29	)	$	(0.31	)	$	(1.41	)	$	(0.21	)
Weighted average shares used in computing diluted per share amounts	124,960			122,713			124,692			122,399			127,124			124,422

Dividends declared per share	$	0.08		$	0.18		$	0.26		$	0.36		$	—		$	0.18

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

TIVO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,
2019 2018 2019 2018
Net loss $ (9,540 ) $ (20,570 ) $ (36,184 ) $ (38,287 )
Other comprehensive income, net of tax:
Change in foreign currency translation adjustment 691
(2,712 ) 404
(1,603 )
Unrealized gains (losses) on marketable securities
Change in unrealized gains (losses) on marketable securities 391
225
892
(108 )
Less: Reclassification adjustment on sale —
—
—
216
Other comprehensive income (loss), net of tax 1,082
(2,487 ) 1,296
(1,495 )
Comprehensive loss $ (8,458 ) $ (23,057 ) $ (34,888 ) $ (39,782 )



	Three Months Ended March 31,
	2020			2019
Net loss	$	(179,184	)	$	(26,644	)
Other comprehensive (loss) income, net of tax:
Change in foreign currency translation adjustment	(1,420		)	(287		)
Unrealized gains on marketable securities
Change in unrealized gains on marketable securities	—			501
Less: Reclassification adjustment	48			—
Other comprehensive (loss) income, net of tax	(1,372		)	214
Comprehensive loss	$	(180,556	)	$	(26,430	)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

TIVO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)



	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, 2018	125,781	$	126	(1,806	)	$	(32,124	)	$	3,239,395		$	(3,869	)	$	(1,710,587	)	$	1,492,941
Net loss															(26,644		)	(26,644		)
Other comprehensive income, net of tax												214						214
Issuance of common stock under employee stock purchase plan	735	1							6,951									6,952
Issuance of restricted stock, net	325	—							—									—
Equity-based compensation									8,433									8,433
Dividends									(22,469		)							(22,469		)
Withholding taxes related to net share settlement of restricted awards				(140	)	(1,397		)										(1,397		)
Balance as of March 31, 2019	126,841	$	127	(1,946	)	$	(33,521	)	$	3,232,310		$	(3,655	)	$	(1,737,231	)	$	1,458,030



	Common stock			Treasury stock					Additional paid-in capital			Accumulated other comprehensive loss			Accumulated deficit			Total stockholders’ equity			Common stock			Treasury stock					Additional paid-in capital		Accumulated other comprehensive loss			Accumulated deficit			Total stockholders’ equity
	Shares	Amount		Shares		Amount															Shares	Amount		Shares		Amount
Balance as of March 31, 2018	124,389	$	124	(1,465	)	$	(27,634	)	$	3,272,119		$	(1,746	)	$	(1,378,956	)	$	1,863,907
Balance as of December 31, 2019																					129,216	$	129	(2,550	)	$	(38,176	)	$	3,235,996	$	(3,612	)	$	(2,120,654	)	$	1,073,683
Cumulative effect adjustment																															(37		)	(1,452		)	(1,489		)
Net loss															(20,570		)	(20,570		)														(179,184		)	(179,184		)
Other comprehensive loss, net of tax												(2,487		)				(2,487		)											(1,372		)				(1,372		)
Issuance of common stock under employee stock purchase plan																					847	1							5,238								5,239
Issuance of restricted stock, net	139	1							—									1			227	—							—								—
Equity-based compensation									7,092									7,092											6,328								6,328
Dividends									(22,118		)							(22,118		)
Withholding taxes related to net share settlement of restricted awards				(92	)	(1,291		)										(1,291		)				(86	)	(643		)									(643		)
Balance as of June 30, 2018	124,528	$	125	(1,557	)	$	(28,925	)	$	3,257,093		$	(4,233	)	$	(1,399,526	)	$	1,824,534
Balance as of March 31, 2020																					130,290	$	130	(2,636	)	$	(38,819	)	$	3,247,562	$	(5,021	)	$	(2,301,290	)	$	902,562

Common stock Treasury stock Additional paid-in capital Accumulated other comprehensive loss Accumulated deficit Total stockholders’ equity
Shares Amount Shares Amount
Balance as of March 31, 2019 126,841
$ 127
(1,946 ) $ (33,521 ) $ 3,232,310
$ (3,655 ) $ (1,737,231 ) $ 1,458,030
Net loss (9,540 ) (9,540 )
Other comprehensive income, net of tax 1,082
1,082
Issuance of restricted stock, net 472
—
—
—
Equity-based compensation 8,987
8,987
Dividends (9,998 ) (9,998 )
Equity component related to repurchase of 2020 Convertible Notes (996 ) (996 )
Withholding taxes related to net share settlement of restricted awards (211 ) (1,698 ) (1,698 )
Balance as of June 30, 2019 127,313
$ 127
(2,157 ) $ (35,219 ) $ 3,230,303
$ (2,573 ) $ (1,746,771 ) $ 1,445,867

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 (38,287 ) (38,287 )
Other comprehensive loss, net of tax (1,495 ) (1,495 )
Issuance of common stock under employee stock purchase plan 639
1
7,574
7,575
Issuance of restricted stock, net 504
1
—
1
Equity-based compensation 20,726
20,726
Dividends (44,229 ) (44,229 )
Withholding taxes related to net share settlement of restricted awards (288 ) (4,185 ) (4,185 )
Balance as of June 30, 2018 124,528
$ 125
(1,557 ) $ (28,925 ) $ 3,257,093
$ (4,233 ) $ (1,399,526 ) $ 1,824,534

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, 2018 125,781
$ 126
(1,806 ) $ (32,124 ) $ 3,239,395
$ (3,869 ) $ (1,710,587 ) $ 1,492,941
Net loss (36,184 ) (36,184 )
Other comprehensive income, net of tax 1,296
1,296
Issuance of common stock under employee stock purchase plan 735
1
6,951
6,952
Issuance of restricted stock, net 797
—
—
—
Equity-based compensation 17,420
17,420
Dividends (32,467 ) (32,467 )
Equity component related to repurchase of 2020 Convertible Notes (996 ) (996 )
Withholding taxes related to net share settlement of restricted awards (351 ) (3,095 ) (3,095 )
Balance as of June 30, 2019 127,313
$ 127
(2,157 ) $ (35,219 ) $ 3,230,303
$ (2,573 ) $ (1,746,771 ) $ 1,445,867

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

TIVO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six Months Ended June 30,						Three Months Ended March 31,
	2019			2018			2020			2019
Operating activities:
Net loss	$	(36,184	)	$	(38,287	)	$	(179,184	)	$	(26,644	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Income from discontinued operations, net of tax	—			(3,595		)
Depreciation	10,691			10,914			4,968			5,364
Amortization of intangible assets	56,362			82,221			28,142			28,178
Amortization of convertible note discount and note issuance costs	8,000			7,674			3,597			4,007
Restructuring and asset impairment charges	4,489			5,647			739			1,813
Goodwill impairment							171,572			—
Equity-based compensation	17,311			18,755			6,296			8,379
Change in fair value of interest rate swaps	4,709			(8,505		)	4,181			4,646
Loss on debt extinguishment	300			—			—			199
Deferred income taxes	(1,307		)	(298		)	(4,481		)	(672		)
Other operating, net	3,943			2,248			1,411			28
Changes in operating assets and liabilities:
Accounts receivable	(25,615		)	14,335			(9,030		)	(3,672		)
Inventory	1,280			1,347			253			1,303
Prepaid expenses and other current assets and other long-term assets	(3,794		)	2,942			(60		)	(3,860		)
Right-of-use assets, net of lease liabilities	9,004			—			(732		)	(413		)
Accounts payable and accrued expenses and other long-term liabilities	(17,882		)	(28,976		)	(41,672		)	(17,947		)
Taxes payable	(2,055		)	(1,178		)	(1,243		)	1,378
Unearned revenue	2,598			(3,452		)	(5,053		)	2,238
Net cash provided by operating activities	31,850			61,792
Net cash (used in) provided by operating activities - Continuing operations							(20,296		)	4,325
Net cash used in operating activities - Discontinued operations							(406		)	—
Net cash (used in) provided by operating activities							(20,702		)	4,325
Investing activities:
Payments for purchase of short- and long-term marketable securities	(51,615		)	(89,012		)	—			(29,849		)
Proceeds from sales or maturities of short- and long-term marketable securities	145,298			89,583
Proceeds from sales or maturities of securities							51,310			49,000
Payments for purchase of property and equipment	(8,863		)	(14,165		)	(2,683		)	(4,305		)
Payments for acquisition of patents	(6,850		)	—			—			(4,250		)
Other investing, net	3			15			—			3
Net cash provided by (used in) investing activities	77,973			(13,579		)
Net cash provided by investing activities							48,627			10,599
Financing activities:
Principal payments on long-term debt	(95,963		)	(3,500		)	(296,788		)	(46,588		)
Payments for dividends	(32,545		)	(44,348		)	—			(22,544		)
Payments for withholding taxes related to net settlement of restricted awards	(3,095		)	(4,185		)	(643		)	(1,397		)
Proceeds from employee stock purchase plan	6,952			7,575			5,239			6,952
Net cash used in financing activities	(124,651		)	(44,458		)	(292,192		)	(63,577		)
Effect of exchange rate changes on cash and cash equivalents	207			(530		)	(933		)	(120		)
Net (decrease) increase in cash and cash equivalents	(14,621		)	3,225
Net decrease in cash and cash equivalents							(265,200		)	(48,773		)
Cash and cash equivalents at beginning of period	161,955			128,965			373,719			161,955
Cash and cash equivalents at end of period	$	147,334		$	132,190		$	108,519		$	113,182

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

TIVO CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation and Summary of Significant Accounting Policies

Description of Business

On April 28, 2016, Rovi Corporation ("Rovi") and TiVo Inc. (renamed TiVo Solutions Inc. ("TiVo Solutions")) entered into an Agreement and Plan of Merger (the “Merger Agreement”) for Rovi to acquire TiVo Solutions in a cash and stock transaction (the "TiVo Acquisition"). Following consummation of the TiVo Acquisition on September 7, 2016 (the "TiVo Acquisition Date"), TiVo Corporation (the "Company" or "TiVo"), a Delaware corporation founded in April 2016 as Titan Technologies Corporation and then a wholly-owned subsidiary of Rovi, owns both Rovi and TiVo Solutions.

The Company is a global leader in ~~media~~bringing entertainment together, making entertainment content easy to find, watch and ~~entertainment products that power consumer entertainment experiences and enable its customers to deepen and further monetize their audience relationships. The Company~~enjoy. TiVo provides a broad set of cloud-based services, embedded software solutions and intellectual property ~~cloud-based services~~that bring entertainment together for the watchers, creators and ~~set-top box ("STB") solutions that enable people~~advertisers. For the creators and advertisers, TiVo's products deliver a passionate group of watchers to ~~find~~increase viewership and ~~enjoy~~engagement across online video, ~~television ("TV"), movies~~TV and ~~music~~other entertainment ~~including~~viewing platforms. Our products and innovations are protected by broad portfolios of licensable technology patents. These portfolios cover many aspects of content discovery, ~~through device-embedded and cloud-based user experience ("UX"), including interactive program guides (“IPGs”),~~ digital video ~~recorders~~recorder ("~~DVRs"~~DVR"), natural language voice and text search, cloud-based recommendations services and the Company's extensive entertainment metadata (i.e., descriptive information, promotional images or other content that describes or relates to television shows, videos, movies, sports, music, books, games or other entertainment content). The Company's integrated platform includes software and cloud-based services that provide an all-in-one approach for navigating a fragmented universe of content by seamlessly combining live, recorded, video-on-demand ("VOD") and over-the-top ("OTT") ~~content into one intuitive user interface with simple universal search, discovery,~~experiences, multi-screen viewing, mobile device video experiences, entertainment personalization, voice interaction, social and ~~recording, to create a unified viewing experience. The Company distributes its products through service provider relationships, integrated into third-party devices~~interactive applications, data analytics solutions and directly to retail consumers. The Company also offers advanced media and advertising solutions, including viewership data, sponsored discovery and in-guide advertising, which enable advanced audience targeting and measurement in linear and OTT TV advertising. Solutions are sold globally to cable, satellite, consumer electronics ("CE"), entertainment, media and online distribution companies, and, in the United States, the Company sells a suite of DVR and whole home media products and services directly to retail consumers.

On May 9, 2019, the Company announced that its Board of Directors unanimously approved a plan to separate the Product and Intellectual Property Licensing businesses ~~(the “Separation”)~~ into separately traded public ~~companies.~~companies (the “TiVo Separation”). The TiVo Separation iswas expected to be completed through a dividend of newly issued shares of the common stock of a Company subsidiary that ~~will~~would hold the Product business (“ProductCo”), which was targeted for completion by April 2020.

On December 18, 2019, the Company and Xperi Corporation (“Xperi”) entered into an Agreement and Plan of Merger and Reorganization (the “Xperi Merger Agreement”), pursuant to which TiVo and Xperi have agreed, subject to the terms and conditions of the Xperi Merger Agreement, to effect an all-stock, merger of equals strategic combination of their respective businesses (the "Xperi Combination"). The ~~Company intends that~~board of directors of each of TiVo and Xperi have approved the ~~Separation will be completed in a manner generally intended~~Xperi Merger Agreement and the transactions contemplated thereby. The Xperi Combination is subject to ~~qualify as tax-free to~~certain customary approvals, including the approval of shareholders of TiVo ~~Corporation’s stockholders for U.S. federal income tax purposes. The Separation,~~and Xperi, and is expected to be completed in the first half of 2020, is subject to certain conditions, including, among others, obtaining final approval from TiVo Corporation's Board of Directors, receipt of a favorable opinion and/or rulings with respect to the tax-free nature of the transaction for federal income tax purposes and the U.S. Securities and Exchange Commission declaring ProductCo's Registration Statement effective.by June 30, 2020.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted in accordance with such rules and regulations. However, the Company believes the disclosures made are adequate to make the information not misleading. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are considered necessary to present fairly the results for the periods presented.

The information contained in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto and other disclosures contained in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. The Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive Loss, Condensed Consolidated Statements of Stockholders' Equity and the Condensed Consolidated Statements of Cash Flows for the interim periods presented are not necessarily indicative of the results to be expected for the year ended December 31, ~~2019,~~2020, for any future year, or for any other future interim period.

The accompanying Condensed Consolidated Financial Statements include the accounts of TiVo Corporation and subsidiaries and affiliates in which the Company has a controlling financial interest after the elimination of intercompany accounts and transactions.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and related disclosures as of the date of the financial statements and the results of operations for the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, long-lived asset impairment, including goodwill and intangible assets, equity-based compensation and income taxes. Actual results may differ from those estimates.

~~Right-of-Use Assets~~Risks and ~~Lease Liabilities~~Uncertainties

The recent outbreak of the Coronavirus Disease 2019, or COVID-19, which has been declared by the World Health Organization to be a “public health emergency of international concern,” is impacting worldwide economic activity. As a public health epidemic, COVID-19 poses the risk that the Company or its workforce, suppliers and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. The COVID-19 pandemic has recently had adverse impacts on many aspects of the Company's operations, directly and indirectly, including its workforce, consumer behavior, distribution, suppliers and the market generally. For example, in March 2020, the Company announced its workforce would work remotely as a result of the pandemic as it reviewed its processes related to workplace safety, including social distancing and sanitation practices recommended by the Centers for Disease Control and Prevention. As the Company generates the substantial majority of its revenue from pay TV operators and others in the video delivery industry, to date COVID-19 has not had a significant impact on the Company’s revenue. However, the impacts of the COVID-19 pandemic could cause delays in obtaining new customers and executing renewals and could also impact the Company's consumer business, including sales of TiVo Stream 4K which was recently launched. Further, the global financial markets have experienced increased volatility and have declined since December 31, 2019. The Condensed Consolidated Financial Statements as of and for the three months ended March 31, 2020 reflect management's assumptions about the economic environment and the Company's ability to realize certain assets, including long-lived assets, such as goodwill, accounts receivable and investments in other companies. Although the response to the COVID-19 pandemic is expected to be temporary, such conditions in the global financial markets and business activities could lead to further impairment of our long-lived assets, including goodwill, increased credit losses and impairments of investments in other companies.

~~At inception~~Management believes the Company's Cash and cash equivalents and anticipated operating cash flow, supplemented with access to capital markets as necessary, are generally sufficient to support its operating businesses, capital expenditures, restructuring activities, interest payments and income tax payments, in addition to investments in future growth opportunities and activities related to the Xperi Combination for at least the next twelve months. The Company is taking steps to manage its resources by reducing and/or deferring capital expenditures, inventory purchases and operating expenses to mitigate the adverse impact of the COVID-19 pandemic. Future impacts of the COVID-19 pandemic may require further actions by the Company to improve its cash position, including but not limited to, implementing employee furloughs and foregoing capital expenditures and other discretionary expenses.

Allowance for Credit Losses

The Company performs ongoing credit evaluations of its customers. The Company reviews its accounts receivable to identify potential collection issues. A specific allowance for credit losses is recorded when warranted by specific customer circumstances, such as in the case of a bankruptcy filing, a deterioration in the customer's operating results or financial position or the past due status of a receivable based on its contractual payment terms. If there are subsequent changes in circumstances related to the specific customer, adjustments to recoverability estimates are recorded. For accounts receivable not specifically assessed, including unbilled receivables, an allowance for credit losses is recorded using the immediate reversion methodology for forecasting expected losses based on historical loss experience, current conditions and reasonable and supportable forecasts that affect collectability and other factors. Accounts receivable deemed uncollectible are charged off when collection efforts have been exhausted.

Inventory

Inventories consist primarily of finished DVRs and accessories and are stated at the lower of cost or net realizable value on an aggregate basis. Cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis. Adjustments to reduce the carrying amount of inventory to the lower of cost or net realizable value are made, if required, for excess or obsolete goods, which includes a review of, among other factors, demand requirements and market conditions. As of March 31, 2020 and December 31, 2019, substantially all inventory is comprised of finished goods.

Goodwill

Goodwill represents the excess of cost over fair value of the net assets of an ~~agreement,~~acquired business. The recoverability of goodwill is assessed at the ~~agreement~~reporting unit level, which is ~~reviewed~~either the operating segment or one level below. Goodwill is evaluated for potential impairment annually, as of the beginning of the fourth quarter, and whenever events or changes in circumstances indicate its carrying amount may not be recoverable.

Qualitative factors are first assessed to determine ifwhether events or changes in circumstances indicate it is ~~or contains~~more-likely-than-not that the fair value of a ~~lease.~~reporting unit is less than its carrying amount. If, ~~an agreement~~based on the qualitative assessment, it is ~~or contains~~considered more-likely-than-not that the fair value of a ~~lease,~~reporting unit is less than its carrying amount, then a quantitative impairment test is performed. In the ~~Company recognizes a Right-of-use asset, representing~~quantitative impairment test, the ~~right~~fair value of each reporting unit is compared to ~~use an underlying asset for the lease term, and a Lease liability, representing the obligation to make lease payments arising from a lease.~~its carrying amount.

~~Right-of-use assets~~The fair value of the Product reporting unit and ~~Lease liabilities are measured~~the Intellectual Property Licensing reporting unit is estimated using an income approach. Under the income approach, the fair value of a reporting unit is estimated based on the present value of future cash flows and considers projected revenue growth rates, future operating margins, income tax rates and economic and market conditions, as well as risk-adjusted discount rates. The carrying amount of a reporting unit is determined by assigning assets and liabilities, including goodwill and intangible assets, to the ~~lease payments over~~reporting unit. If the ~~lease term. The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The present~~fair value of ~~future lease payments~~a reporting unit exceeds its carrying amount, goodwill is ~~calculated utilizing the discount rate implicit in the lease.~~not impaired. If the ~~discount rate implicit in the lease is not readily determinable, the present~~fair value of ~~future lease payments~~a reporting unit is calculated utilizing the Company’s incremental borrowing rate. Right-of-use assets and Lease liabilities are subject to adjustment in the event of modifications to lease terms, changes in the probability thatless than its carrying amount, an ~~option to extend or terminate a lease would be exercised and other factors. In addition, Right-of-use assets are periodically reviewed for impairment.~~

Certain of the Company’s lease agreements require variable payments, such as inflation-indexed measures. When a lease requires an indexed payment, Right-of-use assets and Lease liabilities are measured based on the variable rate in effect at the measurement date. All other variable fees, such as increases in lessor operating costs and usage-based fees, are excluded from the calculation of the Right-of-use assets and Lease liabilities and are expensed as incurred.

The Company has lease agreements that contain both lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) and non-lease components (e.g., common-area maintenance costs). The Company applies a practical expedient to combine lease components and non-lease components into a single lease component for recognition and measurement purposes.

Lease expense includes amortization of the Right-of-use assets and accretion of the Lease liabilities. Amortization of the Right-of-use assets is calculated as the periodic lease cost less accretion of the lease liability. The amortization period for Right-of-use assets is limitedimpairment loss equal to the ~~expected lease term. For operating leases, lease expense~~difference is recognized in the Condensed Consolidated Statements of Operations as an operating expense over the lease term on a straight-line basis. For financing leases, amortization of the Right-of-use asset is recognized as an operating expense in the Condensed Consolidated Statements of Operations over the lease term separately from accretion of the Lease liability.

The Company applies 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 and lease expense for these leases is recognized as incurred.recognized.

Recent Accounting Pronouncements

Standards ~~Recently~~ Adopted

In February 2016, the Financial Accounting Standards Board ("FASB") issued a new accounting standard for leases. The new lease accounting standard generally requires the recognition of operating and financing lease liabilities and corresponding right-of-use assets on the statement of financial position. The Company adopted the provisions of the new lease accounting standard on January 1, 2019 using the modified retrospective transition approach and certain practical expedients as described in Note 10. On adoption, the Company recognized the present value of its existing minimum lease payments as a $66.7 million Right-of-use asset and an $81.9 million Lease liability. The difference between the Right-of-use asset and the Lease liability on adoption primarily arises from previously recorded deferred rent, which was effectively reclassified to the Right-of-use asset on adoption. As a result, there was no impact on Accumulated deficit. 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.

In March 2017, the FASB shortened the amortization period for certain investments in callable debt securities held at a premium to the earliest call date. Application of the shortened amortization period was effective for the Company beginning on January 1, 2019 on a modified retrospective basis. The application of the shortened amortization period did not have a material effect on the Company's Condensed Consolidated Financial Statements.

In February 2018, the FASB issued guidance on the reclassification of certain income tax effects from accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act of 2017 (the "Tax Act of 2017"). Application of the reclassification guidance was effective for the Company beginning on January 1, 2019. On adoption, the Company made an accounting policy election to use the specific identification method to release income tax effects from Accumulated other comprehensive loss. The Company also made an accounting policy election not to reclassify the stranded tax effects of the Tax Act of 2017 from Accumulated other comprehensive loss to Accumulated deficit. The application of the reclassification guidance did not have a material effect on the Company's Condensed Consolidated Financial Statements.

~~Standards Pending Adoption~~2020

In August 2018, the FASB modified the requirements for capitalizing costs incurred to implement a hosting arrangement that is a service contract. The modified requirements were intended to align the cost capitalization requirements for hosting arrangements with the cost capitalization requirements for internal-use software. The Company adopted the modified ~~guidance is effective for the Company beginning~~requirements on January 1, 2020 ~~with early adoption permitted. The guidance can be applied prospectively to all arrangements entered into or materially modified after~~using the ~~effective date or using a~~ retrospective transition approach. ~~The~~On adoption, the Company ~~does not expect application~~reclassified $0.5 million of ~~the modified requirements for capitalizing~~net capitalized costs that were incurred to implement a hosting arrangement from Property and equipment, net to ~~have a material effect on its Condensed Consolidated Financial Statements.~~Other assets.

In June 2016, the FASB issued updated guidance that requires entities to use a current expected credit loss model to measure credit-related impairments for financial instruments held at amortized cost. The current expected credit loss model is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect collectability. Current expected credit losses, and subsequent adjustments, represent an estimate of lifetime expected credit losses that are recorded as an allowance deducted from the amortized cost of the financial instrument. The updated guidance also amends the other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments for credit-related losses through an allowance and eliminating the length of time a security has been in an unrealized loss position as a consideration in the determination of whether a credit loss exists. The ~~updated~~Company adopted the amended credit loss guidance on January 1, 2020 using the modified retrospective transition approach. On adoption, the Company recognized a cumulative effect adjustment, net of tax effects, that increased both the Accumulated deficit and the allowance for credit losses by $1.5 million as presented in Note 3, primarily related to establishing an allowance for credit losses on contract assets for which revenue has been recognized in excess of the amount billed to the customer. Results for the periods beginning after December 31, 2019 are presented under the amended credit loss guidance, while prior period amounts were not restated and continue to be reported in accordance with the Company’s previous allowance for doubtful accounts policies.

Standards Pending Adoption

In December 2019, the FASB issued guidance to simplify the accounting for income taxes by removing certain exceptions to general principles, clarifying requirements and including amendments to improve consistent application of the guidance. The guidance specifically removes the exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, such as discontinued operations or other comprehensive income. The guidance also requires an entity to recognize a franchise tax that is partially based on income as an income-based tax and to account for any other amounts incurred as a non-income-based tax. The guidance is effective for the Company beginning on January 1, ~~2020 and is effective using a modified retrospective transition approach for the provisions related to application of the current expected credit loss model to financial instruments and~~2021 using a prospective ~~transition approach for the provisions related to credit losses on available-for-sale debt securities.~~approach. Early ~~application~~adoption is permitted. The Company is evaluating the effect of application on its Condensed Consolidated Financial Statements.

(2) ~~Discontinued Operations~~

In the three and six months ended June 30, 2018, the Company recognized Income from discontinued operations, net of tax, of $2.3 million and $3.6 million, respectively, as a result of the expiration of certain indemnification obligations and the execution of settlement agreements during the period associated with previous business disposals.

~~(3)~~ Financial Statement Details

~~Inventory~~

~~Components of Inventory were as follows (in thousands):~~

June 30, 2019 December 31, 2018
Raw materials $ 641
$ 864
Finished goods 3,136
6,585
Inventory $ 3,777
$ 7,449

Property and equipment, net

Components of Property and equipment, net were as follows (in thousands):


	June 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Computer software and equipment	$	152,863		$	148,935		$	162,017		$	160,893
Leasehold improvements	50,377			47,431			45,246			46,383
Furniture and fixtures	9,736			9,494			9,991			10,054
Property and equipment, gross	212,976			205,860			217,254			217,330
Less: Accumulated depreciation and amortization	(162,005		)	(152,274		)	(173,548		)	(169,066		)
Property and equipment, net	$	50,971		$	53,586		$	43,706		$	48,264

Accounts payable and accrued expenses

Components of Accounts payable and accrued expenses were as follows (in thousands):


	June 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Accounts payable	$	15,155	$	2,180	$	8,881	$	11,801
Accrued compensation and benefits	33,539		46,466		20,015		44,456
Other accrued liabilities	62,022		56,335		52,531		69,992
Accounts payable and accrued expenses	$	110,716	$	104,981	$	81,427	$	126,249

~~(4)~~(3) Revenues

Revenue Details

The following information depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors by disaggregating revenue by significant customer, contract-type, geographic area and product offering (presented in Note ~~15), significant customer, contract-type and geographic area.~~13). This information includes revenue recognized from contracts with customers and revenue from other sources, including out-of-license settlements.

~~Customers representing 10% or more~~During the three months ended March 31, 2020 and 2019, AT&T Inc. ("AT&T") represented 11%and 11% of Total Revenues, net, ~~were as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
2019 2018 2019 2018
Shaw Communications 15 % (a)
(a)
(a)
AT&T Inc. ("AT&T") 10 % 10 % 11 % 10 %
Virgin Media (a)
(a)
(a)
10 %

~~(a) Customer below~~respectively. Other than AT&T, no customer accounted for more than 10% of Total Revenues, net ~~for~~during the ~~period.~~

three months ended March 31, 2020 and 2019. Substantially all revenue from ~~Shaw Communications and~~ AT&T is reported in the Intellectual Property Licensing segment. ~~Substantially all revenue from Virgin Media is reported in the Product segment.~~

By segment, the pattern of revenue recognition was as follows (in thousands):

Three Months Ended June 30, 2019 Three Months Ended June 30, 2018
Product Intellectual Property Licensing Total Revenues, net Product Intellectual Property Licensing Total Revenues, net
Goods and services transferred at a point in time $ 17,353
$ 30,303
$ 47,656
$ 20,675
$ 27,330
$ 48,005
Goods and services transferred over time 67,854
36,179
104,033
72,112
42,594
114,706
Out-of-license settlements —
24,483
24,483
—
10,149
10,149
Total Revenues, net $ 85,207
$ 90,965
$ 176,172
$ 92,787
$ 80,073
$ 172,860


	Six Months Ended June 30, 2019						Six Months Ended June 30, 2018						Three Months Ended March 31, 2020						Three Months Ended March 31, 2019
	Product		Intellectual Property Licensing		Total Revenues, net		Product		Intellectual Property Licensing		Product		Product		Intellectual Property Licensing		Total Revenues, net		Product		Intellectual Property Licensing		Total Revenues, net
Goods and services transferred at a point in time	$	38,347	$	58,431	$	96,778	$	57,476	$	55,449	$	112,925	$	18,620	$	32,674	$	51,294	$	20,994	$	28,127	$	49,121
Goods and services transferred over time	138,163		72,879		211,042		152,163		85,444		237,607		67,856		37,211		105,067		70,309		36,701		107,010
Out-of-license settlements	—		26,587		26,587		—		12,165		12,165		—		3,500		3,500		—		2,104		2,104
Total Revenues, net	$	176,510	$	157,897	$	334,407	$	209,639	$	153,058	$	362,697	$	86,476	$	73,385	$	159,861	$	91,303	$	66,932	$	158,235

Revenue by geographic area was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended March 31,
	2019		2018		2019		2018		2020		2019
United States	$	106,836	$	117,176	$	214,674	$	236,111	$	116,892	$	107,838
Canada	32,488		11,283		42,547		20,376
United Kingdom	7,390		13,718		13,586		47,230
Rest of the world	29,458		30,683		63,600		58,980		42,969		50,397
Total Revenues, net	$	176,172	$	172,860	$	334,407	$	362,697	$	159,861	$	158,235

Revenue by geographic area is predominately based on the end user's location. ~~Other than the U.S. and Canada, no country accounted for more than 10% of Total Revenues, net for the three and six months ended June 30, 2019.~~ Other than the U.S., no country accounted for more than 10% of Total Revenues, net for the three months ended ~~June 30, 2018. Other than~~March 31, 2020 and 2019.

Adoption of Amended Credit Loss Guidance

The Company adopted the ~~U.S.~~provisions of the amended credit loss guidance as described in Note 1 using the modified retrospective transition approach on January 1, 2020. As such the amended credit loss guidance was applied to accounts receivable not specifically reserved and ~~United Kingdom, no country accounted~~contract assets for ~~more than 10%~~which revenue has been recognized in excess of ~~Total Revenues, net~~the amount billed to the customer as of December 31, 2019. Results for periods beginning after December 31, 2019 are presented under the ~~six months ended June 30, 2018.~~amended credit loss guidance, while prior period amounts were not restated and continue to be reported in accordance with the previous allowance for doubtful accounts policies.

The cumulative effect of these changes on the Condensed Consolidated Balance Sheets on adoption was as follows (in thousands):



	Balance as of			Cumulative Effect Adjustment			Balance as of
Effect of adoption	December 31, 2019			Cumulative Effect Adjustment			January 1, 2020
Accounts receivable, net	$	158,016		$	(1,463	)	$	156,553
Deferred tax liabilities, net	34,231			48			34,279
Accumulated other comprehensive loss	(3,612		)	(37		)	(3,649		)
Accumulated deficit	(2,120,654		)	(1,452		)	(2,122,106		)

Accounts receivable, net

Components of Accounts receivable, net were as follows (in thousands):


	June 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Accounts receivable, gross	$	180,733		$	155,708		$	168,898		$	160,139
Less: Allowance for doubtful accounts	(2,920		)	(2,842		)
Less: Allowance for credit losses							(4,280		)	(2,123		)
Accounts receivable, net	$	177,813		$	152,866		$	164,618		$	158,016

As of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, AT&T represented ~~25%~~ 18%and ~~18%~~19% of Accounts receivable, net, respectively. Other than AT&T, no customer accounted for more than 10% of Accounts receivable, net as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018.~~2019.

Allowance for Credit Losses



	Three Months Ended March 31,
	2020			2019
Balance at beginning of period	$	(2,123	)	$	(2,842	)
Cumulative effect adjustment	(1,463		)	—
Provision for bad debt	(965		)	(68		)
Deductions and write-offs, net	271			424
Balance at end of period	$	(4,280	)	$	(2,486	)

Contract Balances

Contract assets primarily consist of revenue recognized in excess of the amount billed to the customer, limited to net realizable value and deferred engineering costs for significant software customization or modification and set-up services to the extent deemed recoverable. Substantially all unbilled amounts are expected to be invoiced to the customer within the next 12

months. Contract assets also include the incremental costs of obtaining a contract with a customer,

principally sales commissions when the renewal commission is not commensurate with the initial commission. Contract assets were recorded in the Condensed Consolidated Balance Sheets as follows (in thousands):


	June 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Accounts receivable, net	$	55,396	$	35,115	$	67,479	$	56,862
Prepaid expenses and other current assets	2,166		1,654		3,420		2,600
Other long-term assets	10,645		8,532		10,878		11,514
Total contract assets, net	$	68,207	$	45,301	$	81,777	$	70,976

NoNaN impairment losses were recognized with respect to contract assets for the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 and ~~2018.~~2019.

Contract liabilities are mainly comprised of unearned revenue related to consumer lifetime subscriptions for the TiVo service, multi-period licensing or cloud-based services and other offerings for which the Company is paid in advance of when control of the promised good or service is transferred to the customer. Unearned revenue also includes amounts related to professional services to be performed in the future. For the three ~~and six~~ months ended ~~June 30, 2019,~~March 31, 2020, the Company recognized ~~$10.4~~$16.1 million ~~and $24.4 million, respectively,~~ of revenue that had been included in Unearned revenue as of December 31, ~~2018.~~2019.

As of ~~June 30, 2019,~~March 31, 2020, approximately ~~$714.5~~$604.8 million of revenue is expected to be recognized from unsatisfied performance obligations that are primarily related to fixed-fee intellectual property and software-as-a-service agreements, which is expected to be recognized as follows: ~~16%~~24% in the remainder of ~~2019, 24% in~~ 2020, ~~17%~~22% in 2021, 16% in 2022, 14% in 2023, 12% in ~~2022, 11% in 2023~~2024 and ~~20%~~12% thereafter.

~~(5)~~(4) Investments

~~The amortized cost~~ and ~~fair value of cash, cash equivalents and marketable securities by significant investment category were as follows (in thousands):~~

June 30, 2019
Amortized Cost Unrealized
Gains Unrealized
Losses Fair Value
Cash $ 40,398
$ —
$ —
$ 40,398
Cash equivalents - Money market funds 102,453
—
—
102,453
Cash equivalents - Corporate debt securities 4,483
—
—
4,483
Cash and cash equivalents $ 147,334
$ —
$ —
$ 147,334

Corporate debt securities $ 51,882
$ 77
$ (11 ) $ 51,948
U.S. Treasuries / Agencies 87,744
287
(30 ) 88,001
Marketable securities $ 139,626
$ 364
$ (41 ) $ 139,949
Cash, cash equivalents and marketable securities $ 287,283

December 31, 2018
Amortized Cost Unrealized
Gains Unrealized
Losses Fair Value
Cash $ 40,125
$ —
$ —
$ 40,125
Cash equivalents - Money market funds 121,830
—
—
121,830
Cash and cash equivalents $ 161,955
$ —
$ —
$ 161,955

Corporate debt securities $ 114,159
$ 1
$ (400 ) $ 113,760
U.S. Treasuries / Agencies 118,497
70
(164 ) 118,403
Marketable securities $ 232,656
$ 71
$ (564 ) $ 232,163
Cash, cash equivalents and marketable securities $ 394,118

~~As of June 30, 2019, the amortized cost and fair value of marketable securities, by contractual maturity, were as follows (in thousands):~~

Amortized Cost Fair Value
Due in less than 1 year $ 114,047
$ 114,183
Due in 1-2 years 25,579
25,766
Total $ 139,626
$ 139,949

As of June 30, 2019 and December 31, 2018, Other long-term assets include equity securities accounted for under the equity method with a carrying amount of $3.1 million and $2.2 million, respectively, and equity securities without a readily determinable fair value with a carrying amount of $1.5 millionand $1.5 million, respectively. No impairments or adjustments to the carrying amount of the Company's equity securities without a readily determinable fair value were recognized in the three and six months ended June 30, 2019 and 2018.

~~(6)~~ Fair Value Measurements

Fair Value Hierarchy

The Company uses valuation techniques that are based on observable and unobservable inputs to measure fair value. Observable inputs are developed using publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use. Fair value measurements are classified in a hierarchy that gives the highest priority to observable inputs and the lowest priority to unobservable inputs. Assets and liabilities are classified in a fair value hierarchy based on the lowest level input that is significant to the fair value measurement in its entirety:


•	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 six~~ months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ there were no transfers between levels of the fair value hierarchy.

Recurring Fair Value Measurements

Assets

The amortized cost and ~~liabilities~~fair value of cash, cash equivalents and marketable securities by significant investment

category, as well as their classification on the Condensed Consolidated Balance Sheets were as follows (in thousands):



As of December 31, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Cash and Cash Equivalents		Short-Term Investments
Cash	$	119,349	$	—	$	—		$	119,349	$	119,349	$	—
Level 1:
Money market funds	226,111		—		—			226,111		226,111		—
Level 1 Subtotal	226,111		—		—			226,111		226,111		—
Level 2:
Corporate debt securities	40,522		—		(1		)	40,521		16,280		24,241
U.S. Treasuries / Agencies	39,009		32		(10		)	39,031		11,979		27,052
Level 2 Subtotal	79,531		32		(11		)	79,552		28,259		51,293
Total assets	$	424,991	$	32	$	(11	)	$	425,012	$	373,719	$	51,293

As of March 31, 2020, Cash and cash equivalents consisted of $43.8 million in cash and $64.7 million in Money market funds classified in Level 1 of the fair value hierarchy.

As of March 31, 2020 and December 31, 2019, Other long-term assets include equity securities accounted for under the equity method with a carrying amount of $4.0 million and $3.7 million, respectively, and equity securities without a readily determinable fair value with a carrying amount of $0.1 millionand $0.4 million, respectively. During the three months ended March 31, 2020, an impairment loss of $0.3 million was recognized on the Company's equity securities without a readily determinable fair value. NaNimpairments or adjustments to the carrying amount of the Company's equity securities without a readily determinable fair value were recognized in the three months ended March 31, 2019.

Liabilities

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):

June 30, 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 $ 102,453
$ 102,453
$ —
$ 121,830
$ 121,830
$ —
Corporate debt securities 4,483
4,483
—

Short-term marketable securities
Corporate debt securities 51,948
—
51,948
90,753
—
90,753
U.S. Treasuries / Agencies 62,236
—
62,236
68,203
—
68,203
Prepaid expenses and other current assets
Interest rate swaps —
—
—
173
—
173
Long-term marketable securities

Corporate debt securities —
—
—
23,007
—
23,007
U.S. Treasuries / Agencies 25,765
—
25,765
50,200
—
50,200
Total Assets $ 246,885
$ 106,936
$ 139,949
$ 354,166
$ 121,830
$ 232,336
Liabilities
Other long-term liabilities
Interest rate swaps $ (7,538 ) $ —
$ (7,538 ) $ (3,012 ) $ —
$ (3,012 )
Total Liabilities $ (7,538 ) $ —
$ (7,538 ) $ (3,012 ) $ —
$ (3,012 )



	March 31, 2020			December 31, 2019
	Significant Other Observable Inputs (Level 2)			Significant Other Observable Inputs (Level 2)
Liabilities
Other long-term liabilities
Interest rate swaps	$	(10,294	)	$	(6,120	)
Total Liabilities	$	(10,294	)	$	(6,120	)

~~Rollforward of Level 3~~

Nonrecurring Fair Value Measurements

~~Changes~~As part of the quantitative interim goodwill impairment test performed as of March 31, 2020, the Product and Intellectual Property Licensing reporting units were measured at fair value, resulting in a Goodwill impairment charge of $171.6 million. The unobservable inputs used to estimate the fair value of ~~assets~~the Product and ~~liabilities~~Intellectual Property Licensing reporting units include projected revenue growth rates, future operating margins and risk-adjusted discount rates, and, accordingly, these measurements would be classified in Level 3 of the fair value ~~hierarchy were as follows (in thousands):~~

Three Months Ended June 30, 2018 Six Months Ended June 30, 2018
Cubiware Contingent Consideration Auction Rate Securities Cubiware Contingent Consideration
Balance at beginning of period $ (3,204 ) $ 10,584
$ (2,234 )
Sales —
(10,715 ) —
Loss included in earnings (395 ) (85 ) (1,365 )
Unrealized loss reclassified on sale —
216
—
Balance at end of period $ (3,599 ) $ —
$ (3,599 )

~~For~~hierarchy. The Goodwill impairment charge and the ~~three~~valuation techniques used to estimate reporting unit fair values are more fully described in Note 1 and six months ended June 30, 2018, the 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 $0.3 million and $1.2 million loss and in Interest expense related to accretion of the liability to future value of $0.1 million and $0.2 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.Note 5.

Valuation Techniques

The fair value of marketable 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 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):


	June 30, 2019				December 31, 2018				March 31, 2020				December 31, 2019
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
2020 Convertible Notes	$	285,914	$	286,888	$	326,640	$	316,538	$	—	$	—	$	292,699	$	292,419
2021 Convertible Notes	48		48		48		48		48		48		48		48
Term Loan Facility B	619,622		607,919		665,449		633,404
2019 Term Loan Facility									692,269		734,606		692,792		736,110
Total Long-term debt	$	905,584	$	894,855	$	992,137	$	949,990	$	692,317	$	734,654	$	985,539	$	1,028,577


(a)	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.

~~(7) Goodwill and~~(5) Intangible Assets, Net and Goodwill

Intangible Assets, Net

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



	March 31, 2020
	Gross		Accumulated Amortization			Net
Finite-lived intangible assets
Developed technology and patents	$	1,064,962	$	(878,295	)	$	186,667
Existing contracts and customer relationships	402,186		(220,948		)	181,238
Content databases and other	57,466		(52,847		)	4,619
Trademarks / Tradenames	8,300		(8,300		)	—
Total finite-lived intangible assets	1,532,914		(1,160,390		)	372,524
Indefinite-lived intangible assets
TiVo Tradename	14,000		—			14,000
Total intangible assets	$	1,546,914	$	(1,160,390	)	$	386,524



	December 31, 2019
	Gross		Accumulated Amortization			Net
Finite-lived intangible assets
Developed technology and patents	$	1,065,506	$	(855,934	)	$	209,572
Existing contracts and customer relationships	402,695		(216,148		)	186,547
Content databases and other	57,410		(52,475		)	4,935
Trademarks / Tradenames	8,300		(8,300		)	—
Total finite-lived intangible assets	1,533,911		(1,132,857		)	401,054
Indefinite-lived intangible assets
TiVo Tradename	14,000		—			14,000
Total intangible assets	$	1,547,911	$	(1,132,857	)	$	415,054

Patent Acquisitions

During the three months ended March 31, 2019, the Company acquired a portfolio of patents for $4.3 million in cash. The Company accounted for the patent portfolio acquired as an asset acquisition and is amortizing the purchase price over a weighted average period of ten years.

Estimated Amortization of Finite-Lived Intangible Assets

As of March 31, 2020, estimated amortization expense for finite-lived intangible assets was as follows (in thousands):



Remainder of 2020	$	84,228
2021	69,577
2022	41,913
2023	24,860
2024	21,859
Thereafter	130,087
Total	$	372,524

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 96
—
96
June 30, 2019 $ 253,107
$ 1,291,332
$ 1,544,439



	Product			Intellectual Property Licensing			Total
December 31, 2019	$	153,226		$	1,036,599		$	1,189,825
Impairment	(76,070		)	(95,502		)	(171,572		)
Foreign currency translation	57			—			57
March 31, 2020	$	77,213		$	941,097		$	1,018,310

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. The process of evaluating goodwill for potential impairment is subjective and requires significant estimates, assumptions and

judgments particularly related to the identification of reporting units, the assignment of assets and liabilities to reporting units

and estimating the fair value of each reporting unit.

~~Intangible Assets, Net~~

~~Intangible assets, net consisted~~Due to significant and sustained decline in the trading price of ~~the following (in thousands):~~

June 30, 2019
Gross Accumulated
Amortization Net
Finite-lived intangible assets
Developed technology and patents $ 1,058,531
$ (810,553 ) $ 247,978
Existing contracts and customer relationships 402,799
(205,987 ) 196,812
Content databases and other 57,308
(51,731 ) 5,577
Trademarks / Tradenames 8,300
(8,300 ) —
Total finite-lived intangible assets 1,526,938
(1,076,571 ) 450,367
Indefinite-lived intangible assets
TiVo Tradename 14,000
—
14,000
Total intangible assets $ 1,540,938
$ (1,076,571 ) $ 464,367

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

~~Patent Acquisitions~~

InTiVo's common stock during the three ~~and six~~ months ended ~~June 30,~~March 31, 2020, management concluded sufficient indicators of potential impairment were identified and that it was more-likely-than-not that goodwill was impaired and that a quantitative impairment test should be performed as of March 31, 2020 for the Product and Intellectual Property Licensing reporting units. Although the long-range forecasts for the Product and Intellectual Property Licensing reporting units did not materially change from those used in performing the quantitative impairment test as of December 31, 2019, the ~~Company acquired patent portfolios for $2.6~~fair value decreased due to the significant and sustained decline in the trading price of TiVo's common stock. Based on this decline in fair value, a Goodwill impairment charge of $171.6 million was recognized during the three months ended March 31, 2020, of which $76.1 million related to the Product reporting unit and ~~$6.9~~$95.5 million ~~in cash. The Company accounted for~~related to the ~~patent portfolios acquired as asset acquisitions and is amortizing the purchase price over a weighted average period of nine years.~~

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

~~As of June 30, 2019, estimated amortization expense for finite-lived intangible assets was as follows (in thousands):~~

Remainder of 2019 $ 56,014
2020 111,768
2021 68,999
2022 41,270
2023 24,072
Thereafter 148,244
Total $ 450,367

Intellectual Property Licensing reporting unit.

~~(8)~~(6) Restructuring and Asset Impairment Charges

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


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended March 31,
	2019		2018		2019		2018		2020		2019
Facility-related costs	$	433	$	186	$	433	$	288	$	65	$	—
Severance costs	2,157		592		3,970		2,784		674		1,813
Share-based payments	—		323		—		2,575
Asset impairment	86		—		86		—
Restructuring and asset impairment charges	$	2,676	$	1,101	$	4,489	$	5,647	$	739	$	1,813

Components of accrued restructuring costs were as follows (in thousands):


	June 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Facility-related costs	$	—	$	264
Severance costs	2,922		3,996		$	1,720	$	2,264
Accrued restructuring costs	$	2,922	$	4,260	$	1,720	$	2,264

The Company expects a substantial portion of the accrued restructuring costs to be paid by the end of ~~2019.~~2020.

2019 Transformation Plan

In connection with its May 2019 announcement of the TiVo Separation, the Company initiated certain activities to transform its business operations (the "2019 Transformation Plan"). As a result of the 2019 Transformation Plan, the Company is reducing headcount, moving certain positions to lower cost locations, rationalizing facilities and legal entities and terminating certain leases and other contracts. Restructuring activities related to the 2019 Transformation Plan for the three months ended March 31, 2020 were as follows (in thousands):



	Balance at Beginning of Period		Restructuring Expense		Cash Settlements			Non-Cash Settlements		Other		Balance at End of Period
Severance costs	$	603	$	597	$	(787	)	$	—	$	—	$	413
Total	$	603	$	597	$	(787	)	$	—	$	—	$	413

The process of completing the TiVo Separation and the Xperi Combination has been, and is expected to continue to be, time-consuming and involve significant costs and expenses. In addition to the restructuring costs associated with the 2019 Transformation Plan, the Company also recorded $4.0 million of Merger, separation and transformation costs that do not qualify as restructuring expenses during the three months ended March 31, 2020. These costs are primarily Selling, general and administrative costs and consist of employee-related costs, costs to establish certain stand-alone functions and information technology systems and other one-time transaction-related costs, including investment banking and consulting fees and other incremental costs directly associated with the TiVo Separation or the Xperi Combination.

Profit Improvement Plan

In February 2018, the Company announced its intention to explore strategic alternatives. In connection with exploring strategic alternatives, the Company initiated certain cost saving actions (the "Profit Improvement Plan"). As a result of the Profit Improvement Plan, the Company moved certain positions to lower cost locations, eliminated layers of management and rationalized facilities resulting in severance costs and the termination of certain leases and other contracts. Restructuring activities related to the Profit Improvement Plan for the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 were as follows (in thousands):


	Balance at Beginning of Period		Restructuring Expense		Cash Settlements			Non-Cash Settlements			Other			Balance at End of Period		Balance at Beginning of Period		Restructuring Expense		Cash Settlements			Non-Cash Settlements			Other			Balance at End of Period
Facility-related costs	$	—	$	433	$	—		$	(433	)	$	—		$	—	$	—	$	65	$	—		$	(65	)	$	—		$	—
Severance costs	3,857		3,970		(5,045		)	—			(2		)	2,780		1,522		77		(410		)	—			(24		)	1,165
Asset impairment	—		86		—			(86		)	—			—
Total	$	3,857	$	4,489	$	(5,045	)	$	(519	)	$	(2	)	$	2,780	$	1,522	$	142	$	(410	)	$	(65	)	$	(24	)	$	1,165

As a result of actions associated with the Profit Improvement Plan, Restructuring ~~and asset impairment~~ charges of ~~$5.3~~$1.8 million, primarily for severance-related benefits, were recognized in the ~~six~~three months ended ~~June 30, 2018.~~

March 31, 2019. The Profit Improvement Plan was substantially ~~completed~~complete as of ~~June 30,~~December 31, 2019.

Previous Restructuring Plans

~~Following completion~~As of ~~the TiVo Acquisition, TiVo Corporation began implementing integration plans that were intended to realize operational synergies between Rovi~~March 31, 2020 and ~~TiVo Solutions (the "TiVo Integration Restructuring Plan"). As a result~~December 31, 2019, Accrued restructuring costs of ~~these integration plans, the Company eliminated duplicative positions resulting in severance costs~~$0.1 million and ~~the termination of certain leases and other contracts. As a result of actions associated with the~~ ~~TiVo Integration Restructuring Plan, Restructuring and asset impairment charges of $0.4~~$0.1 million, ~~primarily facility-related costs, were recognized~~respectively, are included in the ~~six months ended June 30, 2018. The~~ ~~TiVo Integration Restructuring Plan~~ ~~was completed as of December 31, 2018.~~Condensed Consolidated Balance Sheets related to previous restructuring plans.

Prior to the TiVo Acquisition, Rovi and TiVo Solutions had each initiated restructuring plans. The Legacy Rovi Restructuring Plan and the Legacy TiVo Solutions Restructuring Plan were completed as of December 31, 2018.

~~(9)~~(7) Debt and Interest Rate Swaps

A summary of debt issued by or assumed by the Company was as follows (dollars in thousands):


				June 30, 2019				December 31, 2018							March 31, 2020				December 31, 2019
	Stated Interest Rate	Issue Date	Maturity Date	Outstanding Principal		Carrying Amount		Outstanding Principal		Carrying Amount		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	$	295,000	$	285,914	$	345,000	$	326,640	0.500%	March 4, 2015	March 1, 2020	$	—	$	—	$	295,000	$	292,699
2021 Convertible Notes	2.000%	September 22, 2014	October 1, 2021	48		48		48		48		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		619,622		668,500		665,449
2019 Term Loan Facility												Variable	November 22, 2019	November 22, 2024	713,210		692,269		715,000		692,792
Total Long-term debt				$	916,960	905,584		$	1,013,548	992,137					$	713,258	692,317		$	1,010,048	985,539
Less: Current portion of long-term debt						285,914				373,361							66,450				343,035
Long-term debt, less current portion						$	619,670			$	618,776						$	625,867			$	642,504

2020 Convertible Notes

Rovi issued $345.0 million in aggregate principal of 0.500% Convertible Senior Notes that mature March 1, 2020 (the “2020 Convertible Notes”) at par pursuant to an Indenture dated March 4, 2015 (as supplemented, the "2015 Indenture"). The 2020 Convertible Notes were sold in a private placement and bear interest at an annual rate of 0.500% payable semi-annually in arrears on March 1 and September 1 of each year, commencing September 1, 2015. In connection with the TiVo Acquisition, TiVo Corporation and Rovi entered into a supplemental indenture under which TiVo Corporation became a guarantor of the 2020 Convertible Notes and the notes became convertible into TiVo Corporation common stock.

~~The~~ ~~2020 Convertible Notes~~ were convertible at an initial conversion rate of 34.5968 shares of TiVo Corporation common stock per $1,000 of principal of notes, which was equivalent to an initial conversion price of $28.9044 per share of TiVo Corporation common stock. The conversion rate and conversion price are subject to adjustment pursuant to the 2015 Indenture, including as a result of dividends paid by TiVo Corporation. As ofIn June ~~30,~~ 2019, the ~~2020 Convertible Notes~~ ~~are convertible at a conversion rate~~Company repurchased $50.0 million of ~~39.3110 shares of TiVo Corporation common stock per $1,000 principal of notes, which is equivalent to a conversion price of $25.4382 per share of TiVo Corporation common stock.~~

~~Holders may convert the~~ ~~2020 Convertible Notes, prior to the close of business on the business day immediately preceding December 1, 2019, in multiples of $1,000 of principal under the following circumstances:~~

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~~

~~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 aggregateoutstanding principal of the 2020 Convertible Notes ~~converted and deliver shares of TiVo Corporation’s common stock in respect~~for $49.4 million. The Company allocated $48.4 million of the ~~remainder, if any, of~~repurchase price to the ~~conversion obligation in excess of~~liability component and the ~~aggregate principal~~remaining $1.0 million to the equity component of the 2020 Convertible Notes ~~being converted.~~

. The ~~conversion rate is subject~~Company accounted for the repurchase as a partial debt extinguishment and recognized a Loss on debt extinguishment of $0.1 million during the three months ended June 30, 2019 from writing off unamortized debt discount and issuance costs related 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~~repurchase. The Company repaid the ~~2015 Indenture) prior to March 1, 2020, holders may require Rovi to repurchase for cash all or a portion~~outstanding principal of $295.0 million on the maturity 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.~~March 1, 2020.

TiVo Corporation ~~has~~ separately accounted for the liability and equity components of the 2020 Convertible 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. 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. 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. 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~~.

~~In June 2019, the Company repurchased $50.0 million of outstanding principal of the~~ ~~2020 Convertible Notes~~ ~~for $49.4 million. The Company allocated $48.4 million of the repurchase price to the liability component and the remaining $1.0 million to the equity component of the~~ ~~2020 Convertible Notes~~. The Company accounted for the repurchase as a partial debt extinguishment and recognized a Loss on debt extinguishment of $0.1 million during the three months ended June 30, 2019 from writing off the unamortized debt discount and issuance costs related to the repurchase.

Related to the 2020 Convertible Notes, the Condensed Consolidated Balance Sheets included the following (in thousands):


	June 30, 2019			December 31, 2018			March 31, 2020		December 31, 2019
Liability component
Principal outstanding	$	295,000		$	345,000		$	—	$	295,000
Less: Unamortized debt discount	(8,033		)	(16,253		)	—		(2,031		)
Less: Unamortized debt issuance costs	(1,053		)	(2,107		)	—		(270		)
Carrying amount	$	285,914		$	326,640		$	—	$	292,699

Equity component	$	62,861		$	63,854		$	62,858	$	62,858

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 June 30,				Six Months Ended June 30,				Three Months Ended March 31,
	2019		2018		2019		2018		2020		2019
Stated interest	$	425	$	431	$	856	$	863	$	245	$	431
Amortization of debt discount	3,399		3,292		6,808		6,546		2,031		3,409
Amortization of debt issuance costs	436		402		868		795		270		432
Total interest expense	$	4,260	$	4,125	$	8,532	$	8,204	$	2,546	$	4,272

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

Concurrent with the issuance of the 2020 Convertible Notes in 2015, Rovi 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~~corresponded to the initial conversion price of the 2020 Convertible Notes, and ~~are~~were exercisable by TiVo Corporation on conversion of the 2020 Convertible Notes. The exercise price iswas subject to adjustment, including as a result of dividends paid by TiVo Corporation. As of ~~June 30,~~December 31, 2019, the call options ~~give~~gave TiVo Corporation the right, but not the obligation, to purchase up to ~~11.6~~11.7 million shares of TiVo Corporation's common stock at an exercise price of ~~$25.4382~~$25.1668 per share. The call options ~~are~~were intended to reduce the potential dilution from conversion of the 2020 Convertible Notes. The purchased call options ~~are~~were separate transactions from the 2020 Convertible Notes and holders of the 2020 Convertible Notes dodid not have any rights with respect to the purchased call options. The call options expired on March 1, 2020.

Concurrent with the issuance of the 2020 Convertible Notes in 2015, Rovi 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 ~~June 30, 2019, 12.9~~March 31, 2020, 13.0 million warrants were outstanding with an exercise price of ~~$35.3308~~$34.9541 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 also start expiring on June 1, 2020. The warrants were entered into in order 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.

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 Convertible 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 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. 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 ~~June 30, 2019,~~March 31, 2020, the 2021 Convertible Notes are convertible

at a conversion rate of ~~24.5558~~24.8196 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 ~~$34.4399~~$34.0738 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~~

2019 Term Loan Facility and Revolving Loan Credit ~~Facility~~Agreement

On ~~July 2, 2014, Rovi Corporation,~~November 22, 2019, the Company, as ~~parent guarantor, and two of its wholly-owned subsidiaries, Rovi Solutions Corporation and Rovi Guides, Inc., as borrowers,~~borrower, and certain of ~~its other~~the Company’s subsidiaries, as ~~subsidiary~~ guarantors (together with the Company, collectively, the “Loan Parties”), entered into (i) a Credit and Guaranty 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 (““2019 Term Loan ~~Facility A”~~Facility”), with the lenders party thereto and HPS Investment Partners, LLC, as administrative agent and collateral agent and (ii) ~~seven-year $700.0 million term loan B facility (“Term~~an ABL Credit and Guaranty Agreement (the “Revolving 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”Credit Agreement” and, together with the 2019 Term Loan Facility, the ~~“Senior Secured~~“2019 Credit ~~Facility”~~Agreements”)~~. In September 2015, Rovi made a voluntary principal prepayment to extinguish~~, with the lenders party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent and Wells Fargo Bank, National Association, as co-collateral agent.

Under the 2019 Term Loan Facility, ~~A and elected to terminate~~ the ~~Revolving Facility.~~

~~Prior to~~Company borrowed $715.0 million, which matures on November 22, 2024. Loans under the ~~refinancing described below,~~2019 Term Loan Facility ~~B was amortizing in equal quarterly installments in~~bear interest, at the Company's option, at an ~~aggregate annual amount~~interest rate equal to 1%either (a) the London Interbank Offered Rate ("LIBOR"), plus (i) if TiVo’s Total Leverage Ratio (as defined in the 2019 Term Loan Facility) is greater than or equal to 3.50:1.00, 5.75%, (ii) if TiVo’s Total Leverage Ratio is greater than or equal to 3.00:1.00 but less than 3.50:100, 5.50%, or (iii) if TiVo’s Total Leverage Ratio is less than 3.00:1.00, 5.25%, in each case, subject to a 1.00% LIBOR floor or (b) the Base Rate (as defined in the 2019 Term Loan Facility), (i) if TiVo’s Total Leverage Ratio is greater than or equal to 3.50:1.00, 4.75%, (ii) if TiVo’s Total Leverage Ratio is greater than or equal to 3.00:1.00 but less than 3.50:100, 4.50%, or (iii) if TiVo’s Total Leverage Ratio is less than 3.00:1.00, 4.25%, in each case, subject to a 2.00% Base Rate floor.

TiVo may voluntarily prepay the 2019 Term Loan Facility at any time subject to (i) a 3.00% prepayment premium if the loans are prepaid on or prior to November 22, 2020 and (ii) a 2.00% prepayment premium if the loans are prepaid on or prior to November 22, 2021. TiVo is required to make mandatory prepayments with (i) net cash proceeds from certain asset sales, (ii) net insurance or condemnation proceeds, (iii) net cash proceeds from issuances of debt (other than permitted debt), (iv) beginning with the fiscal year ending December 31, 2020, 50% of TiVo’s Consolidated Excess Cash Flow (as defined in the 2019 Term Loan Facility), (v) extraordinary receipts and (vi) certain net litigation proceeds, in each case, subject to certain exceptions. In the event the Xperi Combination is completed on or prior to November 22, 2020, TiVo would be required to repay the then-outstanding principal of the 2019 Term Loan Facility at par plus a 3.00% prepayment premium.

On March 31, 2020, TiVo was required to make a payment equal to 0.25% of the original principal amount ~~thereof,~~of the 2019 Term Loan Facility. Thereafter, quarterly installments in an amount equal to 2.50% of the original principal amount of the 2019 Term Loan Facility are due, with any remaining balance payable on the final maturity date of the 2019 Term Loan Facility.

The Company also entered into a $60.0 million Revolving Loan Credit Facility B.as part of the 2019 Credit Agreements, which expires on March 31, 2021. Availability of the Revolving Loan Credit Facility is based upon a borrowing base formula and periodic borrowing base certifications valuing certain of the Loan Parties’ accounts receivable as reduced by certain reserves, if any. There were 0 amounts outstanding under the Revolving Loan Credit Facility at any time during the three months ended March 31, 2020 or the year ended December 31, 2019. Loans under ~~Term~~the Revolving Loan Credit Facility ~~B bore~~bear interest, at ~~the Company's~~TiVo’s option, at a rate equal to either (a) LIBOR, plus (i) if the ~~London Interbank Offered Rate ("LIBOR")~~average daily Specified Excess Availability (as defined in the Revolving Loan Credit Agreement) is greater than 66.67%, ~~plus an applicable margin~~1.50%, (ii) if the average daily Specified Excess Availability is greater than 33.33% but less than or equal to ~~3.00% per annum (subject~~66.66%, 1.75%, or (iii) if the average daily Specified Excess Availability is less than or equal to 33.33%, 2.00%, in each case, subject to a ~~0.75%~~0.00% LIBOR ~~floor)~~floor or (b) the ~~prime lending rate, plus an applicable margin~~Base Rate (as defined in the Revolving Loan Credit Agreement), (i) if the average daily Specified Excess Availability is greater than 66.67%, 0.50%, (ii) if the average daily Specified Excess Availability is greater than 33.33% but less than or equal to ~~2.00% per annum.~~66.66%, 0.75%, or (iii) if the average daily Specified Excess Availability is less than or equal to 33.33%, 1.00%, in each case, subject to a 1.00% Base Rate floor.

~~On January 26, 2017, TiVo Corporation, as parent guarantor, two of its wholly-owned subsidiaries, Rovi Solutions Corporation~~Revolving loans may be borrowed, repaid 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 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 is part of the Senior Secured Credit Facility.re-borrowed until March 31, 2021, when all outstanding amounts must be repaid.

The 2019 Credit ~~Agreement contains~~Agreements contain 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 2019 Credit ~~Agreement is~~Agreements are secured by substantially all of the Company's assets. ~~Annually,~~

Financing for the ~~Company~~Xperi Combination

provide a senior secured first lien term loan B facility in an aggregate principal amount of $1,100 million (the “Debt Financing”). On January 3, 2020, TiVo, Xperi, Bank of America, Royal Bank and Barclays Bank PLC (“Barclays”) entered into a supplement to the Commitment Letter to add Barclays as an additional initial lender and an additional joint lead arranger and joint bookrunner and to reallocate a portion of the debt commitments of Bank of America and Royal Bank under the Commitment Letter to Barclays. The proceeds from the Debt Financing may be ~~required~~used (i) to ~~make an additional principal payment on Refinancing Agreement No. 1, which is calculated as a percentage~~pay fees and expenses incurred in connection with the Merger and the related transactions, (ii) to finance the refinancing of ~~the prior year's "Excess Cash Flow" as defined in the Credit Agreement. In February 2019, the Company made an Excess Cash Flow payment~~certain existing indebtedness 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 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 from writing off the unamortized debt discountTiVo and ~~issuance costs related~~Xperi, and (iii) to the ~~Excess Cash Flow payment.~~extent of any remaining amounts, for working capital and other general corporate purposes.

Expected Principal Payments

As of ~~June 30, 2019,~~March 31, 2020, aggregate expected principal payments on long-term debt, including the current portion of long-term debt, were as follows (in thousands):


2019 (a)	$	295,000
2020	—
Remainder of 2020			$	53,623
2021	621,960		71,548
2022			71,500
2023			71,500
2024			445,087
Total	$	916,960	$	713,258


~~(a)~~	~~While the~~ ~~2020 Convertible Notes~~ ~~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 ~~(Loss) gain~~Loss 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 ~~June 30,~~March 31, 2020 and 2019, and 2018, the Company recorded a loss of $3.4 million and gains of $1.8 million, respectively, from adjusting its interest rate swaps to fair value. During the six months ended June 30, 2019 and 2018, the Company recorded a loss of $5.1 million and ~~gains of $6.2~~$1.7 million, respectively, from adjusting its interest rate swaps to fair value.

Details of the Company's interest rate swaps as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 were as follows (dollars in thousands):


			Notional								Notional
Contract Inception	Contract Effective Date	Contract Maturity	June 30, 2019		December 31, 2018		Interest Rate Paid	Interest Rate Received	Contract Effective Date	Contract Maturity	March 31, 2020		December 31, 2019		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	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	March 2017	July 2021	$	200,000	$	200,000	2.93%	One-month USD-LIBOR

~~(10)~~(8) 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 ~~June 30, 2019,~~March 31, 2020, the Company's leases have remaining lease terms of ~~1 year~~3 months to 89 years and the Company has an option to terminate certain leases within the next 6 years. Additionally, certain leases include options to extend the lease term for up to 10 years. 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. Income from subleases is recognized as a reduction to Selling, general and administrative expenses.

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


							Three Months Ended March 31,
Classification	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019			2020			2019
Fixed lease cost	$	4,522		$	9,015		$	4,080		$	4,493
Variable lease cost	1,218			2,599			1,145			1,381
Short-term lease cost	139			332			41			193
Less: Sublease income	(2,341		)	(4,576		)	(2,077		)	(2,235		)
Total operating lease cost	$	3,538		$	7,370		$	3,189		$	3,832

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


			Three Months Ended March 31,
	Six Months Ended June 30, 2019		2020			2019
Operating cash flows:
Cash paid for amounts included in the measurement of operating Lease liabilities	$	9,800	$	4,583		$	4,895
Non-cash activity:
Right-of-use assets obtained in exchange for operating Lease liabilities, net	$	2,260	$	—		$	1,902
Remeasurement of Right-of-use assets			$	(290	)	$	—

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


	June 30, 2019			March 31, 2020			December 31, 2019
Right-of-use assets	$	62,645		$	56,405		$	59,888

Lease liabilities - current	$	13,591		$	12,035		$	13,009
Lease liabilities - non current	63,898			58,303			61,603
Total Lease liabilities	$	77,489		$	70,338		$	74,612

Weighted average remaining lease term	5.8 years			6.0 years			6.0 years
Weighted average discount rate	6.52		%	6.7		%	6.6		%

Expected Lease Payments

As of ~~June 30, 2019,~~March 31, 2020, aggregate expected lease payments were as follows (in thousands):


	Operating Lease Liabilities			Sublease Income			Net Operating Lease Payments			Operating Lease Liabilities			Sublease Income			Net Operating Lease Payments
Remainder of 2019	$	8,578		$	(3,365	)	$	5,213
2020	18,338			(6,873		)	11,465
Remainder of 2020										$	12,312		$	(4,325	)	$	7,987
2021	16,648			(6,808		)	9,840			16,604			(5,738		)	10,866
2022	13,126			(6,269		)	6,857			13,712			(5,909		)	7,803
2023	11,110			(6,081		)	5,029			11,681			(6,081		)	5,600
2024										11,995			(6,256		)	5,739
Thereafter	26,751			(13,470		)	13,281			19,715			(7,214		)	12,501
Total lease payments	94,551			(42,866		)	51,685			86,019			(35,523		)	50,496
Less: imputed interest	(17,062		)	—			(17,062		)	(15,681		)	—			(15,681		)
Total	$	77,489		$	(42,866	)	$	34,623		$	70,338		$	(35,523	)	$	34,815

~~Leases Not Yet In Effect~~

(9) Contingencies

~~In February~~Guaranteed Minimum Purchase Obligation

On December 31, 2019, the Company entered into ~~an operating lease with~~ a ~~10 year term that begins after June 30, 2019 for the use of a corporate office, for which~~contract requiring the Company ~~expects~~ to ~~record~~generate a ~~Right-of-use asset~~minimum number of ~~approximately $4.5 million~~Qualified Referred Subscribers (as defined in the contract) over a 30 month period. In the event that the aggregate number of Qualified Referred Subscribers generated by the Company within the specified time period is less than the minimum guaranteed subscribers, the Company is required to pay an amount equal to the shortfall between the number of Qualified Referred Subscribers generated by the Company and the required minimum multiplied by a ~~Lease liability~~per Qualified Referred Subscribers fee, up to a maximum of ~~approximately $6.0 million at lease commencement. Simultaneous with~~$5.0 million. As of March 31, 2020, 0 amounts were accrued in the ~~commencement~~Condensed Consolidated Balance Sheets related to this contract as the Company believes it will be able to generate the minimum number of ~~this lease, another~~Qualified Referred Subscribers within the original 30 month period.

Inventory Purchase Commitment

The Company uses a contract manufacturer to provide manufacturing services for its products. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate supply, the Company enters into agreements its contract manufacturer that either allow them to procure inventory based on criteria as defined by the Company or that establish the parameters defining the Company’s requirements. A significant portion of the Company’s ~~leases is anticipated to be terminated~~purchase commitments arising from these agreements consist of firm, non-cancelable and unconditional purchase commitments. In certain instances, these agreements allow the Company ~~expects~~the option to ~~de-recognize a Right-of-use asset~~cancel, reschedule or adjust the Company’s requirements based on its business needs prior to firm orders being placed. As of ~~approximately $0.8~~March 31, 2020, the Company had total purchase commitments for inventory of $6.4 million, ~~and a Lease liability~~ of ~~approximately $0.8 million.~~

~~(11) Contingencies~~which $1.2 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,~~digital video recorders ("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 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, 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.

The Company believes it has recorded adequate provisions for any such lawsuits, claims and proceedings and, as of ~~June 30, 2019,~~March 31, 2020, 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)~~(10) 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 June 30,		Six Months Ended June 30,		Three Months Ended March 31,
	2019	2018	2019	2018	2020	2019
Weighted average shares used in computing basic per share amounts	124,960	122,713	124,692	122,399	127,124	124,422
Dilutive effect of equity-based compensation awards	—	—	—	—	—	—
Weighted average shares used in computing diluted per share amounts	124,960	122,713	124,692	122,399	127,124	124,422

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 June 30,		Six Months Ended June 30,		Three Months Ended March 31,
	2019	2018	2019	2018	2020	2019
Restricted awards	4,557	3,876	4,821	4,153	5,225	5,085
Stock options	770	2,166	1,030	2,238	503	1,290
2020 Convertible Notes (a)	13,368	12,748	13,465	12,748	7,857	13,411
2021 Convertible Notes (a)	1	1	1	1	1	1
Warrants related to 2020 Convertible Notes (a)	12,851	12,423	12,836	12,374	12,999	12,821
Weighted average potential shares excluded from the calculation of Diluted EPS	31,547	31,214	32,153	31,514	26,585	32,608


(a)	See Note 97 for additional details.

For the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018, 0.5~~1.1 million and 0.9 million weighted average performance-based restricted awards, respectively, were excluded from the calculation of Diluted EPS as the performance metric had yet to be achieved. For the six months ended June 30, 2019 and 2018, 0.4 million and 1.00.3 million weighted average performance-based restricted awards, respectively, were excluded from the calculation of Diluted EPS as the performance metric had yet to be achieved.

Effect of the 2020 Convertible Notes and related transactions on Diluted EPS

In periods when the Company reports income from continuing operations, the dilutive effect of additional shares of common stock that may be issued on conversion of the 2020 Convertible Notes ~~are~~, which were repaid in March 2020, were included in the calculation of Diluted EPS if the price of the Company’s common stock ~~exceeds~~exceeded the conversion price. The 2020 Convertible Notes ~~have~~had no impact on Diluted EPS until the price of the Company's common stock ~~exceeds~~exceeded the conversion price of ~~$25.4382~~$25.1668 per share because the principal of the 2020 Convertible Notes iswas required to be settled in cash. ~~Based on the closing price of the Company's common stock of $7.37 per share on June 30, 2019, the if-converted value of the~~ ~~2020 Convertible Notes~~ ~~was less than the outstanding principal.~~

The 2020 Convertible Notes would be dilutive if the Company’s common stock closed at or above ~~$25.4382~~$25.1668 per share. However, on conversion, no economic dilution iswas expected from the 2020 Convertible Notes as the exercise of call options purchased by the Company with respect to its common stock described in Note ~~9 is~~7 was expected to eliminate any potential dilution from the 2020 Convertible Notes that would have otherwise occurred. The call options, ~~are~~which expired in March 2020, were always excluded from the calculation of Diluted EPS as they ~~are~~were anti-dilutive under the treasury stock method.

The warrants sold by the Company with respect to its common stock in connection with the 2020 Convertible Notes described in Note 97 have an effect on Diluted EPS when the Company’s share price exceeds the warrant’s strike price of ~~$35.3308~~$34.9541 per share. As the price of the Company’s common stock increases above the warrant strike price, additional dilution would occur.

Share Repurchase Program

On February 14, 2017, TiVo Corporation's Board of Directors approved an increase to the share repurchase program authorization to $150.0 million. The February 2017 authorization includes amounts which were outstanding under previously authorized share repurchase programs. During the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018, no~~0 shares were repurchased under the share repurchase program. As of ~~June 30, 2019,~~March 31, 2020, the Company had $150.0 million of share repurchase authorization remaining. The February 2017 authorization is subject to restrictions included in the Xperi Merger Agreement, and the Company does not intend to make purchases under the February 2017 authorization during the pendency thereof.

The Company issues restricted stock and restricted stock units (collectively, "restricted awards") as part of the equity-based compensation plans described in Note ~~13.~~11. For ~~the majority of~~ restricted awards, shares are withheld to satisfy required withholding taxes at the vesting date. Shares withheld to satisfy required withholding taxes in connection with the vesting of restricted awards are treated as common stock repurchases in the Condensed Consolidated Financial Statements because they reduce the number of shares that would have been issued on vesting. However, these withheld shares are not included in common stock repurchases under the Company's authorized share repurchase plan. During the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company withheld ~~0.2~~0.1 million and 0.1 million shares of common stock to satisfy ~~$1.7~~$0.6 million and $1.3 million of required withholding taxes, respectively. During the six months ended June 30, 2019 and 2018, the Company withheld 0.4 million and 0.3 million shares of common stock to satisfy $3.1 million and $4.2$1.4 million of required withholding taxes, respectively.

Dividends

For the three months ended ~~June 30,~~March 31, 2019, ~~and 2018,~~ the Company declared and paid dividends of ~~$0.08 and~~ $0.18 per share, ~~respectively,~~ for an aggregate cash ~~payments~~payment of ~~$10.0 millionand $22.2 million, respectively. For~~$22.5 million. NaN dividends were declared or paid during the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020.

The capacity to pay dividends in the future depends on many factors, including the Company's financial condition, results of operations, capital requirements, capital structure, industry practice and ~~2018,~~other business conditions that the ~~Company declared~~Board of Directors considers relevant. In addition, the agreements governing the Company's debt and ~~paid dividends~~the Xperi Merger Agreement restrict the payment of ~~$0.26 and $0.36 per share, respectively, for aggregate cash payments of $32.5 millionand $44.3 million, respectively.~~dividends.

Section 382 Transfer Restrictions

On ~~September 7, 2016,~~December 18, 2019 (the “Rights Dividend Declaration Date”), upon entering into an Agreement and Plan of Merger and Reorganization with Xperi Corporation, the ~~effective time~~Board of Directors of the ~~TiVo Acquisition,~~Company adopted a Section 382 rights plan (the “Section 382 Rights Plan”), and declared a dividend distribution of 1 right for each outstanding share of the Company’s ~~certificate~~common stock to stockholders of ~~incorporation was amended and restated~~record at the close of business on January 6, 2020. The Board of Directors adopted the Section 382 Rights Plan in an effort to ~~include certain transfer restrictions intended~~protect stockholder value by attempting to ~~preserve tax benefits related~~protect against a possible limitation on the Company’s ability to ~~the~~use its net operating

loss carryforwards (“NOLs”) of. If the Company ~~pursuant to~~experiences an “ownership change,”

as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), that apply to transfers made by 5% stockholders, transferees related to a 5% stockholder, transferees acting in coordination with a 5% stockholder, or transfers that would result in a stockholder becoming a 5% stockholder. If the ~~Company experiences an “ownership change,” as defined in Section 382 of the Code, its~~Company’s ability to fully utilize the NOLs on an annual basis will be substantially limited, and the timing of the usage of the NOLs could be substantially delayed, which could therefore significantly impair the value of those benefits. ~~These transfer restrictions are~~The Section 382 Rights Plan is intended to act as a deterrent to any person (an “Acquiring Person”) acquiring (together with all affiliates and associates of such person) beneficial ownership of 5%4.95% or more of the ~~Company's~~Company’s outstanding common stock within the meaning of Section 382 of the Code, without the approval of the ~~Company's~~ Board of Directors. ~~Such transfer restrictions~~Stockholders who beneficially own 4.95% or more of the Company’s outstanding common stock as of the Rights Dividend Declaration Date will ~~expire on~~not be deemed to be an Acquiring Person, but such person will be deemed an Acquiring Person if such person (together with all affiliates and associates of such person) becomes the ~~earlier~~beneficial owner of ~~(i)~~securities representing a percentage of the ~~repeal~~Company’s common stock that exceeds by 0.5% or more than the lowest percentage of beneficial ownership of the Company’s common stock that such person had at any time since the Rights Dividend Declaration Date. The description and terms of the rights are set forth in a Section 382 ~~or any successor statute if~~Rights Agreement, dated as of December 18, 2019, by and between the ~~Company’s~~Company and American Stock Transfer & Trust Company, LLC, as Rights Agent.

On the Rights Dividend Declaration Date, the Board of Directors ~~determines that such restrictions are no longer necessary or desirable~~authorized the issuance of one right (a “Right”) for each outstanding share of the ~~preservation~~Company’s common stock to the Company’s stockholders of ~~certain tax benefits, (ii)~~record as of December 18, 2019. Subject to the ~~beginning~~terms, provisions and conditions of the Section 382 Rights Agreement, if the Rights become exercisable, each Right would initially represent the right to purchase from the Company one one-thousandth of a ~~taxable year to which~~share of the Company’s ~~Board~~Series A Junior Participating Preferred Stock, par value $0.001 per share, for a purchase price of ~~Directors determines that no tax benefits may be carried forward or (iii)~~$35 per Right. If issued, each fractional share of Series A Junior Participating Preferred Stock would give the ~~end~~stockholder approximately the same dividend, voting and liquidation rights as does 1 share of the ~~day on September 7, 2019, three years from the effective time of the TiVo Acquisition when the~~ Company’s ~~certificate of incorporation was amended and restated~~common stock. However, prior to ~~include certain transfer restrictions. The Company conducted~~exercise, a Right does not give its holder any rights as a stockholder ~~advisory vote with respect to the maintenance~~ of ~~such transfer restrictions in its certificate of incorporation at its 2017 Annual Meeting of Stockholders and the stockholders approved of such transfer restrictions.~~TiVo, including any dividend, voting or liquidation rights.

~~(13)~~(11) Equity-based Compensation

Restricted Awards and Stock Options

The Company grants equity-based compensation awards from the Rovi 2008 Equity Incentive Plan (the “Rovi 2008 Plan”). The Rovi 2008 Plan permits the grant of restricted awards, stock options and similar types of equity awards to employees, officers, directors and consultants of the Company. Restricted stock is considered outstanding at the time of grant as holders are entitled to voting rights. Restricted awards are generally subject to a four-year graded vesting ~~period.~~period, with annual vesting. Stock options generally have a four-year vesting ~~periods of four years~~period, with one quarter of the grant vesting on the first anniversary of the grant, followed by monthly vesting thereafter. Stock options generally have a contractual term of seven years. As of ~~June 30, 2019,~~March 31, 2020, the Company had ~~35.9~~36.7 million shares of common stock reserved and ~~15.6~~12.3 million shares of common stock available for issuance under the Rovi 2008 Plan.

On September 7, 2016, the Company assumed the TiVo Inc. Amended and Restated 2008 Equity Incentive Award Plan (the “TiVo 2008 Plan”). The Company amended and restated the TiVo 2008 Plan effective as of the closing of the TiVo Acquisition to be the TiVo Corporation Titan Equity Incentive Award Plan for purposes of awards granted following the TiVo Acquisition Date. Restricted stock is considered outstanding at the time of grant as holders are entitled to voting rights. Restricted awards assumed from the TiVo 2008 Plan are generally subject to a ~~three-year~~three- year graded vesting period, with ~~semiannual~~semi-annual vesting. Restricted awards issued by the Company from the TiVo 2008 Plan are generally subject to a four-year graded vesting ~~period.~~period, with annual vesting. Stock options assumed from the TiVo 2008 Plan generally have a four-year vesting period with one quarter of the grant vesting on the first anniversary of the grant, followed by monthly vesting thereafter. Stock options assumed from the TiVo 2008 Plan generally have a contractual term of seven years. As of ~~June 30, 2019,~~March 31, 2020, there were 3.9 million shares of common stock reserved for future issuance as outstanding awards vest under the TiVo 2008 Plan. The TiVo 2008 Plan expired in August 2018, and no0 further shares of common stock are available for future grant.

The Company also grants performance-based restricted stock units to certain of its senior officers for three-year performance periods. Vesting in the performance-based restricted stock units is subject to a market condition, as well as a service condition. Depending on the level of achievement, the maximum number of shares that could be issued on vesting generally could be up to 200% of the target number of performance-based restricted stock units granted. For awards subject to a market vesting condition, the fair value per award is fixed at the grant date and the amount of compensation expense is not adjusted during the performance period regardless of changes in the level of achievement of the market condition.

In June 2019, the Company granted 0.6 millionperformance-based restricted stock units to certain of its senior officers with vesting conditioned on completion of a change-in-control event as defined in the grant agreement, as well as a service condition. For these awards, the fair value per award is estimated as the price of the Company's common stock at the close of trading on the date of grant, less the present value of dividends expected to be paid during the vesting period. However, no

compensation expense is recognized for these awards until the change-in-control event occurs, at which time the grant date fair value of ~~$3.3~~$3.8 million, adjusted for any forfeitures, would be recognized as compensation expense.

Employee Stock Purchase Plan

The Company’s 2008 Employee Stock Purchase Plan (“ESPP”) allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions. The ESPP consists of up to ~~four~~4 consecutive six-month purchase periods within a twenty-four-month offering period. Employees purchase shares each purchase period at the lower of 85% of the market value of the Company’s common stock at either the beginning of the offering period or the end of the purchase period. As of ~~June 30, 2019,~~March 31, 2020, the Company had ~~3.9~~2.5 million shares of common stock reserved and ~~3.9~~2.5 million shares available for issuance under the ESPP.

Valuation Techniques and Assumptions

~~The Company's~~As new grants of restricted awards are ~~generally~~ not eligible for dividend ~~protection. The~~protection, the fair value of restricted awards subject to service conditions is estimated as the price of the Company's common stock at the close of trading on the date of grant, less the present value of dividends expected to be paid during the vesting ~~period. Where a restricted stock award requires a post-vesting restriction on sale, the grant date fair value is adjusted to reflect a liquidity discount based on the expected post-vesting holding~~ period.

The Company uses the Black-Scholes-Merton option-pricing formula to estimate the fair value of ESPP shares. The Black-Scholes-Merton option-pricing formula uses complex and subjective inputs, such as the expected volatility of the Company's common stock over the expected term of the grant and projected employee exercise behavior. Expected volatility is estimated using a combination of historical volatility and implied volatility derived from publicly-traded options on the Company's common stock. The expected term is estimated by calculating the period the award is expected to be outstanding based on historical experience and the terms of the grant. The risk-free interest rate is estimated based on the yield of U.S. Treasury zero-coupon bonds with remaining terms similar to the expected term at the grant date. The Company assumes a constant dividend yield commensurate with the dividend yield on the grant date.

Weighted-average assumptions used to estimate the fair value of equity-based compensation awards granted during the period were as follows:


	Three Months Ended June 30,		Six Months Ended June 30,				Three Months Ended March 31,
	2019	2018	2019		2018		2020		2019
ESPP shares:
Expected volatility	N/A	N/A	52.3	%	42.5	%	45.3	%	52.3	%
Expected term	N/A	N/A	1.3 years		1.3 years		1.3 years		1.3 years
Risk-free interest rate	N/A	N/A	2.5	%	1.9	%	1.4	%	2.5	%
Expected dividend yield	N/A	N/A	6.6	%	5.2	%	0	%	6.5	%

The number of awards expected to vest during the requisite service period is estimated at the time of grant using historical data and equity-based compensation is only recognized for awards for which the requisite service is expected to be ~~rendered.~~rendered for awards subject to service or performance vesting conditions. Forfeiture estimates are revised during the requisite service period and the effect of changes in the number of awards expected to vest during the requisite service period is recognized on a cumulative catch-up basis in the period estimates are revised.

The weighted-average grant date fair value of equity-based awards (per award) and pre-tax equity-based compensation expense (in thousands) was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended March 31,
	2019		2018		2019		2018		2020		2019
Weighted average grant date fair value
Restricted awards	$	6.86	$	12.51	$	7.55	$	12.57	$	7.71	$	8.58
ESPP shares	N/A		N/A		$	3.42	$	4.83	$	3.91	$	3.42
Equity-based compensation
Pre-tax equity-based compensation, excluding amounts included in restructuring expense	$	8,932	$	6,731	$	17,311	$	18,755	$	6,296	$	8,379
Pre-tax equity-based compensation, included in restructuring expense	$	—	$	323	$	—	$	2,575

As of ~~June 30, 2019,~~March 31, 2020, there was ~~$47.6~~$45.0 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested equity-based awards which is expected to be recognized over a remaining weighted average period of ~~2.5~~2.4 years. The unrecognized compensation cost, net of estimated forfeitures, excludes ~~$3.3~~$3.8 million of unrecognized compensation cost related to performance-based restricted stock units with vesting conditioned on completion of a change-in-control event.

Equity-Based Compensation Award Activity

Activity related to the Company's restricted awards for the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 was as follows:


	Restricted Awards (In Thousands)		Weighted-Average Grant Date Fair Value		Restricted Awards (In Thousands)		Weighted-Average Grant Date Fair Value
Outstanding as of beginning of period	5,350		$	14.26	6,532		$	9.39
Granted	1,266		$	7.55	120		$	7.71
Vested	(869	)	$	15.22	(228	)	$	15.87
Forfeited	(557	)	$	14.62	(464	)	$	11.18
Outstanding as of end of period	5,190		$	12.43	5,960		$	8.97

As of ~~June 30, 2019,~~March 31, 2020, unvested restricted ~~stock~~ awards ~~includes 0.8~~include 1.1 million performance-based restricted stock units.

The aggregate fair value of restricted awards vested during the three months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~ was ~~$4.0~~$1.7 million and ~~$3.3 million, respectively. The aggregate fair value of restricted awards vested during the six months ended June 30, 2019 and 2018 was $7.8 million and $12.8~~$3.8 million, respectively.

~~(14)~~(12) Income Taxes

Due to the fact that the Company has significant net operating loss carryforwards and has recorded a valuation allowance against a significant portion of its deferred tax assets, foreign withholding taxes are generally the primary driver of ~~Income~~income tax ~~expense.~~expense and the primary reason for cash payments of income taxes.

Components of Income tax (benefit) expense were as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2019			2018			2019			2018			2020			2019
Foreign withholding tax	$	6,373		$	3,182		$	11,218		$	7,070		$	2,603		$	4,845
Federal income tax	1,140			—			2,412			—			1,346			1,272
State income tax	(67		)	122			(273		)	179			114			(207		)
Foreign income tax	338			214			673			560			7			335
Change in indefinite reinvestment assertion	—			1,221			—			1,221
Change in deferred tax liabilities	—			(369		)	—			(491		)
Goodwill impairment													(4,563		)	—
Change in unrecognized tax benefits	(40		)	(51		)	32			(3		)	77			73
Income tax expense	$	7,744		$	4,319		$	14,062		$	8,536
Income tax (benefit) expense													$	(416	)	$	6,318

The Company believes it has provided adequate reserves for all tax deficiencies or reductions in tax benefits that could result from U.S. federal, state and foreign tax audits. The Company regularly assesses the potential outcomes of these audits in order to determine the appropriateness of its tax positions. Adjustments to accruals for unrecognized tax benefits are made to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular income tax audit. However, income tax audits are inherently unpredictable and there can be no assurance the Company will accurately predict the outcome of these audits. The amounts ultimately paid on resolution of an audit could be materially different from the amounts previously recognized, and therefore the resolution of one or more of these uncertainties in any particular period could have a material adverse impact on the Condensed Consolidated Financial Statements.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was enacted. The CARES Act is an emergency economic stimulus package in response to the COVID-19 pandemic, which among other things, contains numerous income tax provisions. Some of these tax provisions are expected to be effective retroactively for years ending before the date of enactment. The Company is currently evaluating the effect of the CARES Act on the Condensed Consolidated Financial Statements, which is not expected to be material.

~~(15)~~(13) Segment Information

Reportable segments are identified based on the Company's organizational structure and information reviewed by the Company’s chief operating decision maker ("CODM") to evaluate performance and allocate resources. The Company's operations are organized into ~~two~~2 reportable segments for financial reporting purposes: Product and Intellectual Property Licensing.

The Product segment consists primarily of licensing Company-developed UXuser experience products and services to multi-channel video service providers and CEconsumer electronics ("CE") manufacturers, licensing the TiVo service and selling TiVo-enabled devices, licensing metadata and advanced search and recommendation and viewership data, as well as sponsored discovery and in-guide advertising. We group our Product segment into three verticals based on the products delivered to our customer: Platform Solutions; Software and Services; and Other. Platform Solutions includes licensing Company-developed UX products, the TiVo service and selling TiVo-enabled devices. Software and Services includes licensing our metadata and advanced media and advertising solutions, including viewership data, sponsored discovery and in-guide advertising. ~~The Product segment also~~Other includes legacy Analog Content Protection ("ACP"), VCR Plus+ and media recognition products.

The Intellectual Property Licensing segment consists primarily of licensing ~~the Company's~~our patent portfolio to U.S. and international pay TVtelevision ("TV") providers (directly and through their suppliers), mobile device manufacturers, CE manufacturers and OTT video providers. Our broad portfolio of licensable technology patents covers many aspects of content discovery, DVR, VOD, OTT experiences, multi-screen functionality and personalization, as well as interactive applications and advertising. We group our Intellectual Property Licensing segment into three verticals based primarily on the business of our customer: US Pay TV Providers; CE Manufacturers; and New Media, International Pay TV Providers and Other. US Pay TV Providers includes direct and indirect licensing of traditional US Pay TV Providers regardless of the particular distribution technology (e.g., cable, satellite or the internet). CE Manufacturers includes the licensing of our patents to traditional CE manufacturers. New Media, International Pay TV Providers and Other includes licensing to international pay TV providers, virtual service providers, mobile device manufacturers and content and new media companies.

Segment results are derived from the Company's internal management reporting system. The accounting policies used to derive segment results are substantially the same as those used by the consolidated company. Intersegment revenues and expenses have been eliminated from segment financial information as transactions between reportable segments are excluded from the measure of segment profitability reviewed by the CODM. In addition, certain costs are not allocated to the segments as they are considered corporate costs. Corporate costs primarily include general and administrative costs such as corporate management, finance, legal and human resources. The CODM uses an Adjusted EBITDA (as defined below) measure to evaluate the performance of, and allocate resources to, the segments. Segment balance sheets are not used by the CODM to allocate resources or assess performance.

Segment results were as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2019			2018			2019			2018			2020			2019
Product
Platform Solutions	$	65,731		$	72,208		$	136,768		$	168,148		$	64,535		$	71,037
Software and Services	19,242			19,619			39,144			38,098			21,636			19,902
Other	234			960			598			3,393			305			364
Revenues, net	85,207			92,787			176,510			209,639			86,476			91,303
Adjusted Operating Expenses (1)	77,668			81,467			160,558			170,933			67,844			82,890
Adjusted EBITDA (2)	7,539			11,320			15,952			38,706			18,632			8,413
Intellectual Property Licensing
US Pay TV Providers	41,996			49,217			84,113			99,132			45,109			42,117
CE Manufacturers	7,730			8,927			16,348			17,895			8,334			8,618
New Media, International Pay TV Providers and Other	41,239			21,929			57,436			36,031			19,942			16,197
Revenues, net	90,965			80,073			157,897			153,058			73,385			66,932
Adjusted Operating Expenses (1)	21,359			24,972			43,166			50,329			22,120			21,807
Adjusted EBITDA (2)	69,606			55,101			114,731			102,729			51,265			45,125
Corporate
Adjusted Operating Expenses (1)	14,524			14,512			30,621			30,560			11,691			16,097
Adjusted EBITDA (2)	(14,524		)	(14,512		)	(30,621		)	(30,560		)	(11,691		)	(16,097		)
Consolidated
Total Revenues, net	176,172			172,860			334,407			362,697			159,861			158,235
Adjusted Operating Expenses (1)	113,551			120,951			234,345			251,822			101,655			120,794
Adjusted EBITDA (2)	62,621			51,909			100,062			110,875			58,206			37,441
Depreciation	5,327			5,773			10,691			10,914			4,968			5,364
Amortization of intangible assets	28,184			40,809			56,362			82,221			28,142			28,178
Restructuring and asset impairment charges	2,676			1,101			4,489			5,647			739			1,813
Goodwill impairment													171,572			—
Equity-based compensation	8,932			6,731			17,311			18,755			6,296			8,379
Separation costs	3,315			—			4,447			—
Merger, separation and transformation costs													4,026			1,132
Transition and integration costs	558			7,041			1,153			9,451			82			595
Earnout amortization	—			536			—			1,494
CEO transition cash costs	1,000			(1,600		)	1,000			(975		)
Remeasurement of contingent consideration	—			281			—			1,171
Operating income (loss)	12,629			(8,763		)	4,609			(17,803		)
Operating loss													(157,619		)	(8,020		)
Interest expense	(12,475		)	(12,171		)	(24,636		)	(23,805		)	(17,049		)	(12,161		)
Interest income and other, net	1,515			544			3,290			2,110			187			1,775
(Loss) gain on interest rate swaps	(3,364		)	1,841			(5,085		)	6,152
Loss on interest rate swaps													(5,119		)	(1,721		)
Loss on debt extinguishment	(101		)	—			(300		)	—			—			(199		)
Loss from continuing operations before income taxes	$	(1,796	)	$	(18,549	)	$	(22,122	)	$	(33,346	)
Loss before income taxes													$	(179,600	)	$	(20,326	)

(1)

Adjusted Operating Expenses are defined as operating expenses excluding Depreciation, Amortization of intangible assets, Restructuring and asset impairment charges, Goodwill impairment, Equity-based compensation, ~~Separation~~Merger, separation and transformation costs and Transition and integration ~~costs, retention earn-outs payable to former shareholders of acquired businesses, CEO transition cash costs and Remeasurement of contingent consideration.~~costs.


(2)	Adjusted EBITDA is defined as operating loss excluding Depreciation, Amortization of intangible assets, Restructuring and asset impairment charges, Goodwill impairment, Equity-based compensation, ~~Separation~~Merger, separation and transformation costs and Transition and integration costs.

~~costs, retention earn-outs payable to former shareholders of acquired businesses, CEO transition cash costs and Remeasurement of contingent consideration.~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q for TiVo Corporation (the “Company,” “we” or “us”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including the discussion contained in Item ~~2.,~~2, "Management’s Discussion and Analysis of Financial Condition and Results of Operations." We have based these forward-looking statements on our current expectations and projections about future events or future financial performance, which include implementing our business strategy, successfully integrating Rovi Corporation ("Rovi") and TiVo Inc. (renamed TiVo Solutions Inc. (“TiVo Solutions”)) following our acquisition of TiVo Solutions on September 7, 2016 (the "TiVo Acquisition"), realizing planned synergies and cost-savings associated with the TiVo Acquisition, developing and introducing new technologies, obtaining, maintaining and expanding market acceptance of the technologies we offer, successfully renewing intellectual property licenses with the major North American pay TV service providers, competition in our markets, the potential impact of the COVID-19 pandemic, and the impact of ~~the separation of~~ our ~~Product and IP Licensing businesses into two independent companies.~~previously announced combination with Xperi Corporation.

In some cases, these forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “future,” “predict,” “potential,” “intend,” or “continue,” and similar expressions. These statements are based on the beliefs and assumptions of our management and on information currently available to our management. Our actual results, performance and achievements may differ materially from the results, performance and achievements expressed or implied in such forward-looking statements. For a discussion of some of the factors that might cause such a difference, see the "Risk Factors" contained in Part II, Item ~~1A.~~1A. of this Quarterly Report on Form 10-Q. Except as required by law, we specifically disclaim any obligation to update such forward-looking statements.

The following commentary should be read in conjunction with the Consolidated Financial Statements and related notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 and the Condensed Consolidated Financial Statements and related notes thereto contained in Part I, Item 1. of this Quarterly Report on Form 10-Q, which are incorporated by reference herein.

Executive Overview of Results

TiVo Corporation ("TiVo") is a global leader in bringing entertainment ~~technology~~together, making entertainment content easy to find, watch and ~~audience insights.~~enjoy. TiVo ~~delivers innovative~~provides a broad set of cloud-based services, embedded software solutions and intellectual property that bring entertainment together for the watchers, creators and advertisers. For the creators and advertisers, TiVo's products deliver a passionate group of watchers to increase viewership and engagement across online video, TV and other entertainment viewing platforms. Our products and innovations are protected by broad portfolios of licensable ~~technologies that revolutionize how people find~~technology patents. These portfolios cover many aspects of content ~~across a changing media landscape. TiVo enables the world’s leading media~~discovery, digital video recorder ("DVR"), video-on-demand ("VOD") and over-the-top ("OTT") experiences, multi-screen viewing, mobile device video experiences, entertainment ~~providers to deliver the ultimate entertainment experience. Explore the next generation of entertainment at tivo.com, forward.tivo.com or follow us on Twitter @tivo or @tivoforbusiness.~~personalization, voice interaction, social and interactive applications, data analytics solutions and advertising.

Our operations are organized into two reportable segments for financial reporting purposes: Product and Intellectual Property Licensing. The Product segment consists primarily of licensing Company-developed user experience ("UX") products and services to multi-channel video service providers and consumer electronics ("CE") manufacturers, licensing the TiVo service and selling TiVo-enabled devices, licensing metadata and advanced search and recommendation and viewership data, as well as sponsored discovery and in-guide advertising. We group our Product segment into three verticals based on the products delivered to our customer: Platform Solutions; Software and Services; and Other. Platform Solutions includes licensing Company-developed UX products, the TiVo service and selling TiVo-enabled devices. Software and Services includes licensing our metadata and advanced media and advertising solutions, including viewership data, sponsored discovery and in-guide advertising. Other includes legacy Analog Content Protection ("ACP"), VCR Plus+ and media recognition products.

The Intellectual Property Licensing segment consists primarily of licensing our patent portfolio to U.S. and international pay television ("TV") providers (directly and through their suppliers), mobile device manufacturers, CE manufacturers and ~~over-the-top ("OTT")~~OTT video providers. Our broad portfolio of licensable technology patents covers many aspects of content discovery, ~~DVR, video-on-demand (“VOD”),~~DVRs, VOD, OTT experiences, multi-screen functionality and personalization, as well as interactive applications and advertising. We group our Intellectual Property Licensing segment into three verticals based primarily on the business of our customer: US Pay TV Providers; CE Manufacturers; and New Media, International Pay TV Providers and Other. US Pay TV Providers includes direct and indirect licensing of traditional US Pay TV Providers regardless of the particular distribution technology (e.g., cable, satellite or the internet). CE Manufacturers includes the licensing of our patents to traditional CE manufacturers. New Media, International Pay TV Providers and Other includes licensing to international pay TV providers, virtual service providers, mobile device manufacturers and content and new media companies.

Total Revenues, net for the three months ended ~~June 30, 2019~~March 31, 2020 increased by 2%1% compared to the prior year. The $4.8 million decrease in Product revenues was primarily attributable to $6.7 million of revenue from a perpetual Passport license agreement with an international MSO customer in the three months ended March 31, 2019, which was partially offset by a $2.9 million increase in TV viewership data revenue. Intellectual Property Licensing revenues increased $6.5 million primarily due to subscriber growth since the year ~~primarily as~~ago period, new licenses and contract amendments executed since the year ago period and a ~~result of a $14.3~~$1.4 million increase in catch-up payments intended to make us whole for the pre-license period of ~~use,~~use.

Our Net loss was $179.2 million, or $1.41 per diluted share, compared to $26.6 million, or $0.21 per diluted share, in the prior year. For the three months ended March 31, 2020, we reduced Research and development and Selling, general and

administrative costs by $17.7 million, primarily related to expanding our license with Shaw Communications to include the TiVo Solutions patent portfolio and our first social media customer, which was partially offset by an $8.4 million decrease in revenue from TiVo Solutions "Time Warp" agreements that were entered into with AT&T Inc. ("AT&T"), DirecTV, EchoStar Corporation ("EchoStar") and Verizon Communications, Inc. ("Verizon") prior to the TiVo Acquisition Date as a result of ~~contract expirations~~benefits from our ongoing transformation and restructuring activities.Offsetting these cost improvements, our Operating loss for the three months ended March 31, 2020 reflects a $171.6 million Goodwill impairment charge resulting from a significant and sustained decline in the trading price of TiVo's common stock. In addition, our Operating loss includes a $3.0 million increase in patent litigation costs compared to the year-ago period,primarily related to the timing of costs incurred in the ongoing Comcast litigation, and a $2.8 million increase in Merger, separation and transformation costs. Our Net lossfor the three months ended March 31, 2020 benefited from $6.7 million of lower income tax costs, primarily related to tax benefits from the Goodwill impairment charge, and a $1.6 million ~~decrease~~revenue increase. Our Net loss for the three months ended March 31, 2020 also includes a $4.9 million increase in ~~Hardware revenue~~Interest expense as a result of refinancing our Term Loan B in November 2019 and a $3.4 million increase in the Loss on interest rate swaps resulting from adverse interest rate movements.

The recent outbreak of a novel strain of coronavirus, SARS-CoV-2, or COVID-19, which has been declared by the World Health Organization to be a “public health emergency of international concern,” is impacting worldwide economic activity. As a public health epidemic, COVID-19 poses the risk that we or our workforce, suppliers and other partners may be prevented from conducting business activities for an indefinite period of time, including due to ~~the planned transition~~shutdowns that may be requested or mandated by governmental authorities. The COVID-19 pandemic has recently had adverse impacts on many aspects of our operations, directly and indirectly, including our workforce, consumer behavior, distribution, suppliers and the market generally. For example, in March 2020, we announced our workforce would work remotely as a result of the pandemic as we reviewed our processes related to workplace safety, including social distancing and sanitation practices recommended by the Centers for Disease Control and Prevention. As we generate the substantial majority of our revenue from pay TV operators and others in the video delivery industry, to date COVID-19 has not had a significant impact on our revenue. However, the impacts of the COVID-19 pandemic could cause delays in obtaining new customers and executing renewals and could also impact our consumer business, including sales of TiVo Stream 4K which was recently launched. Further, the global financial markets have experienced increased volatility and have declined since December 31, 2019. The Condensed Consolidated Financial Statements as of and for the three months ended March 31, 2020 reflect our assumptions about the economic environment and our ability to ~~deploying~~realize certain assets, including long-lived assets, such as goodwill, accounts receivable and investments in other companies. Although the ~~TiVo service on third-party hardware.~~response to the COVID-19 pandemic is expected to be temporary, such conditions in the global financial markets and business activities could lead to further impairment of our long-lived assets, including goodwill, increased credit losses and impairments to our investments in other companies.

We believe our Cash and cash equivalents and anticipated operating cash flow, supplemented with access to capital markets as necessary, are generally sufficient to support our operating businesses, capital expenditures, restructuring activities, interest payments and income tax payments, in addition to investments in future growth opportunities and activities related to the Xperi Combination for at least the next twelve months. We are taking steps to manage our resources by reducing and/or deferring capital expenditures, inventory purchases and operating expenses to mitigate the adverse impact of the COVID-19 pandemic. Future impacts of the COVID-19 pandemic may require us to take further actions to improve our cash position, including but not limited to, implementing employee furloughs and foregoing capital expenditures and other discretionary expenses.

Our intellectual property license with Comcast Corporation ("Comcast") expired on March 31, 2016. Our Product relationship with Comcast, primarily a metadata license, expired on September 30, 2017. The expiration of our intellectual property license with Comcast, as well as litigation initiated against Comcast, ~~has resulted in a reduction of revenue~~reduced revenues and ~~an increase in~~increased litigation costs. While we anticipate Comcast will eventually execute a new intellectual property license, the length of time that Comcast is out of license prior to executing a new license is uncertain. The amount of revenue recognized in the reporting period in which a new license is executed is uncertain and depends on a variety of factors, including license terms such as duration, pricing, covered products and fields of use, and the duration of the out-of-license period. In addition, while litigation costs have increased, whether the litigation initiated against Comcast will cause total expenses to increase or decrease longer-term will be a function of several factors, including the length of time Comcast is out of license and the length of time we remain in litigation with Comcast.

For the three months ended June 30, 2019, our Loss from continuing operations, net of tax was $9.5 million, or $0.08 per diluted share, compared to $22.9 million, or $0.19 per diluted share, in the prior year. The smaller loss in the three months ended June 30, 2019 was the result of a $12.6 million decrease in Amortization of intangible assets due to certain TiVo Solutions intangible assets reaching the end of their economic life, a $6.5 million decrease in Transition and integration costs, primarily associated with a legacy TiVo Solutions legal matter recorded in the second quarter of 2018, a $5.2 million decrease in patent litigation costs which is primarily related to the timing of costs incurred in the ongoing Comcast litigation and the $3.3 million increase in revenue described above. These benefits were partially offset by a $5.2 million decrease in income from our interest rate swaps, a $3.3 million increase in Separation costs and a $2.4 million inventory impairment due to a reduced forecast for sales of refurbished units.

On May 9, 2019, we announced that our Board of Directors unanimously approved a plan to separate the Product and Intellectual Property Licensing businesses ~~(the “Separation”)~~ into separately traded public ~~companies.~~companies (the “TiVo Separation”), which was targeted for completion by April 2020. On December 18, 2019, the Company and Xperi Corporation (“Xperi”) entered into an Agreement and Plan of Merger and Reorganization (the “Xperi Merger Agreement”), pursuant to which TiVo and Xperi agreed to effect an all-stock, merger of equals strategic combination of their respective businesses (the "Xperi Combination"). The ~~Separation~~board of directors of each of TiVo and Xperi have approved the Xperi Merger Agreement and the transactions contemplated thereby. The Xperi Combination is subject to certain customary approvals, including the approval of shareholders of TiVo and Xperi, and 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 intend that the Separation will be completed in a manner generally intended to qualify as tax-free to TiVo Corporation’s stockholders for U.S. federal income tax purposes. The Separation, expected to be completed in the first half of 2020, is subject to certain conditions, including, among others, obtaining final approval from TiVo Corporation's Board of Directors, receipt of a favorable opinion and/or rulings with respect to the tax-free nature of the transaction for federal income tax purposes and the U.S. Securities and Exchange Commission declaring ProductCo's Registration Statement effective.by June 30, 2020.

The ~~process of completing~~TiVo Separation and the ~~Separation has~~Xperi Combination processes have been and isare expected to continue to be time-consuming and involve significant costs and expenses. ~~For example, during~~During the ~~six~~three months ended ~~June 30, 2019,~~March 31, 2020, we ~~recorded Separation costs~~incurred $4.0 million of ~~$4.4 million,~~Merger, separation and ~~as of June 30, 2019, we expect to incur future Separation costs of up to $37.0 million through 2019 to execute the Separation. These~~transformation costs. The Merger, separation and transformation costs are primarily Selling, general and administrative costs, consisting of employee-related costs, costs to ~~establish certain stand-alone functions and~~improve information technology systems and other one-time transaction-related costs, including investment banking and consulting fees and other incremental costs directly

associated with the ~~separation process.~~TiVo Separation or the Xperi Combination. In addition, in connection with the May 2019 announcement of our plan to separate the Product and Intellectual Property Licensing businesses, we implemented a cost efficiency program to transform our business operations and to execute the TiVo Separation (the "2019 Transformation Plan"). As a result of the 2019 Transformation Plan, we are reducing headcount, moving certain positions to lower cost locations, rationalizing facilities and legal entities and terminating certain leases and other contracts. The 2019 Transformation Plan will continue to be implemented prior to completion of the Xperi Combination. The 2019 Transformation Plan resulted in restructuring charges of $0.6 million during the three months ended March 31, 2020, substantially all of which related to severance costs. We expect to spend up to an additional $15.0 million to complete the 2019 Transformation Plan and prepare for the Xperi Combination, excluding spend contingent on completion of the Xperi Combination.

Comparison of Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~

The ~~condensed~~ consolidated results of operations for the three ~~and six~~ months ended ~~June 30, 2019 and 2018~~March 31, 2020 compared to the prior year were as follows (dollars in thousands):

Three Months Ended June 30,
2019 2018 Change $ Change %
Revenues, net:
Licensing, services and software $ 174,496
$ 169,554
$ 4,942
3 %
Hardware 1,676
3,306
(1,630 ) (49 )%
Total Revenues, net 176,172
172,860
3,312
2 %
Costs and expenses:
Cost of licensing, services and software revenues, excluding depreciation and amortization of intangible assets 35,786
42,583
(6,797 ) (16 )%
Cost of hardware revenues, excluding depreciation and amortization of intangible assets 5,768
4,989
779
16 %
Research and development 38,202
43,411
(5,209 ) (12 )%
Selling, general and administrative 47,600
42,957
4,643
11 %
Depreciation 5,327
5,773
(446 ) (8 )%
Amortization of intangible assets 28,184
40,809
(12,625 ) (31 )%
Restructuring and asset impairment charges 2,676
1,101
1,575
143 %
Total costs and expenses 163,543
181,623
(18,080 ) (10 )%
Operating income (loss) 12,629
(8,763 ) 21,392
(244 )%
Interest expense (12,475 ) (12,171 ) (304 ) 2 %
Interest income and other, net 1,515
544
971
178 %
(Loss) gain on interest rate swaps (3,364 ) 1,841
(5,205 ) (283 )%
Loss on debt extinguishment (101 ) —
(101 ) N/a
Loss from continuing operations before income taxes (1,796 ) (18,549 ) 16,753
(90 )%
Income tax expense 7,744
4,319
3,425
79 %
Loss from continuing operations, net of tax (9,540 ) (22,868 ) 13,328
(58 )%
Income from discontinued operations, net of tax —
2,298
(2,298 ) (100 )%
Net loss $ (9,540 ) $ (20,570 ) $ 11,030
(54 )%


	Six Months Ended June 30,											Three Months Ended March 31,
	2019			2018			Change $			Change %		2020			2019			Change $			Change %
Revenues, net:
Licensing, services and software	$	330,657		$	355,712		$	(25,055	)	(7	)%	$	157,238		$	156,161		$	1,077		1	%
Hardware	3,750			6,985			(3,235		)	(46	)%	2,623			2,074			549			26	%
Total Revenues, net	334,407			362,697			(28,290		)	(8	)%	159,861			158,235			1,626			1	%
Costs and expenses:
Cost of licensing, services and software revenues, excluding depreciation and amortization of intangible assets	75,219			85,798			(10,579		)	(12	)%	37,396			39,433			(2,037		)	(5	)%
Cost of hardware revenues, excluding depreciation and amortization of intangible assets	9,861			10,040			(179		)	(2	)%	5,022			4,093			929			23	%
Research and development	79,583			91,841			(12,258		)	(13	)%	33,744			41,381			(7,637		)	(18	)%
Selling, general and administrative	93,593			94,039			(446		)	—	%	35,897			45,993			(10,096		)	(22	)%
Depreciation	10,691			10,914			(223		)	(2	)%	4,968			5,364			(396		)	(7	)%
Amortization of intangible assets	56,362			82,221			(25,859		)	(31	)%	28,142			28,178			(36		)	—	%
Restructuring and asset impairment charges	4,489			5,647			(1,158		)	(21	)%	739			1,813			(1,074		)	(59	)%
Goodwill impairment												171,572			—			171,572			N/a
Total costs and expenses	329,798			380,500			(50,702		)	(13	)%	317,480			166,255			151,225			91	%
Operating income (loss)	4,609			(17,803		)	22,412			(126	)%
Operating loss												(157,619		)	(8,020		)	(149,599		)	1,865	%
Interest expense	(24,636		)	(23,805		)	(831		)	3	%	(17,049		)	(12,161		)	(4,888		)	40	%
Interest income and other, net	3,290			2,110			1,180			56	%	187			1,775			(1,588		)	(89	)%
(Loss) gain on interest rate swaps	(5,085		)	6,152			(11,237		)	(183	)%
Loss on interest rate swaps												(5,119		)	(1,721		)	(3,398		)	197	%
Loss on debt extinguishment	(300		)	—			(300		)	N/a		—			(199		)	199			N/a
Loss from continuing operations before income taxes	(22,122		)	(33,346		)	11,224			(34	)%
Income tax expense	14,062			8,536			5,526			65	%
Loss from continuing operations, net of tax	(36,184		)	(41,882		)	5,698			(14	)%
Income from discontinued operations, net of tax	—			3,595			(3,595		)	(100	)%
Loss before income taxes												(179,600		)	(20,326		)	(159,274		)	784	%
Income tax (benefit) expense												(416		)	6,318			(6,734		)	(107	)%
Net loss	$	(36,184	)	$	(38,287	)	$	2,103		(5	)%	$	(179,184	)	$	(26,644	)	$	(152,540	)	573	%

Total Revenues, net

For the three months ended ~~June 30, 2019,~~March 31, 2020, Total Revenues, net increased 2%1% compared to the prior year as Product revenues decreased ~~$7.6~~$4.8 million and Intellectual Property Licensing revenues increased ~~$10.9~~$6.5 million. Product generated ~~48%~~54% and ~~54%~~58% of Total Revenues, net for the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018, respectively.~~

For the six months ended June 30, 2019, Total Revenues, net decreased 8% compared to the prior year as Product revenues decreased $33.1 million and Intellectual Property Licensing revenues increased $4.8 million. Product generated 53% and 58% of Total Revenues, net for the six months ended June 30, 2019 and 2018, respectively.

For details on the changes in Total Revenues, net, see the discussion of our segment results below.

Cost of licensing, services and software revenues, excluding depreciation and amortization of intangible assets

Cost of licensing, services and software revenues, excluding depreciation and amortization of intangible assets, consists primarily of employee-related costs, patent prosecution, maintenance and litigation costs and an allocation of overhead and facilities costs, as well as service center and other expenses related to providing the TiVo ~~service~~Service and our metadata offering.

For the three months ended ~~June 30, 2019,~~March 31, 2020, Cost of licensing, services and software revenues, excluding depreciation and amortization of intangible assets decreased ~~16% as~~5% compared to the prior year primarily due to benefits from our transformation and restructuring activities, including a ~~result of~~$1.5 million decrease in compensation costs, a ~~$5.2~~$1.4 million decrease in non-recurring engineering costs, a $0.9 million decrease in patent prosecution costs and a $0.9 million decrease in facility and information technology costs. These cost decreases were partially offset by a $3.0 million increase in patent litigation costs, which was primarily related to the timing of costs incurred in the ongoing Comcast ~~litigation, and benefits from cost saving initiatives.~~litigation. We expect to continue to incur material expenses related to the Comcast litigation in the future. These decreases were partially offset by a $1.1 million impairment associated with a prepaid license that is not expected to be recoverable from the net direct revenue resulting from patent license agreements executed with new customers.

For the six months ended June 30, 2019, Cost of licensing, services and software revenues, excluding depreciation and amortization of intangible assets decreased 12% as a result of an $8.7 million decrease in patent litigation costs, which was primarily related to the timing of costs incurred in the ongoing Comcast litigation, and benefits from cost saving initiatives. We expect to continue to incur material expenses related to the Comcast litigation in the future. This decrease in costs was partially offset by a $1.1 million impairment recognized in the three months ended June 30, 2019 associated with a prepaid license that is not expected to be recoverable from the net direct revenue resulting from the patent license agreement.

Cost of hardware revenues, excluding depreciation and amortization of intangible assets

Cost of hardware revenues, excluding depreciation and amortization of intangible assets includes all product-related costs associated with TiVo-enabled devices, including ~~manufacturing costs,~~ employee-related costs, warranty costs and order fulfillment costs, as well as certain licensing costs and an allocation of overhead and facilities costs. Hardware is sold by the Company primarily as a means to generate revenue from the TiVo ~~service.~~Service. As a result, generating positive gross margins from hardware sales is not the primary goal of our hardware operations.

For the three ~~and six~~ months ended ~~June 30, 2019,~~March 31, 2020, Cost of hardware revenues, excluding depreciation and amortization of intangible assets ~~benefited~~increased 23% compared to the prior year, reflecting a $1.2 million charge resulting from ~~the planned transition of our customers to deploying the TiVo service on third-party hardware~~a non-cancellable purchase commitment, which ~~reduced costs. These benefits were~~was partially offset by ~~a $2.4 million inventory impairment during the three~~benefits from our transformation and ~~six months ended June 30, 2019 due to a reduced forecast for sales of refurbished units.~~restructuring activities.

Research and development

Research and development expenses are comprised primarily of employee-related costs, consulting costs and an allocation of overhead and facilities costs.

For the three months ended ~~June 30, 2019,~~March 31, 2020, Research and development expenses decreased ~~12%~~18% compared to the prior year, primarily due to benefits from our transformation and restructuring activities, including a $4.5 million decrease in compensation costs and a $0.5 million decrease in Transition and integration costs associated with the TiVo Acquisition. The decrease in compensation costs was primarily the result of cost savings from the Profit Improvement restructuring action described below.

~~For the six months ended June 30, 2019, Research and development expenses decreased 13% compared to the prior year primarily due to a $7.6~~$5.1 million decrease in compensation costs, a ~~$3.7~~$1.9 million decrease in facility and information technology costs and a $1.2 million decrease in consulting costs and a $0.9 million decrease in Transition and integration costs associated with the TiVo Acquisition. The decrease in compensation costs was primarily the result of cost savings from the Profit Improvement restructuring action.costs.

Selling, general and administrative

Selling expenses are comprised primarily of employee-related costs, including travel costs, advertising costs and an allocation of overhead and facilities costs. General and administrative expenses are comprised primarily of employee-related costs, including travel costs, ~~corporate~~outside services such as accounting, consulting, legal and tax ~~fees~~services, and an allocation of overhead and facilities costs.

Selling, general and administrative expenses ~~increased 11%~~decreased 22% during the three months ended ~~June 30, 2019. The increase is~~March 31, 2020 compared to the prior year, primarily due to ~~$6.2~~benefits from our transformation and restructuring activities, including a $9.6 million ~~of higher~~decrease in compensation costs ~~largely as a result of changes in our chief executive officer in the three months ended June 30, 2019 and 2018, $3.3 million of Separation costs incurred during the three months ended June 30, 2019~~ and a ~~$0.7~~$3.5 million reduction in spending on outside services, which was partially offset by a $2.8 million increase in Merger, separation and transformation costs and a $0.9 million increase in bad debt expense. These cost increases were partially offset by a $6.1 million decrease in Transition and integration costs associated with the TiVo Acquisition, which was primarily due to a $4.5 million loss associated with a legacy TiVo Solutions legal matter recorded in the second quarter of 2018.

Selling, general and administrative expenses decreased slightly during the six months ended June 30, 2019 primarily due to a $7.8 million decrease in Transition and integration costs associated with the TiVo Acquisition, which was primarily due to a $4.5 million loss associated with a legacy TiVo Solutions legal matter recorded in the second quarter of 2018. This decrease was partially offset by $4.4 million of Separation costs incurred during the six months ended June 30, 2019 and a $2.5 million increase in compensation costs, primarily as a result of the change in our chief executive officer in the three months ended June 30, 2019 and 2018.

~~Amortization of intangible assets~~

The decrease in Amortization of intangible assets during the three and six months ended June 30, 2019 was primarily due to certain intangible assets acquired as part of the TiVo Acquisition reaching the end of their economic life.

Restructuring and asset impairment charges

In connection with the May 2019 announcement of the TiVo Separation, we initiated certain activities to transform our business operations (the "2019 Transformation Plan"). As a result of the 2019 Transformation Plan, we are reducing headcount, moving certain positions to lower cost locations, rationalizing facilities and legal entities and terminating certain leases and other contracts. In connection with the 2019 Transformation Plan, in the last nine months, we have taken actions that are expected to generate in excess of $27 million in annualized cost savings and we expect to incur material restructuring charges through mid-2020. The 2019 Transformation Plan resulted in Restructuring charges of $0.6 million during the three months ended March 31, 2020, substantially all of which related to severance costs.

In February 2018, we announced our intention to explore strategic alternatives. In connection with exploring strategic alternatives, we initiated certain cost saving actions (the "Profit Improvement Plan"). As a result of the Profit Improvement Plan, we moved certain positions to lower cost locations, eliminated layers of management and rationalized facilities, which resulted in severance costs and the termination of certain leases and other contracts, generating over $40 million in annualized cost savings. As a result of actions associated with the Profit Improvement Plan, Restructuring and asset impairment charges of ~~$2.7~~$0.1 million and ~~$1.1~~$1.8 million, primarily for severance-related benefits, were recognized in the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. ~~Restructuring charges of $4.5 million and $5.3 million, primarily for severance-related benefits, were recognized in the six months ended June 30, 2019 and 2018, respectively, as part of the~~ ~~Profit Improvement Plan~~.

~~Following completion of the TiVo Acquisition, integration plans were implemented which were intended to realize operational synergies between Rovi and TiVo Solutions (the "TiVo Integration Restructuring Plan~~Goodwill impairment~~"). As part of the~~

~~TiVo Integration Restructuring Plan, we eliminated duplicative positions resulting in severance costs and terminated certain leases and other contracts, generating over $110 million in annualized cost synergies.~~ As a result of ~~actions associated with~~a quantitative goodwill impairment test performed as of March 31, 2020, a Goodwill impairment charge of $171.6 million was recognized, of which $76.1 million related to the ~~TiVo Integration Restructuring Plan, Restructuring~~Product reporting unit and ~~asset~~$95.5 million related to the Intellectual Property Licensing reporting unit. For further details about the Goodwill impairment ~~charges~~charge, refer to Note 5 to the Condensed Consolidated Financial Statements included in Part I, Item 1. of ~~$0.4 million, primarily facility-related costs, were recognized in the six months ended June 30, 2018.~~this Quarterly Report on Form 10-Q, which is incorporated by reference herein.

Interest expense

Interest expense increased by ~~$0.3 million and $0.8~~$4.9 million during the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 primarily due to ~~an increase~~changes in the effective interest ~~rates~~rate associated with ~~Term Loan Facility B~~, which bears interest, at our election, at a rate equal to either London Interbank Offered Rate ("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. The increase in interest rates was partially offset by the $46.6 million Excess Cash Flow principal payment onrefinancing Term Loan Facility B in ~~February 2019. We expect interest expense to decrease due to~~November 2019, partially offset by the ~~$46.6 million Excess Cash Flow principal payment on~~ ~~Term Loan Facility B~~ ~~in February 2019 and the $50.0 million of~~ 2020 Convertible Notes ~~repurchased~~maturing in ~~June 2019.~~March 2020.

Interest income and other, net

The decrease in Interest income and other, net ~~increased $1.0 million and $1.2 million during the three and six months ended June 30, 2019, respectively. The increase~~ for the three months ended ~~June 30, 2019~~March 31, 2020 was primarily due to a ~~$0.5~~$1.1 million ~~increase~~decrease in interest income due to ~~an increase~~the liquidation of our marketable securities investment portfolio in ~~interest rates, $0.3~~connection with the maturing 2020 Convertible Notes, $0.4 million of ~~beneficial~~adverse movements in foreign currency exchange rates and a ~~$0.2~~$0.3 million ~~increase in income from an~~impairment of a non-marketable equity method investment. The increase for the six months ended June 30, 2019 was primarily due to a $1.4 million increase in interest income due to an increase in interest rates. We expect interest income to decrease due to investment sales in 2019 to fund the $46.6 million Excess Cash Flow principal payment on ~~Term Loan Facility B~~ ~~in February 2019 and the $50.0 million of~~ ~~2020 Convertible Notes~~ ~~repurchased in June 2019.~~security.

~~(Loss) gain~~Loss on interest rate swaps

We have not designated any of our interest rate swaps as hedges for accounting purposes. Therefore, changes in the fair value of our interest rate swaps are not offset by changes in the fair value of the related hedged item in our Condensed Consolidated Statements of Operations (see Note 97 to the Condensed Consolidated Financial Statements included in Part I, Item 1. of this Quarterly Report on Form 10-Q, which is incorporated by reference herein). We generally utilize interest rate swaps to convert the interest rate on a portion of our loans with a floating interest rate to a fixed interest rate. Under the terms of our interest rate swaps, we receive a floating rate of interest and pay a fixed rate of interest. When there is an increase in expected future LIBOR, we generally have gains when adjusting our interest rate swaps to fair value. When there is a decrease in expected future LIBOR, we generally have losses when adjusting our interest rate swaps to fair value.

Loss on debt extinguishment

~~In June~~Prior to the November 2019 refinancing, annually, the Company ~~repurchased $50.0 million of outstanding principal on its~~ ~~2020 Convertible Notes. The Company accounted for the repurchase as a partial debt extinguishment and recognized a Loss on debt extinguishment of $0.1 million in the three months ended June 30, 2019.~~

~~Annually, the Company may be~~was required to make an additional principal payment on Term Loan Facility B, which iswas calculated as a percentage of the prior year's "Excess Cash Flow" as defined in the Credit Agreement. In February 2019, the Company made an Excess Cash Flow payment of $46.6 million on Term Loan Facility ~~B. The Company~~B, which was accounted for ~~the Excess Cash Flow payment~~ as a partial debt extinguishment, and recognized a $0.2 million Loss on debt extinguishment ~~of $0.2 million~~ in the ~~six~~three months ended ~~June 30,~~March 31, 2019.

Income tax expense

Due to our significant net operating loss carryforwards and a valuation allowance applied against a significant portion of our deferred tax assets, foreign withholding taxes are generally the primary driver of ~~our Income~~income tax ~~expense.~~expense and the primary reason for cash payments of income taxes.

We recorded an Income tax ~~expense~~benefit for the three months ended ~~June 30, 2019~~March 31, 2020 of ~~$7.7~~$0.4 million, which primarily consists of ~~$6.4~~a $4.6 million benefit from the Goodwill impairment charge recognized during the three months ended March 31, 2020, which was partially offset by $2.6 million of Foreign withholding tax ~~$1.1~~and $1.3 million of U.S. Federal income ~~tax and $0.3 million of Foreign income~~ tax.

We recorded an Income tax expense for the three months ended ~~June 30, 2018~~March 31, 2019 of ~~$4.3~~$6.3 million, which primarily consists of ~~$3.2~~$4.8 million of Foreign withholding tax and ~~$1.2~~$1.3 million of ~~withholding taxes from a change in our assertion regarding the indefinite reinvestment of certain foreign earnings.~~

~~We recorded Income tax expense for the six months ended June 30, 2019 of $14.1 million, which primarily consists of $11.2 million of Foreign withholding tax, $2.4 million of~~U.S. Federal income tax and $0.7 million of Foreign income tax, which was partially offset by $0.3 million of State income tax benefits. We recorded an Income tax expense for the six months ended June 30, 2018 of $8.5 million, which primarily consists of $7.1 million of Foreign withholding tax, $1.2 million of withholding taxes from a change in our assertion regarding the indefinite reinvestment of certain foreign earnings and $0.6 million of Foreign income tax, which was partially offset by a $0.5 million benefit to continuing operations from a gain on discontinued operations.tax.

The year-over-year ~~increase~~decrease in Foreign withholding tax was due to a ~~larger~~smaller portion of license fees received in the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 coming from licensees in countries subject to foreign withholding taxes.

~~Income from discontinued operations, net of tax~~

In the three and six months ended June 30, 2018, we recognized Income from discontinued operations, net of tax, of $2.3 million and $3.6 million, respectively, as a result of the expiration of certain indemnification obligations and the

~~execution of settlement agreements during the period associated with previous business disposals.~~

Segment Results

We report segment information in the same way management internally organizes the business for assessing performance and making decisions regarding the allocation of resources to the business units. The terms Adjusted Operating Expenses and Adjusted EBITDA in the following discussion use the definitions provided in Note 1513 of the Condensed Consolidated Financial Statements included in Part I, Item 1.1 of this Quarterly Report on Form 10-Q, which is incorporated by reference herein.

Product

We group our Product segment into three verticals based on the products delivered to our customer: Platform Solutions; Software and Services; and Other. Platform Solutions includes licensing Company-developed UX products, the TiVo service and selling TiVo-enabled devices. Software and Services includes licensing our metadata and advanced media and advertising solutions, including viewership data, sponsored discovery and in-guide advertising. Other includes legacy Analog Content Protection ("ACP"), VCR Plus+ and media recognition products.

The Product segment's results of operations for the three ~~and six~~ months ended ~~June 30, 2019 and 2018~~March 31, 2020 compared to the prior year were as follows (dollars in thousands):

Three Months Ended June 30,
2019 2018 Change $ Change %
Platform Solutions $ 65,731
$ 72,208
$ (6,477 ) (9 )%
Software and Services 19,242
19,619
(377 ) (2 )%
Other 234
960
(726 ) (76 )%
Product Revenues 85,207
92,787
(7,580 ) (8 )%
Adjusted Operating Expenses 77,668
81,467
(3,799 ) (5 )%
Adjusted EBITDA $ 7,539
$ 11,320
$ (3,781 ) (33 )%
Adjusted EBITDA Margin 8.8 % 12.2 %


	Six Months Ended June 30,											Three Months Ended March 31,
	2019			2018			Change $			Change %		2020			2019			Change $			Change %
Platform Solutions	$	136,768		$	168,148		$	(31,380	)	(19	)%	$	64,535		$	71,037		$	(6,502	)	(9	)%
Software and Services	39,144			38,098			1,046			3	%	21,636			19,902			1,734			9	%
Other	598			3,393			(2,795		)	(82	)%	305			364			(59		)	(16	)%
Product Revenues	176,510			209,639			(33,129		)	(16	)%	86,476			91,303			(4,827		)	(5	)%
Adjusted Operating Expenses	160,558			170,933			(10,375		)	(6	)%	67,844			82,890			(15,046		)	(18	)%
Adjusted EBITDA	$	15,952		$	38,706		$	(22,754	)	(59	)%	$	18,632		$	8,413		$	10,219		121	%
Adjusted EBITDA Margin	9.0		%	18.5		%						21.5		%	9.2		%

For the three months ended ~~June 30, 2019,~~March 31, 2020, Product revenue declined 5% compared to the prior year due to a decrease in revenues from Platform Solutions and Other, which was partially offset by an increase in revenue from Software and Services.

For the three months ended March 31, 2020, the $6.5 million decrease in Platform Solutions revenue was primarily attributable to ~~a decrease in consumer subscription and hardware revenue. Consumer subscriber~~$6.7 million of revenue for the three months ended June 30, 2019 decreased $2.7 million due to subscriber erosion and an increase in the amortization period for lifetime subscriptions in December 2018. In addition, consumer hardware revenue decreased as a result of the planned transition of our customers to deploying the TiVo service on third-party hardware, resulting in a decrease in the number of TiVo set-top boxes sold. Platform Solutions revenue includes total hardware revenue of $1.7 million and $3.3 million for the three months ended June 30, 2019 and 2018, respectively. The decrease in Platform Solutions revenue was also partially due to the prior year benefiting from a $2.2 million minimum revenue guarantee.

For the six months ended June 30, 2019, the $31.4 million decrease in Platform Solutions revenue was primarily attributable to a decrease of $29.8 million in revenue from an international MSO customer exercising a contractual option during the three months ended March 31, 2018 to purchase a fully paid license to its then-current version of the TiVo software and purchasing additional engineering services. In addition, consumer subscriber revenue for the six months ended June 30, 2019 decreased $5.3 million due to subscriber erosion and an increase in the amortization period for lifetime subscriptions in December 2018. Platform Solutions revenue further declined due to a decrease in hardware revenue as a result of the planned transition of our customers to deploying the TiVo service on third-party hardware, resulting in a decrease in the number of TiVo set-top boxes sold. Platform Solutions revenue includes total hardware revenue of $3.8 million and $7.0 million for the six months ended June 30, 2019 and 2018, respectively. Revenue from a perpetual Passport license agreement with an international MSO customer in the three months ended March 31, ~~2019 partially offset these revenue declines.~~2019.

For the three months ended ~~June 30, 2019,~~March 31, 2020, the $0.4 million decrease in Software and Services revenue was the result of a $0.5 million decrease in Personalized Content Discovery revenue and a $0.4 million decrease in advertising revenue, partially offset by a $0.5 million increase in metadata revenue. For the six months ended June 30, 2019, the $1.0$1.7 million increase in Software and Services revenue was primarily the result of a ~~$0.6~~$2.9 million increase in ~~Personalized Content Discovery~~TV viewership data revenue, ~~and a $1.1 million increase in metadata revenue,~~which was partially offset by a ~~$0.6~~$0.9 million ~~decrease~~decline in ~~advertising~~metadata revenue.

For the three ~~and six~~ months ended ~~June 30, 2019, Other~~March 31, 2020, other revenue primarily consists of ACP revenue, which is expected to decline in the future.

The ~~5% and 6% decreases~~18% decrease in Product Adjusted Operating Expenses for the three ~~and six~~ months ended ~~June 30, 2019, respectively, were~~March 31, 2020 compared to the prior year was primarily due to benefits from our transformation and restructuring activities which resulted in reduced ~~spending on~~ Research and ~~Development due to cost savings initiatives, including a decrease in~~development compensation and consulting costs asand a ~~result of~~decrease in facility and information technology costs. These cost ~~savings~~reductions were partially offset by a $1.2 million charge resulting from ~~the Profit Improvement restructuring action. A $2.4 million inventory impairment~~a non-cancellable purchase commitment during the three ~~and six~~ months ended ~~June 30, 2019 due to a reduced forecast for sales of refurbished units partially offset the benefit of our cost savings initiatives.~~March 31, 2020 and an increase in bad debt expense.

The ~~decrease~~increase in Adjusted EBITDA Margin for the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 reflects the revenue ~~changes~~declines and the non-cancellable purchase commitment described above, ~~and the inventory impairment,~~ which ~~was partially~~were more than offset by benefits from ~~cost savings initiatives~~our transformation and ~~a shift in business mix toward higher margin products due to the planned transition of our customers to deploying the TiVo service on third-party hardware.~~restructuring activities.

Intellectual Property Licensing

We group our Intellectual Property Licensing segment into three verticals based primarily on the business of our customer: US Pay TV Providers; CE Manufacturers; and New Media, International Pay TV Providers and Other. US Pay TV Providers includes direct and indirect licensing of traditional US Pay TV Providers regardless of the particular distribution technology (e.g., cable, satellite or the internet). CE Manufacturers includes the licensing of our patents to traditional CE manufacturers. New Media, International Pay TV Providers and Other includes licensing to international pay TV providers, virtual service providers, mobile device manufacturers and content and new media companies.

The Intellectual Property Licensing segment's results of operations for the three ~~and six~~ months ended ~~June 30, 2019 and 2018~~March 31, 2020 compared to the prior year were as follows (dollars in thousands):

Three Months Ended June 30,
2019 2018 Change $ Change %
US Pay TV Providers $ 41,996
$ 49,217
$ (7,221 ) (15 )%
CE Manufacturers 7,730
8,927
(1,197 ) (13 )%
New Media, International Pay TV Providers and Other 41,239
21,929
19,310
88 %
Intellectual Property Licensing Revenues 90,965
80,073
10,892
14 %
Adjusted Operating Expenses 21,359
24,972
(3,613 ) (14 )%
Adjusted EBITDA $ 69,606
$ 55,101
$ 14,505
26 %
Adjusted EBITDA Margin 76.5 % 68.8 %


	Six Months Ended June 30,											Three Months Ended March 31,
	2019			2018			Change $			Change %		2020			2019			Change $			Change %
US Pay TV Providers	$	84,113		$	99,132		$	(15,019	)	(15	)%	$	45,109		$	42,117		$	2,992		7	%
CE Manufacturers	16,348			17,895			(1,547		)	(9	)%	8,334			8,618			(284		)	(3	)%
New Media, International Pay TV Providers and Other	57,436			36,031			21,405			59	%	19,942			16,197			3,745			23	%
Intellectual Property Licensing Revenues	157,897			153,058			4,839			3	%	73,385			66,932			6,453			10	%
Adjusted Operating Expenses	43,166			50,329			(7,163		)	(14	)%	22,120			21,807			313			1	%
Adjusted EBITDA	$	114,731		$	102,729		$	12,002		12	%	$	51,265		$	45,125		$	6,140		14	%
Adjusted EBITDA Margin	72.7		%	67.1		%						69.9		%	67.4		%

For the three ~~and six~~ months ended ~~June 30, 2019,~~March 31, 2020, Intellectual Property Licensing revenue grew 10% compared to the prior year due to an increase in revenues from New Media, International Pay TV Providers and Other and US Pay TV Providers, which was partially offset by a decrease in revenue from CE Manufacturers.

For the three months ended March 31, 2020, the increase in revenue from US Pay TV Providers was primarily due to ~~decreases of $8.4~~subscriber growth since the year ago period and a $1.1 million ~~and $17.3 million~~increase in the three and six months ended June 30, 2019, respectively, in revenue from TiVo Solutions Time Warp agreements entered into with AT&T, DirecTV, EchoStar and Verizon prior to the TiVo Acquisition Date due to the expiration of these contracts by the end of July 2018. In addition, revenue from catch-up payments intended to make us whole for the pre-license period.

For the three months ended March 31, 2020, the decrease in revenue from ~~US Pay TV Providers~~CE Manufacturers compared to the prior year was primarily the result of a decrease of $0.7 million from catch-up payments intended to make us whole for the pre-license period of use ~~for the three~~ and ~~six months ended June 30, 2019 decreased~~ by ~~$0.4 million and $0.4 million, respectively. These revenue declines were partially offset by increases in revenue from our existing customers.~~

~~For the three and six months ended June 30, 2019, the decrease in revenue from CE Manufacturers was primarily due to~~ a decrease in our licensees' market share, combined with continuing pressures on our licensees' business models. Such declines could continue unless we are able to successfully license new entrants to this market. ~~In addition,~~Partially offsetting these revenue ~~decreased by $0.2~~declines was a $1.1 million ~~for~~benefit from a new license with a large CE manufacturer executed in the three months ended ~~June 30, 2019 and increased by $0.5 million for the six months ended June 30, 2019 from catch-up payments from CE Manufacturers intended to make us whole for the pre-license period of use.~~December 31, 2019.

For the three ~~and six~~ months ended ~~June 30, 2019, the increase in~~March 31, 2020, New Media, International Pay TV Providers and Other reflects an increase ~~of $14.9 million and $14.4 million, respectively,~~ in revenue from catch-up payments intended to make us whole for the pre-license period of use, primarily related to expanding our license with Shaw Communications to include the TiVo Solutions patent portfolio and our first social media customer. In addition, revenue for the three and six months ended June 30, 2019 increased compared to the prior period due to new licenses and contract amendments executed since the year ago ~~period.~~period and an increase of $1.0 million in revenue from catch-up payments intended to make us whole for the pre-license period of use.

The ~~14% and 14% decreases~~1% increase in Intellectual Property Licensing Adjusted Operating Expenses during the three ~~and six~~ months ended ~~June 30, 2019, respectively, reflect decreases of $5.2~~March 31, 2020 reflects a $3.0 million ~~and $8.7 million, respectively,~~increase in patent litigation costs ~~which~~ compared to the year-ago period,primarily ~~relates~~related to the timing of costs incurred in the ongoing Comcast ~~litigation. These decreases in costs were~~litigation, partially offset by ~~a $1.1 million impairment recognized in the three months ended June 30, 2019 associated with a prepaid license that is not expected to be recoverable~~benefits from ~~the net direct revenue resulting from new patent license agreements executed with customers.~~our transformation and restructuring activities.

The increase in Adjusted EBITDA Margin for the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 is primarily the result of the increase in Intellectual Property Licensing revenue ~~combined with a decrease~~and benefits from our transformation and restructuring activities, which were partially offset by an increase in patent litigation costs.

Corporate

Corporate costs primarily include employee-related general and administrative costs ~~such as~~for the corporate management, finance, legal and human ~~resources.~~resources functions, outside services such as accounting, consulting, legal and tax services, and an allocation of overhead and facilities costs.

Corporate costs for the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 compared to the prior year were as follows (dollars in thousands):

Three Months Ended June 30,
2019 2018 Change $ Change %
Adjusted Operating Expenses $ 14,524
$ 14,512
$ 12
— %

Six Months Ended June 30,
2019 2018 Change $ Change %
Adjusted Operating Expenses $ 30,621
$ 30,560
$ 61
— %



	Three Months Ended March 31,
	2020		2019		Change $			Change %
Adjusted Operating Expenses	$	11,691	$	16,097	$	(4,406	)	(27	)%

For the three ~~and six~~ months ended ~~June 30, 2019,~~March 31, 2020, the ~~slight increase~~decrease in Corporate Adjusted Operating Expenses primarily reflects ~~an increase~~a decrease in compensation costs, ~~partially offset by~~a reduction in spending on outside services and other benefits from ~~cost savings initiatives.~~our transformation and restructuring activities.

Liquidity and Capital Resources

We finance our business primarily from operating cash flow. We believe our cash position remains strong and our cash, cash equivalents and marketable securities and anticipated operating cash flow, supplemented with access to capital markets as necessary, are generally sufficient to support our operating businesses, capital expenditures, restructuring activities, maturing debt, interest payments and income tax payments, in addition to investments in future growth opportunities and payments for dividends and share repurchases for at least the next twelve months. Our access to capital markets may be constrained and our cost of borrowing may increase under certain business, market and economic conditions; however, our use of a variety of funding sources to meet our liquidity needs is designed to facilitate continued access to sufficient capital resources under such conditions. ~~Based on current market and business conditions, if we were to refinance our existing debt, we anticipate our cost of borrowing would increase.~~

As of ~~June 30, 2019,~~March 31, 2020, we had ~~$147.3~~$108.5 million in Cash and cash equivalents, ~~$114.2 million in Short-term marketable securities and $25.8 million in Long-term marketable securities. Our cash, cash equivalents and marketable securities~~which are held in numerous locations around the world, with ~~$36.4~~$23.2 millionheld by our foreign ~~subsidiaries as of June 30, 2019.~~subsidiaries. Due to our net operating loss carryforwards and the effects of the Tax Act of 2017, we could repatriate amounts to the U.S. with minimal income tax effects. However, the Company's liquidity may be negatively impacted by the COVID-19 pandemic if normal business operations are not resumed in the near-term. Further, the extent to which the COVID-19 pandemic and our precautionary measures in response thereto impact our business and liquidity will depend on future developments, which are highly uncertain and cannot be precisely predicted at this time.

Sources and Uses of Cash

Cash flows for the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 compared to the prior year were as follows (in thousands):

Six Months Ended June 30,
2019 2018 Change $ Change %
Net cash provided by operating activities $ 31,850
$ 61,792
$ (29,942 ) (48 )%
Net cash provided by (used in) investing activities 77,973
(13,579 ) 91,552
(674 )%
Net cash used in financing activities (124,651 ) (44,458 ) (80,193 ) 180 %
Effect of exchange rate changes on cash and cash equivalents 207
(530 ) 737
(139 )%
Net (decrease) increase in cash and cash equivalents $ (14,621 ) $ 3,225
$ (17,846 ) (553 )%



	Three Months Ended March 31,
	2020			2019			Change $			Change %
Net cash (used in) provided by operating activities - Continuing operations	$	(20,296	)	$	4,325		$	(24,621	)	(569	)%
Net cash provided by investing activities	48,627			10,599			38,028			359	%
Net cash used in financing activities	(292,192		)	(63,577		)	(228,615		)	360	%
Net cash used in operating activities - Discontinued operations	(406		)	—			(406		)	N/a
Effect of exchange rate changes on cash and cash equivalents	(933		)	(120		)	(813		)	678	%
Net decrease in cash and cash equivalents	$	(265,200	)	$	(48,773	)	$	(216,427	)	444	%

For the ~~six~~three months ended ~~June 30, 2019,~~March 31, 2020, operating cash flow decreased ~~$29.9~~$24.6 million. The decrease was primarily due to payments for Merger, separation and transformation costs, the timing of collections on Accounts receivable, net ~~partially offset by higher employee severance~~ and ~~retention accruals,~~ a ~~2018 payment related to TiVo's acquisition of Cubiware, the timing of payments to trade vendors and certain~~decrease in cash collections in advance of revenue being recognized. We expect to make material cash payments for ~~Separation~~restructuring actions and Merger, separation and transformation costs through 2020. The

availability of cash generated by our operations in the future could be adversely affected by business risks including, but not limited to, the Risk Factors described in in Part II, Item ~~1A.~~1A. of this Quarterly Report on Form 10-Q and Part 1, Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2019, which are incorporated by reference herein.

For the ~~six~~three months ended ~~June 30, 2019,~~March 31, 2020, investing cash flow increased~~$91.6~~ $38.0 million. Net proceeds from marketable security investment transactions increased by~~$93.1~~ $32.2 millioncompared to the prior year. The proceeds from the investment transactions were primarily used to repay ~~debt~~the 2020 Convertible Notes at their maturity. In addition, investing cash

flow benefited from the use of $4.3 million of cash to acquire patent portfolios during the ~~six~~three months ended ~~June 30,~~March 31, 2019. ~~The decrease in capital expenditures for the six months ended June 30, 2019 was primarily associated with infrastructure projects designed to integrate TiVo Solutions in 2018.~~ We expect ~~2019~~2020 full year capital expenditures of approximately ~~$30~~$20 million to ~~$35~~$25 million for infrastructure projects designed to support anticipated growth in our business, to strengthen our operations infrastructure and to complete the ~~Separation. Partially offsetting these cash flow benefits was $6.9 million of cash paid to acquire patent portfolios during the six months ended June 30,~~ 2019. Transformation Plan.

Financing cash flow for the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 reflects the ~~repurchase~~repayment of ~~$50.0~~$295.0 million of outstanding principal of the Company's 2020 Convertible Notes ~~for $49.4 million~~at their maturity and a ~~$46.6~~$1.8 million principal payment on the 2019 Term Loan Facility B ~~compared to $3.5 million of principal payments in the six months ended June 30, 2018.~~. Net cash used in financing activities for the ~~six~~three months ended ~~June 30,~~March 31, 2020 reflects a decrease of $0.8 million in tax withholding payments from the net share settlement of restricted awards, partially offset by a decrease in cash receipts of $1.7 million from sales of stock through our employee stock purchase plan. Financing cash flow for the three months ended March 31, 2019 reflects a $46.6 million principal payment on Term Loan Facility B. Net cash used in financing activities for the three months ended March 31, 2019 reflects a dividend ~~payments~~payment of ~~$0.26~~$0.18 per share, resulting in an aggregate cash ~~payments~~payment of ~~$32.5 million compared to dividend payments of $0.36 per share, resulting in aggregate cash payments of $44.3 million for the six months ended June 30, 2018.~~$22.5 million.

On February 14, 2017, TiVo Corporation's Board of Directors approved an increase to the stock repurchase program authorization to $150.0 million, which remains available as of ~~June 30, 2019.~~March 31, 2020. The February 2017 authorization includes amounts which were outstanding under previously authorized share repurchase programs. The February 2017 authorization is subject to restrictions included in the Xperi Merger Agreement, and we do not intend to make purchases under the February 2017 authorization during the pendency thereof.

Capital Resources

The outstanding principal and carrying amount of debt we issued or assumed was as follows (in thousands):

June 30, 2019 December 31, 2018
Outstanding Principal Carrying Amount Outstanding Principal Carrying Amount
2020 Convertible Notes $ 295,000
$ 285,914
$ 345,000
$ 326,640
2021 Convertible Notes 48
48
48
48
Term Loan Facility B 621,912
619,622
668,500
665,449
Total $ 916,960
$ 905,584
$ 1,013,548
$ 992,137

~~While $295.0 million of~~ ~~2020 Convertible Notes~~ ~~is scheduled to mature on March 1, 2020, the~~ ~~2020 Convertible Notes~~ ~~can be freely converted by holders beginning December 1, 2019. The~~ ~~2020 Convertible Notes~~ ~~may be converted by holders prior to December 1, 2019 in certain circumstances.~~



	March 31, 2020				December 31, 2019
	Outstanding Principal		Carrying Amount		Outstanding Principal		Carrying Amount
2020 Convertible Notes	$	—	$	—	$	295,000	$	292,699
2021 Convertible Notes	48		48		48		48
2019 Term Loan Facility	713,210		692,269		715,000		692,792
Total	$	713,258	$	692,317	$	1,010,048	$	985,539

For more information on our borrowings, see Note 97 to the Condensed Consolidated Financial Statements included in Part I, Item 1. of this Quarterly Report on Form 10-Q, which is incorporated by reference herein. Our ability to make payments on ~~and to refinance~~ our indebtedness depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions. If our cash flows and capital resources are insufficient to service our debt obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness. For additional information about liquidity risk, see the Risk Factors described in Part II, Item 1A. of this Quarterly Report on Form 10-Q, which are incorporated by reference herein.

2020 Convertible Notes

Rovi Corporation issued $345.0 million in aggregate principal of 0.500% Convertible Notes that mature on March 1, 2020 at par pursuant to an Indenture dated March 4, 2015 (the "2015 Indenture"). In June 2019, the Company repurchased $50.0 million of outstanding principal of the 2020 Convertible Notes.

The ~~2020 Convertible Notes~~ ~~were convertible at an initial conversion rate of 34.5968 shares of TiVo Corporation common stock per $1,000 of~~Company repaid the outstanding principal of notes, which was equivalent to an initial conversion price of $28.9044 per share of TiVo Corporation common stock. The conversion rate and conversion price are subject to adjustment pursuant to the 2015 Indenture, including as a result of dividends paid by TiVo Corporation. As of June 30, 2019, the ~~2020 Convertible Notes~~ ~~are~~

~~convertible~~$295.0 million at ~~a conversion rate of 39.3110 shares of TiVo Corporation common stock per $1,000 principal of notes, which is equivalent to a conversion price of $25.4382 per share of TiVo Corporation common stock.~~

~~Holders may convert the~~ ~~2020 Convertible Notes~~ ~~prior to the close of business on the business day immediately preceding December 1, 2019, in multiples of $1,000 of principal under the following circumstances:~~

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~~

~~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 our 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 our 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.~~March 1, 2020.

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.~~

~~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.~~

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 Convertible 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.

~~Senior Secured~~2019 Term Loan Facility and Revolving Loan Credit ~~Facility~~Agreement

On ~~July 2, 2014, Rovi Corporation,~~November 22, 2019, the Company, as ~~parent guarantor, and two of its wholly-owned subsidiaries, Rovi Solutions Corporation and Rovi Guides, Inc., as borrowers,~~borrower, and certain of ~~its other~~the Company’s subsidiaries, as ~~subsidiary~~ guarantors (together with the Company, collectively, the “Loan Parties”), entered into (i) a Credit and Guaranty 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“2019 Term Loan ~~Facility A,~~Facility”), with the ~~“Term~~lenders party thereto and HPS Investment Partners, LLC, as administrative agent and collateral agent and (ii) an ABL Credit and Guaranty Agreement (the “Revolving Loan ~~Facility”) and (iii) five-year $175.0 million revolving credit facility (including a letter of credit sub-facility) (the "Revolving Facility”~~Credit Agreement” and, together with the 2019 Term Loan Facility, the ~~“Senior Secured~~“2019 Credit ~~Facility”~~Agreements”)~~. In September 2015, Rovi made a voluntary principal prepayment to extinguish~~, with the lenders party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent and Wells Fargo Bank, National Association, as co-collateral agent.

Under the 2019 Term Loan Facility, ~~A and elected to terminate~~ the ~~Revolving Facility.~~

The Company also entered into a $60.0 million Revolving Loan Credit Facility B.as part of the 2019 Credit Agreements, which expires on March 31, 2021. Availability of the Revolving Loan Credit Facility is based upon a borrowing base formula and periodic borrowing base certifications valuing certain of the Loan Parties’ accounts receivable as reduced by certain reserves, if any. There were no amounts outstanding under the Revolving Loan Credit Facility at any time during the three months ended March 31, 2020 or the year ended December 31, 2019. Loans under ~~Term~~the Revolving Loan Credit Facility ~~B bore~~bear interest, at ~~our~~TiVo’s option, at a rate equal to either (a) LIBOR, plus ~~an applicable margin~~(i) if the average daily Specified Excess Availability (as defined in the Revolving Loan Credit Agreement) is greater than 66.67%, 1.50%, (ii) if the average daily Specified Excess Availability is greater than 33.33% but less than or equal to ~~3.00% per annum (subject~~66.66%, 1.75%, or (iii) if the average daily Specified Excess Availability is less than or equal to 33.33%, 2.00%, in each case, subject to a ~~0.75%~~0.00% LIBOR ~~floor)~~floor or (b) the ~~prime lending rate, plus an applicable margin~~Base Rate (as defined in the Revolving Loan Credit Agreement), (i) if the average daily Specified Excess Availability is greater than 66.67%, 0.50%, (ii) if the average daily Specified Excess Availability is greater than 33.33% but less than or equal to ~~2.00% per annum.~~66.66%, 0.75%, or (iii) if the average daily Specified Excess Availability is less than or equal to 33.33%, 1.00%, in each case, subject to a 1.00% Base Rate floor.

The 2019 Credit ~~Agreement contains~~Agreements contain customary representations and warranties and customary affirmative and negative covenants applicable to usthe Company and ~~our~~its subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions. The 2019 Credit ~~Agreement is~~Agreements are secured by substantially all of the Company's assets. ~~Annually, we~~

Financing for the Xperi Combination

In connection with the execution of the Xperi Merger Agreement, TiVo and Xperi obtained a debt commitment letter (the “Commitment Letter”), dated December 18, 2019, with Bank of America, N.A. (“Bank of America”), BofA Securities, Inc. and Royal Bank of Canada (“Royal Bank”), pursuant to which, Bank of America and Royal Bank have committed to provide a senior secured first lien term loan B facility in an aggregate principal amount of $1,100 million (the “Debt Financing”). On January 3, 2020, TiVo, Xperi, Bank of America, Royal Bank and Barclays Bank PLC (“Barclays”) entered into a supplement to the Commitment Letter to add Barclays as an additional initial lender and an additional joint lead arranger and joint bookrunner and to reallocate a portion of the debt commitments of Bank of America and Royal Bank under the Commitment Letter to Barclays. The proceeds from the Debt Financing may be ~~required~~used (i) to ~~make an additional principal payment on Refinancing Agreement No. 1, which is calculated as a percentage~~pay fees and expenses incurred in connection with the Merger and the related transactions, (ii) to finance the refinancing of certain existing indebtedness of TiVo and Xperi, and (iii) to the ~~prior year's "Excess Cash Flow" as defined in the Credit Agreement. In February 2019, the Company made an Excess Cash Flow payment~~extent of ~~$46.6 million, which eliminated the~~any remaining ~~quarterly principal payments. The outstanding principal balance of Term Loan Facility B is due in July 2021.~~amounts, for working capital and other general corporate purposes.

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. 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 balances reported in the Condensed Consolidated Financial Statements are reasonable; however, actual results could differ materially.

~~There~~Except as described below, there 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 7. of our Annual Report on Form 10-K for the year ended December 31, 2019, which is incorporated by reference herein.

Goodwill

Goodwill represents the excess of cost over fair value of the net assets of an acquired business. The recoverability of goodwill is assessed at the reporting unit level, which is either the operating segment or one level below. Goodwill is evaluated for potential impairment annually, as of the beginning of the fourth quarter, and whenever events or changes in circumstances indicate its carrying amount may not be recoverable.

Qualitative factors are first assessed to determine whether events or changes in circumstances indicate it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount.

Qualitative factors which could trigger a quantitative impairment test, include, but are not limited to a:

significant deterioration in general economic, industry or market conditions;

significant adverse development in cost factors;

significant deterioration in actual or expected financial performance or operating results;

significant adverse changes in legal factors or in the business climate, including adverse regulatory actions or assessments; and

significant sustained decrease in share price.

If, based on the qualitative assessment, it is considered more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, then a quantitative impairment test is performed. In the quantitative impairment test, the fair value of each reporting unit is compared to its carrying amount. The fair value of the Product reporting unit and the Intellectual Property Licensing reporting unit is estimated using an income approach. Under the income approach, the fair value of a reporting unit is estimated based on the present value of future cash flows and considers projected revenue growth rates, future operating margins, income tax rates and economic and market conditions, as well as risk-adjusted discount rates. The carrying

amount of a reporting unit is determined by assigning assets and liabilities, including goodwill and intangible assets, to the reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not impaired. If the fair value of a reporting unit is less than its carrying amount, an impairment loss equal to the difference is recognized.

The process of evaluating goodwill for potential impairment is subjective and requires significant estimates, assumptions and judgments particularly related to the identification of reporting units, the assignment of assets and liabilities to reporting units and estimating the fair value of each reporting unit.

Due to significant and sustained decline in the trading price of TiVo's common stock during the three months ended March 31, 2020, management concluded sufficient indicators of potential impairment were identified and that it was more-likely-than-not that goodwill was impaired and that a quantitative impairment test should be performed as of March 31, 2020 for the Product and Intellectual Property Licensing reporting units. Although the long-range forecasts for the Product and Intellectual Property Licensing reporting units did not materially change from those used in performing the quantitative impairment test as of December 31, 2019, the fair value decreased due to the significant and sustained decline in the trading price of TiVo's common stock. Based on this decline in fair value, a Goodwill impairment charge of $171.6 million was recognized during the three months ended March 31, 2020, of which $76.1 million related to the Product reporting unit and $95.5 million related to the Intellectual Property Licensing reporting unit.

Following the recognition of the Goodwill impairment charge, the equity fair value of the Product reporting unit equaled its carrying amount of $351.5 million and the equity fair value of the Intellectual Property Licensing reporting unit equaled its carrying amount of $551.0 million, which is net of the Company's debt. A deterioration in conditions or circumstances similar to those described above may result in additional goodwill impairment charges for the Product or Intellectual Property Licensing reporting units in the future. In addition, if we fail to renew licenses, or renew licenses with materially different terms than those assumed, if there is an adverse outcome with respect to patent infringement claims we have asserted against Comcast, an impairment of goodwill for the Intellectual Property Licensing reporting unit could result, the effect of which could be material.

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, ~~2018,~~2019, which is incorporated by reference herein. Other than the ~~repurchase~~

maturity of ~~$50.0~~$295.0 million ~~of outstanding principal~~ of the Company's 2020 Convertible Notes in ~~June 2019, the $46.6~~March 2020 and $6.4 million ~~principal payment on~~ ~~Term Loan Facility B~~ ~~in February 2019 and the $4.3 million paid in January 2019 in connection with an agreement executed in December 2018 to acquire a portfolio~~ of ~~patents,~~new inventory purchase commitments, our contractual obligations have not changed materially since December 31, ~~2018.~~2019.

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, ~~2018,~~2019, which is incorporated by reference herein. Since

December 31, ~~2018,~~2019, 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 1. 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, ~~2018,~~2019, which is incorporated by reference herein. ~~Our~~Other than as a result of the disposition of our short- and long-term marketable securities during the three months ended March 31, 2020, our exposure to market risk has not changed materially since December 31, ~~2018.~~2019.

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 our 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

We believe there have been no changes to our internal controls over financial reporting during the quarter ended ~~June 30, 2019,~~March 31, 2020, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II.

ITEM 1. LEGAL PROCEEDINGS

Information with respect to this item is contained in Note 119 to the Condensed Consolidated Financial Statements included in Part I ~~Item 1.~~ of this Quarterly Report on Form 10-Q, which is incorporated by reference herein.

ITEM 1A. RISK FACTORS

~~Management~~Other than described below, 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 1A. of our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, which is incorporated by reference ~~herein, other than as described below.~~herein.

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~~effects of health epidemics, including the recent global coronavirus pandemic, have led to ~~customary closing conditions, including, among others, obtaining final approval from~~periods of significant volatility in various markets and industries and could harm the ~~TiVo Board~~Company’s business and results of ~~Directors, receipt of tax opinions, and the effectiveness of an applicable registration statement with the Securities and Exchange Commission.~~operations.

~~Unanticipated developments,~~The Company’s business and results of operations could be adversely affected by health epidemics, including ~~difficulty~~the recent coronavirus pandemic. In December 2019, a novel strain of coronavirus, SARS-CoV-2, or COVID-19, was reported to have surfaced in ~~separating~~Wuhan, China. Since then, coronavirus has spread to many countries worldwide, including the ~~assets~~United States. In March 2020, the World Health Organization declared the coronavirus to be a pandemic. Given the ongoing 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-freedynamic nature of the ~~Distribution, regulatory or other approvals or clearances~~circumstances, it is difficult to ~~approve or facilitate~~predict 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~~coronavirus outbreak on the Company’s business, and there is no guarantee that efforts by the Company to address the adverse impacts of the coronavirus will be effective. The impact to date has included periods of significant volatility in various markets and industries. This volatility could have an adverse impact on the Company’s customers and on the companies’ business, financial condition and results of operations, including impairment of our long-lived assets, including goodwill, increased credit losses and impairments of investments in other companies. In particular, industries that include customers of the Company have and may continue to be impacted by the coronavirus outbreak and/or other events beyond the control of the Company, and further volatility could have an additional negative impact on these industries, customers, and the ~~Distribution~~Company. In addition, recent actions by United States federal, state and foreign governments to address the coronavirus outbreak, including travel bans and school, business and entertainment venue closures, may also have a significant adverse effect on ~~our existing credit facilities~~the markets in which the Company conducts its business. The extent of impacts resulting from the coronavirus outbreak and ~~convertible notes, could delay~~other events beyond the Company’s control will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus outbreak and actions taken to contain the coronavirus 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.~~its impact, among others.

~~We expect that~~In addition, the ~~process of completing~~coronavirus outbreak could result in business disruption to the ~~Separation, including the Distribution, will be time-consuming~~Company, 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~~Company is unable to recover from such a business disruption on a timely basis, the ~~Distribution, is not completed. Furthermore, the time~~Company’s business and ~~energy required~~financial conditions and results of ~~our senior management and other employees~~operations would be adversely affected. The Company may also incur additional costs to ~~plan and execute the Separation may lead to increased costs, negative effects on relationships with business partners, suppliers, and customers, and~~remedy damages caused by such disruptions, ~~in operations, and may ultimately harm our businesses,~~which could adversely affect its financial condition and results of operations. ~~We may also experience difficulty attracting, retaining and motivating employees during~~For example, COVID-19 poses 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~~Company or its workforce, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. The COVID-19 pandemic has recently had adverse impacts on many aspects of the ~~value~~Company's operations, directly and indirectly, including its workforce, consumer behavior, distribution, its suppliers and the market generally. In March 2020, the Company announced its workforce would work remotely as a result of the ~~two independent, publicly traded companies will be less than~~pandemic as it reviewed its processes related to workplace safety, including social distancing and sanitation practices recommended by the ~~value~~Centers for Disease Control and Prevention. The impacts of the COVID-19 pandemic could also cause delays in obtaining new customers and executing renewals and could also impact the Company's consumer business, including sales of TiVo Stream 4K which was recently launched.

There can be no assurance that the global coronavirus pandemic will not have a material and adverse impact on the Company’s business, operating results and financial condition. Even after the coronavirus outbreak has subsided, the Company ~~before~~may continue to experience material and adverse impact on its business, operating results and financial condition as a result of its global economic impact, including any recession that has occurred or may occur in the ~~Separation. There~~future. The ultimate impact of the coronavirus pandemic or a similar health epidemic is ~~also a risk that we may~~highly uncertain and subject to change. The Company does not ~~be able to achieve~~yet know the full ~~strategic, operational~~extent of potential delays or impacts on its business, operations or the global economy as a whole. Future impacts of COVID-19 may require further actions by the Company to improve its cash position, including but not limited to, implementing employee furloughs and ~~financial benefits to us~~foregoing capital expenditures 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.other discretionary expenses.

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.~~investment, subject to restrictions in the 2019 Term Loan Facility and the Xperi Merger Agreement.

The following table provides information about the Company's purchases of its common stock during the three months ended ~~June 30, 2019~~March 31, 2020 (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)
April 2019 —
$ —
— $ 150,000
May 2019 —
$ —
— $ 150,000
June 2019 —
$ —
— $ 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 2020	—	$	—	—	$	150,000
February 2020	—	$	—	—	$	150,000
March 2020	—	$	—	—	$	150,000
Total	—	$	—	—


(1)	Excludes shares withheld to satisfy minimum statutory tax withholding requirements in connection with the net share settlement of restricted awards on vesting. During the three months ended ~~June 30, 2019,~~March 31, 2020, we withheld ~~0.2~~0.1 million shares of common stock to satisfy ~~$1.7~~$0.6 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. The February 2017 authorization is subject to restrictions included in the Xperi Merger Agreement, and we do not intend to make purchases under the February 2017 authorization during the pendency thereof.

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
3.10
Amended and Restated Bylaws of TiVo Corporation
8-K 5/23/2019 3.1
10.01
Offer Letter dated May 24, 2019 between TiVo Corporation and David Shull**
8-K 5/23/2019 10.1
10.02
Executive Severance and Arbitration Agreement dated as of May 31, 2019 between TiVo Corporation and David Shull**
8-K 5/23/2019 10.2
10.03
Letter Agreement dated May 24, 2019 between TiVo Corporation and Raghavendra Rau**
8-K 5/23/2019 10.3
10.04
TiVo Corporation 2008 Equity Incentive Plan**
DEF 14A 3/15/2019 Annex A
10.05
Form of Notice of Restricted Stock Unit / Restricted Stock Unit Agreement for Non-Executives under the TiVo Corporation 2008 Equity Incentive Plan**
X
10.06
Form of Notice of Restricted Stock Unit / Restricted Stock Unit Agreement for Executives under the TiVo Corporation 2008 Equity Incentive Plan**
X
10.07
Form of Notice of Performance-Based Restricted Stock Unit / Performance-Based Restricted Stock Unit Agreement under the TiVo Corporation 2008 Equity Incentive Plan**
X
10.08
Form of Notice of Annual Restricted Stock Award / Restricted Stock Award Agreement for Directors under the TiVo Corporation 2008 Equity Incentive Plan**
X
10.09
Form of Notice of Quarterly Restricted Stock Award / Restricted Stock Award Agreement for Directors under the TiVo 2008 Equity Incentive Plan**
X
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.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X
101.SCH Inline XBRL Taxonomy Extension Schema Document X
104+ Cover Page Interactive Data File X



		Incorporated by Reference
Exhibit Number	Exhibit Description	Company Form+	Filing Date	Exhibit Number	Filed Herewith
2.1	Amendment No. 1 to the Agreement and Plan of Merger and Reorganization, dated January 31, 2020, by and among, Xperi Corporation, TiVo Corporation, XRAY-TWOLF HoldCo Corporation, XRAY Merger Sub Corporation and TWOLF Merger Sub Corporation	8-K	2/3/2020	2.1
3.1	Amended and Restated Certificate of Incorporation of Titan Technologies Corporation (now known as TiVo Corporation) filed with the Secretary of State of the State of Delaware on September 7, 2016	8-K	9/8/2016	3.1
3.2	Certificate of Designation of Series A Junior Participating Preferred Stock of TiVo Corporation, filed with the Secretary of State of Delaware on December 20, 2019	8-K	12/24/2019	3.1
3.3	Amended and Restated Bylaws of TiVo Corporation	8-K	5/30/2019	3.1
10.1	Supplement to Commitment Letter and Fee letter, dated as of January 3, 2020, by and among TiVo Corporation, Xperi Corporation, Bank of America, N.A., BofA Securities, Inc., Royal Bank of Canada and Barclays Bank PLC.	8-K	1/7/2020	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.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document				X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document				X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document				X
101.SCH	Inline XBRL Taxonomy Extension Schema Document				X
104	Cover Page Interactive Data File				**


*	Furnished herewith.


**	~~Management contract or compensatory plan or arrangement.~~


+	Included in Interactive Data File covered by Exhibit 101.

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/ David Shull
~~July 31, 2019~~May 6, 2020		David Shull
		President and Chief Executive Officer

Principal Financial ~~Officer:~~
~~Date:~~	~~By:~~	~~/s/ Peter C. Halt~~
~~July 31, 2019~~		~~Peter C. Halt~~
		~~Chief Financial Officer~~

~~Principal~~and Accounting Officer:
Date:	By:	/s/ Wesley Gutierrez
~~July 31, 2019~~May 6, 2020		Wesley Gutierrez
		Chief ~~Accounting~~Financial Officer ~~and Treasurer~~

5046



	June 30, 2019		December 31, 2018
Raw materials	$	641	$	864
Finished goods	3,136		6,585
Inventory	$	3,777	$	7,449



	Three Months Ended June 30, 2019						Three Months Ended June 30, 2018
	Product		Intellectual Property Licensing		Total Revenues, net		Product		Intellectual Property Licensing		Total Revenues, net
Goods and services transferred at a point in time	$	17,353	$	30,303	$	47,656	$	20,675	$	27,330	$	48,005
Goods and services transferred over time	67,854		36,179		104,033		72,112		42,594		114,706
Out-of-license settlements	—		24,483		24,483		—		10,149		10,149
Total Revenues, net	$	85,207	$	90,965	$	176,172	$	92,787	$	80,073	$	172,860



	June 30, 2019
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash	$	40,398	$	—	$	—		$	40,398
Cash equivalents - Money market funds	102,453		—		—			102,453
Cash equivalents - Corporate debt securities	4,483		—		—			4,483
Cash and cash equivalents	$	147,334	$	—	$	—		$	147,334

Corporate debt securities	$	51,882	$	77	$	(11	)	$	51,948
U.S. Treasuries / Agencies	87,744		287		(30		)	88,001
Marketable securities	$	139,626	$	364	$	(41	)	$	139,949
Cash, cash equivalents and marketable securities								$	287,283



	Amortized Cost		Fair Value
Due in less than 1 year	$	114,047	$	114,183
Due in 1-2 years	25,579		25,766
Total	$	139,626	$	139,949



	Three Months Ended June 30, 2018			Six Months Ended June 30, 2018
	Cubiware Contingent Consideration			Auction Rate Securities			Cubiware Contingent Consideration
Balance at beginning of period	$	(3,204	)	$	10,584		$	(2,234	)
Sales	—			(10,715		)	—
Loss included in earnings	(395		)	(85		)	(1,365		)
Unrealized loss reclassified on sale	—			216			—
Balance at end of period	$	(3,599	)	$	—		$	(3,599	)



Remainder of 2019	$	56,014
2020	111,768
2021	68,999
2022	41,270
2023	24,072
Thereafter	148,244
Total	$	450,367