Non-cash interest expense on convertible notes. The Company incurs non-cash interest expense related to its convertible notes. The Company excludes non-cash interest expense related to its convertible notes to provide more accurate comparisons of the Company’s results with other peer companies and to more accurately reflect the Company’s ongoing operations.

Income tax adjustments. For purposes of internal forecasting, planning and analyzing future periods that assume net income from operations, the Company estimates a fixed, long-term projected tax rate of approximately 36 percent, which consists of estimated U.S. federal and state tax rates, and excludes tax rates associated with certain items such as withholding tax, tax credits, deferred tax asset valuation allowance and the release of any deferred tax asset valuation allowance. Accordingly, the Company has applied the 36 percent tax rate to its non-GAAP financial results for all periods. The Company has provided below a reconciliation of its GAAP provision for income taxes and GAAP effective tax rate to the assumed non-GAAP provision for income taxes and non-GAAP effective tax rate.

On occasion in the future, there may be other items, such as asset impairments and significant gains or losses from contingencies that the Company may exclude in deriving its non-GAAP financial measures if it believes that doing so is consistent with the goal of providing useful information to investors and management.

Forward-Looking Statements

This release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 including those relating to Rambus’ expectations regarding 2016 revenue for the first quarter and year, and estimated, fixed, long-term projected tax rates. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs and certain assumptions made by Rambus’ management. Actual results may differ materially. Rambus’ business generally is subject to a number of risks which are described more fully in Rambus’ periodic reports filed with the Securities and Exchange Commission. Rambus undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

About Rambus Inc.

Rambus creates cutting-edge semiconductor and IP products, spanning memory and interfaces to security, smart sensors and lighting. Our chips, customizable IP cores, architecture licenses, tools, services, training and innovations improve the competitive advantage of our customers. We collaborate with the industry, partnering with leading ASIC and SoC designers, foundries, IP developers, EDA companies and validation labs. For more information, visit www.rambus.com.

RMBSFN

Rambus Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
		December 31,			December 31,
		2015			2014
ASSETS
Current assets:
Cash and cash equivalents		$	143,764		$	154,126
Marketable securities		143,942			145,983
Accounts receivable		16,408			6,001
Prepaids and other current assets		11,476			8,541
Deferred taxes		—			187
Total current assets		315,590			314,838
Intangible assets, net		64,266			89,371
Goodwill		116,899			116,899
Property, plant and equipment, net		56,616			64,023
Deferred taxes, long-term		162,485			536
Other assets		3,648			2,612
Total assets		$	719,504		$	588,279
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	4,096		$	6,962
Accrued salaries and benefits		12,278			14,840
Other accrued liabilities		11,992			12,856
Total current liabilities		28,366			34,658
Long-term liabilities:
Convertible notes, long-term		120,901			115,089
Long-term imputed financing obligation		38,625			39,063
Other long-term liabilities		5,079			7,847
Total long-term liabilities		164,605			161,999
Total stockholders’ equity		526,533			391,622
Total liabilities and stockholders’ equity		$	719,504		$	588,279

Rambus Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2015				2014				2015				2014
Revenue:
Royalties		$	66,242			$	64,134			$	262,415			$	271,521
Contract and other revenue		10,531				7,906				33,863				25,037
Total revenue		76,773				72,040				296,278				296,558
Operating costs and expenses:
Cost of revenue (1)		11,340				10,748				45,344				41,947
Research and development (1)		25,604				28,445				111,110				110,025
Sales, general and administrative (1)		16,853				19,131				70,554				74,770
Restructuring charges		3,576				—				3,576				39
Gain from sale of intellectual property		(424		)		(3,359		)		(3,686		)		(3,529		)
Gain from settlement		(510		)		(510		)		(2,040		)		(2,040		)
Total operating costs and expenses		56,439				54,455				224,858				221,212
Operating income		20,334				17,585				71,420				75,346
Interest income and other income (expense), net		350				156				1,224				(276		)
Interest expense		(3,122		)		(3,065		)		(12,413		)		(24,820		)
Interest and other income (expense), net		(2,772		)		(2,909		)		(11,189		)		(25,096		)
Income before income taxes		17,562				14,676				60,231				50,250
Provision for (benefit from) income taxes		4,570				6,835				(151,157		)		24,049
Net income		$	12,992			$	7,841			$	211,388			$	26,201
Net income per share:
Basic		$	0.12			$	0.07			$	1.84			$	0.23
Diluted		$	0.11			$	0.07			$	1.80			$	0.22
Weighted average shares used in per share calculation
Basic		111,476				115,024				114,814				114,318
Diluted		113,388				117,620				117,484				117,624

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