TMCNet:  Rovi Corporation Reports Fourth Quarter and Full Year 2012 Financial Performance

[February 13, 2013]

Rovi Corporation Reports Fourth Quarter and Full Year 2012 Financial Performance

(GlobeNewswire Via Acquire Media NewsEdge) SANTA CLARA, Calif., Feb. 13, 2013 (GLOBE NEWSWIRE) -- Rovi Corporation (Nasdaq:ROVI) today reported financial results for the fourth quarter and full year 2012 ended December 31, 2012. All 2011 and 2012 results presented in this release have been adjusted to reflect the reclassification of the Rovi Entertainment Store business, which the Company has put up for sale, as discontinued operations.


The Company reported fourth quarter GAAP revenue of $157.0 million, compared to $174.3 million in the fourth quarter of 2011. Fourth quarter 2012 GAAP net income was $2.1 million, compared to a GAAP net loss of $49.3 million for the fourth quarter of 2011. The fourth quarter of 2011 included a $40.6 million impairment charge to reduce the carrying value of the intangible assets of the Roxio Consumer Software business to fair value less costs to sell. On a non-GAAP basis, fourth quarter Adjusted Pro Forma Income was $47.9 million, compared to $70.6 million in the fourth quarter of 2011, and Adjusted Pro Forma Income Per Common Share was $0.48, compared to $0.65 in the fourth quarter of 2011. The year-over-year declines were primarily attributable to reductions in revenue within the Company's consumer electronics vertical.

For the full year 2012, the Company reported 2012 GAAP revenues of $650.6 million, compared to $681.0 million for 2011. The full year 2012 GAAP net loss was $34.3 million, compared to a GAAP net loss of $41.3 million for 2011. Non-GAAP Adjusted Pro Forma Income for full year 2012 was $222.9 million, compared to $289.4 million for 2011. Adjusted Pro Forma Income Per Common Share was $2.12 for 2012, compared to $2.56 for 2011.

Adjusted Pro Forma Income and Adjusted Pro Forma Income Per Common Share are defined below in the section entitled Non-GAAP or Adjusted Pro Forma Information. Reconciliations between GAAP pro forma and Adjusted Pro Forma results from operations are provided in the tables below.

"As we close out 2012, we are proud of all that we accomplished in this transition year - particularly as we eliminated more than $26 million in annualized costs while working to re-define our strategic focus, reorganize the business around our core assets and improve our product execution," said Tom Carson, President and CEO of Rovi. "In 2013, we will continue executing on our strategic plan to position Rovi for sustainable growth in years to come. We look forward to strengthening our core business and creating our role at the center of the new value chain as digital entertainment continues to transition to TV Everywhere and IP video delivery." Business Outlook Consistent with the information provided at the Company's investor day in early January, Rovi anticipates fiscal year 2013 revenue of between $630 million and $660 million, and Adjusted Pro Forma Income Per Common Share of between $1.90 and $2.20, excluding revenues and results from the Rovi Entertainment Store business, which has been reclassified as discontinued operations.

Conference Call Information Rovi management will host a conference call today, February 13, 2013, at 2:00 p.m. PT / 5:00 p.m. ET to discuss the financial results. Investors and analysts interested in participating in the conference are welcome to call 1-800-762-8779 (or international +1-480-629-9771) and reference the Rovi call. The conference call can also be accessed via live webcast in the Investor Relations section of Rovi's website at http://www.rovicorp.com/.

A replay of the conference call will be available through April 30, 2013 and can be accessed by calling 1-800-406-7325 (or international +1-303-590-3030) and entering access code 4594114#. A replay of the audio webcast will be available on Rovi Corporation's website approximately 1-2 hours after the live webcast ends and will remain on Rovi Corporation's website until its next quarterly earnings call.

Non-GAAP or Adjusted Pro Forma Information Rovi Corporation provides non-GAAP Adjusted Pro Forma information. References to Adjusted Pro Forma information are references to non-GAAP pro forma measures. The Company provides Adjusted Pro Forma information to assist investors in assessing its current and future operations in the way that its management evaluates those operations. Adjusted Pro Forma Income and Adjusted Pro Forma Income Per Common Share are supplemental measures of the Company's performance that are not required by, and are not presented in accordance with GAAP. Adjusted Pro Forma information is not a substitute for any performance measure derived in accordance with GAAP, including, but not limited to, GAAP pro forma information prepared in accordance with ASC 805, Business Combinations.

Adjusted Pro Forma and GAAP pro forma measures assume the Sonic Solutions business combination, the Roxio software and Rovi Entertainment Store business dispositions all occurred on January 1, 2010. Adjusted Pro Forma Income is defined as GAAP pro forma income (loss) from continuing operations, net of tax, adding back non-cash items such as equity-based compensation, amortization of intangibles, amortization or write-off of note issuance costs, non-cash interest expense recorded on convertible debt under Accounting Standards Codification ("ASC") 470-20 (formerly known as FSP APB 14-1), mark-to-market fair value adjustments for interest rate swaps, caps and foreign currency collars and the reversals of discrete tax items including reserves; as well as items which impact comparability that are required to be recorded under GAAP, but that the Company believes are not indicative of its core operating results such as transaction, transition and integration costs, restructuring and asset impairment charges, payments to note holders and for expenses in connection with the early redemption or modification of debt and gains on sale of strategic investments. While depreciation expense is a non-cash item, it is included in Adjusted Pro Forma Income as a reasonable proxy for capital expenditures.

Adjusted Pro Forma Income Per Common Share is calculated using Adjusted Pro Forma Income and taking into account the benefit of the convertible debt call option when it allows the Company to purchase shares of its own stock at a price below what those shares could be purchased for in the open market.

The Company's management has evaluated and made operating decisions about its business operations primarily based upon Adjusted Pro Forma Income and Adjusted Pro Forma Income Per Common Share. Management uses Adjusted Pro Forma Income and Adjusted Pro Forma Income Per Common Share as measures as they exclude items management does not consider to be "core costs" or "core proceeds" when making business decisions. Therefore, management presents these Adjusted Pro Forma financial measures along with GAAP measures. For each such Adjusted Pro Forma financial measure, the adjustment provides management with information about the Company's underlying operating performance that enables a more meaningful comparison of its financial results in different reporting periods. For example, since Rovi Corporation does not acquire businesses on a predictable cycle, management excludes amortization of intangibles from acquisitions, transaction costs and transition and integration costs in order to make more consistent and meaningful evaluations of the Company's operating expenses. Management also excludes the effect of restructuring and asset impairment charges, expenses in connection with the early redemption or modification of debt and gains on sale of strategic investments.  Management excludes the impact of equity-based compensation to help it compare current period operating expenses against the operating expenses for prior periods and to eliminate the effects of this non-cash item, which, because it is based upon estimates on the grant dates, may bear little resemblance to the actual values realized upon the future exercise, expiration, termination or forfeiture of the equity-based compensation, and which, as it relates to stock options and stock purchase plan shares, is required for GAAP purposes to be estimated under valuation models, including the Black-Scholes model used by Rovi Corporation.  Management excludes non-cash interest expense recorded on convertible debt under ASC 470-20, mark-to-market fair value adjustments for interest rate swaps, caps, foreign currency collars, and the reversals of discrete tax items including reserves as they are non-cash items and not considered "core costs" or meaningful when management evaluates the Company's operating expenses.  Management reclassifies the current period benefit or cost of the interest rate swaps from gain or loss on interest rate swaps and caps, net to interest expense in order for interest expense to reflect the swap rates, as these instruments were entered into to control the interest rate the Company effectively pays on its convertible debt.  Management includes the benefit of the convertible debt call option, which allows the Company to purchase shares of its own stock at approximately $28.28, and is excluded from GAAP EPS calculation as it is anti-dilutive, because the pragmatic reality is management would exercise this option rather than allow this dilution to occur.  This convertible debt call option was exercised in August 2011.

Management is using these Adjusted Pro Forma measures to help it make budgeting decisions, including decisions that affect operating expenses and operating margin. Further, Adjusted Pro Forma financial information helps management track actual performance relative to financial targets. Making Adjusted Pro Forma financial information available to investors, in addition to GAAP financial information, may also help investors compare the Company's performance with the performance of other companies in our industry, which may use similar financial measures to supplement their GAAP financial information.

Management recognizes that the use of Adjusted Pro Forma measures has limitations, including the fact that management must exercise judgment in determining which types of charges should be excluded from the Adjusted Pro Forma financial information. Because other companies, including companies similar to Rovi Corporation, may calculate their non-GAAP financial measures differently than the Company calculates its Adjusted Pro Forma measures, these Non-GAAP measures may have limited usefulness in comparing companies. Management believes, however, that providing Adjusted Pro Forma financial information, in addition to GAAP financial information, facilitates consistent comparison of the Company's financial performance over time. The Company provides Adjusted Pro Forma financial information to the investment community, not as an alternative, but as an important supplement to GAAP financial information; to enable investors to evaluate the Company's core operating performance in the same way that management does. Reconciliations between historical pro forma and Adjusted Pro Forma results of operations are provided in the tables below.

About Rovi Corporation Rovi powers the discovery, delivery, display and monetization of digital entertainment. With innovative technology solutions for consumer electronics manufacturers, service providers, content producers, advertisers, retailers and websites, Rovi connects people and the entertainment they love. The company holds over 5,000 issued or pending patents worldwide and is headquartered in Santa Clara, California. More information about Rovi can be found at rovicorp.com.

The Rovi Corporation logo is available at http://www.globenewswire.com/newsroom/prs/ pkgid=6482 Forward Looking Statements All statements contained herein, including the quotations attributed to Mr. Carson, that are not statements of historical fact, including statements that use the words "will," "believes," "anticipates," "estimates," "expects," "intends" or similar words that describe the Company's or its management's future plans, objectives, or goals, are "forward-looking statements" and are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, the Company's estimates of revenues and earnings for the 2013 fiscal year, business strategies, and possible sale of its Rovi Entertainment Store business.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results and/or from any future results or outcomes expressed or implied by such forward-looking statements. Such factors include, among others, the Company's ability to successfully execute on its strategic plan and customer demand for and industry acceptance of the Company's technologies and integrated solutions, and the Company's completion of a sale transaction involving the Rovi Entertainment Store business. Such factors are further addressed in the Company's Annual Report on Form 10-K for the period ended December 31, 2012 and such other documents as are filed with the Securities and Exchange Commission from time to time (available at www.sec.gov). The Company assumes no obligation, except as required by law, to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

Rovi Q4 2012 Business and Operating Highlights:  Discovery: IP Licensing: Reached a settlement with Philips for patent infringement proceedings in Germany Vizio and Rovi entered into a settlement and multi-year patent license agreement, and agreed to dismiss all pending litigation between the parties Continued to license new platforms, signing agreements with a widely deployed place-shifting consumer electronics device manufacturer and with Canadian IPTV provider Beanfield Metroconnect Began a new Blu-ray disc licensing program, signing an agreement with one of the world's largest BD software suppliers, covering worldwide PC deployments for some of the world's largest PC makers With Kabel KBW as a licensee Rovi now licenses two of the three largest German operators For the full year, invention disclosures were up over 300% and patent applications were up over 20% compared to last year Guide Products: Renewed 32 North American MSOs Signed Latin America DTA agreements with VideoMar, Tricom, and Cablevision Argentina Delivered TotalGuide HTML 1.2 to Panasonic Licensed to Rogers Communications Rovi's Remote Record and TotalGuide xD Still on track to deploy TotalGuide solutions at six MSOs during the first half of 2013 Introduced Rovi Services Gateway at CES Advertising: Repeat advertising campaigns, including Ford, Hurrycane, Lloyds, Mattel, Stuffies, Servus Credit Union and UMG Introduced in-app and new video advertising capabilities at CES Video Delivery and Display: DivX: Launched DivX 9.0 in November 2012 Deployed storefront powered by DivX Plus Streaming for Dixons mobile Over 859 million devices now deployed with DivX technology Other: Data: Renewed agreements with a major web portal and a large digital music service Increased the level of music and TV programming data provided to the Shazam service Increased the level of content provided to a large CE manufacturer for its music service, a large web portal company, and a major radio station group, among others.    Added to our client list a provider of Automatic Content Recognition for the second screen, a second screen companion app provider and several internet based companiesFor additional business metrics, see our investor presentation located at: http://ir.rovicorp.com/presentations.aspx iid=4206196 ROVI CORPORATION  GAAP CONSOLIDATED STATEMENTS OF OPERATIONS  (IN THOUSANDS, EXCEPT PER SHARE DATA)  (UNAUDITED)         Three Months Ended December 31,Twelve Months EndedDecember 31, 2012201120122011 Revenues $156,951 $174,313 $650,573 $680,975 Costs and expenses:   Cost of revenues 29,960 26,158 110,163 96,888 Research and development 34,819 41,060 147,648 149,310 Selling, general and administrative 38,652 42,296 156,963 177,199 Depreciation 5,067 4,937 20,770 19,534 Amortization of intangible assets 26,131 27,128 103,926 104,711 Restructuring and asset impairment charges 546 1,969 5,094 20,800 Total costs and expenses 135,175 143,548 544,564 568,442 Operating income from continuing operations 21,776 30,765 106,009 112,533 Interest expense (16,535) (13,002) (61,742) (53,776) Interest income and other, net (222) 898 3,203 4,859 Debt modification expense (4,496) Gain (loss) on interest rate swaps and caps, net 30 (2,857) (10,624) (4,314) Loss on debt redemption (2,096) (1,758) (11,514) Income from continuing operations before income taxes 5,049 13,708 30,592 47,788 Income tax (benefit) expense (4,394) 11,405 15,691 8,723 Income from continuing operations, net of tax 9,443 2,303 14,901 39,065 Discontinued operations, net of tax (7,302) (51,649) (49,245) (80,351) Net income (loss) $2,141 $(49,346) $(34,344) $(41,286) Basic earnings per share:         Basic income per share from continuing operations $0.09 $0.02 $0.14 $0.36 Basic loss per share from discontinued operations (0.07) (0.48) (0.47) (0.74) Basic net income (loss) per share $0.02 $(0.46) $(0.33) $(0.38) Shares used in computing basic net earnings per share 100,677 108,923 104,623 108,923 Diluted earnings per share:         Diluted income per share from continuing operations $0.09 $0.02 $0.14 $0.34 Diluted loss per share from discontinued operations (0.07) (0.47) (0.47) (0.70) Diluted net income (loss) per share $0.02 $(0.45) $(0.33) $(0.36) Shares used in computing diluted net earnings per share 100,740 113,131 104,941 113,131           See notes to the GAAP Consolidated Financial Statements in our Form 10-K.

     ROVI CORPORATION  GAAP CONSOLIDATED BALANCE SHEETS  (IN THOUSANDS)  (UNAUDITED)          December 31, 2012December 31, 2011ASSETS     Current assets:     Cash and cash equivalents $285,352 $136,780 Short-term investments 577,988 283,433 Trade accounts receivable, net 106,018 126,752 Taxes receivable 9,237 2,976 Deferred tax assets, net 20,373 32,152 Prepaid expenses and other current assets 26,786 15,056 Assets held for sale 76,852 20,344 Total current assets 1,102,606 617,493 Long-term marketable investment securities 104,893 65,267 Property and equipment, net 32,791 43,203 Finite-lived intangible assets, net 689,494 815,049 Other assets 23,862 41,610 Goodwill 1,341,035 1,364,145 Total assets $3,294,681 $2,946,767   LIABILITIES AND STOCKHOLDERS' EQUITY   Current liabilities:     Accounts payable and accrued expenses $94,830 $107,037 Deferred revenue 16,152 16,460 Current portion of long-term debt 106,407 25,500 Liabilities held for sale 11,053 5,445 Total current liabilities 228,442 154,442 Taxes payable, less current portion 50,800 63,980 Long-term debt, less current portion 1,373,818 969,598 Deferred revenue, less current portion 3,921 4,041 Long-term deferred tax liabilities, net 41,596 36,267 Other non current liabilities 8,683 25,687 Total liabilities 1,707,260 1,254,015 Stockholders' equity:     Common stock 125 123 Treasury stock (634,571) (482,479) Additional paid-in capital 2,196,567 2,114,402 Accumulated other comprehensive loss (1,375) (313) Retained earnings 26,675 61,019 Total stockholders' equity 1,587,421 1,692,752 Total liabilities and stockholders' equity $3,294,681 $2,946,767   See notes to the GAAP Consolidated Financial Statements in our Form 10-K.

           ROVI CORPORATION  ADJUSTED PRO FORMA RECONCILIATION  (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)  (UNAUDITED)          Three Months EndedThree Months Ended  March 31, 2012March 31, 2011  GAAP  AdjustedGAAP  Adjusted  Pro Forma (1)AdjustmentsPro FormaPro Forma (1)AdjustmentsPro Forma Revenues:             Service provider $79,354 $ $79,354 $72,843 $ $72,843 CE discovery and advertising 38,199 38,199 30,164 30,164 CE video delivery and display 37,470 37,470 52,716 52,716 Other 16,704 16,704 17,359 17,359 Total revenues 171,727 171,727 173,082 173,082 Costs and expenses:             Cost of revenues (2) 25,152 (1,215) 23,937 23,302 (634) 22,668 Research and development (3) 40,165 (6,252) 33,913 33,770 (5,091) 28,679 Selling, general and administrative (4) 40,476 (9,768) 30,708 49,461 (12,106) 37,355 Depreciation (5) 5,000 5,000 4,803 4,803 Amortization of intangible assets 25,635 (25,635) 26,049 (26,049) Restructuring and asset impairment charges 1,372 (1,372) 2,082 (2,082) Total costs and expenses 137,800 (44,242) 93,558 139,467 (45,962) 93,505 Operating income from continuing operations 33,927 44,242 78,169 33,615 45,962 79,577 Interest expense (6) (12,148) 6,189 (5,959) (12,978) 8,932 (4,046) Interest income and other, net 1,610 1,610 1,798 1,798 Debt modification expense (4,464) 4,464 Loss (gain) on interest rate swaps and caps, net (7) (104) 104 85 (85) Loss on debt redemption (1,758) 1,758 (9,070) 9,070 Income from continuing operations before income taxes 17,063 56,757 73,820 13,450 63,879 77,329 Income tax expense (8) 4,543 624 5,167 9,524 (3,338) 6,186 Income from continuing operations, net of tax $12,520 $56,133 $68,653 $3,926 $67,217 $71,143 Diluted income per share from continuing operations $0.12   $0.63 $0.03   $0.61 Shares used in computing diluted net earnings per share (9) 108,269   108,269 119,513 (2,476) 117,037               (1) GAAP Pro Forma financial information for the 2012 period is the same as our GAAP results; no adjustments have been made to the GAAP results since they are comparative with prior quarter's pro forma results. GAAP Pro Forma financial information for the 2011 period has been prepared in accordance with ASC 805, Business Combinations, and assumes the acquisition of Sonic, and sale of Roxio Consumer Software and Rovi Entertainment Store businesses had occurred on January 1, 2010.

(2) Adjustments to cost of revenues consist of the following:           March 31, 2012 March 31, 2011       Equity based compensation   $(1,215) $(603)       Transition and integration costs (31)       Total adjustment   $(1,215) $(634)       (3) Adjustments to research and development consist of the following:           March 31, 2012 March 31, 2011       Equity based compensation   $(6,252) $(3,944)       Transition and integration costs (1,147)       Total adjustment   $(6,252) $(5,091)       (4) Adjustments to selling, general and administrative consist of the following:         March 31, 2012 March 31, 2011       Equity based compensation   $(9,768) $(7,980)       Transition and integration costs (4,126)       Total adjustment   $(9,768) $(12,106)       (5) While depreciation is a non-cash item, it is included in Adjusted Pro Forma Income From Continuing Operations as management considers it a proxy for capital expenditures.

(6) Adjustments eliminate non-cash interest expense such as amortization of note issuance costs and the convertible note discount recorded under ASC 470-20 (formerly known as FSP APB 14-1) and reclass to include the impact of interest rate swaps on interest expense.

(7) Adjustment eliminates non-cash mark-to-market gain or loss related to interest rate swaps and caps and reclassifies the current period benefit from the interest rate swap to interest expense.

(8) Adjusts tax expense to the adjusted pro forma cash tax rate.

(9) For the 2011 period, adjustment recognizes the benefit of convertible debt call option, which allows the Company to purchase shares of its own stock at approximately $28.28, and which is excluded from GAAP EPS calculation as it is anti-dilutive.

                           ROVI CORPORATION        ADJUSTED PRO FORMA RECONCILIATION        (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)        (UNAUDITED)                        Three Months EndedThree Months Ended  June 30, 2012June 30, 2011  GAAP  AdjustedGAAP  Adjusted  Pro Forma (1)AdjustmentsPro FormaPro Forma (1)AdjustmentsPro Forma Revenues:             Service provider $77,607 $ $77,607 $74,449 $ $74,449 CE discovery and advertising 31,861 31,861 41,539 41,539 CE video delivery and display 32,980 32,980 44,068 44,068 Other 13,850 13,850 16,653 16,653 Total revenues 156,298 156,298 176,709 176,709 Costs and expenses:             Cost of revenues (2) 27,134 (1,250) 25,884 23,791 (1,198) 22,593 Research and development (3) 37,451 (6,793) 30,658 38,624 (7,748) 30,876 Selling, general and administrative (4) 40,366 (8,961) 31,405 47,769 (14,435) 33,334 Depreciation (5) 5,289 5,289 4,999 4,999 Amortization of intangible assets 25,914 (25,914) 26,897 (26,897) Restructuring and asset impairment charges 14,838 (14,838) Total costs and expenses 136,154 (42,918) 93,236 156,918 (65,116) 91,802 Operating income from continuing operations 20,144 42,918 63,062 19,791 65,116 84,907 Interest expense (6) (16,405) 6,241 (10,164) (14,178) 7,933 (6,245) Interest income and other, net 187 187 1,122 1,122 Debt modification expense (32) 32 Loss on interest rate swaps and caps, net (7) (6,308) 6,308 (697) 697 Loss on debt redemption (348) 348 (Loss) income from continuing operations before income taxes (2,414) 55,499 53,085 5,690 74,094 79,784 Income tax expense (8) 1,834 2,944 4,778 4,979 1,404 6,383 (Loss) income from continuing operations, net of tax $(4,248) $52,555 $48,307 $711 $72,690 $73,401 Diluted (loss) income per share from continuing operations $(0.04)   $0.45 $0.01   $0.64 Shares used in computing diluted net earnings per share (9) 107,035 433 107,468 115,818 (795) 115,023               (1) GAAP Pro Forma financial information for the 2012 period is the same as our GAAP results; no adjustments have been made to the GAAP results since they are comparative with prior quarter's pro forma results. GAAP Pro Forma financial information for the 2011 period has been prepared in accordance with ASC 805, Business Combinations, and assumes the acquisition of Sonic, and sale of Roxio Consumer Software and Rovi Entertainment Store businesses had occurred on January 1, 2010.

(2) Adjustments to cost of revenues consist of the following:     June 30, 2012 June 30, 2011       Equity based compensation   $(1,250) $(807)       Transition and integration costs   (391)       Total adjustment   $(1,250) $(1,198)       (3) Adjustments to research and development consist of the following:         June 30, 2012 June 30, 2011       Equity based compensation   $(6,793) $(5,267)       Transition and integration costs   (2,481)       Total adjustment   $(6,793) $(7,748)       (4) Adjustments to selling, general and administrative consist of the following:             June 30, 2012 June 30, 2011       Equity based compensation   $(8,961) $(9,006)       Transition and integration costs   (5,429)       Total adjustment   $(8,961) $(14,435)       (5) While depreciation is a non-cash item, it is included in Adjusted Pro Forma Income From Continuing Operations as management considers it a proxy for capital expenditures.

(6) Adjustments eliminate non-cash interest expense such as amortization of note issuance costs and the convertible note discount recorded under ASC 470-20 (formerly known as FSP APB 14-1) and reclass to include the impact of interest rate swaps on interest expense.

(7) Adjustment eliminates non-cash mark-to-market gain or loss related to interest rate swaps and caps and reclassifies the current period benefit from the interest rate swap to interest expense.

(8) Adjusts tax expense to the adjusted pro forma cash tax rate.

(9) For the 2012 period, since the adjustments resulted in Adjusted Pro Forma Net Income, shares used in computing diluted net earnings per share were adjusted to include dilutive common equivalent shares outstanding. For the 2011 period, adjustment recognizes the benefit of convertible debt call option, which allows the Company to purchase shares of its own stock at approximately $28.28, and which is excluded from GAAP EPS calculation as it is anti-dilutive.

               ROVI CORPORATION            ADJUSTED PRO FORMA RECONCILIATION            (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)            (UNAUDITED)              Three Months EndedThree Months Ended  September 30, 2012September 30, 2011  GAAP  AdjustedGAAP  Adjusted  Pro Forma (1)AdjustmentsPro FormaPro Forma (1)AdjustmentsPro Forma Revenues:             Service provider $78,692 $ $78,692 $74,464 $ $74,464 CE discovery and advertising 27,847 27,847 57,597 57,597 CE video delivery and display 44,686 44,686 30,032 30,032 Other 14,372 14,372 16,652 16,652 Total revenues 165,597 165,597 178,745 178,745 Costs and expenses:             Cost of revenues (2) 27,917 (645) 27,272 25,223 (1,347) 23,876 Research and development (3) 35,213 (4,792) 30,421 39,931 (8,218) 31,713 Selling, general and administrative (4) 37,469 (7,631) 29,838 44,592 (12,416) 32,176 Depreciation (5) 5,414 5,414 5,022 5,022 Amortization of intangible assets 26,246 (26,246) 26,549 (26,549) Restructuring and asset impairment charges 3,176 (3,176) 1,911 (1,911) Total costs and expenses 135,435 (42,490) 92,945 143,228 (50,441) 92,787 Operating income from continuing operations 30,162 42,490 72,652 35,517 50,441 85,958 Interest expense (6) (16,654) 6,148 (10,506) (13,610) 7,444 (6,166) Interest income and other, net 1,628 1,628 855 855 Loss on interest rate swaps and caps, net (7) (4,242) 4,242 (845) 845 Income from continuing operations before income taxes 10,894 52,880 63,774 21,917 58,730 80,647 Income tax expense (8) 13,708 (7,968) 5,740 6,778 (326) 6,452 (Loss) income from continuing operations, net of tax $(2,814) $60,848 $58,034 $15,139 $59,056 $74,195 Diluted (loss) income per share from continuing operations $(0.03)   $0.56 $0.14   $0.66 Shares used in computing diluted net earnings per share (9) 103,307 37 103,344 111,897 (359) 111,538               (1) GAAP Pro Forma financial information for the 2012 period is the same as our GAAP results; no adjustments have been made to the GAAP results since they are comparative with prior quarter's pro forma results. GAAP Pro Forma financial information for the 2011 period has been prepared in accordance with ASC 805, Business Combinations, and assumes the acquisition of Sonic, and sale of Roxio Consumer Software and Rovi Entertainment Store businesses had occurred on January 1, 2010.

(2) Adjustments to cost of revenues consist of the following:           September 30, 2012 September 30, 2011       Equity based compensation   $(645) $(1,114)       Transition and integration costs     (233)       Total adjustment   $(645) $(1,347)       (3) Adjustments to research and development consist of the following:           September 30, 2012 September 30, 2011       Equity based compensation   $(4,792) $(5,222)       Transition and integration costs     (2,996)       Total adjustment   $(4,792) $(8,218)       (4) Adjustments to selling, general and administrative consist of the following:           September 30, 2012 September 30, 2011       Equity based compensation   $(7,631) $(9,879)       Transition and integration costs     (2,537)       Total adjustment   $(7,631) $(12,416)       (5) While depreciation is a non-cash item, it is included in Adjusted Pro Forma Income From Continuing Operations as management considers it a proxy for capital expenditures.

(6) Adjustments eliminate non-cash interest expense such as amortization of note issuance costs and the convertible note discount recorded under ASC 470-20 (formerly known as FSP APB 14-1) and reclass to include the impact of interest rate swaps on interest expense.

(7) Adjustment eliminates non-cash mark-to-market gain or loss related to interest rate swaps and caps and reclassifies the current period benefit from the interest rate swap to interest expense.

(8) Adjusts tax expense to the adjusted pro forma cash tax rate.

(9) For the 2012 period, since the adjustments resulted in Adjusted Pro Forma Net Income, shares used in computing diluted net earnings per share were adjusted to include dilutive common equivalent shares outstanding. For the 2011 period, adjustment recognizes the benefit of convertible debt call option, which allows the Company to purchase shares of its own stock at approximately $28.28, and which is excluded from GAAP EPS calculation as it is anti-dilutive.

                       ROVI CORPORATION          ADJUSTED PRO FORMA RECONCILIATION          (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)          (UNAUDITED)                                  Three Months EndedThree Months Ended    December 31, 2012December 31, 2011    GAAP  AdjustedGAAP  Adjusted    Pro Forma (1)AdjustmentsPro FormaPro Forma (1)AdjustmentsPro Forma Revenues:               Service provider   $81,400 $ $81,400 $78,127 $ $78,127 CE discovery and advertising   34,786 34,786 40,009 40,009 CE video delivery and display   25,334 25,334 40,380 40,380 Other   15,431 15,431 15,797 15,797 Total revenues   156,951 156,951 174,313 174,313 Costs and expenses:               Cost of revenues (2)   29,960 (1,091) 28,869 26,158 (1,650) 24,508 Research and development (3)   34,819 (8,339) 26,480 41,060 (9,590) 31,470 Selling, general and administrative (4)   38,652 (7,394) 31,258 42,296 (10,929) 31,367 Depreciation (5)   5,067 5,067 4,937 4,937 Amortization of intangible assets   26,131 (26,131) 26,030 (26,030) Restructuring and asset impairment charges 546 (546) 1,969 (1,969) Total costs and expenses 135,175 (43,501) 91,674 142,450 (50,168) 92,282 Operating income from continuing operations 21,776 43,501 65,277 31,863 50,168 82,031 Interest expense (6) (16,535) 6,065 (10,470) (13,002) 6,829 (6,173) Interest income and other, net (222) 1,292 1,070 898 898 Gain (loss) on interest rate swaps and caps, net (7) 30 (30) (2,857) 2,857 Loss on debt redemption (2,096) 2,096 Income from continuing operations before income taxes 5,049 50,828 55,877 14,806 61,950 76,756 Income tax (benefit) expense (8) (4,394) 12,378 7,984 11,427 (5,287) 6,140 Income from continuing operations, net of tax $9,443 $38,450 $47,893 $3,379 $67,237 $70,616 Diluted income per share from continuing operations $0.09   $0.48 $0.03   $0.65 Shares used in computing diluted net earnings per share 100,740   100,740 108,383   108,383                 (1) GAAP Pro Forma financial information for the 2012 period is the same as our GAAP results; no adjustments have been made to the GAAP results since they are comparative with prior quarter's pro forma results. GAAP Pro Forma financial information for the 2011 period has been prepared in accordance with ASC 805, Business Combinations, and assumes the acquisition of Sonic, and sale of Roxio Consumer Software and Rovi Entertainment Store businesses had occurred on January 1, 2010.

(2) Adjustments to cost of revenues consist of the following:               December 31, 2012 December 31, 2011       Equity based compensation $(921) $(1,229)       Transition and integration costs (170) (421)       Total adjustment   $(1,091) $(1,650)       (3) Adjustments to research and development consist of the following:               December 31, 2012 December 31, 2011       Equity based compensation $(6,033) $(6,218)       Transition and integration costs (2,306) (3,372)       Total adjustment   $(8,339) $(9,590)       (4) Adjustments to selling, general and administrative consist of the following:               December 31, 2012 December 31, 2011       Equity based compensation $(6,961) $(9,407)       Transition and integration costs (433) (1,522)       Total adjustment   $(7,394) $(10,929)       (5) While depreciation is a non-cash item, it is included in Adjusted Pro Forma Income From Continuing Operations as management considers it a proxy for capital expenditures.

(6) Adjustments eliminate non-cash interest expense such as amortization of note issuance costs and the convertible note discount recorded under ASC 470-20 (formerly known as FSP APB 14-1) and reclass to include the impact of interest rate swaps on interest expense.

(7) Adjustment eliminates non-cash mark-to-market gain or loss related to interest rate swaps and caps and reclassifies the current period benefit from the interest rate swap to interest expense.

(8) Adjusts tax expense to the adjusted pro forma cash tax rate.

                       ROVI CORPORATION          ADJUSTED PRO FORMA RECONCILIATION      (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)       (UNAUDITED)                              Twelve Months EndedTwelve Months Ended    December 31, 2012December 31, 2011    GAAP  AdjustedGAAP  Adjusted    Pro Forma (1)AdjustmentsPro FormaPro Forma (1)AdjustmentsPro Forma Revenues:               Service provider $317,053 $ $317,053 $299,883 $ $299,883 CE discovery and advertising 132,693 132,693 169,309 169,309 CE video delivery and display 140,470 140,470 167,196 167,196 Other   60,357 60,357 66,461 66,461 Total revenues 650,573 650,573 702,849 702,849 Costs and expenses:             Cost of revenues (2) 110,163 (4,201) 105,962 98,474 (4,829) 93,645 Research and development (3) 147,648 (26,176) 121,472 153,385 (30,647) 122,738 Selling, general and administrative (4) 156,963 (33,754) 123,209 184,118 (49,886) 134,232 Depreciation (5) 20,770 20,770 19,761 19,761 Amortization of intangible assets 103,926 (103,926) 105,525 (105,525) Restructuring and asset impairment charges 5,094 (5,094) 20,800 (20,800) Total costs and expenses 544,564 (173,151) 371,413 582,063 (211,687) 370,376 Operating income from continuing operations 106,009 173,151 279,160 120,786 211,687 332,473 Interest expense (6) (61,742) 24,643 (37,099) (53,768) 31,138 (22,630) Interest income and other, net 3,203 1,292 4,495 4,673 4,673 Debt modification expense (4,496) 4,496 Loss on interest rate swaps and caps, net (7) (10,624) 10,624 (4,314) 4,314 Loss on debt redemption (1,758) 1,758 (11,514) 11,514 Income from continuing operations before income taxes 30,592 215,964 246,556 55,863 258,653 314,516 Income tax expense (8) 15,691 7,978 23,669 32,708 (7,547) 25,161 Income from continuing operations, net of tax $14,901 $207,986 $222,887 $23,155 $266,200 $289,355 Diluted income per share from continuing operations $0.14   $2.12 $0.20   $2.56 Shares used in computing diluted net earnings per share (9) 104,941   104,941 113,890 (908) 112,982                 (1) GAAP Pro Forma financial information for the 2012 period is the same as our GAAP results; no adjustments have been made to the GAAP results since they are comparative with prior period's pro forma results. GAAP Pro Forma financial information for the 2011 period has been prepared in accordance with ASC 805, Business Combinations, and assumes the acquisition of Sonic, and sale of Roxio Consumer Software and Rovi Entertainment Store businesses had occurred on January 1, 2010.

(2) Adjustments to cost of revenues consist of the following:               December 31, 2012 December 31, 2011       Equity based compensation $(4,031) $(3,753)       Transition and integration costs (170) (1,076)       Total adjustment   $(4,201) $(4,829)       (3) Adjustments to research and development consist of the following:               December 31, 2012 December 31, 2011       Equity based compensation $(23,870) $(20,651)       Transition and integration costs (2,306) (9,996)       Total adjustment   $(26,176) $(30,647)       (4) Adjustments to selling, general and administrative consist of the following:               December 31, 2012 December 31, 2011       Equity based compensation $(33,321) $(36,272)       Transition and integration costs (433) (13,614)       Total adjustment   $(33,754) $(49,886)       (5) While depreciation is a non-cash item, it is included in Adjusted Pro Forma Income From Continuing Operations as management considers it a proxy for capital expenditures.

(6) Adjustments eliminate non-cash interest expense such as amortization of note issuance costs and the convertible note discount recorded under ASC 470-20 (formerly known as FSP APB 14-1) and reclass to include the impact of interest rate swaps on interest expense.

(7) Adjustment eliminates non-cash mark-to-market gain or loss related to interest rate swaps and caps and reclassifies the current period benefit from the interest rate swap to interest expense.

(8) Adjusts tax expense to the adjusted pro forma cash tax rate.

(9) For the 2011 period, adjustment recognizes the benefit of convertible debt call option, which allows the Company to purchase shares of its own stock at approximately $28.28, and which is excluded from GAAP EPS calculation as it is anti-dilutive.CONTACT: Investor Contacts Peter Halt Rovi Corporation +1 (818) 295-6800 Chris Keller Rovi Corporation +1 (408) 562-8400 Source: Rovi Corporation 2013 GlobeNewswire, Inc.

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