On occasion in the future, there may be other items, such as 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 relating to Rambus’ expectations regarding revenue for the third quarter of 2015 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 brings invention to market. Our customizable IP cores, architecture licenses, tools, services, and training improve the competitive advantage of our customers’ products while accelerating their time-to-market. Rambus products and innovations capture, secure and move data. For more information, visit www.rambus.com.

RMBSFN

Rambus Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited)
		June 30, 2015				December 31, 2014
ASSETS
Current assets:
Cash and cash equivalents		$	201,477			$	154,126
Marketable securities		146,649				145,983
Accounts receivable		6,745				6,001
Prepaids and other current assets		9,690				8,541
Deferred taxes		1,113				187
Total current assets		365,674				314,838
Intangible assets, net		76,694				89,371
Goodwill		116,899				116,899
Property, plant and equipment, net		60,689				64,023
Deferred taxes, long-term		454				536
Other assets		3,345				2,612
Total assets		$	623,755			$	588,279
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	5,187			$	6,962
Accrued salaries and benefits		11,857				14,840
Other accrued liabilities		14,325				12,856
Total current liabilities		31,369				34,658
Long-term liabilities:
Convertible notes, long-term		117,949				115,089
Long-term imputed financing obligation		38,874				39,063
Other long-term liabilities		10,818				7,847
Total long-term liabilities		167,641				161,999
Total stockholders’ equity		424,745				391,622
Total liabilities and stockholders’ equity		$	623,755			$	588,279

Rambus Inc. Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited)
		Three Months Ended June 30,									Six Months Ended June 30,
		2015				2014					2015					2014
Revenue:
Royalties		$	62,387			$	69,741				$	129,350				$	143,378
Contract and other revenue		10,425				6,777					16,376					11,428
Total revenue		72,812				76,518					145,726					154,806
Operating costs and expenses:
Cost of revenue (1)		12,137				10,637					22,893					20,659
Research and development (1)		29,188				27,668					57,722					54,566
Sales, general and administrative (1)		17,339				18,619					35,841					37,439
Gain from sale of intellectual property		(896		)		—					(3,156			)		(170			)
Gain from settlement		(510		)		(510			)		(1,020			)		(1,020			)
Restructuring charges		—				—					—					39
Total operating costs and expenses		57,258				56,414					112,280					111,513
Operating income		15,554				20,104					33,446					43,293
Interest income and other income (expense), net		203				104					335					117
Interest expense		(3,091		)		(8,770			)		(6,174			)		(18,696			)
Interest and other income (expense), net		(2,888		)		(8,666			)		(5,839			)		(18,579			)
Income before income taxes		12,666				11,438					27,607					24,714
Provision for income taxes		5,805				6,395					11,244					11,867
Net income		$	6,861			$	5,043				$	16,363				$	12,847
Net income per share:
Basic		$	0.06			$	0.04				$	0.14				$	0.11
Diluted		$	0.06			$	0.04				$	0.14				$	0.11
Weighted average shares used in per share calculation
Basic		116,027				114,116					115,683					113,854
Diluted		120,939				117,398					119,225					116,733
_________ (1) Total stock-based compensation expense for the three and six months ended June 30, 2015 and 2014 are presented as follows:
		Three Months Ended June 30,										Six Months Ended June 30,
		2015					2014					2015					2014
Cost of revenue		$	27				$	15				$	39				$	22
Research and development		$	1,988				$	2,615				$	3,755				$	3,926
Sales, general and administrative		$	2,400				$	2,225				$	4,387				$	3,806

Rambus Inc. Supplemental Reconciliation of GAAP to Non-GAAP Results (In thousands) (Unaudited)
		Three Months Ended												Six Months Ended
		June 30, 2015				March 31, 2015				June 30, 2014				June 30, 2015				June 30, 2014
Operating costs and expenses		$	57,258			$	55,022			$	56,414			$	112,280			$	111,513
Adjustments:
Stock-based compensation expense		(4,415		)		(3,766		)		(4,855		)		(8,181		)		(7,754		)
Acquisition-related transaction costs and retention bonus expense		—				(2		)		(1,028		)		(2		)		(2,463		)
Amortization expense		(6,323		)		(6,323		)		(6,757		)		(12,646		)		(13,554		)
Restructuring charges		—				—				—				—				(39		)
Non-GAAP operating costs and expenses		$	46,520			$	44,931			$	43,774			$	91,451			$	87,703
Operating income		$	15,554			$	17,892			$	20,104			$	33,446			$	43,293
Adjustments:
Stock-based compensation expense		4,415				3,766				4,855				8,181				7,754
Acquisition-related transaction costs and retention bonus expense		—				2				1,028				2				2,463
Amortization expense		6,323				6,323				6,757				12,646				13,554
Restructuring charges		—				—				—				—				39
Non-GAAP operating income		$	26,292			$	27,983			$	32,744			$	54,275			$	67,103
Income before income taxes		$	12,666			$	14,941			$	11,438			$	27,607			$	24,714
Adjustments:
Stock-based compensation expense		4,415				3,766				4,855				8,181				7,754
Acquisition-related transaction costs and retention bonus expense		—				2				1,028				2				2,463
Amortization expense		6,323				6,323				6,757				12,646				13,554
Restructuring charges		—				—				—				—				39
Non-cash interest expense on convertible notes		1,581				1,559				5,469				3,140				11,711
Non-GAAP income before income taxes		$	24,985			$	26,591			$	29,547			$	51,576			$	60,235
GAAP provision for income taxes		5,805				5,439				6,395				11,244				11,867
Adjustment to GAAP provision for income taxes		3,190				4,134				4,242				7,324				9,818
Non-GAAP provision for income taxes		8,995				9,573				10,637				18,568				21,685
Non-GAAP net income		$	15,990			$	17,018			$	18,910			$	33,008			$	38,550
Non-GAAP basic net income per share		$	0.14			$	0.15			$	0.17			$	0.29			$	0.34
Non-GAAP diluted net income per share		$	0.13			$	0.14			$	0.16			$	0.28			$	0.33
Weighted average shares used in non-GAAP per share calculation:
Basic		116,027				115,336				114,116				115,683				113,854
Diluted		120,939				117,442				117,398				119,225				116,733

Supplemental Reconciliation of GAAP to Non-GAAP Effective Tax Rate (1)
		Three Months Ended									Six Months Ended
		June 30, 2015			March 31, 2015			June 30, 2014			June 30, 2015			June 30, 2014
GAAP effective tax rate		46	%		36	%		56	%		41	%		48	%
Adjustment to GAAP effective tax rate		(10	)%		—	%		(20	)%		(5	)%		(12	)%
Non-GAAP effective tax rate		36	%		36	%		36	%		36	%		36	%

(1)

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 and deferred tax asset valuation allowance. Accordingly, the Company has applied the 36 percent tax rate to its non-GAAP financial results for all periods to assist the Company’s planning for future periods.

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