Non-GAAP Financial Results (1):

Customer licensing income in the fourth quarter of 2013 was $73.9 million, slightly down sequentially from the third quarter of 2013. As compared to the fourth quarter of 2012, customer licensing income was up 20% primarily for the reasons outlined in the Company’s discussion of GAAP financial results above.

Customer licensing income for the year ended December 31, 2013 was $281.6 million, up 14% over the same period of last year, primarily for the reasons outlined in the Company’s discussion of GAAP financial results above.

Total non-GAAP operating costs and expenses in the fourth quarter of 2013 were $44.2 million, which included non-GAAP general litigation expenses of $1.4 million. This is compared to total non-GAAP operating costs and expenses for the third quarter of 2013 of $43.0 million, which included general litigation expenses of $0.7 million. Total non-GAAP operating costs and expenses in the fourth quarter of 2012 were $45.2 million, which included general litigation expenses of $2.1 million.

Total non-GAAP operating costs and expenses for the year ended December 31, 2013 were $182.8 million as compared to $202.9 million for the year ended December 31, 2012 due primarily to lower headcount related costs, lower general litigation expenses, lower general and patent legal expenses and lower consulting expenses. This was partially offset by a higher bonus accrual and cost of sales related to lighting products.

Non-GAAP net income in the fourth quarter of 2013 was $16.5 million as compared to non-GAAP net income of $17.9 million in the third quarter of 2013 and non-GAAP net income of $8.3 million in the fourth quarter of 2012. Non-GAAP diluted net income per share was $0.14 in the fourth quarter of 2013 as compared to $0.15 in the third quarter of 2013 and $0.07 in the fourth quarter of 2012.

Non-GAAP net income for the year ended December 31, 2013 was $54.4 million as compared to $19.9 million in the same period of 2012. Non-GAAP diluted net income per share for the year ended December 31, 2013 was $0.47 as compared to $0.17 for the same period of 2012.

Other Financial Highlights:

Cash, cash equivalents, and marketable securities as of December 31, 2013 were $387.7 million, an increase of $21.3 million from September 30, 2013. During the fourth quarter of 2013, the Company paid $4.3 million of interest expense related to the Company’s convertible notes due in June 2014.

As of December 31, 2013, the Company had four reportable segments – Memory and Interface Division (MID), Chief Technology Office (CTO), Cryptography Research Inc. (CRI) and Other. CRI has been included as a reportable segment as its revenue of $32.6 million was over ten percent of the Company’s consolidated revenue for the year.

During the fourth quarter of 2013 and the year ended December 31, 2013, the Company recorded an income tax provision of approximately $6.2 million and $21.7 million, respectively. As the Company continues to maintain a full valuation allowance against its U.S. deferred tax assets, the Company’s tax provision consists of primarily foreign withholding taxes.

2014 Outlook:

For 2014, the Company expects customer licensing income and revenue to be between $295 million and $305 million. Customer licensing income and revenue are not without risk and include expectations that the Company will sign new customers for patent as well as solutions licensing. The Company also expects to keep its non-GAAP operating expenses relatively flat, year over year.

The above statements and any others in this document that refer to plans and expectations for the year and the future are forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “should” and their variations identify forward-looking statements. Statements that refer to or are based on projections, uncertain events or assumptions also identify forward-looking statements. Many factors could affect the Company’s actual results, and variances from the Company’s current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements.

Conference Call:

The Company will host a conference call at 2:00 p.m. PT today to discuss its financial results. The call, audio and slides will be available online at investor.rambus.com. A replay will be available following the call on the Rambus Investor Relations website for one week at the following numbers: (855) 859-2056 (domestic) or (404) 537-3406 (international) with ID#37074711.

(1) Non-GAAP Financial Information:

In the commentary set forth above and in the financial statements included in this earnings release, the Company presents the following non-GAAP financial measures: customer licensing income, operating costs and expenses, operating income (loss) and net income (loss). In computing each of these non-GAAP financial measures, the following items were considered: other patent royalties received but not recognized as revenue, gain from settlement, proceeds from sale of intellectual property, stock-based compensation expenses, acquisition-related transaction costs and retention bonus expense, amortization expenses, costs of restatement and related legal activities, restructuring charges, impairment charges, severance costs, non-cash interest expense and certain other one-time adjustments. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for both its own assessment of, and to show investors, how the Company’s performance compares to other periods. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Reconciliation from GAAP to non-GAAP results is included in the financial statements contained in this release. Additionally, the Company has not reconciled customer licensing income guidance to revenue guidance because it does not provide guidance for patent royalties received but not recognized as revenue, which is a reconciling item between revenue and customer licensing income. As items that impact revenue are out of the Company's control and/or cannot be reasonably predicted, the Company is unable to provide such guidance.