NOTE 1  THE COMPANY AND BASIS OF PRESENTATION Xperi Corporation (the Company) licenses its innovative products, technologies and inventions to global electronics companies which, in turn, integrate the technologies into their own consumer electronics and semiconductor products. The Company's technologies and inventions are widely adopted and used every day by millions of people. The Company's audio technologies have shipped in billions of devices for the home, mobile and automotive markets. The Company's imaging technologies have been embedded in billions of smartphones and other mobile devices. The Company's semiconductor packaging and interconnect technologies have been licensed to more than 100 customers and have shipped in over 100 billion semiconductor chips. The accompanying interim unaudited condensed consolidated financial statements as of September 30, 2019 and 2018, and for the three and nine months then ended, have been prepared by the Company in accordance with generally accepted accounting principles (GAAP) in the United States (U.S.) for interim financial information. The amounts as of December 31, 2018 have been derived from the Companys annual audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary (consisting of normal recurring adjustments) to state fairly the financial position of the Company and its results of operations and cash flows as of and for the periods presented. These financial statements should be read in conjunction with the annual audited financial statements and notes thereto as of and for the year ended December 31, 2018, included in the Companys Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 20, 2019 (the Form 10-K). The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2019 or any future period and the Company makes no representations related thereto. In the fourth quarter of 2018, the Company funded a new entity and issued shares to non-controlling interests. At the end of the fourth quarter of 2018, the entity was approximately 85% owned by the Company. As a result of issuing new shares in such entity to noncontrolling interests during the first nine months of 2019, the Companys ownership interest of the entity decreased to approximately 83% as of September 30, 2019. The operating results of this entity have been consolidated in the Companys consolidated financial statements since the fourth quarter of 2018. In the first quarter of 2019, the Company recorded an out-of-period adjustment to decrease current unbilled receivables and decrease retained earnings by $2.9 million to correct an error that originated in the first quarter of 2018 in connection with its adoption of Accounting Standards Update (ASU) No . 2014-09 (Topic 606) Revenue from Contracts with Customers. The adjustment relates to an error in the Companys interpretation of the payment terms of a contract entered into in a prior year. The Company determined that the error was not material to any of its prior annual and interim period financial statements, and the impact of correcting it is not considered to be material to the financial statements for the three and nine months ended September 30, 2019.