InterDigital Reports Fourth Quarter and Full Year 2015 Financial Results

Forward-looking statements are subject to risks and uncertainties.  Actual outcomes could differ materially from those expressed in or anticipated by such forward-looking statements due to a variety of factors, including, without limitation, those identified in this press release, as well as the following: (i) unanticipated delays, difficulties or acceleration in the execution of patent license agreements; (ii) our ability to leverage our strategic relationships and secure new patent license agreements on acceptable terms; (iii) our ability to enter into sales and/or licensing partnering arrangements for certain of our patent assets; (iv) our ability to enter into partnerships with leading inventors and research organizations and identify and acquire technology and patent portfolios that align with InterDigital’s roadmap; (v) our ability to commercialize the company’s technologies and enter into customer agreements; (vi) the failure of the markets for the company’s current or new technologies to materialize to the extent or at the rate that we expect; (vii) unexpected delays or difficulties related to the development of the company’s technologies; (viii) changes in the market share and sales performance of our primary licensees, delays in product shipments of our licensees, delays in the timely receipt and final reviews of quarterly royalty reports from our licensees, delays in payments from our licensees and related matters; (ix) amounts of royalties payable following routine audits, if any, and the timely receipt of such amounts during first quarter 2016; (x) the resolution of current legal proceedings, including any awards or judgments relating to such proceedings, additional legal proceedings, changes in the schedules or costs associated with legal proceedings or adverse rulings in such legal proceedings; (xi) changes or inaccuracies in market projections; and (xii) changes in the company’s business strategy.

We undertake no duty to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.

Footnotes

1                      Throughout this press release, net income (loss) and diluted earnings per share ("EPS") are attributable to InterDigital, Inc. (e.g., after adjustments for noncontrolling interests), unless otherwise stated.

2                      Free cash flow is a supplemental non-GAAP financial measure that InterDigital believes is helpful in evaluating the company's ability to invest in its business, make strategic acquisitions and fund share repurchases, among other things.  A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in the company's cash balance for the period. InterDigital defines “free cash flow” as net cash provided by operating activities less purchases of property and equipment, technology licenses and investments in patents.  InterDigital's computation of free cash flow might not be comparable to free cash flow reported by other companies.  The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.  A detailed reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measure, is provided at the end of this press release.




SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands except per share data)
(unaudited)
 
  For the Three Months
Ended December 31,
  For the Year Ended
December 31,
  2015  2014  2015  2014
REVENUES:       
Per-unit royalty revenue$59,566  $49,220  $234,836  $157,250 
Fixed fee amortized royalty revenue31,718  33,358  131,837  121,903 
Current patent royalties91,284  82,578  366,673  279,153 
Past patent royalties16,720  1,050  65,814  124,236 
Total patent licensing royalties108,004  83,628  432,487  403,389 
Patent sales      1,999 
Past technology solutions revenue2,768    2,852  800 
Current technology solutions revenue1,326  2,493  6,096  9,633 
 $112,098  $86,121  $441,435   $ 415,821  
               
OPERATING EXPENSES:              
Patent administration and licensing 29,201     34,919     120,401     133,808  
Development 19,767     17,440     72,702     75,300  
Selling, general and administrative 9,790     8,474     39,783     37,753  
  58,758     60,833     232,886     246,861  
               
Income from operations 53,340     25,288     208,549     168,960  
               
OTHER EXPENSE (NET) (6,444 )   (4,699 )   (27,534 )   (15,432 )
Income before income taxes 46,896     20,589     181,015     153,528  
INCOME TAX (PROVISION) (14,577 )   (7,361 )   (64,621 )   (52,108 )
NET INCOME $ 32,319     $ 13,228     $ 116,394     $ 101,420  
Net loss attributable to noncontrolling interest (719 )   (562 )   (2,831 )   (2,922 )
NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC. $ 33,038     $ 13,790     $ 119,225     $ 104,342  
NET INCOME PER COMMON SHARE — BASIC $ 0.93     $ 0.37     $ 3.31     $ 2.65  
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC 35,429     37,207     36,048     39,420  
NET INCOME PER COMMON SHARE — DILUTED $ 0.92     $ 0.36     $ 3.27     $ 2.62  
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED 35,887     37,873     36,463     39,879  
CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.20     $ 0.20     $ 0.80     $ 0.70  

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