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Share Name | Share Symbol | Market | Type |
---|---|---|---|
InterDigital Inc | NASDAQ:IDCC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.995 | 0.97% | 103.855 | 103.88 | 103.95 | 105.35 | 103.08 | 103.32 | 271,286 | 18:35:24 |
|
☑
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Pennsylvania
|
|
82-4936666
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $0.01 per share
|
IDCC
|
NASDAQ Stock Market LLC
|
Large accelerated filer
|
☑
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
Common Stock, par value $0.01 per share
|
31,127,273
|
Title of Class
|
Outstanding at July 30, 2019
|
|
|
|
|
PAGES
|
|
|
|
|
|
|
|
FOR THE THREE MONTHS ENDED JUNE 30,
|
|
FOR THE SIX MONTHS ENDED JUNE 30,
|
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
||||||||
Patent licensing royalties
|
$
|
73,567
|
|
|
$
|
68,875
|
|
|
$
|
139,945
|
|
|
$
|
155,973
|
|
|
Technology solutions
|
2,042
|
|
|
680
|
|
|
4,070
|
|
|
1,026
|
|
|
||||
Patent sales
|
—
|
|
|
—
|
|
|
225
|
|
|
—
|
|
|
||||
|
75,609
|
|
|
69,555
|
|
|
144,240
|
|
|
156,999
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
||||||||
Patent administration and licensing
|
37,353
|
|
|
26,487
|
|
|
73,424
|
|
|
53,403
|
|
|
||||
Development
|
17,027
|
|
|
15,829
|
|
|
35,522
|
|
|
32,003
|
|
|
||||
Selling, general and administrative
|
12,314
|
|
|
11,559
|
|
|
26,529
|
|
|
25,763
|
|
|
||||
|
66,694
|
|
|
53,875
|
|
|
135,475
|
|
|
111,169
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
8,915
|
|
|
15,680
|
|
|
8,765
|
|
|
45,830
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
INTEREST EXPENSE
|
(9,907
|
)
|
|
(8,960
|
)
|
|
(19,385
|
)
|
|
(18,203
|
)
|
|
||||
OTHER INCOME (NET)
|
12,354
|
|
|
4,113
|
|
|
15,969
|
|
|
7,020
|
|
|
||||
Income before income taxes
|
11,362
|
|
|
10,833
|
|
|
5,349
|
|
|
34,647
|
|
|
||||
INCOME TAX BENEFIT (PROVISION)
|
(4,984
|
)
|
|
(1,057
|
)
|
|
(3,185
|
)
|
|
3,858
|
|
|
||||
NET INCOME
|
$
|
6,378
|
|
|
$
|
9,776
|
|
|
$
|
2,164
|
|
|
$
|
38,505
|
|
|
Net loss attributable to noncontrolling interest
|
(1,365
|
)
|
|
(1,190
|
)
|
|
(2,776
|
)
|
|
(2,691
|
)
|
|
||||
NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC.
|
$
|
7,743
|
|
|
$
|
10,966
|
|
|
$
|
4,940
|
|
|
$
|
41,196
|
|
|
NET INCOME PER COMMON SHARE — BASIC
|
$
|
0.25
|
|
|
$
|
0.32
|
|
|
$
|
0.15
|
|
|
$
|
1.19
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC
|
31,547
|
|
|
34,769
|
|
|
32,076
|
|
|
34,705
|
|
|
||||
NET INCOME PER COMMON SHARE — DILUTED
|
$
|
0.24
|
|
|
$
|
0.31
|
|
|
$
|
0.15
|
|
|
$
|
1.16
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED
|
31,776
|
|
|
35,631
|
|
|
32,366
|
|
|
35,619
|
|
|
|
FOR THE THREE MONTHS ENDED JUNE 30,
|
|
FOR THE SIX MONTHS ENDED JUNE 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
6,378
|
|
|
$
|
9,776
|
|
|
$
|
2,164
|
|
|
$
|
38,505
|
|
Unrealized gain (loss) on investments, net of tax
|
1,076
|
|
|
376
|
|
|
2,121
|
|
|
(1,371
|
)
|
||||
Comprehensive income
|
$
|
7,454
|
|
|
$
|
10,152
|
|
|
$
|
4,285
|
|
|
$
|
37,134
|
|
Comprehensive loss attributable to noncontrolling interest
|
(1,365
|
)
|
|
(1,190
|
)
|
|
(2,776
|
)
|
|
(2,691
|
)
|
||||
Total comprehensive income attributable to InterDigital, Inc.
|
$
|
8,819
|
|
|
$
|
11,342
|
|
|
$
|
7,061
|
|
|
$
|
39,825
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Common Stock
|
|
Additional
Paid-In Capital
|
|
Retained Earnings
|
|
|
Treasury Stock
|
|
Non-Controlling
Interest
|
|
Total
Shareholders'
Equity
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
BALANCE, DECEMBER 31, 2017
|
70,749
|
|
|
$
|
707
|
|
|
$
|
680,040
|
|
|
$
|
1,257,632
|
|
|
$
|
(2,083
|
)
|
|
36,127
|
|
|
$
|
(1,072,488
|
)
|
|
$
|
9,340
|
|
|
873,148
|
|
Cumulative effect of change in accounting principle
|
—
|
|
|
—
|
|
|
—
|
|
|
161,701
|
|
|
(449
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
161,252
|
|
||||||
Net income attributable to InterDigital, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
30,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,230
|
|
||||||
Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,501
|
)
|
|
(1,501
|
)
|
||||||
Net change in unrealized gain (loss) on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,747
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,747
|
)
|
||||||
Dividends declared ($0.35 per share)
|
—
|
|
|
—
|
|
|
115
|
|
|
(12,280
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,165
|
)
|
||||||
Issuance of common stock, net
|
208
|
|
|
2
|
|
|
(8,279
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,277
|
)
|
||||||
Amortization of unearned compensation
|
—
|
|
|
—
|
|
|
816
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
816
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|
(6,024
|
)
|
|
—
|
|
|
(6,024
|
)
|
||||||
BALANCE, MARCH 31, 2018
|
70,957
|
|
|
$
|
709
|
|
|
$
|
672,692
|
|
|
$
|
1,437,283
|
|
|
$
|
(4,279
|
)
|
|
36,211
|
|
|
$
|
(1,078,512
|
)
|
|
$
|
7,839
|
|
|
1,035,732
|
|
Net income attributable to InterDigital, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
10,966
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,966
|
|
||||||
Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,190
|
)
|
|
(1,190
|
)
|
||||||
Net change in unrealized gain (loss) on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
376
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
376
|
|
||||||
Dividends declared ($0.35 per share)
|
—
|
|
|
—
|
|
|
102
|
|
|
(12,255
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,153
|
)
|
||||||
Exercise of common stock options
|
90
|
|
|
1
|
|
|
3,930
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,931
|
|
||||||
Issuance of common stock, net
|
12
|
|
|
—
|
|
|
(111
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(111
|
)
|
||||||
Amortization of unearned compensation
|
—
|
|
|
—
|
|
|
1,821
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,821
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
(3,148
|
)
|
|
—
|
|
|
(3,148
|
)
|
||||||
BALANCE, JUNE 30, 2018
|
71,059
|
|
|
$
|
710
|
|
|
$
|
678,434
|
|
|
$
|
1,435,994
|
|
|
$
|
(3,903
|
)
|
|
36,251
|
|
|
$
|
(1,081,660
|
)
|
|
$
|
6,649
|
|
|
1,036,224
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In Capital
|
|
Retained Earnings
|
|
|
Treasury Stock
|
|
Non-Controlling
Interest
|
|
Total
Shareholders'
Equity
|
|||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
BALANCE, DECEMBER 31, 2018
|
71,134
|
|
|
$
|
711
|
|
|
$
|
685,512
|
|
|
$
|
1,435,970
|
|
|
$
|
(2,471
|
)
|
|
37,605
|
|
|
$
|
(1,182,993
|
)
|
|
$
|
1,284
|
|
|
$
|
938,013
|
|
Net loss attributable to InterDigital, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,803
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,803
|
)
|
|||||||
Proceeds from and increases in noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,834
|
|
|
12,834
|
|
|||||||
Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,411
|
)
|
|
(1,411
|
)
|
|||||||
Net change in unrealized gain (loss) on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,045
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,045
|
|
|||||||
Dividends declared ($0.35 per share)
|
—
|
|
|
—
|
|
|
103
|
|
|
(11,283
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,180
|
)
|
|||||||
Exercise of common stock options
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Issuance of common stock, net
|
116
|
|
|
1
|
|
|
(4,098
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,097
|
)
|
|||||||
Amortization of unearned compensation
|
—
|
|
|
—
|
|
|
2,096
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,096
|
|
|||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,585
|
|
|
(108,986
|
)
|
|
—
|
|
|
(108,986
|
)
|
|||||||
BALANCE, MARCH 31, 2019
|
71,250
|
|
|
$
|
712
|
|
|
$
|
683,615
|
|
|
$
|
1,421,884
|
|
|
$
|
(1,426
|
)
|
|
39,190
|
|
|
$
|
(1,291,979
|
)
|
|
$
|
12,707
|
|
|
$
|
825,513
|
|
Net income attributable to InterDigital, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
7,743
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,743
|
|
|||||||
Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,365
|
)
|
|
(1,365
|
)
|
|||||||
Net change in unrealized gain (loss) on short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,076
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,076
|
|
|||||||
Dividends declared ($0.35 per share)
|
—
|
|
|
—
|
|
|
104
|
|
|
(10,999
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,895
|
)
|
|||||||
Issuance of common stock, net
|
10
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|||||||
Amortization of unearned compensation
|
—
|
|
|
—
|
|
|
2,116
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,116
|
|
|||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
944
|
|
|
(62,283
|
)
|
|
—
|
|
|
(62,283
|
)
|
|||||||
Equity component of debt, net of tax
|
—
|
|
|
—
|
|
|
56,917
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56,917
|
|
|||||||
Net convertible note hedge transactions, net of tax
|
—
|
|
|
—
|
|
|
(49,740
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49,740
|
)
|
|||||||
Net warrant transactions
|
—
|
|
|
—
|
|
|
43,416
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,416
|
|
|||||||
Deferred financing costs allocated to equity, net of tax
|
—
|
|
|
—
|
|
|
(1,569
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,569
|
)
|
|||||||
Reacquisition of equity component of debt due to prepayment, net of tax
|
—
|
|
|
—
|
|
|
(10,649
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,649
|
)
|
|||||||
BALANCE, JUNE 30, 2019
|
71,260
|
|
|
$
|
712
|
|
|
$
|
724,170
|
|
|
$
|
1,418,628
|
|
|
$
|
(350
|
)
|
|
40,134
|
|
|
$
|
(1,354,262
|
)
|
|
$
|
11,342
|
|
|
$
|
800,240
|
|
|
FOR THE SIX MONTHS ENDED JUNE 30,
|
||||||
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
2,164
|
|
|
$
|
38,505
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
37,642
|
|
|
29,338
|
|
||
Non-cash interest expense, net
|
8,563
|
|
|
6,821
|
|
||
Non-cash change in fair-value
|
710
|
|
|
—
|
|
||
Gain on asset acquisition
|
(14,175
|
)
|
|
—
|
|
||
Change in deferred revenue
|
(62,754
|
)
|
|
(27,167
|
)
|
||
Loss on extinguishment of debt
|
5,488
|
|
|
—
|
|
||
Deferred income taxes
|
(5,714
|
)
|
|
(9,367
|
)
|
||
Share-based compensation
|
4,212
|
|
|
2,637
|
|
||
Other
|
623
|
|
|
29
|
|
||
(Increase) decrease in assets:
|
|
|
|
||||
Receivables
|
(22,169
|
)
|
|
(16,473
|
)
|
||
Deferred charges and other assets
|
(6,463
|
)
|
|
(6,793
|
)
|
||
Increase (decrease) in liabilities:
|
|
|
|
||||
Accounts payable
|
(3,105
|
)
|
|
(2,858
|
)
|
||
Accrued compensation and other expenses
|
2,326
|
|
|
(2,905
|
)
|
||
Accrued taxes payable and other tax contingencies
|
(871
|
)
|
|
(5,535
|
)
|
||
Net cash provided by (used in) operating activities
|
(53,523
|
)
|
|
6,232
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of short-term investments
|
(92,074
|
)
|
|
(101,159
|
)
|
||
Sales of short-term investments
|
267,289
|
|
|
248,190
|
|
||
Purchases of property and equipment
|
(2,862
|
)
|
|
(1,542
|
)
|
||
Capitalized patent costs
|
(17,840
|
)
|
|
(14,507
|
)
|
||
Acquisition of patents
|
—
|
|
|
(2,250
|
)
|
||
Long-term investments
|
—
|
|
|
(6,250
|
)
|
||
Net cash provided by investing activities
|
154,513
|
|
|
122,482
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Net proceeds from exercise of stock options
|
2
|
|
|
3,930
|
|
||
Payments on long-term debt
|
(221,091
|
)
|
|
—
|
|
||
Proceeds from issuance of convertible senior notes
|
400,000
|
|
|
—
|
|
||
Purchase of convertible bond hedge
|
(72,000
|
)
|
|
—
|
|
||
Payment for warrant unwind
|
(4,184
|
)
|
|
—
|
|
||
Prepayment penalty on long-term debt
|
(10,763
|
)
|
|
—
|
|
||
Proceeds from hedge unwind
|
9,038
|
|
|
—
|
|
||
Proceeds from issuance of warrants
|
47,600
|
|
|
—
|
|
||
Payments of debt issuance costs
|
(7,300
|
)
|
|
—
|
|
||
Proceeds from non-controlling interests
|
10,333
|
|
|
—
|
|
||
Dividends paid
|
(22,789
|
)
|
|
(24,319
|
)
|
||
Taxes withheld upon restricted stock unit vestings
|
(4,137
|
)
|
|
(8,388
|
)
|
||
Repurchase of common stock
|
(171,269
|
)
|
|
(9,172
|
)
|
||
Net cash used in financing activities
|
(46,560
|
)
|
|
(37,949
|
)
|
||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
54,430
|
|
|
90,765
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD
|
488,733
|
|
|
433,014
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD
|
$
|
543,163
|
|
|
$
|
523,779
|
|
|
FOR THE SIX MONTHS ENDED JUNE 30,
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
2019
|
|
2018
|
||
Interest paid
|
3,218
|
|
|
2,370
|
|
Income taxes paid, including foreign withholding taxes
|
9,770
|
|
|
10,799
|
|
Non-cash investing and financing activities:
|
|
|
|
||
Dividend payable
|
10,895
|
|
|
12,193
|
|
Increases in noncontrolling interests
|
2,500
|
|
|
—
|
|
Accrued debt issuance costs
|
(1,075
|
)
|
|
—
|
|
Accrued capitalized patent costs, acquisition of patents and property and equipment
|
(1,910
|
)
|
|
(1,991
|
)
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||
|
2019
|
|
2019
|
||||
Operating lease cost
|
$
|
1,105
|
|
|
$
|
2,115
|
|
Short-term lease cost
|
310
|
|
|
520
|
|
||
Variable lease cost
|
381
|
|
|
692
|
|
Maturity of Operating Lease Liabilities
|
June 30, 2019
|
||
Remainder 2019
|
$
|
2,803
|
|
2020
|
4,498
|
|
|
2021
|
3,989
|
|
|
2022
|
4,021
|
|
|
2023
|
3,285
|
|
|
Thereafter
|
6,384
|
|
|
Total lease payments
|
$
|
24,980
|
|
Less: Imputed interest
|
(4,097
|
)
|
|
Present value of lease liabilities
|
$
|
20,883
|
|
Maturity of Operating Leases
|
December 31, 2018
|
||
2019
|
$
|
5,362
|
|
2020
|
3,386
|
|
|
2021
|
2,883
|
|
|
2022
|
2,920
|
|
|
2023
|
2,184
|
|
|
Thereafter
|
5,582
|
|
|
Three months ended June 30,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Increase/(Decrease)
|
|||||||||
Variable patent royalty revenue
|
$
|
8,594
|
|
|
$
|
6,594
|
|
|
$
|
2,000
|
|
|
30
|
%
|
Fixed-fee royalty revenue
|
63,736
|
|
|
60,264
|
|
|
3,472
|
|
|
6
|
%
|
|||
Current patent royalties
a
|
72,330
|
|
|
66,858
|
|
|
5,472
|
|
|
8
|
%
|
|||
Non-current patent royalties
b
|
1,237
|
|
|
2,017
|
|
|
(780
|
)
|
|
(39
|
)%
|
|||
Total patent royalties
|
73,567
|
|
|
68,875
|
|
|
4,692
|
|
|
7
|
%
|
|||
Current technology solutions revenue
a
|
2,042
|
|
|
680
|
|
|
1,362
|
|
|
200
|
%
|
|||
Total revenue
|
$
|
75,609
|
|
|
$
|
69,555
|
|
|
$
|
6,054
|
|
|
9
|
%
|
|
Six months ended June 30,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Increase/(Decrease)
|
|||||||||
Variable patent royalty revenue
|
$
|
17,874
|
|
|
$
|
12,677
|
|
|
$
|
5,197
|
|
|
41
|
%
|
Fixed-fee royalty revenue
|
126,609
|
|
|
117,935
|
|
|
8,674
|
|
|
7
|
%
|
|||
Current patent royalties
a
|
144,483
|
|
|
130,612
|
|
|
13,871
|
|
|
11
|
%
|
|||
Non-current patent royalties
b
|
(4,538
|
)
|
|
25,361
|
|
|
(29,899
|
)
|
|
(118
|
)%
|
|||
Total patent royalties
|
139,945
|
|
|
155,973
|
|
|
(16,028
|
)
|
|
(10
|
)%
|
|||
Current technology solutions revenue
a
|
4,070
|
|
|
1,026
|
|
|
3,044
|
|
|
297
|
%
|
|||
Patent sales
b
|
225
|
|
|
—
|
|
|
225
|
|
|
—
|
%
|
|||
Total revenue
|
$
|
144,240
|
|
|
$
|
156,999
|
|
|
$
|
(12,759
|
)
|
|
(8
|
)%
|
a.
|
Recurring revenues are comprised of current patent royalties, inclusive of Dynamic Fixed-Fee Agreement royalties, and current technology solutions revenue.
|
b.
|
Non-recurring revenues are comprised of non-current patent royalties, which primarily include past patent royalties and royalties from static agreements, as well as patent sales.
|
|
Revenue
|
||
Remainder 2019
|
$
|
128,221
|
|
2020
|
248,250
|
|
|
2021
|
178,583
|
|
|
2022
|
85,228
|
|
|
2023
|
—
|
|
|
Three months ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income applicable to InterDigital, Inc.
|
$
|
7,743
|
|
|
$
|
7,743
|
|
|
$
|
10,966
|
|
|
$
|
10,966
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding: Basic
|
31,547
|
|
|
31,547
|
|
|
34,769
|
|
|
34,769
|
|
||||
Dilutive effect of stock options, RSUs, convertible securities and warrants
|
|
|
229
|
|
|
|
|
862
|
|
||||||
Weighted-average shares outstanding: Diluted
|
|
|
31,776
|
|
|
|
|
35,631
|
|
||||||
Earnings Per Share:
|
|
|
|
|
|
|
|
||||||||
Net income per common share: Basic
|
$
|
0.25
|
|
|
$
|
0.25
|
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
Dilutive effect of stock options, RSUs, convertible securities and warrants
|
|
|
(0.01
|
)
|
|
|
|
(0.01
|
)
|
||||||
Net income per common share: Diluted
|
|
|
$
|
0.24
|
|
|
|
|
$
|
0.31
|
|
|
Six months ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income applicable to InterDigital, Inc.
|
$
|
4,940
|
|
|
$
|
4,940
|
|
|
$
|
41,196
|
|
|
$
|
41,196
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding: Basic
|
32,076
|
|
|
32,076
|
|
|
34,705
|
|
|
34,705
|
|
||||
Dilutive effect of stock options, RSUs, convertible securities and warrants
|
|
|
290
|
|
|
|
|
914
|
|
||||||
Weighted-average shares outstanding: Diluted
|
|
|
32,366
|
|
|
|
|
35,619
|
|
||||||
Earnings Per Share:
|
|
|
|
|
|
|
|
||||||||
Net income per common share: Basic
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
$
|
1.19
|
|
|
$
|
1.19
|
|
Dilutive effect of stock options, RSUs, convertible securities and warrants
|
|
|
—
|
|
|
|
|
(0.03
|
)
|
||||||
Net income per common share: Diluted
|
|
|
$
|
0.15
|
|
|
|
|
$
|
1.16
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Restricted stock units and stock options
|
153
|
|
|
26
|
|
|
102
|
|
|
25
|
|
Convertible securities
|
4,986
|
|
|
—
|
|
|
4,715
|
|
|
—
|
|
Warrants
|
4,986
|
|
|
4,405
|
|
|
4,715
|
|
|
4,404
|
|
Total
|
10,125
|
|
|
4,431
|
|
|
9,532
|
|
|
4,429
|
|
1.
|
Whenever InterDigital engages with a Chinese Manufacturer to license InterDigital’s patent portfolio for 2G, 3G and 4G wireless mobile standards, InterDigital will offer such Chinese Manufacturer the option of taking a worldwide portfolio license of only its standards-essential wireless patents, and comply with F/RAND principles when negotiating and entering into such licensing agreements with Chinese Manufacturers.
|
2.
|
As part of its licensing offer, InterDigital will not require that a Chinese Manufacturer agree to a royalty-free, reciprocal cross-license of such Chinese Manufacturer's similarly categorized standards-essential wireless patents.
|
3.
|
Prior to commencing any action against a Chinese Manufacturer in which InterDigital may seek exclusionary or injunctive relief for the infringement of any of its wireless standards-essential patents, InterDigital will offer such Chinese Manufacturer the option to enter into expedited binding arbitration under fair and reasonable procedures to resolve the royalty rate and other terms of a worldwide license under InterDigital's wireless standards-essential patents. If the Chinese Manufacturer accepts InterDigital's binding arbitration offer or otherwise enters into an agreement with InterDigital on a binding arbitration mechanism, InterDigital will, in accordance with the terms of the arbitration agreement and patent license agreement, refrain from seeking exclusionary or injunctive relief against such company.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
June 30,
|
|
June 30,
|
||||
|
2018
|
|
2018
|
||||
Actual revenue
|
$
|
69,555
|
|
|
$
|
156,999
|
|
Supplemental pro forma revenue
|
72,419
|
|
|
162,727
|
|
||
Actual earnings
|
10,966
|
|
|
41,196
|
|
||
Supplemental pro forma earnings (loss)
|
(426
|
)
|
|
17,662
|
|
||
Actual diluted earnings per share
|
0.31
|
|
|
1.16
|
|
||
Supplemental pro forma diluted earnings (loss) per share
|
(0.01
|
)
|
|
0.50
|
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Cash and cash equivalents
|
$
|
531,698
|
|
|
$
|
475,056
|
|
Restricted cash included within prepaid and other current assets
|
11,465
|
|
|
13,677
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
543,163
|
|
|
$
|
488,733
|
|
|
Fair Value as of June 30, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market and demand accounts (a)
|
$
|
543,163
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
543,163
|
|
Commercial paper (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
U.S. government securities
|
—
|
|
|
167,236
|
|
|
—
|
|
|
167,236
|
|
||||
Corporate bonds, asset backed and other securities
|
—
|
|
|
132,225
|
|
|
—
|
|
|
132,225
|
|
||||
Total
|
$
|
543,163
|
|
|
$
|
299,461
|
|
|
$
|
—
|
|
|
$
|
842,624
|
|
|
Fair Value as of December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market and demand accounts (a)
|
$
|
488,733
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
488,733
|
|
Commercial paper (b)
|
—
|
|
|
14,548
|
|
|
—
|
|
|
14,548
|
|
||||
U.S. government securities
|
—
|
|
|
289,576
|
|
|
—
|
|
|
289,576
|
|
||||
Corporate bonds, asset backed and other securities
|
—
|
|
|
166,600
|
|
|
—
|
|
|
166,600
|
|
||||
Total
|
$
|
488,733
|
|
|
$
|
470,724
|
|
|
$
|
—
|
|
|
$
|
959,457
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration resulting from the Technicolor Acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,800
|
|
|
$
|
19,800
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,800
|
|
|
$
|
19,800
|
|
(a)
|
Primarily included within cash and cash equivalents.
|
(b)
|
As of
June 30, 2019
and December 31, 2018, zero commercial paper was included within cash and cash equivalents.
|
Level 3 Fair Value Measurements
|
|
Contingent Consideration Liability
|
||
Balance as of December 31, 2018
|
|
$
|
19,800
|
|
Changes in fair value recognized in the condensed consolidated statements of income
|
|
|
710
|
|
Derecognition of contingent consideration liability as a Level 3 fair value measurement
|
|
|
(20,510
|
)
|
Balance as of June 30, 2019
|
|
$
|
—
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Principal
Amount
|
|
Carrying
Value
|
|
Fair
Value
|
|
Principal
Amount
|
|
Carrying
Value |
|
Fair
Value
|
||||||||||||
Senior Convertible Long-Term Debt
|
$
|
494,909
|
|
|
$
|
414,663
|
|
|
$
|
505,101
|
|
|
$
|
316,000
|
|
|
$
|
298,951
|
|
|
$
|
331,595
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value |
|
Fair
Value
|
||||||||
Technicolor Acquisition Long-Term Debt
|
$
|
19,708
|
|
|
$
|
21,730
|
|
|
$
|
18,428
|
|
|
$
|
19,100
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
|
2024 Notes
|
2020 Notes
|
Total
|
|
2020 Notes
|
||||||||
Principal
|
$
|
400,000
|
|
$
|
94,909
|
|
$
|
494,909
|
|
|
$
|
316,000
|
|
Less:
|
|
|
|
|
|
||||||||
Unamortized interest discount
|
(70,945
|
)
|
(2,677
|
)
|
(73,622
|
)
|
|
(15,428
|
)
|
||||
Deferred financing costs
|
(6,346
|
)
|
(278
|
)
|
(6,624
|
)
|
|
(1,621
|
)
|
||||
Net carrying amount of 2024 and 2020 Notes
|
$
|
322,709
|
|
$
|
91,954
|
|
$
|
414,663
|
|
|
$
|
298,951
|
|
|
Three months ended June 30,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||
|
2024 Notes
|
|
2020 Notes
|
|
Total
|
|
2024 Notes
|
|
2020 Notes
|
|
Total
|
||||||||||||
Contractual coupon interest
|
$
|
600
|
|
|
$
|
927
|
|
|
$
|
1,527
|
|
|
$
|
—
|
|
|
$
|
1,185
|
|
|
$
|
1,185
|
|
Accretion of debt discount
|
1,101
|
|
|
2,520
|
|
|
3,621
|
|
|
—
|
|
|
3,094
|
|
|
3,094
|
|
||||||
Amortization of deferred financing costs
|
98
|
|
|
266
|
|
|
364
|
|
|
—
|
|
|
347
|
|
|
347
|
|
||||||
Total
|
$
|
1,799
|
|
|
$
|
3,713
|
|
|
$
|
5,512
|
|
|
$
|
—
|
|
|
$
|
4,626
|
|
|
$
|
4,626
|
|
|
Six months ended June 30,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||
|
2024 Notes
|
|
2020 Notes
|
|
Total
|
|
2024 Notes
|
|
2020 Notes
|
|
Total
|
||||||||||||
Contractual coupon interest
|
$
|
600
|
|
|
$
|
2,112
|
|
|
$
|
2,712
|
|
|
$
|
—
|
|
|
$
|
2,370
|
|
|
$
|
2,370
|
|
Accretion of debt discount
|
1,101
|
|
|
5,735
|
|
|
6,836
|
|
|
—
|
|
|
6,126
|
|
|
6,126
|
|
||||||
Amortization of deferred financing costs
|
98
|
|
|
613
|
|
|
711
|
|
|
—
|
|
|
695
|
|
|
695
|
|
||||||
Total
|
$
|
1,799
|
|
|
$
|
8,460
|
|
|
$
|
10,259
|
|
|
$
|
—
|
|
|
$
|
9,191
|
|
|
$
|
9,191
|
|
|
Three months ended
June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest and investment income
|
3,592
|
|
|
4,350
|
|
|
7,488
|
|
|
7,273
|
|
||||
Gain on asset acquisition
|
14,175
|
|
|
—
|
|
|
14,175
|
|
|
—
|
|
||||
Loss on extinguishment of long-term debt
|
(5,488
|
)
|
|
—
|
|
|
(5,488
|
)
|
|
—
|
|
||||
Other
|
75
|
|
|
(237
|
)
|
|
(206
|
)
|
|
(253
|
)
|
||||
Other income (net)
|
$
|
12,354
|
|
|
$
|
4,113
|
|
|
$
|
15,969
|
|
|
$
|
7,020
|
|
|
Statements of Income and Statements of Comprehensive Income Impact
|
||
|
Year Ended
|
||
|
December 31,
|
December 31,
|
December 31,
|
|
2016
|
2017
|
2018
|
Net loss attributable to noncontrolling interest - As Reported
|
$3,521
|
$3,579
|
$4,393
|
Net loss attributable to noncontrolling interest - As Revised
|
$5,261
|
$5,506
|
$5,556
|
|
|
|
|
Net income attributable to InterDigital, Inc. - As Reported
|
$309,001
|
$174,293
|
$63,868
|
Net income attributable to InterDigital, Inc. - As Revised
|
$310,741
|
$176,220
|
$65,031
|
|
|
|
|
Net income per common share, Basic - As Reported
|
$8.95
|
$5.04
|
$1.85
|
Net income per common share, Basic - As Revised
|
$9.00
|
$5.09
|
$1.89
|
|
|
|
|
Net income per common share, Diluted - As Reported
|
$8.78
|
$4.87
|
$1.81
|
Net income per common share, Diluted - As Revised
|
$8.83
|
$4.93
|
$1.84
|
|
|
|
|
Total comprehensive income attributable to InterDigital, Inc. - As Reported
|
$308,665
|
$172,724
|
$63,929
|
Total comprehensive income attributable to InterDigital, Inc. - As Revised
|
$310,405
|
$174,651
|
$65,092
|
|
Statements of Income and Statements of Comprehensive Income Impact
|
|||||
|
Three Months Ended
|
Six Months Ended
|
Nine Months Ended
|
|||
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
June 30,
|
September 30,
|
|
2018
|
2018
|
2018
|
2018
|
2018
|
2018
|
Net loss attributable to noncontrolling interest - As Reported
|
$1,196
|
$930
|
$1,297
|
$970
|
$2,126
|
$3,423
|
Net loss attributable to noncontrolling interest - As Revised
|
$1,501
|
$1,190
|
$1,642
|
$1,223
|
$2,691
|
$4,333
|
|
|
|
|
|
|
|
Net income attributable to InterDigital, Inc. - As Reported
|
$29,925
|
$10,706
|
$21,407
|
$1,830
|
$40,631
|
$62,038
|
Net income attributable to InterDigital, Inc. - As Revised
|
$30,230
|
$10,966
|
$21,752
|
$2,083
|
$41,196
|
$62,948
|
|
|
|
|
|
|
|
Net income per common share, Basic - As Reported
|
$0.86
|
$0.31
|
$0.62
|
$0.05
|
$1.17
|
$1.79
|
Net income per common share, Basic - As Revised
|
$0.87
|
$0.32
|
$0.63
|
$0.06
|
$1.19
|
$1.81
|
|
|
|
|
|
|
|
Net income per common share, Diluted - As Reported
|
$0.84
|
$0.30
|
$0.60
|
$0.05
|
$1.14
|
$1.74
|
Net income per common share, Diluted - As Revised
|
$0.85
|
$0.31
|
$0.61
|
$0.06
|
$1.16
|
$1.77
|
|
|
|
|
|
|
|
Total comprehensive income attributable to InterDigital, Inc. - As Reported
|
$28,178
|
$11,082
|
$21,874
|
$2,795
|
$39,260
|
$61,134
|
Total comprehensive income attributable to InterDigital, Inc. - As Revised
|
$28,483
|
$11,342
|
$22,219
|
$3,048
|
$39,825
|
$62,044
|
|
Balance Sheets and Statements of Shareholders' Equity Impact
|
|||||
|
December 31,
|
December 31,
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
|
2016
|
2017
|
2018
|
2018
|
2018
|
2018
|
Retained earnings - As Reported
|
$1,120,766
|
$1,249,091
|
$1,428,437
|
$1,426,888
|
$1,436,171
|
$1,426,266
|
Retained earnings - As Revised
|
$1,127,380
|
$1,257,632
|
$1,437,283
|
$1,435,994
|
$1,445,622
|
$1,435,970
|
|
|
|
|
|
|
|
Total InterDigital, Inc. shareholders’ equity - As Reported
|
$739,709
|
$855,267
|
$1,019,047
|
$1,020,469
|
$1,000,591
|
$927,025
|
Total InterDigital, Inc. shareholders’ equity - As Revised
|
$746,323
|
$863,808
|
$1,027,893
|
$1,029,575
|
$1,010,042
|
$936,729
|
|
|
|
|
|
|
|
Noncontrolling interest - As Reported
|
$14,659
|
$17,881
|
$16,685
|
$15,755
|
$14,458
|
$10,988
|
Noncontrolling interest - As Revised
|
$8,045
|
$9,340
|
$7,839
|
$6,649
|
$5,007
|
$1,284
|
|
|
|
|
|
|
|
Total equity - As Reported
|
$754,368
|
$873,148
|
$1,035,732
|
$1,036,224
|
$1,015,049
|
$938,013
|
Total equity - As Revised
|
$754,368
|
$873,148
|
$1,035,732
|
$1,036,224
|
$1,015,049
|
$938,013
|
•
|
the acquisition of the R&I unit of Technicolor SA resulted in a net gain of approximately
$14.2 million
, inclusive of a
$20.5 million
gain from the derecognition of a contingent consideration liability, all of which is included within “
Other Income (Net)
” within our condensed consolidated statement of income;
|
•
|
the Technicolor Acquisition and the acquisition of the R&I unit of Technicolor SA, which closed on July 30, 2018 and May 31, 2019, respectively, contributed $3.6 million to our second quarter 2019 revenue and
$13.2 million
to our second quarter 2019 operating expenses, including
$1.7 million
of transaction-related and integration costs; and
|
•
|
in connection with the offering of the 2024 Notes, we repurchased approximately
$221.1 million
in aggregate principal amount of our 2020 Notes, which resulted in the recognition of a
$5.5 million
loss on extinguishment of debt that is included in "
Other Income (Net)"
within our condensed consolidated statement of income.
|
|
June 30, 2019
|
|
December 31, 2018
|
|
Increase /
(Decrease)
|
||||||
Cash and cash equivalents
|
$
|
531,698
|
|
|
$
|
475,056
|
|
|
$
|
56,642
|
|
Restricted cash included within prepaid and other current assets
|
11,465
|
|
|
13,677
|
|
|
(2,212
|
)
|
|||
Short-term investments
|
299,461
|
|
|
470,724
|
|
|
(171,263
|
)
|
|||
Total cash, cash equivalents, restricted cash and short-term investments
|
$
|
842,624
|
|
|
$
|
959,457
|
|
|
$
|
(116,833
|
)
|
|
Six months ended June 30,
|
||||||||||
|
2019
|
|
2018
|
|
Increase /
(Decrease)
|
||||||
Net cash provided by (used in) operating activities
|
$
|
(53,523
|
)
|
|
$
|
6,232
|
|
|
$
|
(59,755
|
)
|
|
Six months ended June 30,
|
||||||||||
|
2019
|
|
2018
|
|
Increase / (Decrease)
|
||||||
Cash Receipts:
|
|
|
|
|
|
||||||
Patent royalties
|
$
|
59,769
|
|
|
$
|
90,696
|
|
|
$
|
(30,927
|
)
|
Technology solutions
|
1,431
|
|
|
8,439
|
|
|
(7,008
|
)
|
|||
Total cash receipts
|
61,200
|
|
|
99,135
|
|
|
(37,935
|
)
|
|||
|
|
|
|
|
|
||||||
Cash Outflows:
|
|
|
|
|
|
||||||
Cash operating expenses
a
|
92,911
|
|
|
79,194
|
|
|
13,717
|
|
|||
Income taxes paid
b
|
9,770
|
|
|
10,799
|
|
|
(1,029
|
)
|
|||
Total cash outflows
|
102,681
|
|
|
89,993
|
|
|
12,688
|
|
|||
|
|
|
|
|
|
||||||
Other working capital adjustments
|
(12,042
|
)
|
|
(2,910
|
)
|
|
(9,132
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows provided by (used in) operating activities
|
$
|
(53,523
|
)
|
|
$
|
6,232
|
|
|
$
|
(59,755
|
)
|
|
June 30,
2019 |
|
December 31, 2018
|
|
Increase / (Decrease)
|
||||||
Current assets
|
$
|
940,998
|
|
|
$
|
1,024,250
|
|
|
$
|
(83,252
|
)
|
Less
: current liabilities
|
242,898
|
|
|
179,395
|
|
|
63,503
|
|
|||
Working capital
|
698,100
|
|
|
844,855
|
|
|
(146,755
|
)
|
|||
Subtract:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
531,698
|
|
|
475,056
|
|
|
56,642
|
|
|||
Restricted cash
|
11,465
|
|
|
13,677
|
|
|
(2,212
|
)
|
|||
Short-term investments
|
299,461
|
|
|
470,724
|
|
|
(171,263
|
)
|
|||
Add:
|
|
|
|
|
|
||||||
Current deferred revenue
|
82,575
|
|
|
111,672
|
|
|
(29,097
|
)
|
|||
Adjusted working capital
|
$
|
(61,949
|
)
|
|
$
|
(2,930
|
)
|
|
$
|
(59,019
|
)
|
2024 Notes
|
|||||
Market Price Per Share
|
Shares Issuable Upon Conversion of the 2024 Notes
|
Shares Issuable Upon Exercise of the 2024 Warrant Transactions
|
Total Treasury Stock Method Incremental Shares
|
Shares Deliverable to InterDigital upon Settlement of the 2024 Note Hedge Transactions
|
Incremental Shares Issuable
(a)
|
|
(Shares in thousands)
|
||||
$85
|
215
|
—
|
215
|
(215)
|
—
|
$90
|
476
|
—
|
476
|
(476)
|
—
|
$95
|
710
|
—
|
710
|
(710)
|
—
|
$100
|
921
|
—
|
921
|
(921)
|
—
|
$105
|
1,111
|
—
|
1,111
|
(1,111)
|
—
|
$110
|
1,284
|
25
|
1,309
|
(1,284)
|
25
|
$115
|
1,442
|
238
|
1,680
|
(1,442)
|
238
|
$120
|
1,587
|
433
|
2,020
|
(1,587)
|
433
|
$125
|
1,721
|
613
|
2,334
|
(1,721)
|
613
|
$130
|
1,844
|
779
|
2,623
|
(1,844)
|
779
|
2020 Notes
|
|||||
Market Price Per Share
|
Shares Issuable Upon Conversion of the 2020 Notes
|
Shares Issuable Upon Exercise of the 2020 Warrant Transactions
|
Total Treasury Stock Method Incremental Shares
|
Shares Deliverable to InterDigital upon Settlement of the 2020 Note Hedge Transactions
|
Incremental Shares Issuable
(a)
|
|
(Shares in thousands)
|
||||
$75
|
71
|
—
|
71
|
(71)
|
—
|
$80
|
150
|
—
|
150
|
(150)
|
—
|
$85
|
220
|
—
|
220
|
(220)
|
—
|
$90
|
282
|
48
|
330
|
(282)
|
48
|
$95
|
337
|
115
|
452
|
(337)
|
115
|
$100
|
387
|
177
|
564
|
(387)
|
177
|
$105
|
433
|
232
|
665
|
(433)
|
232
|
$110
|
474
|
282
|
756
|
(474)
|
282
|
$115
|
511
|
328
|
839
|
(511)
|
328
|
$120
|
546
|
370
|
916
|
(546)
|
370
|
|
Three months ended June 30,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Total Increase/(Decrease)
|
|||||||||
Variable patent royalty revenue
|
$
|
8,594
|
|
|
$
|
6,594
|
|
|
$
|
2,000
|
|
|
30
|
%
|
Fixed-fee royalty revenue
|
63,736
|
|
|
60,264
|
|
|
3,472
|
|
|
6
|
%
|
|||
Current patent royalties
a
|
72,330
|
|
|
66,858
|
|
|
5,472
|
|
|
8
|
%
|
|||
Non-current patent royalties
b
|
1,237
|
|
|
2,017
|
|
|
(780
|
)
|
|
(39
|
)%
|
|||
Total patent royalties
|
73,567
|
|
|
68,875
|
|
|
4,692
|
|
|
7
|
%
|
|||
Current technology solutions revenue
a
|
2,042
|
|
|
680
|
|
|
1,362
|
|
|
200
|
%
|
|||
Patent sales
b
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Total revenue
|
$
|
75,609
|
|
|
$
|
69,555
|
|
|
$
|
6,054
|
|
|
9
|
%
|
a.
|
Recurring revenues are comprised of current patent royalties, inclusive of Dynamic Fixed-Fee Agreement royalties, and current technology solutions revenue.
|
b.
|
Non-recurring revenues are comprised of non-current patent royalties, which primarily include past patent royalties and royalties from static agreements, as well as patent sales.
|
|
Three months ended June 30,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Increase/(Decrease)
|
|||||||||
Patent administration and licensing
|
$
|
37,353
|
|
|
$
|
26,487
|
|
|
$
|
10,866
|
|
|
41
|
%
|
Development
|
17,027
|
|
|
15,829
|
|
|
1,198
|
|
|
8
|
%
|
|||
Selling, general and administrative
|
12,314
|
|
|
11,559
|
|
|
755
|
|
|
7
|
%
|
|||
Total operating expenses
|
$
|
66,694
|
|
|
$
|
53,875
|
|
|
$
|
12,819
|
|
|
24
|
%
|
|
Increase/
(Decrease)
|
||
Technicolor Acquisitions: Recurring costs
|
$
|
11,481
|
|
Personnel-related costs
|
1,104
|
|
|
Other
|
1,435
|
|
|
Intellectual property enforcement and non-patent litigation
|
(1,201
|
)
|
|
Total increase in operating expenses
|
$
|
12,819
|
|
|
Three months ended
June 30,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|||||||||
Interest expense
|
$
|
(9,907
|
)
|
|
$
|
(8,960
|
)
|
|
$
|
(947
|
)
|
|
(11
|
)%
|
Interest and investment income
|
3,592
|
|
|
4,350
|
|
|
(758
|
)
|
|
(17
|
)%
|
|||
Gain on asset acquisition
|
14,175
|
|
|
—
|
|
|
14,175
|
|
|
—
|
%
|
|||
Loss on extinguishment of long-term debt
|
(5,488
|
)
|
|
—
|
|
|
(5,488
|
)
|
|
—
|
%
|
|||
Other income (expense)
|
75
|
|
|
(237
|
)
|
|
312
|
|
|
132
|
%
|
|||
Total non-operating income (expense)
|
$
|
2,447
|
|
|
$
|
(4,847
|
)
|
|
$
|
7,294
|
|
|
150
|
%
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Total Increase/(Decrease)
|
|||||||||
Variable patent royalty revenue
|
$
|
17,874
|
|
|
$
|
12,677
|
|
|
$
|
5,197
|
|
|
41
|
%
|
Fixed-fee royalty revenue
|
126,609
|
|
|
117,935
|
|
|
8,674
|
|
|
7
|
%
|
|||
Current patent royalties (a)
|
144,483
|
|
|
130,612
|
|
|
13,871
|
|
|
11
|
%
|
|||
Non-current patent royalties (b)
|
(4,538
|
)
|
|
25,361
|
|
|
(29,899
|
)
|
|
(118
|
)%
|
|||
Total patent royalties
|
139,945
|
|
|
155,973
|
|
|
(16,028
|
)
|
|
(10
|
)%
|
|||
Current technology solutions revenue (a)
|
4,070
|
|
|
1,026
|
|
|
3,044
|
|
|
297
|
%
|
|||
Patent Sales
|
225
|
|
|
—
|
|
|
225
|
|
|
—
|
%
|
|||
Total revenue
|
$
|
144,240
|
|
|
$
|
156,999
|
|
|
$
|
(12,984
|
)
|
|
(8
|
)%
|
(a)
|
Recurring revenues consist of current patent royalties, inclusive of Dynamic Fixed-Fee Agreement royalties, and current technology solutions revenue.
|
(b)
|
Non-current patent royalties for the six months ended
June 30, 2019
consist of past patent royalties and royalties from static agreements. For the six months ended
June 30, 2018
, non-current patent royalties consist of past patent royalties.
|
|
Six months ended June 30,
|
|
|
|||||||||||
|
2019
|
|
2018
|
|
Increase/(Decrease)
|
|||||||||
Patent administration and licensing
|
$
|
73,424
|
|
|
$
|
53,403
|
|
|
$
|
20,021
|
|
|
37
|
%
|
Development
|
35,522
|
|
|
32,003
|
|
|
3,519
|
|
|
11
|
%
|
|||
Selling, general and administrative
|
26,529
|
|
|
25,763
|
|
|
766
|
|
|
3
|
%
|
|||
Total operating expenses
|
$
|
135,475
|
|
|
$
|
111,169
|
|
|
$
|
24,306
|
|
|
22
|
%
|
|
Increase/(Decrease)
|
||
Technicolor Acquisitions: Recurring costs
|
$
|
20,591
|
|
Personnel-related costs
|
4,679
|
|
|
Technicolor Acquisitions: Transaction and integration costs
|
960
|
|
|
Intellectual property enforcement and non-patent litigation
|
(1,721
|
)
|
|
Other
|
(203
|
)
|
|
Total increase in operating expenses
|
$
|
24,306
|
|
|
Six months ended June 30,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|||||||||
Interest expense
|
$
|
(19,385
|
)
|
|
$
|
(18,203
|
)
|
|
$
|
(1,182
|
)
|
|
(6
|
)%
|
Interest and investment income
|
7,488
|
|
|
7,273
|
|
|
215
|
|
|
3
|
%
|
|||
Gain on asset acquisition
|
14,175
|
|
|
—
|
|
|
14,175
|
|
|
—
|
%
|
|||
Loss on extinguishment of long-term debt
|
(5,488
|
)
|
|
—
|
|
|
(5,488
|
)
|
|
—
|
%
|
|||
Other income (expense)
|
(206
|
)
|
|
(253
|
)
|
|
47
|
|
|
19
|
%
|
|||
Total non-operating income (expense)
|
$
|
(3,416
|
)
|
|
$
|
(11,183
|
)
|
|
$
|
7,767
|
|
|
69
|
%
|
•
|
Our expectations regarding the potential effects of new accounting standards, including the new revenue recognition guidance, on our financial position, results of operations or cash flows;
|
•
|
Our expectation that the amortization of dynamic fixed-fee royalty payments will reduce our
June 30, 2019
deferred revenue balance over the next twelve months;
|
•
|
Our expectations with respect to revenue to be recognized based on contracts signed and committed Dynamic Fixed-Fee Agreement payments as of
June 30, 2019
;
|
•
|
Our expectations and estimations regarding the income tax effects, and the impact on the Company, of the Tax Reform Act, including our forecasted net benefit related to our income qualifying as FDII;
|
•
|
Our expectations with respect to anticipated tax refunds to be received from amending certain tax returns;
|
•
|
The timing, outcome and impact of, and plans, expectations and beliefs with respect to, our various litigation, arbitration, regulatory and administrative matters;
|
•
|
Our belief that we have the ability to obtain additional liquidity through debt and equity financings;
|
•
|
Our expectations with respect to the impact of the Technicolor Acquisitions on our financial statements and our business;
|
•
|
Our belief that our available sources of funds will be sufficient to finance our operations, capital requirements, debt obligations, existing stock repurchase program and dividend program for the next twelve months;
|
•
|
Our expectation that we will continue to pay dividends comparable to our quarterly
$0.35
per share cash dividend in the future; and
|
•
|
Our expectation that we will record a gain on the sale of the Hillcrest Laboratories, Inc. business.
|
Period
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
|
|
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs (3)
|
||||||
April 1, 2019 - April 30, 2019
|
322,037
|
|
|
$
|
67.44
|
|
|
322,037
|
|
|
$
|
37,371,305
|
|
May 1, 2019 - May 31, 2019
|
307,764
|
|
|
$
|
68.02
|
|
|
307,764
|
|
|
$
|
116,430,445
|
|
June 1, 2019 - June 30, 2019
|
313,720
|
|
|
$
|
62.53
|
|
|
313,720
|
|
|
$
|
96,813,533
|
|
Total
|
943,521
|
|
|
$
|
66.00
|
|
|
943,521
|
|
|
$
|
96,813,533
|
|
Exhibit
Number
|
|
Exhibit Description
|
4.1*
|
|
|
|
|
|
4.2*
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
101.SCH
|
|
Schema Document
|
|
|
|
101.CAL
|
|
Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
Definition Linkbase Document
|
|
|
|
101.LAB
|
|
Labels Linkbase Document
|
|
|
|
101.PRE
|
|
Presentation Linkbase Document
|
*
|
|
Incorporated by reference to the previous filing indicated.
|
+
|
|
This exhibit will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such exhibit will not be deemed to be incorporated by reference into any filing under the Securities Act or Securities Exchange Act, except to the extent that InterDigital, Inc. specifically incorporates it by reference.
|
|
INTERDIGITAL, INC.
|
|
|
|
|
Date: August 1, 2019
|
/s/ WILLIAM J. MERRITT
|
|
|
William J. Merritt
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
Date: August 1, 2019
|
/s/ RICHARD J. BREZSKI
|
|
|
Richard J. Brezski
|
|
|
Chief Financial Officer
|
|
1 Year InterDigital Chart |
1 Month InterDigital Chart |
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