InterDigital Reports Fourth Quarter and Full Year 2016 Financial

InterDigital Reports Fourth Quarter and Full Year 2016 Financial Results

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

¹Throughout 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.

²Free 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 INCOME
(dollars in thousands except per share data)
(unaudited)

	For the Three Months Ended December 31,						For the Twelve Months Ended December 31,
	2016			2015			2016			2015
REVENUES:
Per-unit royalty revenue	$	14,031		$	59,566		$	168,050		$	234,836
Fixed fee amortized royalty revenue	73,678			31,718			177,614			131,837
Current patent royalties	87,709			91,284			345,664			366,673
Past patent royalties	180,280			16,720			309,696			65,814
Total patent licensing royalties	267,989			108,004			655,360			432,487
Current technology solutions revenue	5,879			1,326			10,494			6,096
Past technology solutions revenue	—			2,768			—			2,852
	$	273,868		$	112,098		$	665,854		$	441,435

OPERATING EXPENSES:
Patent administration and licensing	31,943			29,201			113,544			120,401
Development	18,295			19,767			68,733			72,702
Selling, general and administrative	14,481			9,790			46,271			39,783
	64,719			58,758			228,548			232,886

Income from operations	209,149			53,340			437,306			208,549

OTHER EXPENSE (NET)	(3,394		)	(6,444		)	(15,035		)	(27,534		)
Income before income taxes	205,755			46,896			422,271			181,015
INCOME TAX PROVISION	(69,978		)	(14,577		)	(116,791		)	(64,621		)
NET INCOME	$	135,777		$	32,319		$	305,480		$	116,394
Net loss attributable to noncontrolling interest	(693		)	(719		)	(3,521		)	(2,831		)
NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC.	$	136,470		$	33,038		$	309,001		$	119,225
NET INCOME PER COMMON SHARE — BASIC	$	3.98		$	0.93		$	8.95		$	3.31
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC	34,286			35,429			34,526			36,048
NET INCOME PER COMMON SHARE — DILUTED	$	3.85		$	0.92		$	8.78		$	3.27
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED	35,487			35,887			35,189			36,463
CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.30		$	0.20		$	1.00		$	0.80

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