We undertake no duty to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law.

Footnotes

1        Throughout this press release, net income and diluted earnings per share (“EPS”) are attributable to InterDigital, Inc. (e.g., after adjustments for non-controlling interests), unless otherwise stated.

2        Adjusted EBITDA is a supplemental non-GAAP financial measure that InterDigital believes provides investors with important insight into the company's ongoing business performance. InterDigital defines Adjusted EBITDA as net income attributable to InterDigital, Inc. plus net loss attributable to non-controlling interest, income tax (provision) benefit, other income (expense) & interest expense, depreciation and amortization, share-based compensation, and other items. Other items may include restructuring costs, impairment charges and other non-recurring items. InterDigital’s computation of Adjusted EBITDA might not be comparable to Adjusted EBITDA reported by other companies. The presentation of Adjusted EBITDA, 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 reconciliation of Adjusted EBITDA to net income attributable to InterDigital, Inc., the most directly comparable GAAP financial measure, is provided below.

3        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 used in operating activities less purchases of property and equipment and capitalized patent costs. InterDigital’s computation of free cash flow might not be comparable to free cash flow reported by other companies. The presentation of free cash flow, 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 reconciliation of free cash flow to net cash used in operating activities, the most directly comparable GAAP financial measure, is provided below.

SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
(unaudited)

	For the Three Months Ended December 31,								For the Twelve Months Ended December 31,
		2022				2021				2022				2021
REVENUES:
Recurring revenues:
Smartphone	$	88,742			$	91,397			$	351,064			$	315,098
CE, IoT/Auto		14,677				9,770				51,717				31,721
Other		197				414				1,107				4,881
Total recurring revenues		103,616				101,581				403,888				351,700
Non-recurring revenues		13,439				10,234				53,906				73,709
Total revenues	$	117,055			$	111,815			$	457,794			$	425,409
OPERATING EXPENSES:
Research and portfolio development		45,732				48,704				185,202				200,484
Licensing		20,170				15,712				71,419				64,625
General and administrative		12,559				14,223				47,377				61,217
Restructuring activities		—				7,587				3,280				27,877
Total Operating expenses		78,461				86,226				307,278				354,203
Income from operations		38,594				25,589				150,516				71,206
INTEREST EXPENSE		(10,050	)			(5,796	)			(29,496	)			(25,225	)
OTHER INCOME (EXPENSE), NET		11,652				9,349				(3,457	)			11,575
Income before income taxes		40,196				29,142				117,563				57,556
INCOME TAX PROVISION		(8,190	)			(9,329	)			(25,502	)			(15,368	)
NET INCOME	$	32,006			$	19,813			$	92,061			$	42,188
Net loss attributable to noncontrolling interest		(402	)			(2,065	)			(1,632	)			(13,107	)
NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC.	$	32,408			$	21,878			$	93,693			$	55,295
NET INCOME PER COMMON SHARE — BASIC	$	1.09			$	0.71			$	3.11			$	1.80
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC		29,664				30,682				30,106				30,764
NET INCOME PER COMMON SHARE — DILUTED	$	1.08			$	0.70			$	3.07			$	1.77
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED		30,031				31,196				30,485				31,253
CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.35			$	0.35			$	1.40			$	1.40

SUMMARY CONSOLIDATED CASH FLOWS