|
þ
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended September 30, 2012
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the transition period from
to
|
PENNSYLVANIA
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
23-1882087
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
R
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
|
|
|
|
(Do not check if a smaller reporting company)
|
|
|
Common Stock, par value $0.01 per share
|
40,950,283
|
Title of Class
|
Outstanding at October 24, 2012
|
|
|
|
|
PAGES
|
|
|
|
|
EX-10.1
|
|
EX-10.2
|
|
EX-10.3
|
|
EX-31.1
|
|
EX-31.2
|
|
EX-32.1
|
|
EX-32.2
|
|
EX-101 INSTANCE DOCUMENT
|
|
EX-101 SCHEMA DOCUMENT
|
|
EX-101 CALCULATION LINKBASE DOCUMENT
|
|
EX-101 LABELS LINKBASE DOCUMENT
|
|
EX-101 PRESENTATION LINKBASE DOCUMENT
|
|
|
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
|
|
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
REVENUES:
|
|
|
|
|
|
|
|
||||||||
Patent licensing royalties
|
$
|
58,384
|
|
|
$
|
75,281
|
|
|
$
|
189,310
|
|
|
$
|
220,794
|
|
Patent sales
|
375,000
|
|
|
—
|
|
|
384,000
|
|
|
—
|
|
||||
Technology solutions
|
626
|
|
|
1,174
|
|
|
1,876
|
|
|
3,992
|
|
||||
|
$
|
434,010
|
|
|
$
|
76,455
|
|
|
$
|
575,186
|
|
|
$
|
224,786
|
|
|
|
|
|
|
|
|
|
||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Patent administration and licensing
|
45,551
|
|
|
17,900
|
|
|
94,979
|
|
|
50,604
|
|
||||
Development
|
16,375
|
|
|
17,015
|
|
|
51,041
|
|
|
50,202
|
|
||||
Selling, general and administrative
|
8,865
|
|
|
9,387
|
|
|
28,968
|
|
|
24,714
|
|
||||
|
70,791
|
|
|
44,302
|
|
|
174,988
|
|
|
125,520
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
363,219
|
|
|
32,153
|
|
|
400,198
|
|
|
99,266
|
|
||||
|
|
|
|
|
|
|
|
||||||||
OTHER EXPENSE
|
(2,708
|
)
|
|
(3,149
|
)
|
|
(7,926
|
)
|
|
(7,472
|
)
|
||||
Income before income taxes
|
360,511
|
|
|
29,004
|
|
|
392,272
|
|
|
91,794
|
|
||||
INCOME TAX PROVISION
|
(124,842
|
)
|
|
(2,798
|
)
|
|
(136,000
|
)
|
|
(25,093
|
)
|
||||
NET INCOME
|
$
|
235,669
|
|
|
$
|
26,206
|
|
|
$
|
256,272
|
|
|
$
|
66,701
|
|
NET INCOME PER COMMON SHARE — BASIC
|
$
|
5.61
|
|
|
$
|
0.58
|
|
|
$
|
5.86
|
|
|
$
|
1.47
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC
|
42,024
|
|
|
45,463
|
|
|
43,761
|
|
|
45,380
|
|
||||
NET INCOME PER COMMON SHARE — DILUTED
|
$
|
5.56
|
|
|
$
|
0.57
|
|
|
$
|
5.81
|
|
|
$
|
1.45
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED
|
42,353
|
|
|
46,281
|
|
|
44,072
|
|
|
46,000
|
|
||||
CASH DIVIDENDS DECLARED PER COMMON SHARE
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
|
|
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net income
|
$
|
235,669
|
|
|
$
|
26,206
|
|
|
$
|
256,272
|
|
|
$
|
66,701
|
|
Unrealized gain (loss) investments, net of tax
|
709
|
|
|
(473
|
)
|
|
1,446
|
|
|
(540
|
)
|
||||
Total comprehensive income
|
$
|
236,378
|
|
|
$
|
25,733
|
|
|
$
|
257,718
|
|
|
$
|
66,161
|
|
|
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
|
||||||
|
2012
|
|
2011
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
256,272
|
|
|
$
|
66,701
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
19,213
|
|
|
17,726
|
|
||
Amortization of deferred financing fees and accretion of debt discount
|
6,806
|
|
|
4,321
|
|
||
Deferred revenue recognized
|
(155,344
|
)
|
|
(175,213
|
)
|
||
Increase in deferred revenue
|
29,220
|
|
|
47,478
|
|
||
Deferred income taxes
|
(2,256
|
)
|
|
7,310
|
|
||
Share-based compensation
|
4,637
|
|
|
6,036
|
|
||
Impairment of long-term investment
|
—
|
|
|
1,616
|
|
||
Non-cash cost of patent sales
|
10,654
|
|
|
—
|
|
||
Other
|
154
|
|
|
(301
|
)
|
||
(Increase) decrease in assets:
|
|
|
|
||||
Receivables
|
(8,223
|
)
|
|
4,610
|
|
||
Deferred charges and other assets
|
(728
|
)
|
|
(1,512
|
)
|
||
Increase (decrease) in liabilities:
|
|
|
|
||||
Accounts payable
|
8,338
|
|
|
(2,267
|
)
|
||
Accrued compensation and other expenses
|
1,193
|
|
|
(2,375
|
)
|
||
Accrued taxes payable and other tax contingencies
|
130,486
|
|
|
(6,690
|
)
|
||
Net cash provided by (used in) operating activities
|
300,422
|
|
|
(32,560
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of short-term investments
|
(267,737
|
)
|
|
(471,382
|
)
|
||
Sales of short-term investments
|
345,551
|
|
|
516,097
|
|
||
Purchases of property and equipment
|
(1,979
|
)
|
|
(2,523
|
)
|
||
Capitalized patent costs
|
(19,783
|
)
|
|
(19,428
|
)
|
||
Acquisition of patents
|
(13,750
|
)
|
|
—
|
|
||
Net cash provided by investing activities
|
42,302
|
|
|
22,764
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Net proceeds from exercise of stock options
|
713
|
|
|
4,050
|
|
||
Payments on long-term debt, including capital lease obligations
|
(180
|
)
|
|
(215
|
)
|
||
Proceeds from issuance of convertible senior notes
|
—
|
|
|
230,000
|
|
||
Purchase of convertible bond hedge
|
—
|
|
|
(42,665
|
)
|
||
Proceeds from issuance of warrants
|
—
|
|
|
31,740
|
|
||
Payments of debt issuance costs
|
—
|
|
|
(8,015
|
)
|
||
Dividends paid
|
(13,388
|
)
|
|
(13,602
|
)
|
||
Tax benefit from share-based compensation
|
1,506
|
|
|
2,705
|
|
||
Repurchase of common stock
|
(152,694
|
)
|
|
—
|
|
||
Net cash (used in) provided by financing activities
|
(164,043
|
)
|
|
203,998
|
|
||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
178,681
|
|
|
194,202
|
|
||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
342,211
|
|
|
215,451
|
|
||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
520,892
|
|
|
$
|
409,653
|
|
|
For the Three Months Ended September 30,
|
||||||||||||||
|
2012
|
|
2011
|
||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common shareholders
|
$
|
235,669
|
|
|
$
|
235,669
|
|
|
$
|
26,206
|
|
|
$
|
26,206
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding: Basic
|
42,024
|
|
|
42,024
|
|
|
45,463
|
|
|
45,463
|
|
||||
Dilutive effect of stock options, RSUs, convertible securities, and warrants
|
|
|
329
|
|
|
|
|
818
|
|
||||||
Weighted-average shares outstanding: Diluted
|
|
|
42,353
|
|
|
|
|
46,281
|
|
||||||
Earnings Per Share:
|
|
|
|
|
|
|
|
||||||||
Net income: Basic
|
$
|
5.61
|
|
|
$
|
5.61
|
|
|
$
|
0.58
|
|
|
$
|
0.58
|
|
Dilutive effect of stock options, RSUs, convertible securities, and warrants
|
|
|
(0.05
|
)
|
|
|
|
(0.01
|
)
|
||||||
Net income: Diluted
|
|
|
$
|
5.56
|
|
|
|
|
$
|
0.57
|
|
|
For the Nine Months Ended September 30,
|
||||||||||||||
|
2012
|
|
2011
|
||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common shareholders
|
$
|
256,272
|
|
|
$
|
256,272
|
|
|
$
|
66,701
|
|
|
$
|
66,701
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding: Basic
|
43,761
|
|
|
43,761
|
|
|
45,380
|
|
|
45,380
|
|
||||
Dilutive effect of stock options, RSUs, convertible securities, and warrants
|
|
|
311
|
|
|
|
|
620
|
|
||||||
Weighted-average shares outstanding: Diluted
|
|
|
44,072
|
|
|
|
|
46,000
|
|
||||||
Earnings Per Share:
|
|
|
|
|
|
|
|
||||||||
Net income: Basic
|
$
|
5.86
|
|
|
$
|
5.86
|
|
|
$
|
1.47
|
|
|
$
|
1.47
|
|
Dilutive effect of stock options, RSUs, convertible securities, and warrants
|
|
|
(0.05
|
)
|
|
|
|
(0.02
|
)
|
||||||
Net income: Diluted
|
|
|
$
|
5.81
|
|
|
|
|
$
|
1.45
|
|
|
Total Shareholders' Equity
|
||
Balance as of December 31, 2011
|
$
|
471,682
|
|
Net income
|
256,272
|
|
|
Unrealized gain on investments, net
|
1,446
|
|
|
Cash dividends declared
|
(12,912
|
)
|
|
Repurchase of Common Stock
|
(152,694
|
)
|
|
Net proceeds for exercise of stock options
|
713
|
|
|
Taxes withheld upon restricted stock unit vestings
|
(3,696
|
)
|
|
Tax benefit from share-based compensation
|
1,506
|
|
|
Share-based compensation
|
4,637
|
|
|
Balance as of September 30, 2012
|
$
|
566,954
|
|
2012
|
Per Share
|
|
Total
|
|
Cumulative by Fiscal Year
|
||||||
First quarter
|
$
|
0.10
|
|
|
$
|
4,469
|
|
|
$
|
4,469
|
|
Second quarter
|
0.10
|
|
|
4,348
|
|
|
8,817
|
|
|||
Third quarter
|
0.10
|
|
|
4,095
|
|
|
12,912
|
|
|||
|
$
|
0.30
|
|
|
$
|
12,912
|
|
|
|
||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
2011
|
Per Share
|
|
Total
|
|
Cumulative by Fiscal Year
|
||||||
First quarter
|
$
|
0.10
|
|
|
$
|
4,535
|
|
|
$
|
4,535
|
|
Second quarter
|
0.10
|
|
|
4,540
|
|
|
9,075
|
|
|||
Third quarter
|
0.10
|
|
|
4,549
|
|
|
13,624
|
|
|||
Fourth quarter
|
0.10
|
|
|
4,570
|
|
|
18,194
|
|
|||
|
$
|
0.40
|
|
|
$
|
18,194
|
|
|
|
||
|
|
|
|
|
|
|
Fair Value as of September 30, 2012
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market and demand accounts (a)
|
$
|
472,929
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
472,929
|
|
Mutual and exchange traded funds
|
100,152
|
|
|
—
|
|
|
—
|
|
|
100,152
|
|
||||
Commercial paper (b)
|
—
|
|
|
149,788
|
|
|
—
|
|
|
149,788
|
|
||||
U.S. government securities
|
—
|
|
|
45,732
|
|
|
—
|
|
|
45,732
|
|
||||
Corporate bonds and asset backed securities
|
—
|
|
|
12,726
|
|
|
—
|
|
|
12,726
|
|
||||
|
$
|
573,081
|
|
|
$
|
208,246
|
|
|
$
|
—
|
|
|
$
|
781,327
|
|
(a)
|
Included within cash and cash equivalents.
|
(b)
|
Includes
$48.0 million
of commercial paper that is included within cash and cash equivalents.
|
|
Fair Value as of December 31, 2011
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market and demand accounts (a)
|
$
|
338,211
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
338,211
|
|
Mutual and exchange traded funds
|
96,130
|
|
|
—
|
|
|
—
|
|
|
96,130
|
|
||||
Commercial paper (b)
|
—
|
|
|
160,574
|
|
|
—
|
|
|
160,574
|
|
||||
U.S. government securities
|
—
|
|
|
66,647
|
|
|
—
|
|
|
66,647
|
|
||||
Corporate bonds and asset backed securities
|
—
|
|
|
16,432
|
|
|
—
|
|
|
16,432
|
|
||||
|
$
|
434,341
|
|
|
$
|
243,653
|
|
|
$
|
—
|
|
|
$
|
677,994
|
|
(a)
|
Included within cash and cash equivalents.
|
(b)
|
Includes
$4.0 million
of commercial paper that is included within cash and cash equivalents.
|
|
September 30, 2012
|
|
December 31, 2011
|
||||
2.50% Senior Convertible Notes due 2016
|
$
|
230,000
|
|
|
$
|
230,000
|
|
Less: Unamortized interest discount
|
(31,643
|
)
|
|
(37,471
|
)
|
||
Net carrying amount of 2.50% Senior Convertible Notes due 2016
|
$
|
198,357
|
|
|
$
|
192,529
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Contractual coupon interest
|
$
|
1,438
|
|
|
$
|
1,437
|
|
|
$
|
4,313
|
|
|
$
|
2,875
|
|
Accretion of debt discount
|
1,965
|
|
|
1,835
|
|
|
5,828
|
|
|
3,669
|
|
||||
Amortization of financing costs
|
326
|
|
|
326
|
|
|
978
|
|
|
652
|
|
||||
Total
|
$
|
3,729
|
|
|
$
|
3,598
|
|
|
$
|
11,119
|
|
|
$
|
7,196
|
|
•
|
Innovation Partners, a new sourcing model based around partnerships with leading inventors and research organizations, as well as the acquisition of technology and patent portfolios that align with InterDigital's roadmap; and
|
•
|
Innovation Labs, which will continue to pursue internally funded technology with the goal of further building the company's already strong portfolio of intellectual property.
|
|
September 30, 2012
|
|
December 31, 2011
|
|
Increase /
(Decrease)
|
||||||
Cash and cash equivalents
|
$
|
520,892
|
|
|
$
|
342,211
|
|
|
$
|
178,681
|
|
Short-term investments
|
260,435
|
|
|
335,783
|
|
|
(75,348
|
)
|
|||
Total Cash and cash equivalents and short-term investments
|
$
|
781,327
|
|
|
$
|
677,994
|
|
|
$
|
103,333
|
|
|
For the Nine Months Ended September 30,
|
||||||||||
|
2012
|
|
2011
|
|
Increase /
(Decrease)
|
||||||
Net cash provided by (used in) operating activities
|
$
|
300,422
|
|
|
$
|
(32,560
|
)
|
|
$
|
332,982
|
|
|
September 30, 2012
|
|
December 31, 2011
|
|
Increase / (Decrease)
|
||||||
Current assets
|
$
|
881,663
|
|
|
$
|
768,887
|
|
|
$
|
112,776
|
|
Less
: current liabilities
|
279,666
|
|
|
173,153
|
|
|
106,513
|
|
|||
Working capital
|
601,997
|
|
|
595,734
|
|
|
6,263
|
|
|||
Subtract:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
520,892
|
|
|
342,211
|
|
|
178,681
|
|
|||
Short-term investments
|
260,435
|
|
|
335,783
|
|
|
(75,348
|
)
|
|||
Add:
|
|
|
|
|
|
||||||
Current deferred revenue
|
94,664
|
|
|
134,087
|
|
|
(39,423
|
)
|
|||
Adjusted working capital
|
$
|
(84,666
|
)
|
|
$
|
51,827
|
|
|
$
|
(136,493
|
)
|
|
For the Three Months Ended September 30,
|
|
|
|||||||||||
|
2012
|
|
2011
|
|
Increase/(Decrease)
|
|||||||||
Per-unit royalty revenue
|
$
|
23.6
|
|
|
$
|
34.2
|
|
|
$
|
(10.6
|
)
|
|
(31
|
)%
|
Fixed fee amortized royalty revenue
|
33.8
|
|
|
33.2
|
|
|
0.6
|
|
|
2
|
%
|
|||
Current patent royalties
|
57.4
|
|
|
67.4
|
|
|
(10.0
|
)
|
|
(15
|
)%
|
|||
Past sales
|
1.0
|
|
|
7.9
|
|
|
(6.9
|
)
|
|
(87
|
)%
|
|||
Total patent licensing royalties
|
58.4
|
|
|
75.3
|
|
|
(16.9
|
)
|
|
(22
|
)%
|
|||
Patent sales revenue
|
375.0
|
|
|
—
|
|
|
375.0
|
|
|
100
|
%
|
|||
Technology solutions revenue
|
0.6
|
|
|
1.2
|
|
|
(0.6
|
)
|
|
(50
|
)%
|
|||
Total revenue
|
$
|
434.0
|
|
|
$
|
76.5
|
|
|
$
|
357.5
|
|
|
467
|
%
|
|
For the Three Months Ended September 30,
|
|||||
|
2012
|
|
|
2011
|
||
Intel Corporation
|
86
|
%
|
(a)
|
|
< 10%
|
|
Samsung Electronics Company, Ltd.
|
< 10%
|
|
(b)
|
|
34
|
%
|
Research in Motion Limited
|
< 10%
|
|
(c)
|
|
13
|
%
|
HTC Corporation
|
< 10%
|
|
|
|
12
|
%
|
Sierra Wireless
|
< 10%
|
|
|
|
11
|
%
|
|
Three months ended September 30,
|
|
|
|||||||||||
|
2012
|
|
2011
|
|
Increase/ (Decrease)
|
|||||||||
Patent administration and licensing
|
$
|
45.6
|
|
|
$
|
17.9
|
|
|
$
|
27.7
|
|
|
155
|
%
|
Development
|
16.4
|
|
|
17.0
|
|
|
(0.6
|
)
|
|
(4
|
)%
|
|||
Selling, general and administrative
|
8.9
|
|
|
9.4
|
|
|
(0.5
|
)
|
|
(5
|
)%
|
|||
Total operating expenses
|
$
|
70.9
|
|
|
$
|
44.3
|
|
|
$
|
26.6
|
|
|
60
|
%
|
|
Increase/
(Decrease)
|
||
Cost of patent sale
|
$
|
15.6
|
|
Intellectual property enforcement and non-patent litigation
|
11.3
|
|
|
Personnel-related costs
|
1.6
|
|
|
Patent amortization
|
0.8
|
|
|
Patent maintenance and patent evaluation
|
0.5
|
|
|
Other
|
(0.1
|
)
|
|
Strategic alternatives evaluation process costs
|
(1.5
|
)
|
|
Long-term compensation
|
(1.6
|
)
|
|
Total increase in operating expenses
|
$
|
26.6
|
|
|
Three months ended September 30,
|
|
|
|
|
|||||||||
|
2012
|
|
2011
|
|
(Decrease)/Increase
|
|||||||||
Interest expense
|
$
|
(3.7
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
(0.1
|
)
|
|
3
|
%
|
Other
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
(100
|
)%
|
|||
Investment income
|
1.0
|
|
|
0.5
|
|
|
0.5
|
|
|
100
|
%
|
|||
|
$
|
(2.7
|
)
|
|
$
|
(3.2
|
)
|
|
$
|
0.5
|
|
|
(16
|
)%
|
|
For the Nine Months Ended September 30,
|
|
|
|||||||||||
|
2012
|
|
2011
|
|
Increase/(Decrease)
|
|||||||||
Per-unit royalty revenue
|
$
|
85.5
|
|
|
$
|
108.6
|
|
|
$
|
(23.1
|
)
|
|
(21
|
)%
|
Fixed fee amortized royalty revenue
|
101.2
|
|
|
101.6
|
|
|
(0.4
|
)
|
|
—
|
%
|
|||
Current patent royalties
|
186.7
|
|
|
210.2
|
|
|
(23.5
|
)
|
|
(11
|
)%
|
|||
Past sales
|
2.6
|
|
|
10.6
|
|
|
(8.0
|
)
|
|
(75
|
)%
|
|||
Total patent licensing royalties
|
189.3
|
|
|
220.8
|
|
|
(31.5
|
)
|
|
(14
|
)%
|
|||
Patent sales revenue
|
384.0
|
|
|
—
|
|
|
384.0
|
|
|
100
|
%
|
|||
Technology solutions revenue
|
1.9
|
|
|
4.0
|
|
|
(2.1
|
)
|
|
(53
|
)%
|
|||
Total revenue
|
$
|
575.2
|
|
|
$
|
224.8
|
|
|
$
|
350.4
|
|
|
156
|
%
|
|
For the Nine Months Ended September 30,
|
||
|
2012
|
|
2011
|
Intel Corporation
|
65%
|
(a)
|
< 10%
|
Samsung Electronics Company, Ltd.
|
13%
|
(b)
|
34%
|
Research in Motion Limited
|
< 10%
|
(c)
|
15%
|
HTC Corporation
|
< 10%
|
|
11%
|
|
For the Nine Months Ended September 30,
|
|
|
|||||||||||
|
2012
|
|
2011
|
|
Increase/ (Decrease)
|
|||||||||
Patent administration and licensing
|
$
|
95.0
|
|
|
$
|
50.6
|
|
|
$
|
44.4
|
|
|
88
|
%
|
Development
|
51.0
|
|
|
50.2
|
|
|
0.8
|
|
|
2
|
%
|
|||
Selling, general and administrative
|
29.0
|
|
|
24.7
|
|
|
4.3
|
|
|
17
|
%
|
|||
Total operating expenses
|
$
|
175.0
|
|
|
$
|
125.5
|
|
|
$
|
49.5
|
|
|
39
|
%
|
|
Increase/
(Decrease)
|
||
Intellectual property enforcement and non-patent litigation
|
$
|
28.3
|
|
Cost of patent sales
|
16.5
|
|
|
Personnel-related costs
|
3.3
|
|
|
Patent maintenance and patent evaluation
|
1.3
|
|
|
Patent amortization
|
2.0
|
|
|
Long-term compensation
|
0.3
|
|
|
Other
|
(0.1
|
)
|
|
Strategic alternatives evaluation process costs
|
(1.0
|
)
|
|
Consulting services
|
(1.1
|
)
|
|
Total increase in operating expenses
|
$
|
49.5
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2012
|
|
2011
|
|
(Decrease)/Increase
|
|||||||||
Interest expense
|
$
|
(11.1
|
)
|
|
$
|
(7.2
|
)
|
|
$
|
(3.9
|
)
|
|
54
|
%
|
Other
|
(0.2
|
)
|
|
(1.8
|
)
|
|
1.6
|
|
|
(89
|
)%
|
|||
Investment income
|
3.3
|
|
|
1.5
|
|
|
1.8
|
|
|
120
|
%
|
|||
|
$
|
(8.0
|
)
|
|
$
|
(7.5
|
)
|
|
$
|
(0.5
|
)
|
|
7
|
%
|
•
|
The potential effects of new accounting standards on our financial statements or results of operations;
|
•
|
Our expectation that the amortization of fixed fee royalty payments and the resolution of the technology solutions agreement arbitration will reduce our
September 30, 2012
deferred revenue balance over the next twelve months;
|
•
|
Our expectation that we will use deferred tax assets to offset future U.S. federal income tax returns;
|
•
|
The timing, outcome and impact of our various litigation, arbitration and administrative matters;
|
•
|
Our ability to obtain additional liquidity through debt and equity financings;
|
•
|
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 in the next twelve months;
|
•
|
Our intention to use the net proceeds from the Intel Corporation sale to fund our existing stock repurchase program and for other general corporate purposes;
|
•
|
Our expectation that we will pay the tax obligation corresponding to the Intel patent sale in fourth quarter 2012;
|
•
|
Our intention to pursue additional patent sale opportunities as part of our expanded strategy;
|
•
|
Our expanded strategy announced on October 23, 2012, that includes enhancing our technology sourcing to broaden the scope of technology areas addressed and establishing a unit, InterDigital Solutions, dedicated to monetizing the company's market-ready technologies and research capabilities;
|
•
|
Our goal to further build the company's already strong portfolio of intellectual property;
|
•
|
Our plans for the InterDigital Solutions unit to focus on commercializing market-ready technologies that emerge from Innovation Labs;
|
•
|
Our expectation that approximately 50 employees will retire from employment with the company under the voluntary early retirement program, and our expectations regarding actual retirement dates;
|
•
|
Our expectation that related to the voluntary early retirement program we will incur a one-time repositioning cost of between $10 million and $12 million, and that the majority of that charge will be recognized in fourth quarter 2012, with the remainder being recognized in first quarter 2013; and
|
•
|
Our expectation that, beginning in 2013, we will realize annualized savings as a result of the voluntary early retirement program in excess of $10 million.
|
Period
|
Total Number of Shares (or Units) Purchased (1)
|
|
Average Price Paid per Share (Unit)
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2)
|
|
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs (3)
|
||||||
July 1, 2012 - July 31, 2012
|
1,041,600
|
|
|
$
|
27.94
|
|
1,041,600
|
|
|
$
|
168,153,801
|
|
August 1, 2012 - August 31, 2012
|
859,841
|
|
|
$
|
31.29
|
|
859,841
|
|
|
$
|
141,251,393
|
|
September 1, 2012 - September 30, 2012
|
551,000
|
|
|
$
|
34.38
|
|
551,000
|
|
|
$
|
122,306,391
|
|
Total
|
2,452,441
|
|
|
$
|
30.56
|
|
2,452,441
|
|
|
$
|
122,306,391
|
|
•
|
A lump sum payment equal to one year of his annual salary of $322,900;
|
•
|
A lump sum payout of his 2012 short-term incentive payment under the Company's Short-Term Incentive Plan at 100% of target, equal to $145,305;
|
•
|
A lump sum payout equal to the current monthly contribution that the Company pays on his behalf for health insurance coverage (medical and dental) multiplied by 24, which totals approximately $45,300;
|
•
|
Immediate vesting, upon his last day of employment, of his outstanding time-based restricted stock units (“RSUs”) granted under the time-based portion of the Company's Long-Term Compensation Program (“LTCP”), calculated on a pro-rata basis using a vesting date of December 31, 2012, which will result in the vesting of 3,954 RSUs on or around December 15, 2012; and
|
•
|
Cash payouts under the long-term incentive portion (“LTIP”) of the LTCP equal to 85% of his target payout level for the three-year cycle ending December 31, 2012, 75% of his target payout level for the three-year cycle ending December 31, 2013 (calculated on a pro-rata basis using a vesting date of December 31, 2012) and 50% of his target payout level for the three-year cycle ending December 31, 2014 (calculated on a pro-rata basis using a vesting date of December 31, 2012), resulting in a total cash payout under the LTIP of $326,898.
|
Exhibit
Number
|
|
Exhibit Description
|
†Exhibit 10.1
|
|
Long-Term Incentive Program, as amended September 2012.
|
|
|
|
†Exhibit 10.2
|
|
Compensation Program for Non-Management Directors, as amended September 2012.
|
|
|
|
†Exhibit 10.3
|
|
Designated Employee Incentive Separation Pay Plan and Summary Plan Description (September 2012).
|
|
|
|
Exhibit 31.1
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
Exhibit 31.2
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
Exhibit 32.1
|
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.*
|
|
|
|
Exhibit 32.2
|
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.*
|
|
|
|
Exhibit 101
|
|
The following financial information from InterDigital, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, filed with the Securities and Exchange Commission on October 25, 2012, formatted in eXtensible Business Reporting Language:
|
|
|
|
|
|
(i) Condensed Consolidated Balance Sheets at September 30, 2012 and December 31, 2011, (ii) Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2012 and 2011, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2012 and 2011, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011 and (v) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
†
|
|
Management contract or compensatory plan or arrangement.
|
|
|
|
*
|
|
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: October 25, 2012
|
/s/ WILLIAM J. MERRITT
|
|
|
William J. Merritt
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
Date: October 25, 2012
|
/s/ RICHARD J. BREZSKI
|
|
|
Richard J. Brezski
|
|
|
Chief Financial Officer
|
|
Exhibit
Number
|
|
Exhibit Description
|
†Exhibit 10.1
|
|
Long-Term Incentive Program, as amended September 2012.
|
|
|
|
†Exhibit 10.2
|
|
Compensation Program for Non-Management Directors, as amended September 2012.
|
|
|
|
†Exhibit 10.3
|
|
Designated Employee Incentive Separation Pay Plan and Summary Plan Description (September 2012).
|
|
|
|
Exhibit 31.1
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
Exhibit 31.2
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
Exhibit 32.1
|
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.*
|
|
|
|
Exhibit 32.2
|
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.*
|
|
|
|
Exhibit 101
|
|
The following financial information from InterDigital, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, filed with the Securities and Exchange Commission on October 25, 2012, formatted in eXtensible Business Reporting Language:
|
|
|
|
|
|
(i) Condensed Consolidated Balance Sheets at September 30, 2012 and December 31, 2011, (ii) Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2012 and 2011, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2012 and 2011, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011 and (v) Notes to Condensed Consolidated Financial Statements.
|
†
|
|
Management contract or compensatory plan or arrangement.
|
|
|
|
*
|
|
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.
|
Organizational Level
|
Target Payout (% of Annual Base Salary)
|
Chief Executive Officer
|
150%
|
Senior Executive Vice President or Executive Vice President (or functional equivalent)
|
80-100%*
|
Vice President (or functional equivalent)
|
50%
|
Senior Director (or functional equivalent)
|
45%
|
Director (or functional equivalent)
|
40%
|
Senior Manager (or functional equivalent)
|
35%
|
Manager (or functional equivalent)
|
30%
|
Non-Manager (or functional equivalent):
|
|
Band 1
|
9%
|
Band 2
|
7%
|
Band 3
|
5%
|
•
|
“cause” means: (a) willful and repeated failure of an employee to perform substantially his or her duties (other than any such failure resulting from incapacity due to physical or mental illness); (b) an employee's conviction of, or plea of guilty or nolo contendere to, a felony which is materially and demonstrably injurious to the Company or an Affiliate; (c) willful misconduct or gross negligence by an employee in connection with his or her employment; (d) unsatisfactory job performance; or (e) an employee's breach of any material obligation or duty owed to the Company or an Affiliate.
|
•
|
“disability” means: (a) a disability entitling the employee to long-term disability benefits under the applicable long-term disability plan of the Company (or an Affiliate if employee is employed by such Affiliate); or (b) if the employee is not covered by such a plan, a physical or mental condition or illness that renders the employee incapable of performing his or her duties for a total of 180 days or more during any consecutive 12-month period.
|
•
|
“retirement” means resignation after attaining a combination of age plus years of service at the Company (and Affiliates) equal to 70.
|
•
|
“Good Reason” means any of the following events, occurring without employee's prior written consent: (i) any material reduction in employee's base salary (other than a proportionate reduction in salary which is applied to a majority of the Company's employees); (ii) a material change in employee's duties or responsibilities within the Company; and (iii) a relocation of employee's primary work location (or office), or Company's primary place of operation, by a distance of more than fifty (50) miles. Notwithstanding the foregoing, Good Reason shall only exist if employee shall have provided the Company with written notice within ninety (90) days of the initial occurrence of any of the foregoing events or conditions, and the Company or any successor or affiliate fails to eliminate the conditions constituting Good Reason within thirty (30) days after receipt of written notice of such event or condition from employee. Employee's resignation from employment with the Company for Good Reason must occur within six (6) months following the initial occurrence of one of the foregoing events or conditions.
|
•
|
Time-Based RSUs: Immediately prior to (but contingent on the occurrence of) that Terminating Event, all time-based RSUs will become fully vested and a distribution of InterDigital shares with respect to those RSUs will be made contemporaneous with, or as soon as practicable after, the Terminating Event;
|
•
|
LTIP: The Participant's LTIP shall remain outstanding pursuant to the same terms and conditions as previously awarded. Notwithstanding the foregoing, in the event that a participant, within one year of a Terminating Event, is terminated without cause or terminates for Good Reason, an early payment of the employee's LTIP will be made in an amount equal to the greater of (i) the employee's target LTIP, or (ii) the level of performance achieved at the time of the Terminating Event. Payment of this amount will be made not later than 30 days after the employee's termination.
|
•
|
“Change of Control” means the first to occur of any of the following events:
|
Base Annual Board Retainer:
|
$40,000
|
Chairman of the Board:
|
$50,000
|
Audit Committee Chair:
|
$30,000
|
Compensation Committee Chair:
|
$15,000
|
All Other Committee Chairs:
|
$10,000
|
Audit Committee Members:
|
$12,000
|
Compensation Committee Members:
|
$7,500
|
All Other Committee Members:
|
$5,000
|
Initial Election RSU Award:
|
$150,000 of RSUs (vesting in full one year from grant date)
|
Annual RSU Award:
|
$150,000 of RSUs (vesting in full one year from grant date)
|
•
|
All cash payments and RSU grants shall be based on service for a full year; pro rata payments and grants shall be made for service of less than one year. Cash payments shall be made on a quarterly basis.
|
•
|
This program is designed to compensate each non-management director for participating in up to eight (8) Board meetings per year and up to eight (8) meetings per year for each Committee on which the non-management director serves. Additional compensation will be paid to each non-management director for participating in meetings in excess of these thresholds, as follows:
|
◦
|
Each additional Board meeting:
$4,000
|
◦
|
Each additional Audit Committee meeting:
$1,200
|
◦
|
Each additional Compensation Committee meeting:
$750
|
◦
|
Each additional other Committee meeting:
$500
|
•
|
Both cash payments and RSUs may be deferred. An election to defer must be made in the calendar year preceding the year in which services are rendered and the compensation is earned (i.e., elections to defer must be made by December 31 of each year for the deferral to apply to the next year's cash payments and/or RSU award(s)).
|
•
|
Each initial election RSU award shall be granted on the date of the director's initial election to the Board. Annual RSU awards shall be granted on the date of each Annual Meeting of Shareholders.
|
•
|
The number of RSUs to be granted pursuant to each initial election award and annual award shall be calculated as follows:
|
•
|
The terms of this program shall be periodically reviewed by the Compensation Committee of the Board of Directors.
|
Section 1.
|
INTRODUCTION
|
Section 2.
|
DEFINITIONS
|
Section 5.
|
DISTRIBUTION OF BENEFITS
|
Section 7.
|
PLAN MODIFICATION OR TERMINATION
|
•
|
Receive Information About Your Plan Benefits
|
•
|
Prudent Actions by Plan Fiduciaries
|
•
|
Enforce Your Rights
|
•
|
Assistance With Your Questions
|
Name of Plan:
|
InterDigital, Inc. Designated Employee Incentive Separation Pay Plan
|
Plan Number:
|
505
|
Plan Year:
|
September 20, 2012-September 19, 2013
|
Name and Address
|
InterDigital, Inc.
|
of Plan Sponsor:
|
200 Bellevue Parkway
|
Number of Plan Sponsor:
|
23-1882087
|
Plan Type:
|
The Plan is an employee welfare benefit plan under section 3(1) of ERISA.
|
Plan Funding:
|
Plan benefits are funded through the Company's general assets.
|
Types of Administration:
|
The Plan is self-administered by the Company.
|
Service of
|
InterDigital, Inc.
|
Legal Process:
|
200 Bellevue Parkway
|
Name and Address of
|
Benefits Committee
|
Plan Administrator:
|
InterDigital, Inc.
|
Claims Administrator:
|
Benefits Committee
|
Fiduciary
|
InterDigital, Inc. The fiduciary may serve in more than one fiduciary capacity.
|
I.
|
Purpose
|
II.
|
Procedure
|
III.
|
Employee Benefits, Bonus and LTCP
|
Employee Name:
|
|
|
|
|
First
|
Middle
|
Last
|
1.
|
I understand that I may become eligible to receive benefits and additional consideration under the InterDigital Designated Employee Incentive Separation Pay Plan (“Incentive Separation Plan”) and Voluntary Early Retirement Program for Designated Employees (“Voluntary Retirement Program”) if I resign voluntarily by submitting this form and complying with the terms and conditions of the Incentive Separation Plan and the Voluntary Retirement Program.
|
2.
|
I understand that if I do not submit this election and my employment is subsequently terminated, I may be eligible to receive separation pay under the InterDigital Severance Pay Plan (“Regular Severance Plan”).
|
3.
|
I acknowledge that the Incentive Separation Plan and Regular Severance Plan have been explained to me to my satisfaction, a copy of each has been provided to me, and I have been advised in writing to consult with an attorney before signing this election or the General Release.
|
4.
|
I understand that by signing and submitting this election, I am irrevocably resigning from my employment. However, if the election is not accepted by the Company on or before October 19, 2012, the election to resign shall not be effective.
|
5.
|
In order to be eligible for benefits and other consideration under the Incentive Separation Plan and Voluntary Retirement Program, I understand that I must: (a) sign this election and provide it to the Chief Administrative Officer so that it is received by the close of business on October 12, 2012; (b) work up to and including October 26, 2012 or December 15, 2012, or some date no later than April 30, 2013 if required in writing (including email) by the Chief Administrative Officer or Chief Executive Officer; and (c) duly execute the Separation Agreement, including General Release (“Separation Agreement”) within 45 days of receipt from the Company, promptly provide it to the Chief Administrative Officer and not revoke the Agreement.
|
6.
|
I understand and agree that by signing and submitting this election, the effective date of my resignation will be October 26, 2012 or December 15, 2012, as I elect below, or if required by the Chief Administrative Officer or Chief Executive Officer (in writing, including by email) a date no later than April 30, 2013.
|
7.
|
I understand that I am under no obligation whatsoever to elect to resign. My rejection of the opportunity to submit this election will not adversely affect my future employment with the Company. However, I will be subject to business decisions that may affect my employment in the same manner as I would be in the absence of the option to resign in exchange for benefits and other consideration under the Incentive Separation Plan and the Voluntary Retirement Program.
|
8.
|
Once I submit my election to resign, my resignation will be irrevocable by me, even if I do not execute a Separation Agreement or if I execute and later revoke a Separation Agreement.
|
9.
|
No representations have been made to me about my prospects for future employment with or termination from the Company and I understand that no one is authorized to make such representations.
|
10.
|
I am signing this election form voluntarily and of my own free will.
|
|
|
|
|
Employee Signature
|
|
Date
|
|
|
|
|
|
|
|
|
|
Witness
|
|
Date
|
|
|
|
|
|
|
Received by:
|
|
|
|
|
|
|
Date
|
Accepted
|
_________________________________
|
|
______________________
|
|
Chief Administrative Officer
|
|
Date
|
Voluntarily Retired
|
|
|
|
|
Chief Administrative Officer
|
|
Date
|
Employee Name:
|
|
|
|
|
First
|
Middle
|
Last
|
1.
|
I understand that I may become eligible to receive benefits and additional consideration under the InterDigital Designated Employee Incentive Separation Pay Plan (“Incentive Separation Plan”) and Voluntary Early Retirement Program for Designated Employees (“Voluntary Retirement Program”) if I resign voluntarily by submitting this form and complying with the terms and conditions of the Incentive Separation Plan and the Voluntary Retirement Program.
|
2.
|
I understand that if I do not submit this election and my employment is subsequently terminated, I may be eligible to receive severance pay under the InterDigital Severance Pay Plan (“Regular Severance Plan”).
|
3.
|
I acknowledge that the Incentive Separation Plan and Regular Severance Plan have been explained to me to my satisfaction, a copy of each has been provided to me, and I have been advised in writing to consult with an attorney before signing this election or the General Release.
|
4.
|
I understand that by signing and submitting this election, I am irrevocably resigning from my employment. However, if the election is not accepted by the Company on or before ____________________, the election to resign shall not be effective. If I submit this election, I will be informed on or before _____________ whether my election has been accepted.
|
5.
|
In order to be eligible for benefits and other consideration under the Incentive Separation Plan and Voluntary Retirement Program, I understand that I must: (a) sign this election and provide it to the Chief Administrative Officer so that it is received by the close of business on ________________; (b) work up to and including ______________________, or some date no later than April 30, 2013 if required in writing (including email) by the Chief Administrative Officer or Chief Executive Officer; and (c) duly execute the Separation Agreement, including General Release (“Separation Agreement”) within 45 days of receipt from the Company, promptly provide it to the Chief Administrative Officer and not revoke the Agreement.
|
6.
|
I understand and agree that by signing and submitting this election, the effective date of my resignation will be ________________, or if required by the Chief Administrative Officer or Chief Executive Officer (in writing, including by email) a date no later than April 30, 2013.
|
7.
|
I understand that I am under no obligation whatsoever to elect to resign. My rejection of the opportunity to submit this election will not adversely affect my future employment with the Company. However, I will be subject to business decisions that may affect my employment in the same manner as I would be in the absence of the option to resign in exchange for benefits and other consideration under the Incentive Separation Plan and the Voluntary Retirement Program.
|
8.
|
Once I submit my election to resign, my resignation will be irrevocable by me, even if I do not execute a Separation Agreement or if I execute and later revoke a Separation Agreement.
|
9.
|
No representations have been made to me about my prospects for future employment with or termination from the Company and I understand that no one is authorized to make such representations.
|
10.
|
I am signing this election form voluntarily and of my own free will.
|
|
|
|
Employee Signature
|
|
Date
|
|
|
|
|
|
|
Witness
|
|
Date
|
|
|
|
|
Received by:
|
|
|
|
|
|
|
Date
|
Accepted
|
_________________________________
|
|
______________________
|
|
Chief Administrative Officer
|
|
Date
|
Voluntarily Retired
|
|
|
|
|
Chief Administrative Officer
|
|
Date
|
|
|
|
Employee Signature
|
|
Date
|
|
|
|
|
|
|
Witness
|
|
Date
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of InterDigital, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: October
25
, 2012
|
/s/ William J. Merritt
|
|
|
William J. Merritt
|
|
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of InterDigital, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: October
25
, 2012
|
/s/ Richard J. Brezski
|
|
|
Richard J. Brezski
|
|
|
Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: October
25
, 2012
|
/s/ William J. Merritt
|
|
|
William J. Merritt
|
|
|
President and Chief Executive Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: October
25
, 2012
|
/s/ Richard J. Brezski
|
|
|
Richard J. Brezski
|
|
|
Chief Financial Officer
|
|