InterDigital (Nasdaq: IDCC)
Needham Growth Conference
January 18, 2018
© 2018 InterDigital, Inc. All Rights Reserved.
Forward-looking Statements
• This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, regarding InterDigital, Inc.’s current beliefs, plans and expectations, as to:
(i) future results, projections and trends; (ii) its strategy and business plan; (iii) the company’s future revenues and expenses; (iv)
investments; (v) partnerships, commercial initiatives and other potential business and revenue opportunities, including through new
markets; (vi) technology development timelines; (vii) future global mobile device and IoT device shipments and market opportunities, and;
(viii) the impact of the recent tax law changes on the company’s financial statements. Such statements are subject to the safe harbor
created by those sections.
• Words such as “anticipate,” “believe,” “estimate,” “expect,” “project,” “intend,” “plan,” “forecast,” “will,” variations of any such words or
similar expressions, and graphical timelines representing future estimates or events are intended to identify such forward-looking
statements. Forward-looking statements are subject to risks and uncertainties. Actual outcomes could differ materially from those
expressed in or anticipated by such forward-looking statements due to a variety of factors, including, without limitation: (i) the market
relevance of our technologies; (ii) changes in the needs, availability, pricing and features of competitive technologies as well as those of
strategic partners or consumers; (iii) unanticipated technical or resource difficulties or delays related to further development of our
technologies; (iv) the entry into additional patent license, patent sales or technology solutions agreements; (v) our ability to successfully
identify and launch new commercial businesses; (vi) our ability to successfully identify and expand into new markets; (vii) our ability to
enter into partnerships, strategic relationships or complementary investment opportunities on acceptable terms; (viii) changes in the
market share and sales performance of our primary licensees, delays in product shipments of our licensees and timely receipt and final
reviews of quarterly royalty reports from our licensees and related matters; (ix) the resolution of current legal proceedings, including any
awards or judgments relating to such proceedings, additional legal proceedings, changes in the schedules or costs associated with legal
proceedings or adverse rulings in such legal proceedings; (x) changes in the company’s strategy going forward; (xi) changes or inaccuracies
in market projections or technology development timelines; and (xii) the company’s final review of, and any regulations or guidance that
may be issued regarding the implementation of, the recent tax law changes, as well as other risks and uncertainties, including those
detailed in our Annual Report on Form 10-K for the year ended December 31, 2016 and from time to time in our other Securities and
Exchange Commission filings. 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.
2 © 2018 InterDigital, Inc. All rights reserved.
3
A Long History of Leadership in Mobile Technology
• Over four decades of mobile
innovation, and pioneers in digital
wireless
• ~180 R&D staff in six R&D locations
around the world
• Our engineers have contributed
inventions to IEEE, IETF, 3GPP, ITU, ETSI
and MPEG standards, among others
• InterDigital has invested over $700
million in R&D during the past decade,
vs. $4.7B in revenue (2007-2016)
Recognized as Thomson-Reuters and
Clarivate Top 100 Global Innovator, an
independent and exclusive listing of top
innovating companies worldwide, in 2015
and 2016
3 © 2018 InterDigital, Inc. All rights reserved.
4
Standards: a Single Research-based Channel to an
Entire Industry
Standards bodies
define tech needs
Needs addressed
by existing and
ongoing core R&D
Solutions
presented to
standards working
groups
Solutions adopted
in standard
Manufacturers choose
to implement standard,
pay innovators for R&D
via license
Once adopted in a
standard, solutions are
incorporated into
products that implement
that standard, resulting in
complete market access
across the industry
© 2018 InterDigital, Inc. All rights reserved.
5
A Track Record of Wireless Innovation, Participation &
Leadership in Key Standards Organizations
• We cover a broad but
related group of standards
bodies and industry
forums
• Strongest focus
• Cellular: 3GPP
• Wi-Fi: 802.11
• Networks: IETF
• Also
• ETSI, ITU, MPEG…
• Vice Chair 3GPP RAN2: 2013-2017
• Vice Chair 3GPP RAN3: 2001-2009
• OMA Board of Directors/ Board Officer: 2013-2015
• Board of Directors Small Cell Forum: 2009-2010
• ETSI RRS Architecture WG Chair (2012-2014)
• IETF Internet Area WG Co-Chair (2013-present)
• 802 OmniRAN EC SG Vice-Chair (2012-present)
• 802.21 TGb Chair (2010-2012)
• 802.21 WG Vice-Chair (2010-2012)
• 802.11 ARC Vice-Chair (2013-present)
• 802.11 TGai Passive Scanning Ad Hoc Chair (2012-2013)
Recent Leadership Positions
© 2018 InterDigital, Inc. All rights reserved.
Leadership in Key Existing Technologies
• 3G: InterDigital accounted for close to 10% of the patents and
patent applications judged likely to be essential to WCDMA – the
third-highest share out of more than 40 companies (May 2015)
• 4G: InterDigital accounted for close to 10% of the patents and
patent applications judged likely to be essential to LTE – fourth-
highest share of nearly 100 companies (September 2016)
• IoT: InterDigital in top 10 of global companies in terms of IoT patent
landscape, ahead of Microsoft and IBM
• Fourth in “high-strength IoT patents” ahead of Intel and Ericsson
(May 2016)
InterDigital does not endorse any third-party analysis in relation to technology areas, but believes these studies may provide independent confirmation of
the strength of the company’s R&D activities in mobile communication.
6 © 2018 InterDigital, Inc. All rights reserved.
And Continued Leadership into 5G
7
~9X increase in 3GPP standards
participation in past decade
Strong emphasis on collaboration,
especially with licensees
LTE LTE-A LTE-Adv Pro
5G NR
0
2000
4000
6000
8000
10000
12000
14000
0
50
100
150
200
250
300
350
400
450
04 05 06 07 08 09 10 11 12 13 14 15 16
InterDigital RAN1 Contributions by Year
InterDigital
Contributions
Co-sourced
Contributions
Total
Contributions
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
0
20
40
60
80
100
120
140
05 06 07 08 09 10 11 12 13 14 15 16
InterDigital RAN2 Contributions by Year
3G/UMTS
LTE LTE-A LTE-Adv Pro
5G NR 3G/UMTS
IDCC IDCC Total Total
Based on publicly-available 3GPP data
Industry
© 2018 InterDigital, Inc. All rights reserved.
Long-term + Diverse Licensees: Bringing Stability to a
High-growth but Volatile Segment
8
All third party trademarks, service marks and/or tradenames used herein are the property of their respective owners.
Business fortunes can change fast
in the mobile industry… but after
collecting close to $250 million
from fixed-fee agreements in Q4
2017 alone, InterDigital is
scheduled to collect another $800
million in cash through 2022
under fixed-fee agreements, with
any per-unit revenues and new
agreements building on that base
Award-winning IoT Solutions
9
2015 ABI Research Hot Tech
Innovator 2015 IoT Nexus
Power Players
and Innovators
Best IoT Product at ARM
TechCon 2014
2016
MarketsandMarkets
Key Innovator
*All third party trademarks, service marks and/or tradenames used herein are the property of their respective owners
2016 Global IoT Platform
Competitive Strategy Innovation &
Leadership
Shortlist – 2016 World
Communication
Awards
Smart Cities Award
M&A Strategy: Add Value to Customers + Tap New
Markets
10
>$500B market in
2016
…while
opening new
markets
New technologies
add value to core
offering…
$65B market in 2021, from <$2B in 2016
$27.5B market in 2021, from <$13B in 2016
$49B market in 2021, from <$13B in 2016
$10B consumer market, $227B industrial
market, in 2021
All data ABI Research, Q1 2017
AR/VR
WEARABLES
DRONES
ROBOTICS
SENSORS
VIDEO
IOT
© 2018 InterDigital, Inc. All rights reserved.
Continued Efforts to Return Value to Shareholders
11
In September 2017,
announced increase in
dividend to $0.35/share,
third dividend increase
since 2014
2014 buyback
authorization
increased twice, now
at $500M with
~$180M left
© 2018 InterDigital, Inc. All rights reserved.
US Tax Reform- Financial Statement Impact
While we are continuing to review the 2017 US Tax Cuts and Jobs Act (Tax Act), which
lowers the U.S. Corporate tax rate to 21%, we want to highlight two items: (1)
• On a go-forward basis, we currently expect a significant portion of our income to
qualify as Foreign Derived Intangible Income (FDII) which, under the Tax Act, would
be subject to an even lower tax rate of 13.1%.
• Given the lower go-forward tax rate, we expect to record in Q4 2017 a one-time,
non-cash charge of approximately $40M - $55M related to revaluation of Deferred
Tax Assets and Liabilities. The reevaluation is necessary as the lower tax rate under
the Tax Act reduces the size of the Deferred Tax Assets and Liabilities which had been
previously determined based on a higher corporate tax rate.
(1) The ultimate impact of tax reform on our Deferred Tax Assets and Liabilities and our future effective tax rate is continuing to be reviewed by the Company and may be
affected by, among other things, future regulations or guidance promulgated by the IRS, FASB and others regarding the implementation of the Tax Act.
12 © 2018 InterDigital, Inc. All rights reserved.
Thank you
© 2018 InterDigital, Inc. All rights reserved.