ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR | ||||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period from to |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
|
☑ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page | |||||
Location | Approximate Square Feet | Principal Use | Lease Expiration Date | ||||||||
Wilmington, Delaware | 36,200 | Corporate headquarters | November 2022 | ||||||||
Rennes, France | 50,000 | Office and research space | October 2024 | ||||||||
Conshohocken, Pennsylvania | 30,300 | Office and research space | September 2026 | ||||||||
New York, New York | 19,400 | Office and research space | July 2030 | ||||||||
Montreal, Quebec | 11,918 | Office and research space | June 2026 | ||||||||
Los Altos, California | 4,900 | Office and research space | November 2027 | ||||||||
2021 | Per Share | Total | Cumulative by Fiscal Year | ||||||||||||||
First quarter | $ | 0.35 | $ | 10,766 | $ | 10,766 | |||||||||||
Second quarter | 0.35 | 10,794 | 21,560 | ||||||||||||||
Third quarter | 0.35 | 10,740 | 32,300 | ||||||||||||||
Fourth quarter | 0.35 | 10,741 | 43,041 | ||||||||||||||
$ | 1.40 | $ | 43,041 | ||||||||||||||
2020 | |||||||||||||||||
First quarter | $ | 0.35 | $ | 10,762 | $ | 10,762 | |||||||||||
Second quarter | 0.35 | 10,781 | 21,543 | ||||||||||||||
Third quarter | 0.35 | 10,782 | 32,325 | ||||||||||||||
Fourth quarter | 0.35 | 10,786 | 43,111 | ||||||||||||||
$ | 1.40 | $ | 43,111 |
12/16 | 12/17 | 12/18 | 12/19 | 12/20 | 12/21 | |||||||||||||||
InterDigital, Inc. | 100.00 | 84.65 | 75.15 | 63.05 | 72.06 | 86.83 | ||||||||||||||
NASDAQ Composite | 100.00 | 129.64 | 125.96 | 172.17 | 249.51 | 304.85 | ||||||||||||||
Russell 2000 | 100.00 | 114.65 | 102.02 | 128.06 | 153.62 | 176.39 | ||||||||||||||
NASDAQ Telecommunications | 100.00 | 128.15 | 99.14 | 117.73 | 129.57 | 132.63 |
Period | Total Number of Shares (or Units) Purchased (1) | Average Price Paid Per Share (or Unit) | Total Number of Shares (or Units) Purchases 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) | |||||||||||||||||||
October 1, 2021 - October 31, 2021 | 95,937 | $ | 67.63 | 95,937 | $ | 41,974,275 | |||||||||||||||||
November 1, 2021 - November 30, 2021 | 7,636 | $ | 66.71 | 7,636 | $ | 41,464,736 | |||||||||||||||||
December 1, 2021 - December 31, 2021 | — | $ | — | — | $ | 41,464,736 | |||||||||||||||||
Total | 103,573 | $ | 67.56 | 103,573 | $ | 41,464,736 |
2021 | |||||||||||||||||||||||||||||
Cash vs. Non-cash revenue: | Q1 | Q2 | Q3 | Q4 | YTD | ||||||||||||||||||||||||
Fixed fee cash receipts (a) | $ | 47,312 | $ | 3,050 | $ | 143,050 | $ | 123,050 | $ | 316,462 | |||||||||||||||||||
Other cash receipts (b) | 10,676 | 17,808 | 7,739 | 15,556 | 51,779 | ||||||||||||||||||||||||
Change in deferred revenue | 23,429 | 63,230 | (150,703) | 80,912 | 16,868 | ||||||||||||||||||||||||
Change in receivables | (3,507) | (499) | 129,655 | (110,546) | 15,103 | ||||||||||||||||||||||||
Other | 4,453 | 4,146 | 13,755 | 2,843 | 25,197 | ||||||||||||||||||||||||
Total Revenue | $ | 82,363 | $ | 87,735 | $ | 143,496 | $ | 111,815 | $ | 425,409 | |||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (9,842) | $ | (27,259) | $ | 96,264 | $ | 71,229 | $ | 130,392 |
2020 | |||||||||||||||||||||||||||||
Cash vs. Non-cash revenue: | Q1 | Q2 | Q3 | Q4 | YTD | ||||||||||||||||||||||||
Fixed fee cash receipts (a) | $ | 20,019 | $ | 114,413 | $ | 142,019 | $ | 53,410 | $ | 329,861 | |||||||||||||||||||
Other cash receipts (b) | 14,481 | 9,880 | 7,845 | 15,751 | 47,957 | ||||||||||||||||||||||||
Change in deferred revenue | 39,512 | (16,829) | (75,749) | 28,669 | (24,397) | ||||||||||||||||||||||||
Change in receivables | (2,664) | (6,228) | 8,902 | (11,364) | (11,354) | ||||||||||||||||||||||||
Other | 4,862 | 3,262 | 4,476 | 4,324 | 16,924 | ||||||||||||||||||||||||
Total Revenue | $ | 76,210 | $ | 104,498 | $ | 87,493 | $ | 90,790 | $ | 358,991 | |||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (26,885) | $ | 69,755 | $ | 101,342 | $ | 19,255 | $ | 163,467 |
2019 | |||||||||||||||||||||||||||||
Cash vs. Non-cash revenue: | Q1 | Q2 | Q3 | Q4 | YTD | ||||||||||||||||||||||||
Fixed fee cash receipts (a) | $ | 22,617 | $ | 18,892 | $ | 150,450 | $ | 56,617 | $ | 248,576 | |||||||||||||||||||
Other cash receipts (b) | 12,260 | 7,431 | 11,400 | 15,509 | 46,600 | ||||||||||||||||||||||||
Change in deferred revenue | 43,423 | 19,331 | (63,629) | 8,624 | 7,749 | ||||||||||||||||||||||||
Change in receivables | (1,725) | 23,894 | (33,828) | 4,917 | (6,742) | ||||||||||||||||||||||||
Other | (7,944) | 6,061 | 8,130 | 16,494 | 22,741 | ||||||||||||||||||||||||
Total Revenue | $ | 68,631 | $ | 75,609 | $ | 72,523 | $ | 102,161 | $ | 318,924 | |||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (30,781) | $ | (22,742) | $ | 125,499 | $ | 17,457 | $ | 89,433 |
Deferred Revenue | |||||
2022 | $ | 294,235 | |||
2023 | 14,023 | ||||
2024 | 920 | ||||
2025 | 920 | ||||
Thereafter | — | ||||
Total | $ | 310,098 | |||
2014 Repurchase Program | Cash Dividends Declared | Total Capital Returned to Shareholders | ||||||||||||||||||||||||||||||
# of Shares | Value | Per Share | Value | |||||||||||||||||||||||||||||
2021 | 458 | $ | 30,000 | $ | 1.40 | $ | 43,041 | $ | 73,041 | |||||||||||||||||||||||
2020 | 6 | 349 | 1.40 | 43,111 | 43,460 | |||||||||||||||||||||||||||
2019 | 2,962 | 196,269 | 1.40 | 43,718 | 239,987 | |||||||||||||||||||||||||||
2018 | 1,478 | 110,505 | 1.40 | 47,922 | 158,427 | |||||||||||||||||||||||||||
2017 | 107 | 7,693 | 1.30 | 45,122 | 52,815 | |||||||||||||||||||||||||||
2016 | 1,304 | 64,685 | 1.00 | 34,359 | 99,044 | |||||||||||||||||||||||||||
2015 | 1,836 | 96,410 | 0.80 | 28,726 | 125,136 | |||||||||||||||||||||||||||
2014 | 3,554 | 152,625 | 0.70 | 27,153 | 179,778 | |||||||||||||||||||||||||||
Total | 11,705 | $ | 658,536 | $ | 9.40 | $ | 313,152 | $ | 971,688 |
Change in amount allocated | |||||||||||
Allocation to past patent royalties | +5% | -%5 | |||||||||
Change in Revenue | $ | 13,732 | $ | (13,732) |
Change in estimate | |||||||||||
Estimated value of patents acquired in connection with PLAs | +5% | -%5 | |||||||||
Revenue | $ | 1,018 | $ | (1,018) | |||||||
Less: Patent amortization | 941 | (941) | |||||||||
Pre-tax income | $ | 77 | $ | (77) |
2021 | 2020 | 2019 | |||||||||||||||
Short-term incentive compensation | $ | 18,820 | $ | 16,166 | $ | 14,129 | |||||||||||
Time-based awards (a) | 8,528 | 6,668 | 6,327 | ||||||||||||||
Performance-based awards (a) | 17,933 | 2,347 | 299 | ||||||||||||||
Other share-based compensation | 3,962 | 2,580 | 1,307 | ||||||||||||||
Total supplemental compensation expense | $ | 49,243 | $ | 27,761 | $ | 22,062 |
December 31, 2021 | December 31, 2020 | Increase / (Decrease) | |||||||||||||||
Cash and cash equivalents | $ | 706,282 | $ | 473,474 | $ | 232,808 | |||||||||||
Restricted cash included within prepaid and other current assets | 5,861 | 3,108 | 2,753 | ||||||||||||||
Restricted cash included within other non-current assets | 1,081 | 1,081 | — | ||||||||||||||
Short-term investments | 235,345 | 453,173 | (217,828) | ||||||||||||||
Total cash, cash equivalents, restricted cash and short-term investments | $ | 948,569 | $ | 930,836 | $ | 17,733 |
For the Year Ended December 31, | |||||||||||||||||
2021 | 2020 | Increase / (Decrease) | |||||||||||||||
Cash flows provided by operating activities | $ | 130,392 | $ | 163,467 | $ | (33,075) |
For the Year Ended December 31, | |||||||||||||||||
2021 | 2020 | Increase / (Decrease) | |||||||||||||||
Cash Receipts: | |||||||||||||||||
Patent royalties | $ | 364,348 | $ | 366,297 | $ | (1,949) | |||||||||||
Technology solutions | 3,893 | 11,521 | (7,628) | ||||||||||||||
Total cash receipts | $ | 368,241 | $ | 377,818 | $ | (9,577) | |||||||||||
Cash Outflows: | |||||||||||||||||
Cash operating expenses (a) | (234,046) | (204,801) | (29,245) | ||||||||||||||
Income taxes paid, net of refunds (b) | (23,091) | (26,233) | 3,142 | ||||||||||||||
Total cash outflows | (257,137) | (231,034) | (26,103) | ||||||||||||||
Other working capital adjustments | 19,288 | 16,683 | 2,605 | ||||||||||||||
Cash flows provided by operating activities | $ | 130,392 | $ | 163,467 | $ | (33,075) |
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) | ||||||||||||
$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 |
Payments Due by Period | |||||||||||||||||||||||||||||
Total | Less Than 1 year | 1-3 Years | 3-5 Years | Thereafter | |||||||||||||||||||||||||
2024 Notes(a) | $ | 400,000 | $ | — | $ | 400,000 | $ | — | $ | — | |||||||||||||||||||
Contractual interest payments on the 2024 Notes(a) | 20,000 | 8,000 | 12,000 | — | — | ||||||||||||||||||||||||
Operating lease obligations | 25,751 | 5,142 | 8,516 | 6,266 | 5,827 | ||||||||||||||||||||||||
Defined benefit plan obligations (b) | 3,012 | 200 | 298 | 248 | 2,266 | ||||||||||||||||||||||||
Purchase obligations (c) | 12,401 | 12,401 | — | — | — | ||||||||||||||||||||||||
Total contractual obligations | $ | 461,164 | $ | 25,743 | $ | 420,814 | $ | 6,514 | $ | 8,093 |
For the Year Ended December 31, | |||||||||||||||||||||||
2021 | 2020 | Total Increase/(Decrease) | |||||||||||||||||||||
Variable patent royalty revenue | $ | 32,234 | $ | 26,587 | $ | 5,647 | 21 | % | |||||||||||||||
Fixed-fee royalty revenue | 314,585 | 298,461 | 16,124 | 5 | % | ||||||||||||||||||
Current patent royalties a | 346,819 | 325,048 | 21,771 | 7 | % | ||||||||||||||||||
Non-current patent royalties b | 73,709 | 21,582 | 52,127 | 242 | % | ||||||||||||||||||
Total patent royalties | 420,528 | 346,630 | 73,898 | 21 | % | ||||||||||||||||||
Current technology solutions revenue a | 4,881 | 11,761 | (6,880) | (58) | % | ||||||||||||||||||
Patent sales b | — | 600 | (600) | (100) | % | ||||||||||||||||||
Total revenue | $ | 425,409 | $ | 358,991 | $ | 66,418 | 19 | % |
For the Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Customer A | 28% | 31% | |||||||||
Customer B | 18% | 22% | |||||||||
Customer C | 14% | —% | |||||||||
Customer D | 10% | 15% |
For the Year Ended December 31, | |||||||||||||||||||||||
2021 | 2020 | Increase/(Decrease) | |||||||||||||||||||||
Patent administration and licensing | $ | 175,741 | $ | 170,178 | $ | 5,563 | 3 | % | |||||||||||||||
Development | 89,368 | 84,646 | 4,722 | 6 | % | ||||||||||||||||||
Selling, general and administrative | 61,217 | 48,999 | 12,218 | 25 | % | ||||||||||||||||||
Restructuring activities | 27,877 | — | 27,877 | 100 | % | ||||||||||||||||||
Total operating expenses | $ | 354,203 | $ | 303,823 | $ | 50,380 | 17 | % |
Increase/(Decrease) | |||||
Restructuring activities | $ | 27,877 | |||
Share-based compensation | 18,294 | ||||
Revenue share | 9,442 | ||||
Personnel-related costs | 7,158 | ||||
Intellectual property enforcement and non-patent litigation | 5,820 | ||||
Non-cash charge of patents disposed | (7,539) | ||||
Corporate initiatives | (4,017) | ||||
Patent maintenance | (2,800) | ||||
Depreciation and amortization | (2,625) | ||||
Other | (1,230) | ||||
Total increase in operating expenses | $ | 50,380 |
For the Year Ended December 31, | |||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||
Interest expense | $ | (25,225) | $ | (40,799) | $ | 15,574 | 38 | % | |||||||||||||||
Interest and investment income | 1,690 | 5,661 | (3,971) | (70) | % | ||||||||||||||||||
Other | 9,885 | 11,263 | (1,378) | (12) | % | ||||||||||||||||||
Total non-operating expense | $ | (13,650) | $ | (23,875) | $ | 10,225 | 43 | % |
2022 | 2023 | 2024 | 2025 | 2026 | Thereafter | Total | |||||||||||||||||||||||||||||||||||
Money market and demand accounts | $705,725 | — | — | — | — | — | $705,725 | ||||||||||||||||||||||||||||||||||
Short-term investments | $210,840 | $32,004 | — | — | — | — | $242,844 | ||||||||||||||||||||||||||||||||||
Average Interest rate | 0.3 | % | 1.3 | % | — | % | — | % | — | % | — | % | 0.5 | % |
PAGE NUMBER | |||||
CONSOLIDATED FINANCIAL STATEMENTS: | |||||
Report of Independent Registered Public Accounting Firm (PCAOB ID | |||||
SCHEDULES: | |||||
DECEMBER 31, 2021 | DECEMBER 31, 2020 | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable, less allowances of $ | |||||||||||
Prepaid and other current assets | |||||||||||
Total current assets | |||||||||||
PROPERTY AND EQUIPMENT, NET | |||||||||||
PATENTS, NET | |||||||||||
DEFERRED TAX ASSETS | |||||||||||
OTHER NON-CURRENT ASSETS, NET | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Accounts payable | |||||||||||
Accrued compensation and related expenses | |||||||||||
Deferred revenue | |||||||||||
Dividend payable | |||||||||||
Other accrued expenses | |||||||||||
Total current liabilities | |||||||||||
LONG-TERM DEBT | |||||||||||
LONG-TERM DEFERRED REVENUE | |||||||||||
OTHER LONG-TERM LIABILITIES | |||||||||||
TOTAL LIABILITIES | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
SHAREHOLDERS’ EQUITY: | |||||||||||
Preferred Stock, $ | |||||||||||
Common Stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, | |||||||||||
Total InterDigital, Inc. shareholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total equity | |||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
REVENUES: | |||||||||||||||||
Patent licensing royalties | $ | $ | $ | ||||||||||||||
Technology solutions | |||||||||||||||||
Patent sales | |||||||||||||||||
Total Revenue | |||||||||||||||||
OPERATING EXPENSES: | |||||||||||||||||
Patent administration and licensing | |||||||||||||||||
Development | |||||||||||||||||
Selling, general and administrative | |||||||||||||||||
Restructuring activities | |||||||||||||||||
Total Operating expenses | |||||||||||||||||
Income from operations | |||||||||||||||||
INTEREST EXPENSE | ( | ( | ( | ||||||||||||||
OTHER INCOME, NET | |||||||||||||||||
Income before income taxes | |||||||||||||||||
INCOME TAX (PROVISION) BENEFIT | ( | ( | |||||||||||||||
NET INCOME | $ | $ | $ | ||||||||||||||
Net loss attributable to noncontrolling interest | ( | ( | ( | ||||||||||||||
NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC. | $ | $ | $ | ||||||||||||||
NET INCOME PER COMMON SHARE — BASIC | $ | $ | $ | ||||||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC | |||||||||||||||||
NET INCOME PER COMMON SHARE — DILUTED | $ | $ | $ | ||||||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED | |||||||||||||||||
CASH DIVIDENDS DECLARED PER COMMON SHARE | $ | $ | $ |
For the Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Unrealized (loss) gain on investments, net of tax | ( | ( | |||||||||||||||
Comprehensive income | $ | $ | $ | ||||||||||||||
Comprehensive loss attributable to noncontrolling interest | ( | ( | ( | ||||||||||||||
Total comprehensive income attributable to InterDigital, Inc. | $ | $ | $ |
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 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to InterDigital, Inc. | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from and increases in noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized gain on short-term investments | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of common stock options | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Common Stock, net | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of Common Stock | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Equity component of debt, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net convertible note hedge transactions, net of tax | — | — | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net warrant transactions | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Deferred financing costs allocated to equity, net of tax | — | — | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Reacquisition of equity component of debt due to prepayment, net of tax | — | — | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to InterDigital, Inc. | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from and increases in noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized loss on short-term investments | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of common stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
— | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to InterDigital, Inc. | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Proceeds from and increases in noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest distribution | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized loss on short-term investments | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of common stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | $ |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Non-cash interest expense, net | |||||||||||||||||
Non-cash change in fair value | ( | ( | |||||||||||||||
Gain on asset acquisition and sale of a business | ( | ||||||||||||||||
Change in deferred revenue | ( | ( | |||||||||||||||
Deferred income taxes | ( | ( | |||||||||||||||
Share-based compensation | |||||||||||||||||
Impairment of long-term investment | |||||||||||||||||
Loss on extinguishment of debt | |||||||||||||||||
Loss on disposal of assets | |||||||||||||||||
Impairment of patents | |||||||||||||||||
Other | |||||||||||||||||
(Increase) decrease in assets: | |||||||||||||||||
Receivables | ( | ||||||||||||||||
Deferred charges and other assets | ( | ( | ( | ||||||||||||||
(Decrease) increase in liabilities: | |||||||||||||||||
Accounts payable | ( | ( | ( | ||||||||||||||
Accrued compensation and other expenses | |||||||||||||||||
Net cash provided by operating activities | |||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||
Purchases of short-term investments | ( | ( | ( | ||||||||||||||
Sales of short-term investments | |||||||||||||||||
Purchases of property and equipment | ( | ( | ( | ||||||||||||||
Capitalized patent costs | ( | ( | ( | ||||||||||||||
Acquisition of patents | ( | ||||||||||||||||
Proceeds from sale of business | |||||||||||||||||
Long-term investments | ( | ||||||||||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||
Net proceeds from exercise of stock options | |||||||||||||||||
Proceeds from issuance of senior convertible notes | |||||||||||||||||
Payments on long-term debt | ( | ( | |||||||||||||||
Purchase of convertible bond hedge | ( | ||||||||||||||||
Payment for warrant unwind | ( | ||||||||||||||||
Prepayment penalty on long-term debt | ( | ||||||||||||||||
Proceeds from hedge unwind | |||||||||||||||||
Proceeds from issuance of warrants | |||||||||||||||||
Payments of debt issuance costs | ( | ||||||||||||||||
Proceeds from noncontrolling interests | |||||||||||||||||
Non-controlling interest distribution | ( | ||||||||||||||||
Dividends paid | ( | ( | ( | ||||||||||||||
Taxes withheld upon restricted stock unit vestings | ( | ( | ( | ||||||||||||||
Repurchase of common stock | ( | ( | ( | ||||||||||||||
Net cash used in financing activities | ( | ( | ( | ||||||||||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ( | ||||||||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | |||||||||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | $ | $ |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | 2021 | 2020 | 2019 | ||||||||||||||
Interest paid | $ | $ | $ | ||||||||||||||
Income taxes paid, including foreign withholding taxes | |||||||||||||||||
Non-cash investing and financing activities: | |||||||||||||||||
Dividend payable | |||||||||||||||||
Increases in noncontrolling interests | |||||||||||||||||
Non-cash acquisition of patents | |||||||||||||||||
Right-of-use assets obtained in exchange of operating lease liabilities (a) | |||||||||||||||||
Accrued capitalized patent costs and property and equipment | ( |
For the Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Variable patent royalty revenue | $ | $ | $ | ||||||||||||||
Fixed-fee royalty revenue | |||||||||||||||||
Current patent royalties a | |||||||||||||||||
Non-current patent royalties b | |||||||||||||||||
Total patent royalties | |||||||||||||||||
Current technology solutions revenue a | |||||||||||||||||
Patent sales b | |||||||||||||||||
Total revenue | $ | $ | $ |
Revenue | |||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
$ | |||||
For the Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
United States | $ | $ | $ | ||||||||||||||
China | |||||||||||||||||
South Korea | |||||||||||||||||
Japan | |||||||||||||||||
Taiwan | |||||||||||||||||
Europe | |||||||||||||||||
Other Asia | |||||||||||||||||
Total revenue | $ | $ | $ |
2021 | 2020 | 2019 | |||||||||||||||
Customer A | |||||||||||||||||
Customer B | |||||||||||||||||
Customer C | |||||||||||||||||
Customer D | |||||||||||||||||
Customer E | < | < |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Money market and demand accounts | $ | $ | |||||||||
Commercial paper | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash included within prepaid and other current assets | |||||||||||
Restricted cash included within other non-current assets | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
December 31, 2021 | |||||||||||||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
Available-for-sale securities | |||||||||||||||||||||||
Commercial paper | $ | $ | $ | ( | $ | ||||||||||||||||||
U.S. government securities | ( | ||||||||||||||||||||||
Corporate bonds, asset backed and other securities | ( | ||||||||||||||||||||||
Total available-for-sale securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Reported in: | |||||||||||||||||||||||
Cash and cash equivalents | $ | ||||||||||||||||||||||
Short-term investments | |||||||||||||||||||||||
Total marketable securities | $ |
December 31, 2020 | |||||||||||||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
Available-for-sale securities | |||||||||||||||||||||||
Commercial paper | $ | $ | $ | ( | $ | ||||||||||||||||||
U.S. government securities | ( | $ | |||||||||||||||||||||
Corporate bonds, asset backed and other securities | ( | $ | |||||||||||||||||||||
Total available-for-sale securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Reported in: | |||||||||||||||||||||||
Cash and cash equivalents | $ | ||||||||||||||||||||||
Short-term investments | |||||||||||||||||||||||
Total marketable securities | $ |
Fair Value as of December 31, 2021 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market and demand accounts (a) | $ | $ | $ | $ | |||||||||||||||||||
Commercial paper (b) | |||||||||||||||||||||||
U.S. government securities | |||||||||||||||||||||||
Corporate bonds, asset backed and other securities | |||||||||||||||||||||||
$ | $ | $ | $ |
Fair Value as of December 31, 2020 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market and demand accounts (a) | $ | $ | $ | $ | |||||||||||||||||||
Commercial paper (b) | |||||||||||||||||||||||
U.S. government securities | |||||||||||||||||||||||
Corporate bonds and asset backed securities | |||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
December 31, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||
Principal Amount | Carrying Value | Fair Value | Principal Amount | Carrying Value | Fair Value | ||||||||||||||||||||||||||||||
Senior Convertible Long-Term Debt | $ | $ | $ | $ | $ | $ |
December 31, 2021 | December 31, 2020 | ||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
Technicolor Patent Acquisition Long-Term Debt | $ | $ | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Computer equipment and software | $ | $ | |||||||||
Leasehold improvements | |||||||||||
Building and improvements | |||||||||||
Engineering and test equipment | |||||||||||
Furniture and fixtures | |||||||||||
Property and equipment, gross | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Weighted average estimated useful life (years) | |||||||||||
Gross patents | $ | $ | |||||||||
Accumulated amortization | ( | ( | |||||||||
Patents, net | $ | $ |
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 |
Goodwill balance as of December 31, 2019 | $ | ||||
Activity | |||||
Goodwill balance as of December 31, 2020 | $ | ||||
Activity | |||||
Goodwill balance as of December 31, 2021 | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
$ | $ | ||||||||||
Less: | |||||||||||
Unamortized interest discount (a) | ( | ||||||||||
Deferred financing costs | ( | ( | |||||||||
Total net carrying amount of Senior Convertible Notes | $ | $ | |||||||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
$ |
For the Year Ended December 31, | ||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||
2024 Notes | 2024 Notes | 2020 Notes | Total | 2024 Notes | 2020 Notes | Total | ||||||||||||||||||||||||||
Contractual coupon interest | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Accretion of debt discount (a) | $ | $ | ||||||||||||||||||||||||||||||
Amortization of financing costs | $ | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter |
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
2027-2031 |
Number of Unvested RSUs | Weighted Average Per Share Grant Date Fair Value | ||||||||||
Balance at December 31, 2020 | $ | ||||||||||
Granted* | |||||||||||
Forfeited | ( | ||||||||||
Vested | ( | ||||||||||
Balance at December 31, 2021 | $ |
For the Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Expected term (in years) | |||||||||||||||||
Expected volatility | % | % | % | ||||||||||||||
Risk-free interest rate | % | % | % | ||||||||||||||
Dividend yield | % | % | % |
Outstanding Options | Weighted Average Exercise Price | ||||||||||
Balance at December 31, 2020 | $ | ||||||||||
Granted* | |||||||||||
Forfeited | ( | ||||||||||
Exercised | ( | ||||||||||
Balance at December 31, 2021 | $ |
2021 | 2020 | 2019 | |||||||||||||||
Current | |||||||||||||||||
Federal | $ | ( | $ | ( | $ | ( | |||||||||||
State | |||||||||||||||||
Foreign source withholding tax | |||||||||||||||||
Deferred | |||||||||||||||||
Federal | ( | ( | ( | ||||||||||||||
State | |||||||||||||||||
Foreign source withholding tax | |||||||||||||||||
( | ( | ||||||||||||||||
Total | $ | $ | ( | $ |
2021 | 2020 | ||||||||||
Total | Total | ||||||||||
Net operating losses | $ | $ | |||||||||
Tax credit carryforward | |||||||||||
Deferred revenue, net | |||||||||||
Amortization and depreciation | |||||||||||
Debt amortization | |||||||||||
Other employee benefits | |||||||||||
Stock compensation | |||||||||||
Lease liability | |||||||||||
Other | ( | ||||||||||
Right of use asset | ( | ( | |||||||||
Less: valuation allowance | ( | ( | |||||||||
Net deferred tax asset | $ | $ |
2021 | 2020 | 2019 | |||||||||||||||
Tax at U.S. statutory rate | % | % | % | ||||||||||||||
Change in valuation allowance | % | % | % | ||||||||||||||
Non-deductible officers' compensation | % | % | % | ||||||||||||||
Uncertain tax positions | % | ( | % | ( | % | ||||||||||||
Non-creditable withholding taxes | % | % | % | ||||||||||||||
State tax provision (b) | % | % | % | ||||||||||||||
Other permanent differences | % | ( | % | % | |||||||||||||
Other | % | % | ( | % | |||||||||||||
Stock compensation | ( | % | % | ( | % | ||||||||||||
Research and development tax credits | ( | % | ( | % | ( | % | |||||||||||
Effect of rates different than statutory | ( | % | ( | % | ( | % | |||||||||||
Amended return benefit (a) | ( | % | ( | % | ( | % | |||||||||||
Foreign derived intangible income deduction | ( | % | % | % | |||||||||||||
Total tax provision (benefit) | % | ( | % | % |
2021 | 2020 | 2019 | |||||||||||||||
Balance as of January 1 | $ | $ | $ | ||||||||||||||
Tax positions related to current year: | |||||||||||||||||
Additions | |||||||||||||||||
Reductions | |||||||||||||||||
Tax positions related to prior years: | |||||||||||||||||
Additions | |||||||||||||||||
Reductions | ( | ||||||||||||||||
Settlements | |||||||||||||||||
Lapses in statues of limitations | ( | ( | ( | ||||||||||||||
Balance as of December 31 | $ | $ | $ |
For the Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Net income applicable to common shareholders | $ | $ | $ | ||||||||||||||
Weighted-average shares outstanding: | |||||||||||||||||
Basic | |||||||||||||||||
Dilutive effect of stock options, RSUs, convertible securities and warrants | |||||||||||||||||
Diluted | |||||||||||||||||
Earnings Per Share: | |||||||||||||||||
Basic | |||||||||||||||||
Dilutive effect of stock options, RSUs, convertible securities and warrants | ( | ( | |||||||||||||||
Diluted | $ | $ | $ |
For the Year Ended December 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||
Restricted stock units and stock options | ||||||||||||||||||||
Convertible securities | ||||||||||||||||||||
Warrants | ||||||||||||||||||||
Total |
2014 Repurchase Program | |||||||||||
# of Shares | Value | ||||||||||
2021 | $ | ||||||||||
2020 | |||||||||||
2019 | |||||||||||
2018 | |||||||||||
2017 | |||||||||||
2016 | |||||||||||
2015 | |||||||||||
2014 | |||||||||||
Total | $ |
2021 | Per Share | Total | Cumulative by Fiscal Year | ||||||||||||||
First quarter | $ | $ | $ | ||||||||||||||
Second quarter | |||||||||||||||||
Third quarter | |||||||||||||||||
Fourth quarter | |||||||||||||||||
$ | $ | ||||||||||||||||
2020 | |||||||||||||||||
First quarter | $ | $ | $ | ||||||||||||||
Second quarter | |||||||||||||||||
Third quarter | |||||||||||||||||
Fourth quarter | |||||||||||||||||
$ | $ |
Balance Sheet Classification | December 31, 2021 | December 31, 2020 | |||||||||||||||
Assets | |||||||||||||||||
Operating lease receivable - current | Prepaid and other current assets | $ | $ | ||||||||||||||
Operating lease right-of-use assets, net | Other non-current assets, net | ||||||||||||||||
Total Lease Assets | $ | $ | |||||||||||||||
Liabilities | |||||||||||||||||
Operating lease liabilities - Current | $ | $ | |||||||||||||||
Operating lease liabilities - Noncurrent | |||||||||||||||||
Total Lease Liabilities | $ | $ |
For the Year Ended December 31, | |||||||||||
2021 | 2020 | 2019 | |||||||||
Operating lease cost | $ | $ | $ | ||||||||
Short-term lease cost | |||||||||||
Variable lease cost | |||||||||||
Maturity of Operating Lease Liabilities | |||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total lease payments | $ | ||||
Less: Imputed interest | ( | ||||
Present value of lease liabilities | $ |
For the Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Interest and investment income | $ | $ | $ | ||||||||||||||
Gain on asset acquisition and sale of business | |||||||||||||||||
Loss on extinguishment of long-term debt | ( | ||||||||||||||||
Other | ( | ||||||||||||||||
Other income, net | $ | $ | $ |
As Reported | As Revised (a) | ||||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2020 | |||||||||||||||
Tax receivables | $ | $ | $ | ||||||||||||||
Prepaid assets | |||||||||||||||||
Patents held for sale | |||||||||||||||||
Other current assets | |||||||||||||||||
Total Prepaid and other current assets | $ | $ | $ |
As Reported | As Revised (a) | ||||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2020 | |||||||||||||||
Tax receivables | $ | $ | $ | ||||||||||||||
Goodwill | |||||||||||||||||
Right-of-use assets | |||||||||||||||||
Long-term investments | |||||||||||||||||
Other non-current assets | |||||||||||||||||
Total Other non-current assets, net | $ | $ | $ |
Balance as of December 31, 2020 | $ | ||||
Accrual | |||||
Cash payments | ( | ||||
Other | $ | ( | |||
Balance as of December 31, 2021 | $ |
For the Year Ended December 31, 2021 | |||||
Patent impairment | $ | ||||
Severance and other benefits | |||||
Outside services and other associated costs | |||||
Reimbursement arrangements | ( | ||||
Total | $ |
Balance Beginning of Period | Increase/ (Decrease) | Reversal of Valuation Allowance | Balance End of Period | ||||||||||||||||||||
2021 valuation allowance for deferred tax assets | $ | 144,367 | $ | 7,155 | $ | — | $ | 151,522 | |||||||||||||||
2020 valuation allowance for deferred tax assets | $ | 133,797 | $ | 10,570 | (a) | $ | — | $ | 144,367 | ||||||||||||||
2019 valuation allowance for deferred tax assets | $ | 125,158 | $ | 8,639 | (a) | $ | — | $ | 133,797 | ||||||||||||||
2021 reserve for uncollectible accounts | $ | — | $ | 322 | $ | — | $ | 322 | |||||||||||||||
2020 reserve for uncollectible accounts | $ | 537 | $ | (537) | (b) | $ | — | $ | — | ||||||||||||||
2019 reserve for uncollectible accounts | $ | 693 | $ | (156) | (b) | $ | — | $ | 537 |
Exhibit Number | Exhibit Description | ||||||||||
*3.1 | |||||||||||
*3.2 | |||||||||||
*4.1 | |||||||||||
*4.2 | |||||||||||
*4.3 | |||||||||||
*4.4 | |||||||||||
Benefit Plans | |||||||||||
†*10.1 | Non-Qualified Stock Option Plan, as amended (Exhibit 10.4 to InterDigital's Annual Report on Form 10-K for the year ended December 31, 1991). | ||||||||||
†*10.2 |
†*10.3 | |||||||||||
†*10.4 | |||||||||||
†*10.5 | |||||||||||
†*10.5 | |||||||||||
†*10.7 | |||||||||||
†*10.8 | |||||||||||
†*10.9 | |||||||||||
†*10.10 | |||||||||||
†*10.11 | |||||||||||
†*10.12 | |||||||||||
†*10.13 | |||||||||||
†*10.14 | |||||||||||
†*10.15 | |||||||||||
†*10.16 | |||||||||||
†*10.17 | |||||||||||
†*10.18 | |||||||||||
†*10.19 | |||||||||||
†*10.20 | |||||||||||
†*10.21 | |||||||||||
†*10.22 | |||||||||||
†*10.23 |
†*10.24 | |||||||||||
†*10.25 | |||||||||||
†*10.26 | |||||||||||
Employment-Related Agreements | |||||||||||
†10.27 | |||||||||||
†#10.28 | |||||||||||
†*10.29 | |||||||||||
†*10.30 | |||||||||||
†10.31 | |||||||||||
Other Material Contracts | |||||||||||
*10.32 | |||||||||||
*10.33 | |||||||||||
21 | |||||||||||
23.1 | |||||||||||
31.1 | |||||||||||
31.2 | |||||||||||
32.1 | |||||||||||
32.2 | |||||||||||
101.INS | XBRL 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 | Inline XBRL Taxonomy Extension Schema Document. | ||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* | Incorporated by reference to the previous filing indicated. |
† | Management contract or compensatory plan or arrangement. | ||||
# | Certain personally identifiable information has been omitted from this exhibit pursuant to Item 601(a)(6) under Regulation S-K. | ||||
+ | 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. |
Date: February 17, 2022 | By: | /s/ Liren Chen | ||||||
Liren Chen | ||||||||
President and Chief Executive Officer |
Date: February 17, 2022 | /s/ S. Douglas Hutcheson | ||||
S. Douglas Hutcheson, Chairman of the Board of Directors | |||||
Date: February 17, 2022 | /s/ Joan H. Gillman | ||||
Joan H. Gillman, Director | |||||
Date: February 17, 2022 | /s/ John A. Kritzmacher | ||||
John A. Kritzmacher, Director | |||||
Date: February 17, 2022 | /s/ Pierre-Yves Lesaicherre | ||||
Pierre-Yves Lesaicherre, Director | |||||
Date: February 17, 2022 | /s/ John D. Markley, Jr. | ||||
John D. Markley, Jr., Director | |||||
Date: February 17, 2022 | /s/ Jean F. Rankin | ||||
Jean F. Rankin, Director | |||||
Date: February 17, 2022 | /s/ Liren Chen | ||||
Liren Chen, Director, President and Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
Date: February 17, 2022 | /s/ Richard J. Brezski | ||||
Richard J. Brezski, Chief Financial Officer | |||||
(Principal Financial Officer and Principal Accounting Officer) |
By: |
INTERDIGITAL INTERNATIONAL LLC | |||||
/s/ Richard Brezski Chief Financial Officer |
/s/ Eeva Hakoranta | ||
Eeva Hakoranta |
•[COMPANY] | ||
•[NAME] •[POSITION] |
Eeva Hakoranta |
Gran Date | Shares Vested | Vest Date | ||||||
3/31/2020 | 3,030 | 6/15/2020 | ||||||
3/31/2020 | 3,024 | 10/15/2021 |
Subsidiary | Jurisdiction / State of Incorporation or Organization | ||||
6GWorld, Inc. | Delaware | ||||
Chordant Europe Ltd. | United Kingdom | ||||
Chordant France SAS | France | ||||
Chordant, Inc. | Delaware | ||||
DRNC Holdings, Inc. | Delaware | ||||
DST Holdings, Inc. | Delaware | ||||
IDAC Holdings, Inc. | Delaware | ||||
IDHL Holdings, Inc. | Delaware | ||||
IDLR Holdings, Inc. | Delaware | ||||
IDPA Holdings, Inc. | Delaware | ||||
IDTP Holdings, Inc. | Delaware | ||||
InterDigital Administrative Solutions, Inc. | Pennsylvania | ||||
InterDigital Belgium, LLC | Delaware | ||||
InterDigital Canada Ltee. | Delaware | ||||
InterDigital Capital, Inc. | Delaware | ||||
InterDigital CE Holdings, Inc. | Delaware | ||||
InterDigital CE Intermediate, SAS | France | ||||
InterDigital CE Patent Holdings, SAS | France | ||||
InterDigital Charitable Foundation, Inc | Delaware | ||||
InterDigital Communications, Inc. | Delaware | ||||
InterDigital Europe, Ltd. | United Kingdom | ||||
InterDigital Finland Oy | Finland | ||||
InterDigital Germany GmbH | Germany | ||||
InterDigital Holdings, Inc. | Delaware | ||||
InterDigital Madison Patent Holdings, SAS | France | ||||
InterDigital Patent Holdings, Inc. | Delaware | ||||
InterDigital R&D France, SAS | France | ||||
InterDigital Technology Corporation | Delaware | ||||
InterDigital VC Holdings, Inc. | Delaware | ||||
InterDigital VC Holdings France, SAS | France | ||||
InterDigital Video Technologies, Inc. | Delaware | ||||
InterDigital Wireless, Inc. | Pennsylvania | ||||
IoT Holdings, Inc. | Delaware | ||||
IPR Licensing, Inc. | Delaware | ||||
NexStar Capital, LLC | Delaware | ||||
NexStar Partners GP, L.P. | Delaware | ||||
NexStar Partners, L.P. | Delaware | ||||
NexStar Strategic Investments, LLC | Delaware | ||||
PCMS Holdings, Inc. | Delaware | ||||
VID SCALE, Inc. | Delaware |
Date: February 17, 2022 | /s/ Liren Chen | |||||||
Liren Chen | ||||||||
President and Chief Executive Officer |
Date: February 17, 2022 | /s/ Richard J. Brezski | |||||||
Richard J. Brezski | ||||||||
Chief Financial Officer |
Date: February 17, 2022 | /s/ Liren Chen | |||||||
Liren Chen | ||||||||
President and Chief Executive Officer |
Date: February 17, 2022 | /s/ Richard J. Brezski | |||||||
Richard J. Brezski | ||||||||
Chief Financial Officer |
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Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Auditor Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Philadelphia, Pennsylvania |
Auditor Firm ID | 238 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
CURRENT ASSETS: | ||
Accounts receivable, less allowances of $322 and $0 | $ 322 | $ 0 |
SHAREHOLDERS’ EQUITY: | ||
Preferred stock, par value (in USD per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 14,399,000 | 14,399,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 71,720,000 | 71,389,000 |
Common stock, shares outstanding (in shares) | 30,689,000 | 30,816,000 |
Treasury stock, shares of common held at cost (in shares) | 41,031,000 | 40,573,000 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 42,188 | $ 37,941 | $ 14,951 |
Unrealized (loss) gain on investments, net of tax | (387) | (110) | 2,397 |
Comprehensive income | 41,801 | 37,831 | 17,348 |
Comprehensive loss attributable to noncontrolling interest | (13,107) | (6,860) | (5,977) |
Total comprehensive income attributable to InterDigital, Inc. | $ 54,908 | $ 44,691 | $ 23,325 |
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Statement of Stockholders' Equity [Abstract] | |||||||||||||
Cash dividends declared per common share (in usd per share) | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 1.40 | $ 1.40 | $ 1.40 | |
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2020-06 | ||||||||||||
Total equity | $ 752,917 | $ 796,566 | $ 752,917 | $ 796,566 | $ 786,281 | $ 938,013 | |||||||
Net loss attributable to noncontrolling interest | $ (13,107) | $ (6,860) | $ (5,977) |
Background and Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BACKGROUND AND BASIS OF PRESENTATION | BACKGROUND AND BASIS OF PRESENTATION InterDigital designs and develops advanced technologies that enable and enhance wireless communications and capabilities. Since our founding in 1972, our engineers have designed and developed a wide range of innovations that are used in digital cellular and wireless products and networks, including 2G, 3G, 4G, 5G and IEEE 802-related products and networks, as well as video processing, coding and display technology. We are a leading contributor of innovation to the wireless communications industry, as well as a leading holder of patents in the video industry. Principles of Consolidation The accompanying consolidated financial statements include all of our accounts and all entities in which we have a controlling interest and/or are required to be consolidated in accordance with the Generally Accepted Accounting Principles in the United States (“GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation. In determining whether we are the primary beneficiary of a variable interest entity and therefore required to consolidate, we apply a qualitative approach that determines whether we have both the power to direct the economically significant activities of the entity and the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. These considerations impact the way we account for our existing collaborative relationships and other arrangements. We continuously assess whether we are the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in us consolidating or deconsolidating our partner(s) to collaborations and other arrangements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. If different assumptions were made or different conditions had existed, our financial results could have been materially different. InterDigital has analyzed the impact of the ongoing Coronavirus pandemic (“COVID-19”) on its financial statements as of December 31, 2021. InterDigital has determined that the changes to its significant judgments and estimates as a result of COVID-19 did not have a material impact on its financial statements. The potential impact of COVID-19 will continue to be analyzed going forward. Prior Periods' Financial Statement Revision During 2021, we determined that we had incorrectly classified $24.3 million of tax receivables as other current assets, whereas we should have reflected these as other non-current assets within the December 31, 2020 consolidated balance sheet. Although we concluded that such misclassification did not materially misstate the previously issued financial statements, we have corrected the classification by revising the accompanying 2020 balance sheet and footnotes. Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. Supplemental Cash Flow Information The following table presents additional supplemental cash flow information for the year ended December 31, 2021, 2020 and 2019 (in thousands):
_____________ a. Effective January 1, 2019, we adopted ASU 2016-02, "Leases (Topic 842)", which outlines a comprehensive change to the lease accounting model.
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Summary of Significant Accounting Policies and New Accounting Guidance |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING GUIDANCE | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING GUIDANCE Foreign Currency Translation The functional currency of substantially all of the Company's wholly-owned subsidiaries is the U.S. dollar. Certain subsidiaries have monetary assets and liabilities that are denominated in a currency that is different than the functional currency. The gains and losses resulting from this remeasurement and translation of monetary assets denominated in a currency that is different than the functional currency are reflected in the determination of net income. Cash, Cash Equivalents, Restricted Cash and Marketable Securities We classify all highly liquid investment securities with original maturities of three months or less at date of purchase as cash equivalents. Cash that is held for a specific purpose and therefore not available to the Company for immediate or general business use is classified as restricted cash. Our investments are comprised of mutual and exchange traded funds, commercial paper, United States and municipal government obligations and corporate securities. Management determines the appropriate classification of our investments at the time of acquisition and re-evaluates such determination at each balance sheet date. As of December 31, 2021 and 2020, the majority of our marketable securities have been classified as available-for-sale and are carried at fair value, with unrealized gains and losses reported net-of-tax as a separate component of shareholders’ equity. Substantially all of our investments are investment grade government and corporate debt securities that have maturities of less than two years, and we have both the ability and intent to hold the investments until maturity.Other-than-Temporary Impairments We review our investment portfolio during each reporting period to determine whether there are identified events or circumstances that would indicate there is a decline in the fair value that is considered to be other-than-temporary. For non-public investments, if there are no identified events or circumstances that would have a significant adverse effect on the fair value of the investment, then the fair value is not estimated. If an investment is deemed to have experienced an other-than-temporary decline below its cost basis, we reduce the carrying amount of the investment to its quoted or estimated fair value, as applicable, and establish a new cost basis for the investment. We charge the impairment to the "Other income, net" line of our consolidated statements of income. Intangible Assets Patents We capitalize external costs, such as filing fees and associated attorney fees, incurred to obtain issued patents and patent license rights. We expense costs associated with maintaining and defending patents subsequent to their issuance in the period incurred. We amortize capitalized patent costs for internally generated patents on a straight-line basis over 10 years, which represents the estimated useful lives of the patents. The ten-year estimated useful life for internally generated patents is based on our assessment of such factors as: the integrated nature of the portfolios being licensed, the overall makeup of the portfolio over time, and the length of license agreements for such patents. The estimated useful lives of acquired patents and patent rights, however, have been and will continue to be based on a separate analysis related to each acquisition and may differ from the estimated useful lives of internally generated patents. The average estimated useful life of acquired patents is 9.7 years. We assess the potential impairment to all capitalized net patent costs when events or changes in circumstances indicate that the carrying amount of our patent portfolio may not be recoverable. Goodwill Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and identified intangible assets acquired under a business combination. We review impairment of goodwill annually on the first day of the fourth quarter. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether a quantitative goodwill impairment test is necessary. If we conclude it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, we need not perform the quantitative assessment. If based on the qualitative assessment we believe it is more likely than not that the fair value of a reporting unit is less than its carrying value, a quantitative assessment test is required to be performed. This assessment requires us to compare the fair value of each reporting unit to its carrying value including allocated goodwill. We determine the fair value of our reporting units generally using a combination of the income and market approaches. The income approach is estimated through the discounted cash flow method based on assumptions about future conditions such as future revenue growth rates, new product and technology introductions, gross margins, operating expenses, discount rates, future economic and market conditions, and other assumptions. The market approach estimates the fair value of our equity by utilizing the market comparable method which is based on revenue multiples from comparable companies in similar lines of business. If the carrying value of a reporting unit exceeds the reporting unit’s fair value, a goodwill impairment charge will be recorded for the difference up to the carrying value of goodwill. The carrying value of goodwill was $22.4 million as of December 31, 2021 and December 31, 2020, which was included within "Other non-current assets, net" in the consolidated balance sheets. No impairments were recorded during 2021, 2020 or 2019 as a result of our annual goodwill impairment assessment. Other Intangible Assets We capitalize the cost of technology solutions and platforms we acquire or license from third parties when they have a future benefit and the development of these solutions and platforms is substantially complete at the time they are acquired or licensed. Intangible assets consist of acquired patents, existing technology, and trade names. Refer to the above Patents section for more information on acquired patents and existing technology. We make judgments about the recoverability of purchased finite-lived intangible assets whenever facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, we assess recoverability by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, we would accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life.Property and Equipment Property and equipment are stated at cost, less depreciation, amortization and impairments. Depreciation and amortization of property and equipment are provided using the straight-line method. The estimated useful lives for computer equipment, computer software, engineering and test equipment and furniture and fixtures are generally to five years. Leasehold improvements are amortized over the lesser of their estimated useful lives or their respective lease terms, which are generally to ten years. Buildings are being depreciated over twenty-five years. Expenditures for major improvements and betterments are capitalized, while minor repairs and maintenance are charged to expense as incurred. Upon the retirement or disposition of property, plant and equipment, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded. Leases We determine if an arrangement is a lease at inception. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date, except short-term leases with an original term of 12 months or less, based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use an incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease right-of-use assets also includes any lease payments made and excludes lease incentives. Lease expense is recognized over the expected term on a straight-line basis. Leases with a lease term of 12 months or less are accounted for using the practical expedient which allows for straight-line rent expense over the remaining term of the lease. Internal-Use Software Costs We capitalize costs associated with software developed for internal use that are incurred during the software development stage. Such costs are limited to expenses incurred after management authorizes and commits to a computer software project, believes that it is more likely than not that the project will be completed, the software will be used to perform the intended function with an estimated service life of two years or more, and the completion of conceptual formulation, design and testing of possible software project alternatives (the preliminary design stage). Costs incurred after final acceptance testing has been successfully completed are expensed. Capitalized computer software costs are amortized over their estimated useful life of three years. All computer software costs capitalized to date relate to the purchase, development and implementation of engineering, accounting and other enterprise software. Impairment of Long-Lived AssetsWe evaluate long-lived assets for impairment when factors indicate that the carrying value of an asset may not be recoverable. When factors indicate that such assets should be evaluated for possible impairment, we review whether we will be able to realize our long-lived assets by analyzing the projected undiscounted cash flows in measuring whether the asset is recoverable. In 2021, a non-controlled subsidiary that we consolidate for financial statement purposes approved a plan to sell certain patents, which resulted in the Company recognizing a $13.2 million impairment, as discussed further in Note 20, "Restructuring Activities". In 2020, we recognized a $1.1 million impairment, comprised of $0.8 million of Property, Plant, and Equipment, and $0.3 million of Operating lease right-of-use asset related to the abandonment of one of our leased properties, which was included within “Operating Expense” in the consolidated statement of income. We did not have any long-lived asset impairments in 2019Revenue Recognition We derive the vast majority of our revenue from patent licensing. The timing and amount of revenue recognized from each licensee depend upon a variety of factors, including the specific terms of each agreement and the nature of the deliverables and obligations. Such agreements are often complex and include multiple performance obligations. These agreements can include, without limitation, performance obligations related to the settlement of past patent infringement liabilities, patent and/or know-how licensing royalties on covered products sold by licensees, access to a portfolio of technology as it exists at a point in time, and access to a portfolio of technology at a point in time along with promises to provide any technology updates to the portfolio during the term. In accordance with US GAAP, we use a five-step model to achieve the core underlying principle that an entity should recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. These steps include (1) identifying the contract with the customer, (2) identifying the performance obligations, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue as the entity satisfies the performance obligation(s). Additionally, we have elected to utilize certain practical expedients in the application of ASC 606. In evaluating the presence of a significant financing component in our agreements, we utilize the practical expedient to exclude any contracts wherein the gap between payment by our customers and the delivery of our performance obligation is less than one year. We have also elected to utilize the practical expedient related to costs of obtaining a contract where an entity may recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Timing of revenue recognition may differ significantly from the timing of invoicing to customers. Contract assets are included in accounts receivable and represent unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed, and right to payment is subject to the underlying contractual terms. Contract assets are classified as long-term assets if the payments are expected to be received more than one year from the reporting date. Contract assets due within less than twelve months of the balance sheet date are included within accounts receivable in our consolidated balance sheets. Contract assets due more than twelve months after the balance sheet date are included within other non-current assets. Patent License Agreements Upon signing a patent license agreement, we provide the licensee permission to use our patented inventions in specific applications. We account for patent license agreements in accordance with the guidance indicated above. Certain patent license agreements contain revenue from non-financial sources in the form of patents received from the customer. Under our patent license agreements, we typically receive one or a combination of the following forms of payment as consideration for permitting our licensees to use our patented inventions in their applications and products: Consideration for Past Patent Royalties Consideration related to a licensee’s product sales from prior periods may result from a negotiated agreement with a licensee that utilized our patented inventions prior to signing a patent license agreement with us or from the resolution of a disagreement or arbitration with a licensee over the specific terms of an existing license agreement. We may also receive consideration for past patent royalties in connection with the settlement of patent litigation where there was no prior patent license agreement. In each of these cases, we record the consideration as revenue as prescribed by the five-step model. Fixed-Fee Agreements Fixed-fee license agreements include fixed, non-refundable royalty payments that fulfill the licensee’s obligations to us under a patent license agreement for a specified time period or for the term of the agreement for specified products, under certain patents or patent claims, for sales in certain countries, or a combination thereof - in each case for a specified time period (including for the life of the patents licensed under the agreement). Dynamic fixed-fee license agreements contain a single performance obligation that represents ongoing access to a portfolio of technology over the license term, since our promise to transfer to the licensee access to the portfolio as it exists at inception of the license, along with promises to provide any technology updates to the portfolio during the term, are not separately identifiable. Upon entering a new agreement, we allocate the transaction price to the performance obligations delivered at signing (e.g. our existing patent portfolio) and future performance obligations (e.g. the technology updates). We use a time-based input method of progress to determine the timing of revenue recognition, and as such we recognize the future deliverables on a straight-line basis over the term of the agreement. We utilize the straight-line method as we believe that it best depicts efforts expended to develop and transfer updates to the customer evenly throughout the term of the agreement. Static fixed-fee license agreements are fixed-price contracts that generally do not include updates to technology we create after the inception of the license agreement or in which the customer does not stand to substantively benefit from those updates during the term. Although we have few static fixed-fee license agreements, we generally satisfy our performance obligations under such agreements at contract signing, and as such revenue is recognized at that time. Variable Agreements Upon entering a new variable patent license agreement, the licensee typically agrees to pay royalties or license fees on licensed products sold during the term of the agreement. We utilize the sales- or usage- based royalty exception for these agreements and recognize revenues during the contract term when the underlying sale or usage occurs. Our licensees under variable agreements provide us with quarterly royalty reports that summarize their sales of covered products and their related royalty obligations to us. We typically receive these royalty reports subsequent to the period in which our licensees’ underlying sales occurred. As a result, we are required to estimate revenues, subject to the constraint on our ability to estimate such amounts and will record a true-up when we receive the actual royalty report from the licensee. Estimating licensees’ quarterly royalties prior to receiving the royalty reports requires us to make assumptions and judgments related to forecasted trends and growth rates used to estimate our licensees’ sales, which could have an impact on the amount of revenue we report on a quarterly basis. Technology Solutions Technology solutions revenue consists primarily of revenue from royalty payments, software licenses, and engineering services. The nature of these contracts and timing of payments vary. We recognize revenue from royalty payments and license agreements using the same methods described above under our policy for recognizing revenue from patent license agreements. We recognize revenue from engineering services using percentage of completion method. Patent Sales Our business strategy of monetizing our intellectual property includes the sale of select patent assets. As patent sales executed under this strategy represent a component of our ongoing major or central operations and activities, we will record the related proceeds as revenue. We will recognize the revenue in accordance with the five-step model, generally upon closing of the patent sale transaction. Investments in Other Entities We may make strategic investments in companies that have developed or are developing technologies that are complementary to our business. We made an accounting policy election for a measurement alternative for our equity investments that do not have readily determinable fair values, specifically related to our strategic investments in other entities. Under the alternative, our strategic investments in other entities without readily determinable fair values are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer, if any. On a quarterly basis, we monitor items such as our investment’s financial position and liquidity, performance targets, business plans, and cost trends to assess whether there are any triggering events or indicators present that would be indicative of an impairment, or any other observable price changes as indicated above. We do not adjust our investment balance when the investee reports profit or loss. Additionally, other investments may be accounted for under the equity method of accounting. Under this method, we initially record our investment in the stock of an investee at cost, and adjust the carrying amount of the investment to recognize our share of the earnings or losses of the investee after the date of acquisition. The amount of the adjustment is included in the determination of net income, and such amount reflects adjustments similar to those made in preparing consolidated statements including adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between our cost and underlying equity in net assets of the investee at the date of investment. The investment is also adjusted to reflect our share of changes in the investee’s capital. Dividends received from an investee reduce the carrying amount of the investment. When there are a series of operating losses by the investee or when other factors indicate that a decrease in value of the investment has occurred which is other than temporary, we recognize an impairment equal to the difference between the fair value and the carrying amount of our investment. The carrying value of our investments in other entities is included within "Other non-current assets, net" on our consolidated balance sheets. During 2021, 2020 and 2019, we made investments in other entities of $1.1 million, $0.2 million and $0.4 million, respectively. The carrying value of our investments in other entities as of December 31, 2021 and 2020 was $21.3 million and $15.5 million, respectively, the majority of which are accounted for under the measurement alternative for equity investments described above.Collaborative Arrangements We record the elements of our collaboration agreements that represent joint operating activities in accordance with ASC 808, Collaborative Arrangements (“ASC 808”). Accordingly, the elements of our collaboration agreements that represent activities in which both parties are active participants, and to which both parties are exposed to the significant risks and rewards that are dependent on the commercial success of the activities, are recorded as collaborative arrangements. Generally, the classification of a transaction under a collaborative arrangement is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants. For transactions that are deemed to be a collaborative arrangement under ASC 808, costs incurred and revenues generated on sales to third parties will be reported in our consolidated statement of operations on a gross basis if the Company is deemed to be the principal in the transaction, or on a net basis if the Company is instead deemed to be the agent in the transaction, consistent with the guidance in ASC 606-10-55-36, Revenue From Contracts with Customers - Principal Agent Considerations. Deferred Charges Direct costs of obtaining a contract or fulfilling a contract in a transaction that results in the deferral of revenue may be either expensed as incurred or capitalized, depending on certain criteria. In conjunction with our adoption of ASC 606 effective January 1, 2018, we made a policy election to utilize the practical expedient related to costs of obtaining a contract where an entity may recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. If the amortization period is greater than one year, we capitalize direct costs incurred for the acquisition or fulfillment of a contract through the date of signing if they are directly related to a particular revenue arrangement and are expected to be recovered. The costs are amortized on a straight-line basis over the life of the patent license agreement. For example, from time to time, we use sales agents to assist us in our licensing and/or patent sale activities. In such cases, we may pay a commission. The commission rate varies from agreement to agreement. Commissions are normally paid shortly after our receipt of cash payments associated with the patent license or patent sale agreements. We defer recognition of commission expense and amortize these expenses in proportion to our recognition of the related revenue. Commission expense is included within the "Patent administration and licensing" line of our consolidated statements of income and was immaterial for the years presented. There were no new direct contract costs incurred during 2021, 2020 or 2019. Incremental direct costs incurred related to a debt financing transaction may be capitalized. In connection with our offering of the 2024 Notes and 2020 Notes, defined and discussed in detail within Note 9, "Obligations", we incurred directly related costs. The initial purchasers' transaction fees and related offering expenses were allocated to the liability and equity components of the debt in proportion to the allocation of proceeds and accounted for as debt issuance costs. The debt issuance costs allocated to the liability component of the debt were capitalized as deferred financing costs and recorded as a direct reduction of the debt. These costs are being amortized over the term of the debt using the effective interest method and are included within the "Interest expense" line of our consolidated statements of income. The costs allocated to the equity component of the debt were recorded as a reduction of the equity component of the debt. The balance of unamortized deferred financing costs as of December 31, 2021 and 2020 was $4.4 million and $4.6 million, respectively. The Company incurred $6.4 million of new debt issuance costs during 2019 in conjunction with the issuance of the 2024 Notes, noting no new debt issuance costs were incurred in 2021 or 2020. Deferred financing expense was $1.6 million, $1.2 million and $1.5 million in 2021, 2020 and 2019, respectively. Research and Development Research and development expenditures are expensed in the period incurred, except certain software development costs that are capitalized between the point in time that technological feasibility of the software is established and when the product is available for general release to customers. We did not have any capitalized software costs related to research and development in any period presented. Research, development and other related costs were approximately $89.4 million, $84.6 million and $74.9 million in 2021, 2020 and 2019, respectively. Compensation Programs We use a variety of compensation programs to attract, retain and motivate our employees, and to align employee compensation more closely with company performance. These programs include, but are not limited to, short-term incentives tied to performance goals, cash awards to inventors for filed patent applications and patent issuances, and long-term incentives in the form of stock option awards, time-based restricted stock unit (“RSU”) awards, performance-based RSU awards and cash awards, noting equity awards are granted pursuant to the terms and conditions of our Equity Plans (as defined in Note 12, "Compensation Plans and Programs"). Our long-term incentives, including equity awards, typically include annual equity and cash award grants with to year vesting periods; as a result, in any one year, we are typically accounting for at least active cycles. We account for compensation costs associated with share-based compensation based on the fair value of the instruments issued. The estimated value of stock options includes assumptions around expected life, stock volatility and dividends. The expected life of our stock option awards is based on the simplified method as prescribed by Staff Accounting Bulletin Topic 14. In all periods, our policy has been to set the value of RSUs awards equal to the value of our underlying common stock on the date of measurement. For grants with graded vesting, we amortize the associated unrecognized compensation cost using an accelerated method. For grants that cliff vest, we amortize the associated unrecognized compensation cost on a straight-line basis over their vesting term. In the event of canceled awards, we adjust compensation expense recognized to date as they occur. Tax windfalls and shortfalls related to the tax effects of employee share-based compensation are included in our tax provision. On the consolidated statements of cash flows, tax windfalls and shortfalls related to employee share-based compensation awards are included within operating activities and cash paid to tax authorities for shares withheld are included within financing activities. The inclusion of windfalls and shortfalls in the tax provision could increase our earnings volatility between periods. Tax windfalls related to share-based compensation for the years ended 2021, 2020 and 2019 were $0.8 million, $0.2 million and $0.2 million, respectively.Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statement of income in the period in which the change was enacted. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if management has determined that it is more likely than not that such assets will not be realized. In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. We are subject to examinations by the U.S. IRS and other taxing jurisdictions on various tax matters, including challenges to various positions we assert in our filings. In the event that the IRS or another taxing jurisdiction levies an assessment in the future, it is possible the assessment could have a material adverse effect on our consolidated financial condition or results of operations. The financial statement recognition of the benefit for an uncertain tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable tax authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50 percent likely of being realized upon ultimate settlement. In the event that the IRS or another taxing jurisdiction levies an assessment in the future, it is possible the assessment could have a material adverse effect on our consolidated financial condition or results of operations.New Accounting Guidance Accounting Standards Update: Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2019-12"). The amendments in this ASU are intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 with early adoption allowed. We adopted this guidance as of January 1, 2021, and the adoption did not have a material impact on our consolidated financial statements. Accounting Standards Update: Simplifying the Accounting for Convertible Instruments In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The amendments in this ASU are intended to simplify accounting for convertible debt instruments and convertible preferred stock by removing certain accounting models which separate the embedded conversion features from the host contract. ASU 2020-06 also amends certain guidance in ASC 260 on the computation of earnings per share for convertible instruments and contracts on an entity’s own equity. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and early adoption was permitted for fiscal years beginning after December 15, 2020. The ASU permits the use of either the modified retrospective or fully retrospective methods of transition. We elected to early adopt this standard on a modified retrospective approach as of January 1, 2021, which resulted in a $10.4 million, $50.2 million and $15.6 million increase to net deferred tax assets, long-term debt and retained earnings, respectively, and a $55.4 million decrease to additional paid-in capital. This $50.2 million increase to long-term debt, net was comprised of $51.6 million of unamortized interest discount partially offset by a net increase of $1.4 million in unamortized debt issuance costs following the reversal of the initially established equity component of deferred financing costs. This was due to the standard no longer requiring bifurcation of the embedded conversion feature from the host contract on the 2024 Notes, as defined in Note 9, "Obligations". This adoption also reduced non-cash interest expense starting in 2021 due to the removal of the accretion of the debt discount on the 2024 Notes. In addition, the adoption requires the use of the if-converted method of calculating diluted earnings per share rather than the treasury stock method for convertible instruments and requires the inclusion of the potential effect of shares settled in cash or shares in the diluted earnings per share calculation. Due to the reduction in non-cash interest expense, this adoption increased basic and diluted earnings per share by $0.35 and $0.34, respectively, in the year ended December 31, 2021. During fourth quarter 2021, we determined that in our early adoption of this accounting standard, we incorrectly accounted for the adoption by increasing debt and decreasing retained earnings by $50.2 million, which resulted in a $10.4 million understatement of deferred taxes, $65.8 million understatement of retained earnings and $55.4 million overstatement of additional paid-in capital. We have concluded that this error did not result in our previously issued 2021 interim financial statements being materially misstated. We will, however, correct the error by prospectively revising our previously issued financial statements as of and for the periods ended March 31, 2021, June 30, 2021 and September 30, 2021 in connection with our 2022 quarterly filings on Form 10-Q. The accompanying annual financial statements reflect the correct accounting for the adoption of this standard. Accounting Standards Update: Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options In May 2021, the FASB issued ASU No. 2021-04. The amendments in this ASU are intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options, including warrants, that remain equity classified after modification or exchange. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021, with early adoption allowed. We have determined that the adoption will not have a material impact on our consolidated financial statements.
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE RECOGNITION | REVENUE RECOGNITION Disaggregated Revenue The following table presents the disaggregation of our revenue for the year ended December 31, 2021, 2020 and 2019 (in thousands):
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 includes past patent royalties and royalties from static agreements, as well as patent sales. During the year ended December 31, 2021, we recognized $219.7 million of revenue that had been included in deferred revenue as of the beginning of the period. As of December 31, 2021, we had contract assets of $18.9 million and $8.3 million included within "Accounts receivable, net" and "Other non-current assets, net" in the consolidated balance sheet, respectively. As of December 31, 2020, we had contract assets of $9.7 million and $8.9 million included within "Accounts receivable, net" and "Other non-current assets, net" in the consolidated balance sheet, respectively. Contracted Revenue Based on contracts signed and committed Dynamic Fixed-Fee Agreement payments as of December 31, 2021, we expect to recognize the following amounts of revenue over the term of such contracts (in thousands):
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Geographic / Customer Concentration |
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GEOGRAPHIC CUSTOMER CONCENTRATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GEOGRAPHIC / CUSTOMER CONCENTRATION | GEOGRAPHIC / CUSTOMER CONCENTRATION The Company’s chief operating decision maker assesses company-wide performance and allocates resources based on consolidated financial information. As such, we have one reportable segment. During 2021, 2020 and 2019, the majority of our revenue was derived from a limited number of licensees based outside of the United States, primarily in Asia. Substantially all of these revenues were paid in U.S. dollars and were not subject to any substantial foreign exchange transaction risk. The table below lists the countries of the headquarters of our licensees and customers and the total revenue derived from each country or region for the periods indicated (in thousands):
During 2021, 2020 and 2019, the following licensees or customers accounted for 10% or more of total revenues:
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Cash, Cash Equivalents, Restricted Cash and Marketable Securities |
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CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES | CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash as of December 31, 2021 and 2020 consisted of the following (in thousands):
The following table provides a reconciliation of total cash, cash equivalents and restricted cash as of December 31, 2021 and 2020 within the consolidated balance sheets (in thousands):
Marketable Securities As of December 31, 2021 and 2020, the majority of our marketable securities are classified as available-for-sale and are carried at fair value, with unrealized gains and losses reported net-of-tax as a separate component of shareholders’ equity. Substantially all of our investments are investment-grade government and corporate debt securities that have maturities of less than two years, and we have both the ability and intent to hold the investments until maturity. We recorded no other-than-temporary impairments during 2021, 2020 or 2019. The gross realized gains and losses on sales of marketable securities were not significant during the years ended December 31, 2021, 2020 and 2019. Marketable securities as of December 31, 2021 and 2020 consisted of the following (in thousands):
As of December 31, 2021 and 2020, $210.8 million and $517.4 million, respectively, of our short-term investments had contractual maturities within one year. The remaining portions of our short-term investments had contractual maturities within to two years.
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Concentration of Credit Risk and Fair Value of Financial Assets and Financial Liabilities |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONCENTRATION OF CREDIT RISK AND FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES | CONCENTRATION OF CREDIT RISK AND FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES Concentration of Credit Risk and Fair Value of Financial Instruments Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash equivalents, short-term investments and accounts receivable. We primarily place our cash equivalents and short-term investments in highly rated financial instruments and in United States government instruments. Our accounts receivable are derived principally from patent license and technology solutions agreements. As of December 31, 2021, four licensees comprised 66%, and as of December 31, 2020 five licensees comprised 53%, of our accounts receivable balance. We perform ongoing credit evaluations of our licensees, who generally include large, multinational, wireless telecommunications equipment manufacturers. We believe that the book values of our financial instruments approximate their fair values. Fair Value Measurements We use various valuation techniques and assumptions when measuring the fair value of our assets and liabilities. We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. This guidance established a hierarchy that prioritizes fair value measurements based on the types of input used for the various valuation techniques (market approach, income approach and cost approach). The levels of the hierarchy are described below: Level 1 Inputs — Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 2 Inputs — Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets with insufficient volume or infrequent transactions (less active markets) or model-driven valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data, including market interest rate curves, referenced credit spreads and pre-payment rates. Level 3 Inputs — Level 3 includes financial instruments for which fair value is derived from valuation techniques including pricing models and discounted cash flow models in which one or more significant inputs are unobservable, including the company’s own assumptions. The pricing models incorporate transaction details such as contractual terms, maturity and, in certain instances, timing and amount of future cash flows, as well as assumptions related to liquidity and credit valuation adjustments of marketplace participants. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy. We use quoted market prices for similar assets to estimate the fair value of our Level 2 investments. Recurring Fair Value Measurements Our financial assets are included within short-term investments on our consolidated balance sheets, unless otherwise indicated. Our financial assets and liabilities that are accounted for at fair value on a recurring basis are presented in the tables below as of December 31, 2021 and December 31, 2020 (in thousands):
_______________ (a)Included within cash and cash equivalents. (b)As of December 31, 2021 and 2020, $7.5 million and $80.1 million of commercial paper was included within cash and cash equivalents, respectively. Level 3 Fair Value Measurements Contingent Consideration During second quarter 2019, we completed the R&I Acquisition. The transaction met the definition of an asset acquisition and was accounted for using the cost accumulation and allocation model. As part of this acquisition, Technicolor reduced its rights to the revenue-sharing arrangement that created the initial contingent consideration liability from the Technicolor Patent Acquisition. We determined that the initial contingent consideration liability from the Technicolor Patent Acquisition was significantly modified in conjunction with the R&I Acquisition, and, as such, the contingent consideration liability will now be accounted for under ASC 450 - Contingencies under the asset acquisition framework when the liability is deemed probable and estimable. Since the contingent consideration liability arising from the amended revenue-sharing arrangement was not probable and estimable as of the acquisition date, the carrying value of the previous contingent consideration liability was derecognized, which resulted in a $20.5 million gain which is included within "Other income, net" in the consolidated statement of income for the year ended December 31, 2019. Therefore, effective as of the acquisition date of May 31, 2019, the contingent consideration liability was no longer a Level 3 fair value recurring measurement. As of December 31, 2021 and 2020, the contingent consideration liability from the amended revenue-sharing arrangement was deemed not probable and estimable and is therefore not reflected within the consolidated financial statements. Fair Value of Long-Term Debt 2024 Senior Convertible Notes The principal amount, carrying value and related estimated fair value of the Company's senior convertible debt reported in the consolidated balance sheets as of December 31, 2021 and December 31, 2020 was as follows (in thousands). The aggregate fair value of the principal amount of the senior convertible long-term debt is a Level 2 fair value measurement.
Technicolor Patent Acquisition Long-term Debt As more fully disclosed in Note 9, "Obligations," we recognized long-term debt in conjunction with the Technicolor Patent Acquisition. The carrying value and related estimated fair value of the Technicolor Patent Acquisition long-term debt reported in the consolidated balance sheet as of December 31, 2021 and December 31, 2020 was as follows (in thousands). The aggregate fair value of the Technicolor Patent Acquisition long-term debt is a Level 3 fair value measurement.
Non-recurring Fair Value Measurements Investments in Other Entities As disclosed in Note 2, "Summary of Significant Accounting Policies and New Accounting Guidance", we made an accounting policy election to utilize a measurement alternative for equity investments that do not have readily determinable fair values, which applies to our long-term strategic investments in other entities. Under the alternative, our long-term strategic investments in other entities that do not have readily determinable fair values are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Any adjustments to the carrying value of those investments are considered non-recurring fair value measurements. During year ended December 31, 2021 and 2020, we recognized $7.6 million and $5.6 million, respectively, of gains resulting from observable price changes of our long-term strategic investments, which was included within “Other income, net” in the consolidated statement of income. During the year ended December 31, 2019, we recognized a net loss of $2.6 million resulting from the partial impairment of one of our strategic investments partially offset by a gain on sale of a separate strategic investment, which is included within "Other income, net" in the consolidated statement of income. Certain of our investments in other entities may be seeking additional financing in the next twelve months or potential exit strategies. We will continue to review and monitor our investments in other entities for any indications of an increase in fair value or impairment. Lease Assets During 2020, we recognized a $1.1 million impairment, comprised of $0.8 million of Property, Plant, and Equipment, and $0.3 million of Operating lease right-of-use asset related to the abandonment of one of our leased properties, which was included within “Operating Expense” in the consolidated statement of income. Patents During 2021, we recognized a $13.2 million impairment, resulting from our restructuring activities as described in Note 20, "Restructuring Activities", which was included within “Restructuring activities” expenses in the consolidated statement of income. The Patents held for sale are recorded at fair value on December 31, 2021 and are included within "Prepaid and other current assets" in the consolidated balance sheet. Also during 2021, we renewed our multi-year, worldwide, non-exclusive patent license agreement with Sony. A portion of the future consideration for the agreement was in the form of patents. We have yet to record these patents on our balance sheet as of December 31, 2021 as they have not yet been transferred. However, we have determined the estimated fair value of the patents for determining the transaction price for revenue recognition purposes, which was estimated to be $30.1 million utilizing the income and market approach. The value will be amortized as a non-cash expense over the patents' estimated useful lives once transferred. During 2020, we entered into a patent license agreement with Huawei and a portion of the future consideration for the agreement was in the form of patents. We have determined the estimated fair value of the patents for determining the transaction price for revenue recognition purposes, which was estimated to be $19.3 million utilizing the market approach. The value is amortized as a non-cash expense over the patents' estimated useful lives. During 2019 we entered into patent license agreements with ZTE for which a portion of the consideration was patents. The estimated fair value of the ZTE patents was $14.0 million which are being amortized as a non-cash expense over their estimated useful lives. We estimated the fair value of the patents in the ZTE transaction utilizing the market approach. As noted above, we estimated the fair value of the patents in these transactions using one of, or a combination of, an analysis of comparable market transactions (the market approach), a discounted cash flow analysis (the income approach) and/or by quantifying the amount of money required to replace the future service capability of the assets (the cost approach). For the market approach, judgment was applied as to which market transactions were most comparable to the transaction. For the income approach, the inputs and assumptions used to develop these estimates were based on a market participant perspective and included estimates of projected royalties, discount rates, economic lives and income tax rates, among others. For the cost approach, we utilized the historical cost of assets of similar technologies to determine the estimated replacement cost, including research, development, testing and patent application fees.
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Property and Equipment |
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PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment, net is comprised of the following (in thousands):
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Patents, Goodwill and Other Intangibles Assets |
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PATENTS, GOODWILL AND OTHER INTANGIBLE ASSETS | PATENTS, GOODWILL AND OTHER INTANGIBLE ASSETS Patents As of December 31, 2021 and 2020, patents consisted of the following (in thousands, except for useful life data):
Amortization expense related to capitalized patent costs was $71.5 million, $74.9 million and $72.3 million in 2021, 2020 and 2019, respectively. These amounts are recorded within the "Patent administration and licensing" line of our consolidated statements of income. The estimated aggregate amortization expense for the next five years related to our patents balance as of December 31, 2021 is as follows (in thousands):
Goodwill The following table shows the change in the carrying amount of our goodwill balance from December 31, 2019 to December 31, 2021, all of which is allocated to our one reportable segment (in thousands):
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Obligations |
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OBLIGATIONS: [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OBLIGATIONS | OBLIGATIONS Long-term debt obligations, excluding the long-term debt resulting from the Technicolor Patent Acquisition, are comprised of the following (in thousands):
_____________ a. Due to the adoption of ASU 2020-06 on January 1, 2021, the unamortized interest discount was reclassified back to the carrying value of the 2024 Notes. Refer to Note 2, "Summary of Significant Accounting Policies and New Accounting Guidance", for further information regarding this adoption. There were no finance leases as of December 31, 2021 or December 31, 2020. Maturities of principal of the long-term debt obligations of the Company as of December 31, 2021, excluding the long-term debt resulting from the Technicolor Patent Acquisition, are as follows (in thousands):
2024 Senior Convertible Notes, and Related Note Hedge and Warrant Transactions On June 3, 2019 we issued $400.0 million in aggregate principal amount of 2.00% Senior Convertible Notes due 2024 (the "2024 Notes"). The net proceeds from the issuance of the 2024 Notes, after deducting the initial purchasers' transaction fees and offering expenses, were approximately $391.6 million. The 2024 Notes bear interest at a rate of 2.00% per year, payable in cash on June 1 and December 1 of each year, commencing on December 1, 2019, and mature on June 1, 2024, unless earlier converted or repurchased. The 2024 Notes were initially convertible into cash, shares of our common stock or a combination thereof, at our election, at an initial conversion rate of 12.3018 shares of common stock per $1,000 principal amount of 2024 Notes (which is equivalent to an initial conversion price of approximately $81.29 per share), as adjusted pursuant to the terms of the indenture governing the 2024 Notes (the "Indenture"). The conversion rate of the 2024 Notes, and thus the conversion price, may be adjusted in certain circumstances, including in connection with a conversion of the 2024 Notes made following certain fundamental changes and under other circumstances set forth in the Indenture. As of December 31, 2020, we made the irrevocable election to settle all conversions of the 2024 Notes through combination settlements of cash and shares of common stock, with a specified dollar amount of $1,000 per $1,000 principal amount of 2024 Notes and any remaining amounts in shares of common stock. Prior to 5:00 p.m., New York City time, on the business day immediately preceding March 1, 2024, the 2024 Notes will be convertible only under certain circumstances as set forth in the Indenture, including on any date during any calendar quarter (and only during such calendar quarter) beginning after September 30, 2019 if the closing sale price of the common stock was more than 130% of the applicable conversion price (approximately $105.68 based on the current conversion price of the 2024 Notes) on each applicable trading day for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter. Commencing on March 1, 2024, the 2024 Notes will be convertible at any time prior to 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding the maturity date of the 2024 Notes. The Company may not redeem the 2024 Notes prior to their maturity date. If a fundamental change (as defined in the Indenture) occurs, holders may require the Company to purchase all or a portion of their 2024 Notes for cash at a repurchase price equal to 100% of the principal amount of the 2024 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The 2024 Notes are our senior unsecured obligations and rank equally in right of payment with any of our current and any future senior unsecured indebtedness. The 2024 Notes are effectively subordinated to all of our future secured indebtedness to the extent of the value of the related collateral, and the 2024 Notes are structurally subordinated to indebtedness and other liabilities, including trade payables, of our subsidiaries. On May 29 and May 31, 2019, in connection with the offering of the 2024 Notes, we entered into convertible note hedge transactions (collectively, the “2024 Note Hedge Transactions”) that cover, subject to customary anti-dilution adjustments, approximately 4.9 million shares of common stock, in the aggregate, at a strike price that initially corresponds to the initial conversion price of the 2024 Notes, subject to adjustment, and are exercisable upon any conversion of the 2024 Notes. The aggregate cost of the 2024 Note Hedge Transactions was $72.0 million. On May 29 and May 31, 2019, we also entered into privately negotiated warrant transactions (collectively, the “2024 Warrant Transactions” and, together with the 2024 Note Hedge Transactions, the “2024 Call Spread Transactions”), whereby we sold warrants to acquire, subject to customary anti-dilution adjustments, approximately 4.9 million shares of common stock at an initial strike price of $109.43 per share, subject to adjustment. As consideration for the 2024 Warrant Transactions, we received aggregate proceeds of $47.6 million. The net cost of the 2024 Call Spread Transactions was $24.4 million. The net proceeds from the issuance of the 2024 Notes, after deducting fees and offering expenses, were used for the following: (i) $232.7 million was used to repurchase $221.1 million in aggregate principal amount of the 2020 Notes (as defined below) in privately negotiated transactions concurrently with the offering of the 2024 Notes, (ii) $19.6 million was used to repurchase shares of common stock at $62.53 per share, the closing price of the stock on May 29, 2019; and (iii) $24.4 million, in addition to the proceeds from the 2024 Warrant Transactions discussed above, was used to fund the cost of the 2024 Call Spread Transactions. Accounting Treatment of the 2024 Notes and Related Convertible Note Hedge and Warrant Transactions The 2024 Call Spread Transactions were classified as equity. The Company bifurcated the proceeds from the offering of the 2024 Notes between liability and equity components. On the date of issuance, the liability and equity components were calculated to be approximately $328.0 million and $72.0 million, respectively. The initial $328.0 million liability component was determined based on the fair value of similar debt instruments excluding the conversion feature. The initial $72.0 million ($56.9 million net of tax) equity component represents the difference between the fair value of the initial $328.0 million in debt and the $400.0 million gross proceeds. The related initial debt discount of $72.0 million was being amortized over the life of the 2024 Notes using the effective interest method. An effective interest rate of 6.25% was used to calculate the debt discount on the 2024 Notes. Upon the adoption of ASU 2020-06 on January 1, 2021, we reclassified the unamortized debt discount from equity to Long-term debt. Refer to Note 2, "Summary of Significant Accounting Policies and New Accounting Guidance" for further information regarding this adoption. In connection with the above-noted transactions, the Company incurred approximately $8.4 million of directly related costs. The initial purchasers' transaction fees and related offering expenses were allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt and equity issuance costs, respectively. We allocated $6.4 million of debt issuance costs to the liability component, which were capitalized as deferred financing costs. These costs are being amortized as interest expense over the term of the debt using the effective interest method. The remaining $1.9 million of costs ($1.7 million net of tax) allocated to the equity component were recorded as a reduction of equity. 2020 Senior Convertible Notes, and Related Note Hedge and Warrant Transactions During second quarter 2019, the Company used $232.7 million from the offering of the 2024 Notes to repurchase $221.1 million in aggregate principal amount of the 1.50% Senior Convertible Notes due 2020 (the "2020 Notes") in privately negotiated transactions concurrently with the offering of the 2024 Notes. As a result of the partial repurchase of the 2020 Notes, $94.9 million in aggregate principal amount of the 2020 Notes remained outstanding as of December 31, 2019. On March 1, 2020, the maturity date of the 2020 Notes, the Company repaid in full the remaining $94.9 million of outstanding principal. We recognized a $5.5 million loss on extinguishment of debt during the year ended December 31, 2019 in connection with this repurchase, which was included within "Other income, net" in the consolidated statement of income for the period. The loss on extinguishment represents the difference between the calculated fair value of the debt immediately prior to its derecognition and the carrying amount of the debt component, including any unamortized debt discount and issuance costs. The remaining consideration paid for the partial repurchase of the 2020 Notes was allocated to the reacquisition of the equity component, which equaled $13.0 million ($10.6 million net of tax) and was recorded as a reduction of equity during the year ended December 31, 2019. The remaining unamortized debt discount and issuance costs of $3.3 million was amortized throughout the remaining life of the 2020 Notes, up to maturity on March 1, 2020. The following table presents the amount of interest cost recognized for the years ended December 31, 2021, 2020 and 2019 related to the contractual interest coupon, accretion of the debt discount and the amortization of financing costs (in thousands):
_____________ a. Due to the adoption of ASU 2020-06 on January 1, 2021, the unamortized interest discount was reclassified back to the carrying value of the 2024 Notes. Refer to Note 2, "Summary of Significant Accounting Policies and New Accounting Guidance", for further information regarding this adoption. Madison Arrangement In conjunction with the Technicolor Patent Acquisition, we assumed Technicolor’s rights and obligations under the Madison Arrangement, which commenced in 2015. The Madison Arrangement falls under the scope of ASC 808, Collaborative Arrangements. Under the Madison Arrangement, Technicolor and Sony combined portions of their respective digital TV (“DTV”) and computer display monitor (“CDM”) patent portfolios and created a combined licensing opportunity to DTV and CDM manufacturers. Per an Agency and Management Services Agreement (“AMSA”) entered into upon the creation of the Madison Arrangement, Technicolor was initially appointed as sole licensing agent of the arrangement, and InterDigital has now assumed that role. As licensing agent, we are responsible for making decisions regarding the prosecution and maintenance of the combined patent portfolio and the licensing and enforcement of the combined patent portfolio in the field of use of DTVs and CDMs on an exclusive basis during the term of the AMSA in exchange for an agent fee. We were deemed to be the principal in this collaborative arrangement under ASC 808, and, as such, in accordance with ASC 606-10-55-36, Revenue From Contracts with Customers - Principal Agent Considerations, we record revenues generated on sales to third parties and costs incurred on a gross basis in the consolidated statements of income. Therefore, we recognize all royalties from customers as revenue and payments to Sony for its royalty share as operating expenses within the consolidated statements of income. Cost reimbursements for expenses incurred resulting from fulfilling the duties of the licensing agent are recorded as contra expenses. During the years ended December 31, 2021, 2020, and 2019, gross revenues recorded related to the Madison Arrangement were $26.1 million, $5.5 million, and $13.5 million, respectively, and are reflected within "Patent licensing royalties" in the consolidated statement of income. Net operating expenses related to the Madison Arrangement during the years ended December 31, 2021, 2020, and 2019 were $18.9 million, $8.4 million and $12.0 million, including $11.9 million, $2.5 million, and $6.3 million related to revenue sharing, respectively, and are reflected primarily within "Patent administration and licensing" expenses in the consolidated statement of income. Long-term debt An affiliate of CPPIB Credit Investments Inc. ("CPPIB Credit"), a wholly owned subsidiary of Canada Pension Plan Investment Board, is a third-party investor in the Madison Arrangement. CPPIB Credit has made certain payments to Technicolor and Sony and has agreed to contribute cash to fund certain capital reserve obligations under the arrangement in exchange for a percentage of future revenues, specifically through September 11, 2030 in regard to the Technicolor patents. Upon our assumption of Technicolor’s rights and obligations under the Madison Arrangement, our relationship with CPPIB Credit met the criteria in ASC 470-10-25, Sales of Future Revenues or Various Other Measures of Income (“ASC 470”), which relates to cash received from an investor in exchange for a specified percentage or amount of revenue or other measure of income of a particular product line, business segment, trademark, patent, or contractual right for a defined period. Under this guidance, we recognized the fair value of our contingent obligation to CPPIB Credit, as of the acquisition date, as long-term debt in our consolidated balance sheet. This initial fair value measurement was based on the perspective of a market participant and includes significant unobservable inputs which are classified as Level 3 inputs within the fair value hierarchy. The fair value of the long-term debt as of December 31, 2021 is disclosed within Note 6, "Concentration of Credit Risk and Fair Value of Financial Assets and Financial Liabilities". Our repayment obligations are contingent upon future royalty revenues generated from the Madison Arrangement and there are no minimum or maximum payments under the arrangement. Under ASC 470, amounts recorded as debt shall be amortized under the interest method. At each reporting period, we will review the discounted expected future cash flows over the life of the obligation. The Company made an accounting policy election to utilize the catch-up method when there is a change in the estimated future cash flows, whereby we will adjust the carrying amount of the debt to the present value of the revised estimated future cash flows, discounted at the original effective interest rate, with a corresponding adjustment recognized as interest expense within “Interest expense” in the consolidated statements of income. The effective interest rate as of the acquisition date was approximately 14.5%. This rate represents the discount rate that equates the estimated future cash flows with the fair value of the debt as of the acquisition date, and is used to compute the amount of interest to be recognized each period based on the estimated life of the future revenue streams. During the years ended December 31, 2021, 2020 and 2019, we recognized $2.9 million, $3.1 million, and $2.7 million, respectively, of interest expense related to this debt which is included within “Interest expense” in the consolidated statements of income. Any future payments made to CPPIB Credit, or additional proceeds received from CPPIB Credit, will decrease or increase the long-term debt balance accordingly. Restricted cash Under the Madison Arrangement, the parties reserve cash in bank accounts to fund our activities to manage the portfolios. These accounts are custodial accounts for which the funds are restricted for this purpose. As of December 31, 2021 and 2020, the Company had $5.9 million and $3.1 million, respectively, of restricted cash included within the consolidated balance sheet attributable to the Madison Arrangement. Refer to Note 5, "Cash, Cash Equivalents, Restricted Cash and Marketable Securities", for a reconciliation of cash, cash equivalents and restricted cash within the consolidated balance sheets. Technicolor Contingent Consideration As part of the Technicolor Acquisitions, we entered into a revenue-sharing arrangement with Technicolor that created a contingent consideration liability, which is accounted for under ASC 450 - Contingencies under the asset acquisition framework when the liability is deemed probable and estimable. Under the revenue-sharing arrangement, Technicolor receives 42.5% of future cash receipts from new licensing efforts from the Madison Arrangement only, subject to certain conditions and hurdles. As of December 31, 2021 and 2020, the contingent consideration liability from the revenue-sharing arrangement was deemed not probable and is therefore not reflected within the consolidated financial statements.
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Commitments |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS | COMMITMENTS Minimum future payments for accounts payable and other purchase commitments, excluding long-term operating leases for office space, as of December 31, 2021 were as follows (in thousands):
Refer to Note 9, "Obligations," for details of the Company's long-term debt obligations and the revenue-sharing arrangement with Technicolor resulting from the Technicolor Patent Acquisition and the R&I Acquisition. Refer to Note 16, "Leases," for maturities of the Company's operating lease liabilities as of December 31, 2021. Defined Benefit Plans In connection with the Technicolor Patent Acquisition and the R&I Acquisition, we assumed certain defined benefit plans which are accounted for in accordance with ASC 715 - Compensation - Retirement Benefits. These plans include a retirement lump sum indemnity plan and jubilee plan, both of which provide benefit payments to employees based upon years of service and compensation levels. As part of the Company's announced restructuring plan, as discussed below in Note 20, "Restructuring Activities", the number of employees under the Company's plan was significantly reduced. The Company revalued the projected benefit obligation and recognized a $2.3 million gain on curtailment during 2021, which was included within "Other income, net" in the consolidated statement of income. As of December 31, 2021 and 2020, the combined accumulated projected benefit obligation related to these plans totaled $4.8 million and $7.6 million, respectively. Service cost and interest cost for the combined plans totaled $0.4 million, $0.6 million and $0.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. The weighted average discount rate and assumed salary increase rate for these plans were 0.7% and 3.0%, respectively. These plans are not required to be funded and were not funded as of December 31, 2021. Expected future benefit payments under these plans as of December 31, 2021 were as follows (in thousands):
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Litigation and Legal Proceedings |
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Dec. 31, 2021 | |
Litigation Settlement [Abstract] | |
LITIGATION AND LEGAL PROCEEDINGS | LITIGATION AND LEGAL PROCEEDINGS COURT PROCEEDINGS Lenovo UK Proceeding On August 27, 2019, the Company and certain of its subsidiaries filed a claim in the UK High Court against Lenovo Group Limited and certain of its subsidiaries. The claim, as amended, alleges infringement of five of the Company's patents relating to 3G and/or 4G/LTE standards: European Patent (U.K.) Nos. 2,363,008; 2,421,318; 2,485,558; 2,557,714; and 3,355,537. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. The UK High Court held case management conferences on October 6, 2020 and December 16, 2020, a disclosure hearing on January 19, 2021 and pre-trial review hearings for the first trial on January 28, 2021 and February 8, 2021. At those hearings, the UK High Court entered a schedule for the technical and non-technical FRAND proceedings. Two technical trials were scheduled for March 2021 and June 2021, and the non-technical FRAND trial was scheduled for January 2022. There are three additional technical trials scheduled for the remaining patents following the FRAND trial. The first and second technical trials were completed, and on July 29, 2021, the UK High Court issued its decision regarding the first technical trial finding European Patent (UK) No. 2,485,558 valid, infringed, and essential to Release 8 of LTE. On January 6, 2022, the UK High Court issued its decision regarding the second technical trial finding European Patent (UK) No. 3,355,537 invalid. The Company plans on appealing the second technical trial decision. The FRAND trial commenced on January 11, 2022 concluded on February 11, 2022. District of Delaware Patent Proceeding On August 28, 2019, the Company and certain of its subsidiaries filed a complaint in the United States District Court for the District of Delaware (the "Delaware District Court") against Lenovo Holding Company, Inc. and certain of its subsidiaries alleging that Lenovo infringes eight of InterDigital's U.S. patents—U.S. Patent Nos. 8,085,665; 8,199,726; 8,427,954; 8,619,747; 8,675,612; 8,797,873; 9,203,580; and 9,456,449—by making, using, offering for sale, and/or selling Lenovo wireless devices with 3G and/or 4G LTE capabilities. As relief, InterDigital is seeking: (a) a declaration that InterDigital is not in breach of its relevant FRAND commitments with respect to Lenovo; (b) to the extent Lenovo does not agree to negotiate a worldwide patent license, does not agree to enter into binding international arbitration to set the terms of a FRAND license, and does not agree to be bound by the FRAND terms to be set by the UK High Court in the separately filed UK proceedings described above, an injunction prohibiting Lenovo from continued infringement; (c) damages, including enhanced damages for willful infringement and supplemental damages; and (d) attorneys’ fees and costs. On September 16, 2020, the Delaware District Court entered a schedule for the case, setting a patent jury trial. On March 8, 2021, the Delaware District Court held a claim construction hearing, and the court issued its order on May 10, 2021 construing various disputed terms. On March 24, 2021, the Delaware District Court consolidated the antitrust proceeding discussed below with this patent proceeding. Trial for the consolidated proceedings is scheduled for March 6, 2023. District of Delaware Antitrust Proceeding On April 9, 2020, Lenovo (United States) Inc. and Motorola Mobility LLC filed a complaint in the Delaware District Court against the Company and certain of its subsidiaries. The complaint alleges that the Company defendants have violated Sections 1 and 2 of the Sherman Act in connection with, among other things, their licensing of 3G and 4G standards essential patents ("SEPs"). The complaint further alleges that the Company defendants have violated their commitment to the ETSI with respect to the licensing of 3G and 4G SEPs on FRAND terms and conditions. The complaint seeks, among other things (i) rulings that the Company defendants have violated Sections 1 and 2 of the Sherman Act and are liable for breach of their ETSI FRAND commitments, (ii) a judgment that the plaintiffs are entitled to a license with respect to the Company's 3G and 4G SEPs on FRAND terms and conditions, and (iii) injunctions against any demand for allegedly excessive royalties or enforcement of the Company defendants' 3G and 4G U.S. SEPs against the plaintiffs or their customers via patent infringement proceedings. On June 22, 2020, the Company filed a motion to dismiss Lenovo's Sherman Act claims with prejudice, and to dismiss Lenovo's breach of contract claim with leave to re-file as a counterclaim in the Company's legal proceeding against Lenovo in the Delaware District Court discussed above. Oral argument on the Company's motion to dismiss was held on October 27, 2020. On March 24, 2021, the Delaware District Court ruled on the Company’s motion to dismiss. The Delaware District Court dismissed the Sherman Act Section 1 claim without prejudice, denied the motion to dismiss the Sherman Act Section 2 claim, and consolidated the Section 2 and breach of contract claims with Company’s Delaware patent proceeding discussed above. China Proceedings On April 10, 2020, Lenovo (Beijing) Ltd. and certain of its affiliates filed a complaint against the Company and certain of its subsidiaries in the Beijing Intellectual Property Court (Beijing IP Court) seeking a determination of the FRAND royalty rates payable for the Company's Chinese 3G, 4G and 5G SEPs. On February 20, 2021, the Company filed an application challenging the jurisdiction of the Beijing IP Court to take up Lenovo’s complaint. On November 15, 2021, the Beijing IP Court denied the jurisdictional challenge, and the Company filed an appeal with the Supreme People’s Court of the People’s Republic of China (SPC) on December 14, 2021. The appeal remains pending. On November 26, 2021, the Company was informed that Lenovo had purportedly filed an additional complaint against the Company in the Wuhan Intermediate People’s Court seeking a determination of a global FRAND royalty rate for the period from 2024 to 2029 for the Company’s 3G, 4G, and 5G SEPs. The Company has not yet been served with this complaint. Oppo, OnePlus and realme UK Proceeding On December 20, 2021, the Company filed a patent infringement claim in the UK High Court against Guangdong Oppo Mobile Telecommunications Corp., Ltd. (“Oppo”) and certain of its affiliates, OnePlus Technology (Shenzhen) Co., Ltd. (“OnePlus”) and certain of its affiliates, and realme Mobile Telecommunications (Shenzhen) Co., Ltd. (“realme”) and certain of its affiliates, alleging infringement of European Patent (UK) Nos. 2,127,420; 2,421,318; 2,485,558; and 3,355,537 relating to cellular 3G, 4G/LTE or 5G standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. India Proceeding On December 20, 2021 and December 22, 2021, the Company and certain of its subsidiaries filed patent infringement claims in the Delhi High Court in New Delhi, India against Oppo and certain of its affiliates, OnePlus and certain of its affiliates, and realme Mobile Telecommunication (India) Private Limited, alleging infringement of Indian Patent Nos. 262910, 295912, 313036, 320182, 319673, 242248, 299448, and 308108 relating to cellular 3G, 4G/LTE, and/or 5G, and HEVC standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. Germany Proceeding On December 20, 2021, a subsidiary of the Company filed three patent infringement claims, two in the Munich District Court and one in the Mannheim District Court, against Oppo and certain of its affiliates, OnePlus and certain of its affiliates, and realme and certain of its affiliates, alleging infringement of European Patent (DE) Nos. 2,485,558; 2,127,420; and 2,421,318 relating to cellular 3G, 4G/LTE and/or 5G standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. The first hearing is scheduled for November 17, 2022, before the Munich District Court. China Proceeding On January 19, 2022, the Company was informed that Oppo had purportedly filed a complaint against the Company in the Guangzhou Intellectual Property Court seeking a determination of a global FRAND royalty rate for the Company’s 3G, 4G, 5G, 802.11 and HEVC SEPs. The Company has not yet been served with this complaint. OTHER We are party to certain other disputes and legal actions in the ordinary course of business, including arbitrations and legal proceedings with licensees regarding the terms of their agreements and the negotiation thereof. We do not currently believe that these matters, even if adversely adjudicated or settled, would have a material adverse effect on our financial condition, results of operations or cash flows. None of the preceding matters have met the requirements for accrual or disclosure of a potential range as of December 31, 2021.
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Compensation Plans and Programs |
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COMPENSATION PLANS AND PROGRAMS | COMPENSATION PLANS AND PROGRAMS Compensation Programs We use a variety of compensation programs to attract, retain and motivate our employees, and to more closely align employee compensation with company performance. These programs include, but are not limited to, short-term incentive awards tied to performance goals, cash awards to inventors for filed patent applications and patent issuances, and long-term incentives in the form of stock option awards, time-based RSU awards, performance-based RSU awards and cash awards. Our long-term incentives typically include annual time-based RSU grants or cash awards with a three-year vesting period, as well as annual performance-based RSU grants or cash awards with a to five-year performance period; as a result, in any one year, we are typically accounting for at least active cycles. Additionally, from time to time, executive officers are awarded long term incentives or new hire grants that may include time-based RSUs, performance-based RSUs or options. We issue new shares of our common stock to satisfy our obligations under the share-based components of these programs. However, our Board of Directors has the right to authorize the issuance of treasury shares to satisfy such obligations in the future. Equity Incentive Plans On June 14, 2017, our shareholders adopted and approved the 2017 Equity Incentive Plan (the "2017 Plan"), under which officers, employees, non-employee directors and consultants can receive share-based awards such as RSUs, restricted stock and stock options as well as other stock or cash awards. The plan was amended in order to reserve an additional 1.8 million shares of our common stock for issuance under the 2017 Plan. Such amendment was adopted and approved by our shareholders on June 2, 2021. From June 2009 through June 14, 2017, we granted equity awards pursuant to our 2009 Stock Incentive Plan (the “2009 Plan," and, together with the 2017 Plan, the "Equity Plans"), which was adopted and approved by our shareholders on June 4, 2009, and the material terms of which were re-approved on June 12, 2014. Upon the adoption of the 2017 Plan, the 2009 Plan was terminated and all shares remaining available for grant under the 2009 Plan were canceled. The number of shares available for issuance under the 2017 Plan, as amended, is equal to 4.2 million shares plus any shares subject to awards granted under the 2009 Plan that, on or after June 14, 2017, expire or otherwise terminate without having been exercised in full, or that are forfeited to or repurchased by us. RSUs and Restricted Stock We may issue RSUs to officers, employees, non-employee directors and consultants. Any cancellations of unvested RSUs granted under the Equity Plans will increase the number of shares remaining available for grant under the 2017 Plan. Time-based RSUs vest over periods generally ranging from 1 to 3 years from the date of the grant. Performance-based RSUs generally have a vesting period between 3 and 5 years. Milestone performance-based RSUs may vest at any time, upon achievement of the milestone goal, during the performance period, which is typically 5 years. As of December 31, 2021, we had unrecognized compensation cost related to share-based awards of $16.4 million, at current performance accrual rates. For time-based grants with graded vesting, we expect to amortize the associated unrecognized compensation cost using an accelerated method. For time-based grants that cliff vest, we expect to amortize the associated unrecognized compensation cost as of December 31, 2021, on a straight-line basis generally over the remaining vesting period. Vesting of performance-based RSU awards is subject to attainment of specific goals established by the Compensation Committee of the Board of Directors. Depending upon performance achievement against these goals, the number of shares that vest can be anywhere from 0 to 3 times the target number of shares. Information with respect to current RSU activity is summarized as follows (in thousands, except per share amounts):
* These numbers include fewer than 0.1 million RSUs credited on unvested RSU awards as dividend equivalents. Dividend equivalents accrue with respect to unvested RSUs when and as cash dividends are paid on the Company's common stock, and vest if and when the underlying RSUs vest. Granted amounts include performance-based RSU awards at their maximum potential payout. During 2021, 2020 and 2019, we granted approximately 0.5 million, 0.4 million and 0.3 million RSUs under the Equity Plans, respectively, with weighted-average per share grant date fair values of $68.44, $46.18 and $66.19, respectively, assuming target payout for the performance-based awards. The total vest date fair value of the RSUs that vested in 2021, 2020 and 2019 was $22.6 million, $6.7 million and $12.7 million, respectively. The weighted average per share grant date fair value of the awards that vested in 2021, 2020 and 2019 was $62.44, $65.06 and $58.84, respectively. Other Equity Grants We grant equity awards to non-management Board members and may grant equity awards certain consultants. Stock Options The 2009 Plan allowed, and the 2017 Plan allows, for the granting of incentive and non-qualified stock options, as well as other securities. The administrator of the Equity Plans, the Compensation Committee of the Board of Directors, determines the number of options to be granted, subject to certain limitations set forth in the 2017 Plan. Since 2013, both incentive and non-qualified stock options have been granted annually as part of our long-term incentive programs, which have generally vested over three years. During the year ended December 31, 2018, performance-based options were granted for the first time. The number of performance-based options which vest, if at all, is anywhere from 0 to 3 times the target number of options subject to the attainment of performance goals measured either during or at the end of the performance period. Performance-based options typically have a vesting period between and five years. Milestone performance options may vest at any time, upon achievement of the milestone goal, during the performance period, which is typically 5 years. Under the terms of the Equity Plans, the exercise price per share of each option, other than in the event of options granted in connection with a merger or other acquisition, cannot be less than 100% of the fair market value of a share of common stock on the date of grant. Options granted under the Equity Plans are generally exercisable for a period of between 7 to 10 years from the date of grant and may vest on the grant date, another specified date, over a period of time and/or dependent upon the attainment of specified performance goals. We also have approximately 0.1 million options outstanding under a prior stock plan that do not expire. The fair value for option awards is computed using the Black-Scholes pricing model, whose inputs and assumptions are determined as of the date of grant and which require considerable judgment. Expected volatility was based upon a combination of implied and historic volatilities. The weighted-average grant date fair value per option award granted during the years ended December 31, 2021, 2020 and 2019 was $23.04, $11.46, and $13.68, respectively, based upon the assumptions included in the table below:
Information with respect to current year stock option activity is summarized as follows (in thousands, except per share amounts):
* Granted amounts include performance-based option awards at their maximum potential payout. The weighted average remaining contractual life of our outstanding options was 11.0 years as of December 31, 2021. Options with an indefinite contractual life, which were granted between 1983 and 1986 under a prior stock plan, were assigned an original life in excess of 50 years for purposes of calculating the weighted average remaining contractual life. The majority of these options have an exercise price between $9.00 and $11.63. The total intrinsic value of our outstanding options as of December 31, 2021 was $7.7 million. Of the 0.6 million outstanding options as of December 31, 2021, 0.3 million were exercisable with a weighted-average exercise price of $47.43. Options exercisable as of December 31, 2021, had total intrinsic value of $7.7 million and a weighted average remaining contractual life of 12.4 years. The total intrinsic value of stock options exercised during the years ended December 31, 2021, 2020 and 2019 was $3.6 million, $1.1 million and $0.1 million, respectively. In 2021, we recorded cash received from the exercise of options of $8.0 million. Upon option exercise, we issued new shares of stock. As of December 31, 2021, we had unrecognized compensation cost on our unvested stock options of $1.3 million, at current performance accrual rates. As of December 31, 2021 and 2020, we had approximately 0.1 million and 0.5 million options outstanding, respectively, that had exercise prices less than the fair market value of our stock at the respective balance sheet date. These options would have generated cash proceeds to the Company of $3.5 million and $16.9 million, respectively, if they had been fully exercised on those dates. Defined Contribution Plans We have a 401(k) plan (“Savings Plan”) wherein employees can elect to defer compensation within federal limits. We match a portion of employee contributions. Our 401(k) contribution expense was approximately $1.3 million, $1.1 million and $1.1 million for 2021, 2020 and 2019, respectively. Additionally, the company contributed $3.4 million, $0.2 million and $0.2 million in 2021, 2020 and 2019, respectively, to other defined contribution plans. Under InterDigital’s Deferred Compensation Plan (“Deferred Plan”), eligible US employees may make tax-deferred contributions that cannot be made under the 401(k) Plan due to Internal Revenue Service limitations. We match 50% of a participant’s contributions up to 6% of the participants excess compensation pay. From time to time InterDigital makes discretionary company contributions to the Deferred Plan on behalf of a participant. The company contributed $3.0 million to the Deferred Plan in 2021.
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Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TAXES | TAXES Our income tax provision (benefit) consists of the following components for 2021, 2020 and 2019 (in thousands):
The deferred tax assets and liabilities were comprised of the following components at December 31, 2021 and 2020 (in thousands):
The following is a reconciliation of income taxes at the federal statutory rate with income taxes recorded by the Company for the years ended December 31, 2021, 2020 and 2019:
(a) In 2020, a net discrete benefit of $20.9 million was recorded that primarily relates to the expected amendment of prior year returns to utilize a tax asset generated in the current year. In 2021, when the returns were filed, there was an additional benefit recorded. (b) In 2019, we determined that we would not be able to utilize our state deferred tax assets for our parent company in Delaware and Pennsylvania, therefore we put a full valuation allowance on these assets. Valuation Allowances and Net Operating Losses We establish a valuation allowance for any portion of our deferred tax assets for which management believes it is more likely than not that we will be unable to utilize the assets to offset future taxes. Given the binary nature of our business, at this time we believe it is more likely than not that the majority of our state net operating losses and net operating losses in certain subsidiaries in France, as well as our non-wholly owned subsidiaries in the United States and United Kingdom will not be utilized; therefore we have maintained a near full valuation allowance against our state, French and United Kingdom net operating losses as of December 31, 2021. All other deferred tax assets are fully benefited. Uncertain Income Tax Positions As of December 31, 2021, 2020 and 2019, we had $15.7 million, $3.8 million and $4.5 million, respectively, of unrecognized tax benefits that, if recognized, would impact the Company's effective tax rate. The total amount of unrecognized tax benefits could change within the next twelve months for a number of reasons including audit settlements, tax examination activities and the recognition and measurement considerations under this guidance. During 2021, after finalizing our amended return position we increased the reserve established in 2020 by $12.8 million. We also reversed reserves of $1.1 million previously established on 2017 research and development and manufacturing deduction credits as a result of the lapsing of stature of limitations for that tax year. During 2020, we established reserves of $1.1 million related to uncertainty arising from our ability to generate the full benefit of the amended returns that utilize the current year tax asset. We also reversed reserves of $1.8 million previously established on 2016 research and development and manufacturing deduction credits as a result of the lapsing of the statute of limitations for that tax year. During 2019, we established a reserve of $0.3 million related to an additional deduction related to the issuance cost of convertible debt that is recorded through equity. The following is a roll forward of our total gross unrecognized tax benefits, which if reversed would impact the effective tax rate, for the fiscal years 2021 through 2019 (in thousands):
Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company and its subsidiaries are subject to United States federal income tax, foreign income and withholding taxes and income taxes from multiple state jurisdictions. Our federal income tax returns for 2006 to the present, with the exception of 2011 and 2012, are currently open and will not close until the respective statutes of limitations have expired. The statutes of limitations generally expire three years following the filing of the return or in some cases three years following the utilization or expiration of net operating loss carry forwards. The statute of limitations applicable to our open federal returns will expire at the end of 2022. Excluding the Korea Competent Authority Proceeding and the Finland Competent Authority Proceeding described in the section below, specific tax treaty procedures remain open for certain jurisdictions for 2014 to the present. Many of our subsidiaries have filed state income tax returns on a separate company basis. To the extent these subsidiaries have unexpired net operating losses, their related state income tax returns remain open. These returns have been open for varying periods, some exceeding ten years. The total amount of state net operating losses is $1.6 billion. Foreign Taxes We pay foreign source withholding taxes on patent license royalties when applicable. We apply foreign source withholding tax payments against our United States federal income tax obligations to the extent we have foreign source income to support these credits. In 2021, 2020 and 2019, we paid $21.7 million, $25.9 million and $18.8 million in foreign source withholding taxes, respectively, and applied these payments as credits against our United States federal tax obligation. Between 2014 and 2021, we paid approximately $134.6 million in foreign taxes to foreign governments that have tax treaties with the U.S., for which we have claimed foreign tax credits against our U.S. tax obligations, and for which the tax treaty procedures are still open. It is possible that as a result of tax treaty procedures, the U.S. government may reach an agreement with the related foreign governments that will result in a partial refund of foreign taxes paid with a related reduction in our foreign tax credits. Due to foreign currency fluctuations, any such agreement could result in foreign currency gain or loss. On November 8, 2019, the Company received notification that its request for competent authority pertaining to Article 25 (Mutual Agreement Procedure) of the United States-Republic of Finland Income Tax Convention had been reviewed by the IRS and an agreement has been reached (the “Finland Competent Authority Proceeding”). As a result of this agreement, the Company does not anticipate any tax consequences.
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Net Income Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER SHARE | NET INCOME PER SHARE Basic Earnings Per Share ("EPS") is calculated by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if options or other securities with features that could result in the issuance of common stock were exercised or converted to common stock. The following table reconciles the numerator and the denominator of the basic and diluted net income per share computation (in thousands, except for per share data):
Certain shares of common stock issuable upon the exercise or conversion of certain securities have been excluded from our computation of earnings per share because the strike price or conversion rate, as applicable, of such securities was greater than the average market price of our common stock for the years ended December 31, 2021, 2020 and 2019, as applicable, and, as a result, the effect of such exercise or conversion would have been anti-dilutive. Set forth below are the securities and the weighted average number of shares of common stock underlying such securities that were excluded from our computation of earnings per share for the periods presented (in thousands):
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Equity Transactions |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY TRANSACTIONS | EQUITY TRANSACTIONS Repurchase of Common Stock In June 2014, our Board of Directors authorized a $300 million share repurchase program (the “2014 Repurchase Program”). Subsequently our Board of Directors authorized four $100 million increases to the program, respectively, bringing the total amount of the 2014 Repurchase Program to $700 million. The Company may repurchase shares under the 2014 Repurchase Program through open market purchases, pre-arranged trading plans or privately negotiated purchases. The table below sets forth the total number of shares repurchased and the dollar value of shares repurchased under the 2014 Repurchase Program (in thousands). As of December 31, 2021, there was approximately $41.5 million remaining under the share repurchase authorization.
Dividends Cash dividends on outstanding common stock declared in 2021 and 2020 were as follows (in thousands, except per share data):
In September 2017, we announced that our Board of Directors had approved an increase in the Company’s quarterly cash dividend to $0.35 per share. We currently expect to continue to pay dividends comparable to our quarterly $0.35 per share cash dividend in the future; however, continued payment of cash dividends and changes in the Company's dividend policy will depend on the Company's earnings, financial condition, capital resources and capital requirements, alternative uses of capital, restrictions imposed by any existing debt, economic conditions and other factors considered relevant by our Board of Directors.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASESThe Company enters into operating leases primarily for real estate to support research and development ("R&D") sites and general office space in North America, with additional locations in Europe and Asia. The Company does not currently have any finance leases. Certain of our leases include options to extend the lease at our discretion at the end of the lease term, or terminate the lease early subject to certain conditions and penalties. We do not include any renewal options in our lease terms for calculating our lease liabilities, as the renewal options allow us to maintain operational flexibility and we are not reasonably certain we will exercise these options. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the specific facts and circumstances present. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable, and, as such, the Company utilizes its incremental borrowing rate as the discount rate based on information available on the lease commencement date. Our incremental borrowing rate represents the rate we would incur to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. The table below includes the balances of operating lease right-of-use assets and operating lease liabilities as of December 31, 2021 and 2020 (in thousands):
The components of lease costs which were included within operating expenses in our consolidated statement of income were as follows (in thousands):
For the years ended December 31, 2021 and 2020, sublease income was insignificant. Cash paid for amounts included in the measurement of operating lease liabilities for the year ended December 31, 2021 and 2020 was $4.0 million and $4.9 million, respectively, and was included in net cash provided by operating activities in our consolidated statement of cash flows. As of December 31, 2021, the weighted average remaining operating lease term was 6.2 years and the weighted average discount rate used to determine the operating lease liabilities was 5.4%. As of December 31, 2021, there have been no leases entered into that have not yet commenced. The maturities of our operating lease liabilities as of December 31, 2021, excluding short-term leases with terms less than 12 months, were as follows (in thousands):
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Other Income, Net |
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OTHER INCOME, NET | OTHER INCOME, NET The amounts included in "Other income, net" in the consolidated statements of income for the year ended December 31, 2021, 2020 and 2019 were as follows (in thousands):
The decrease in interest and investment income during 2021 and 2020 was primarily due to reduced rates of return on our short-term investments. Refer to Note 9, "Obligations," for further information on the $5.5 million loss on extinguishment of long-term debt recognized during the year ended December 31, 2019. Gain on asset acquisition and sale of business On May 31, 2019, we completed the acquisition of the Research & Innovation unit of Technicolor SA ("Technicolor"), which we refer to as the R&I Acquisition. The R&I Acquisition unit met the definition of an asset acquisition and was accounted for using the cost accumulation and allocation model. The R&I Acquisition resulted in a net gain of approximately $14.2 million, inclusive of the $20.5 million gain from the derecognition of a contingent consideration liability, all of which is included within “Other income, net” in the consolidated statement of income for the year ended December 31, 2019. On July 19, 2019, we completed the sale of Hillcrest's product business to a subsidiary of CEVA, Inc. In connection with the sale, we received proceeds of $10.0 million and we retained substantially all of the Hillcrest patent assets that we acquired in 2016. As a result of this transaction, we recorded an $8.5 million gain on sale which is included within "Other income, net" in the consolidated statements of income for the year ended December 31, 2019. Other Other included a $3.0 million foreign currency translation loss in 2021, compared to $4.6 million and $4.2 million of gains in 2020 and 2019, respectively, arising from euro translation of our foreign subsidiaries. Additionally, in 2021 we recognized a $1.9 million gain on a contract termination and a $2.3 million gain on the curtailment of our defined benefit plan, as discussed further in Note 10, "Commitments". Lastly, during 2021 and 2020 we recognized $7.6 million and $5.6 million of gains, respectively, and in 2019 a loss of $2.6 million resulting from observable price changes of our long-term strategic investments. All of these items are included in the "Other" caption in the table above.
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Variable Interest Entities |
12 Months Ended |
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Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES As further discussed below, we are the primary beneficiary of three variable interest entities. As of December 31, 2021, the combined book values of the assets and liabilities associated with these variable interest entities included in our consolidated balance sheet were $27.1 million and $2.5 million, respectively. Assets included $5.1 million of cash and cash equivalents, $4.0 million of accounts receivable and prepaid assets, and $18.0 million of patents, net. As of December 31, 2020, the combined book values of the assets and liabilities associated with these variable interest entities included in our consolidated balance sheet were $62.0 million and $5.8 million, respectively. Assets included $24.5 million of cash and cash equivalents, $2.3 million of accounts receivable, and $35.2 million of patents, net. Chordant On January 31, 2019, we launched the Company’s Chordant™ business as a standalone company. Chordant is a variable interest entity and we have determined that we are the primary beneficiary for accounting purposes and consolidate Chordant. For the years ended December 31, 2021, 2020 and 2019, we have allocated approximately $2.3 million, $1.1 million, and $1.5 million, respectively, of Chordant's net loss to noncontrolling interests held by other parties. During second quarter 2021, Chordant began the process of ceasing operations. Convida Wireless Convida Wireless was launched in 2013 and most recently renewed in 2021 to combine Sony's consumer electronics expertise with our pioneering IoT expertise to drive IoT communications and connectivity. Based on the terms of the agreement, the parties will contribute funding and resources for additional research and platform development, which we will perform. Convida Wireless is a variable interest entity. Based on our provision of research and platform development services to Convida Wireless, we have determined that we remain the primary beneficiary for accounting purposes and will continue to consolidate Convida Wireless. For the years ended December 31, 2021, 2020 and 2019, we have allocated approximately $10.8 million, $5.7 million and $4.5 million, respectively, of Convida Wireless' net loss to noncontrolling interests held by other parties. During 2021, we recognized a $13.2 million impairment on the patents within the Convida portfolio, resulting from our restructuring activities as described in Note 20, "Restructuring Activities", which is included within “Restructuring activities” expenses in the consolidated statement of income. The patents held for sale are recorded at fair value on December 31, 2021 and are included within "Prepaid and other current assets" in the consolidated balance sheet. Signal Trust for Wireless Innovation During 2013, we announced the establishment of the Signal Trust for Wireless Innovation (the “Trust”), the goal of which was to monetize a patent portfolio primarily related to 3G and LTE cellular infrastructure. During fourth quarter 2021, the Trust was fully dissolved and all remaining assets were transferred to us as majority beneficiary. The Trust was accounted for as a variable interest entity. Based on the terms of the trust agreement, we determined that we were the primary beneficiary for accounting purposes and included the Trust in our consolidated financial statements up to the date of dissolution. We recorded a $2.4 million charge within the "Patent administration and licensing" line of our consolidated statements of income in 2020 associated with the wind down of the Trust.
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Other Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS | OTHER ASSETS The amounts included in "Prepaid and other current assets" in the consolidated balance sheet as of December 31, 2021 and 2020 were as follows (in thousands):
The amounts included in "Other non-current assets, net" in the consolidated balance sheet as of December 31, 2021 and 2020 were as follows (in thousands):
____________________________ (a)As discussed in Note 1, we revised our prior period presentation of "Prepaid and other current assets" and "Other non-current assets, net". This column represents the effect of the revision on the consolidated balance sheet.
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Restructuring Activities |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING ACTIVITIES | RESTRUCTURING ACTIVITIES During second quarter 2021, the Company began the process of a strategic review and undertook certain actions in order to increase focus on core technologies and markets. On June 10, 2021, the Company announced that, as a result of a strategic review of its research and innovation priorities, it commenced the process of a collective economic layoff in which it proposed a reduction in force of 66 positions in its research and innovation unit, 60 of whom are based in France. The Company launched an information-consultation process with respect to the contemplated reorganization with the works council of certain of its French subsidiaries, as required by French law. On September 28, 2021, the Company finalized an agreement with the representative trade unions of certain of its French subsidiaries to commence the reorganization of the research and innovation unit located in France as part of the reduction in force. This agreement was validated by the Regional Director of Economy, Employment, Labor and Solidarity on October 25, 2021. The majority of termination notices were issued in fourth quarter 2021. This action resulted in a reduction of employees under the benefit plans, and as a result the Company recognized a $2.3 million curtailment gain during 2021. This curtailment gain was included within "Other income, net" in the consolidated statement of income. During June 2021, Chordant began the process of ceasing operations. The Company implemented a reduction in workforce action in second quarter 2021, consisting of 18 employees. Additionally, in June 2021, a non-controlled subsidiary that we consolidate for financial statement purposes approved a plan to sell certain patents. The proceeds from the sale of these patents will contribute to funding Convida's operations. These assets were evaluated as a separate asset group and reclassified as assets held for sale. Upon the reclassification, the patents to be sold are recorded at fair value, which resulted in the Company recognizing a $13.2 million impairment in 2021. We determined the fair value based upon evaluation of market conditions. The patents held for sale are included within "Prepaid and other current assets" in the consolidated balance sheet. In October 2021, we expanded our restructuring efforts to include general and administrative functions largely centered in the U.S., which will result in a further reduction in force of approximately 8% of total headcount as well as cuts to our non-labor expenses. These employees were provided notification of termination during fourth quarter 2021. Restructuring charges are estimated based on information available at the time such charges are recorded. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts incurred for such activities may differ from amounts initially estimated. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the reduction in force or other restructuring activities. The restructuring charges associated with the above activities totaling $27.9 million in 2021 are presented net of any reimbursement arrangements and include $1.7 million of outside services and other associated costs related to non-recurring consultant and legal fees. We expect additional charges to be recorded in 2022. As of December 31, 2021, the Company's restructuring liability was $18.3 million, of which $12.5 million was included in "Other accrued expenses" and $5.8 million was included in "Other long-term liabilities" on our condensed consolidated balance sheet. The following table presents the change in our restructuring liability during the period (in thousands):
The restructuring expenses included in "Restructuring activities" in the consolidated statements of income for the year December 31, 2021 were as follows (in thousands):
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Summary of Significant Accounting Policies and New Accounting Guidance (Policies) |
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Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include all of our accounts and all entities in which we have a controlling interest and/or are required to be consolidated in accordance with the Generally Accepted Accounting Principles in the United States (“GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation. In determining whether we are the primary beneficiary of a variable interest entity and therefore required to consolidate, we apply a qualitative approach that determines whether we have both the power to direct the economically significant activities of the entity and the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. These considerations impact the way we account for our existing collaborative relationships and other arrangements. We continuously assess whether we are the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in us consolidating or deconsolidating our partner(s) to collaborations and other arrangements.
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Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. If different assumptions were made or different conditions had existed, our financial results could have been materially different. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation.
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Foreign Currency Transaction | Foreign Currency Translation The functional currency of substantially all of the Company's wholly-owned subsidiaries is the U.S. dollar. Certain subsidiaries have monetary assets and liabilities that are denominated in a currency that is different than the functional currency. The gains and losses resulting from this remeasurement and translation of monetary assets denominated in a currency that is different than the functional currency are reflected in the determination of net income.
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Cash, Cash Equivalents, Restricted Cash and Marketable Securities | Cash, Cash Equivalents, Restricted Cash and Marketable Securities We classify all highly liquid investment securities with original maturities of three months or less at date of purchase as cash equivalents. Cash that is held for a specific purpose and therefore not available to the Company for immediate or general business use is classified as restricted cash. Our investments are comprised of mutual and exchange traded funds, commercial paper, United States and municipal government obligations and corporate securities. Management determines the appropriate classification of our investments at the time of acquisition and re-evaluates such determination at each balance sheet date. As of December 31, 2021 and 2020, the majority of our marketable securities have been classified as available-for-sale and are carried at fair value, with unrealized gains and losses reported net-of-tax as a separate component of shareholders’ equity. Substantially all of our investments are investment grade government and corporate debt securities that have maturities of less than two years, and we have both the ability and intent to hold the investments until maturity.
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Other-than-Temporary Impairments and Impairment of Long-Lived Assets | Other-than-Temporary Impairments We review our investment portfolio during each reporting period to determine whether there are identified events or circumstances that would indicate there is a decline in the fair value that is considered to be other-than-temporary. For non-public investments, if there are no identified events or circumstances that would have a significant adverse effect on the fair value of the investment, then the fair value is not estimated. If an investment is deemed to have experienced an other-than-temporary decline below its cost basis, we reduce the carrying amount of the investment to its quoted or estimated fair value, as applicable, and establish a new cost basis for the investment. We charge the impairment to the "Other income, net" line of our consolidated statements of income. Impairment of Long-Lived AssetsWe evaluate long-lived assets for impairment when factors indicate that the carrying value of an asset may not be recoverable. When factors indicate that such assets should be evaluated for possible impairment, we review whether we will be able to realize our long-lived assets by analyzing the projected undiscounted cash flows in measuring whether the asset is recoverable. In 2021, a non-controlled subsidiary that we consolidate for financial statement purposes approved a plan to sell certain patents, which resulted in the Company recognizing a $13.2 million impairment, as discussed further in Note 20, "Restructuring Activities". In 2020, we recognized a $1.1 million impairment, comprised of $0.8 million of Property, Plant, and Equipment, and $0.3 million of Operating lease right-of-use asset related to the abandonment of one of our leased properties, which was included within “Operating Expense” in the consolidated statement of income. We did not have any long-lived asset impairments in 2019
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Patents | Intangible Assets Patents We capitalize external costs, such as filing fees and associated attorney fees, incurred to obtain issued patents and patent license rights. We expense costs associated with maintaining and defending patents subsequent to their issuance in the period incurred. We amortize capitalized patent costs for internally generated patents on a straight-line basis over 10 years, which represents the estimated useful lives of the patents. The ten-year estimated useful life for internally generated patents is based on our assessment of such factors as: the integrated nature of the portfolios being licensed, the overall makeup of the portfolio over time, and the length of license agreements for such patents. The estimated useful lives of acquired patents and patent rights, however, have been and will continue to be based on a separate analysis related to each acquisition and may differ from the estimated useful lives of internally generated patents. The average estimated useful life of acquired patents is 9.7 years. We assess the potential impairment to all capitalized net patent costs when events or changes in circumstances indicate that the carrying amount of our patent portfolio may not be recoverable.
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Goodwill and Other Intangible Assets | Goodwill Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and identified intangible assets acquired under a business combination. We review impairment of goodwill annually on the first day of the fourth quarter. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether a quantitative goodwill impairment test is necessary. If we conclude it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, we need not perform the quantitative assessment. If based on the qualitative assessment we believe it is more likely than not that the fair value of a reporting unit is less than its carrying value, a quantitative assessment test is required to be performed. This assessment requires us to compare the fair value of each reporting unit to its carrying value including allocated goodwill. We determine the fair value of our reporting units generally using a combination of the income and market approaches. The income approach is estimated through the discounted cash flow method based on assumptions about future conditions such as future revenue growth rates, new product and technology introductions, gross margins, operating expenses, discount rates, future economic and market conditions, and other assumptions. The market approach estimates the fair value of our equity by utilizing the market comparable method which is based on revenue multiples from comparable companies in similar lines of business. If the carrying value of a reporting unit exceeds the reporting unit’s fair value, a goodwill impairment charge will be recorded for the difference up to the carrying value of goodwill. The carrying value of goodwill was $22.4 million as of December 31, 2021 and December 31, 2020, which was included within "Other non-current assets, net" in the consolidated balance sheets. No impairments were recorded during 2021, 2020 or 2019 as a result of our annual goodwill impairment assessment. Other Intangible Assets We capitalize the cost of technology solutions and platforms we acquire or license from third parties when they have a future benefit and the development of these solutions and platforms is substantially complete at the time they are acquired or licensed. Intangible assets consist of acquired patents, existing technology, and trade names. Refer to the above Patents section for more information on acquired patents and existing technology. We make judgments about the recoverability of purchased finite-lived intangible assets whenever facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, we assess recoverability by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, we would accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life.
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Property and Equipment | Property and Equipment Property and equipment are stated at cost, less depreciation, amortization and impairments. Depreciation and amortization of property and equipment are provided using the straight-line method. The estimated useful lives for computer equipment, computer software, engineering and test equipment and furniture and fixtures are generally to five years. Leasehold improvements are amortized over the lesser of their estimated useful lives or their respective lease terms, which are generally to ten years. Buildings are being depreciated over twenty-five years. Expenditures for major improvements and betterments are capitalized, while minor repairs and maintenance are charged to expense as incurred. Upon the retirement or disposition of property, plant and equipment, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded.
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Leases | LeasesWe determine if an arrangement is a lease at inception. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date, except short-term leases with an original term of 12 months or less, based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use an incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease right-of-use assets also includes any lease payments made and excludes lease incentives. Lease expense is recognized over the expected term on a straight-line basis. Leases with a lease term of 12 months or less are accounted for using the practical expedient which allows for straight-line rent expense over the remaining term of the lease. |
Internal-Use Software Costs | Internal-Use Software Costs We capitalize costs associated with software developed for internal use that are incurred during the software development stage. Such costs are limited to expenses incurred after management authorizes and commits to a computer software project, believes that it is more likely than not that the project will be completed, the software will be used to perform the intended function with an estimated service life of two years or more, and the completion of conceptual formulation, design and testing of possible software project alternatives (the preliminary design stage). Costs incurred after final acceptance testing has been successfully completed are expensed. Capitalized computer software costs are amortized over their estimated useful life of three years. All computer software costs capitalized to date relate to the purchase, development and implementation of engineering, accounting and other enterprise software.
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Revenue Recognition | Revenue Recognition We derive the vast majority of our revenue from patent licensing. The timing and amount of revenue recognized from each licensee depend upon a variety of factors, including the specific terms of each agreement and the nature of the deliverables and obligations. Such agreements are often complex and include multiple performance obligations. These agreements can include, without limitation, performance obligations related to the settlement of past patent infringement liabilities, patent and/or know-how licensing royalties on covered products sold by licensees, access to a portfolio of technology as it exists at a point in time, and access to a portfolio of technology at a point in time along with promises to provide any technology updates to the portfolio during the term. In accordance with US GAAP, we use a five-step model to achieve the core underlying principle that an entity should recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. These steps include (1) identifying the contract with the customer, (2) identifying the performance obligations, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue as the entity satisfies the performance obligation(s). Additionally, we have elected to utilize certain practical expedients in the application of ASC 606. In evaluating the presence of a significant financing component in our agreements, we utilize the practical expedient to exclude any contracts wherein the gap between payment by our customers and the delivery of our performance obligation is less than one year. We have also elected to utilize the practical expedient related to costs of obtaining a contract where an entity may recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Timing of revenue recognition may differ significantly from the timing of invoicing to customers. Contract assets are included in accounts receivable and represent unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed, and right to payment is subject to the underlying contractual terms. Contract assets are classified as long-term assets if the payments are expected to be received more than one year from the reporting date. Contract assets due within less than twelve months of the balance sheet date are included within accounts receivable in our consolidated balance sheets. Contract assets due more than twelve months after the balance sheet date are included within other non-current assets. Patent License Agreements Upon signing a patent license agreement, we provide the licensee permission to use our patented inventions in specific applications. We account for patent license agreements in accordance with the guidance indicated above. Certain patent license agreements contain revenue from non-financial sources in the form of patents received from the customer. Under our patent license agreements, we typically receive one or a combination of the following forms of payment as consideration for permitting our licensees to use our patented inventions in their applications and products: Consideration for Past Patent Royalties Consideration related to a licensee’s product sales from prior periods may result from a negotiated agreement with a licensee that utilized our patented inventions prior to signing a patent license agreement with us or from the resolution of a disagreement or arbitration with a licensee over the specific terms of an existing license agreement. We may also receive consideration for past patent royalties in connection with the settlement of patent litigation where there was no prior patent license agreement. In each of these cases, we record the consideration as revenue as prescribed by the five-step model. Fixed-Fee Agreements Fixed-fee license agreements include fixed, non-refundable royalty payments that fulfill the licensee’s obligations to us under a patent license agreement for a specified time period or for the term of the agreement for specified products, under certain patents or patent claims, for sales in certain countries, or a combination thereof - in each case for a specified time period (including for the life of the patents licensed under the agreement). Dynamic fixed-fee license agreements contain a single performance obligation that represents ongoing access to a portfolio of technology over the license term, since our promise to transfer to the licensee access to the portfolio as it exists at inception of the license, along with promises to provide any technology updates to the portfolio during the term, are not separately identifiable. Upon entering a new agreement, we allocate the transaction price to the performance obligations delivered at signing (e.g. our existing patent portfolio) and future performance obligations (e.g. the technology updates). We use a time-based input method of progress to determine the timing of revenue recognition, and as such we recognize the future deliverables on a straight-line basis over the term of the agreement. We utilize the straight-line method as we believe that it best depicts efforts expended to develop and transfer updates to the customer evenly throughout the term of the agreement. Static fixed-fee license agreements are fixed-price contracts that generally do not include updates to technology we create after the inception of the license agreement or in which the customer does not stand to substantively benefit from those updates during the term. Although we have few static fixed-fee license agreements, we generally satisfy our performance obligations under such agreements at contract signing, and as such revenue is recognized at that time. Variable Agreements Upon entering a new variable patent license agreement, the licensee typically agrees to pay royalties or license fees on licensed products sold during the term of the agreement. We utilize the sales- or usage- based royalty exception for these agreements and recognize revenues during the contract term when the underlying sale or usage occurs. Our licensees under variable agreements provide us with quarterly royalty reports that summarize their sales of covered products and their related royalty obligations to us. We typically receive these royalty reports subsequent to the period in which our licensees’ underlying sales occurred. As a result, we are required to estimate revenues, subject to the constraint on our ability to estimate such amounts and will record a true-up when we receive the actual royalty report from the licensee. Estimating licensees’ quarterly royalties prior to receiving the royalty reports requires us to make assumptions and judgments related to forecasted trends and growth rates used to estimate our licensees’ sales, which could have an impact on the amount of revenue we report on a quarterly basis. Technology Solutions Technology solutions revenue consists primarily of revenue from royalty payments, software licenses, and engineering services. The nature of these contracts and timing of payments vary. We recognize revenue from royalty payments and license agreements using the same methods described above under our policy for recognizing revenue from patent license agreements. We recognize revenue from engineering services using percentage of completion method. Patent Sales Our business strategy of monetizing our intellectual property includes the sale of select patent assets. As patent sales executed under this strategy represent a component of our ongoing major or central operations and activities, we will record the related proceeds as revenue. We will recognize the revenue in accordance with the five-step model, generally upon closing of the patent sale transaction.
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Accounts Receivable | Accounts ReceivableAccounts receivable is presented net of allowance for doubtful accounts. Our accounts receivable consists mainly of trade receivables derived from fixed-fee license arrangements with contractual payment terms. The remaining material amounts of our accounts receivable are from variable patent license agreements, which primarily are paid on a quarterly basis. The provision for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of the financial asset, based on historical experience, current conditions and reasonable forecasts of future economic conditions. Further, we evaluate the collectability of our accounts receivable and if there is doubt that we will collect the full amount, we will record a reserve specific to that customer’s receivable balance. |
Investments in Other Entities | Investments in Other Entities We may make strategic investments in companies that have developed or are developing technologies that are complementary to our business. We made an accounting policy election for a measurement alternative for our equity investments that do not have readily determinable fair values, specifically related to our strategic investments in other entities. Under the alternative, our strategic investments in other entities without readily determinable fair values are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer, if any. On a quarterly basis, we monitor items such as our investment’s financial position and liquidity, performance targets, business plans, and cost trends to assess whether there are any triggering events or indicators present that would be indicative of an impairment, or any other observable price changes as indicated above. We do not adjust our investment balance when the investee reports profit or loss. Additionally, other investments may be accounted for under the equity method of accounting. Under this method, we initially record our investment in the stock of an investee at cost, and adjust the carrying amount of the investment to recognize our share of the earnings or losses of the investee after the date of acquisition. The amount of the adjustment is included in the determination of net income, and such amount reflects adjustments similar to those made in preparing consolidated statements including adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between our cost and underlying equity in net assets of the investee at the date of investment. The investment is also adjusted to reflect our share of changes in the investee’s capital. Dividends received from an investee reduce the carrying amount of the investment. When there are a series of operating losses by the investee or when other factors indicate that a decrease in value of the investment has occurred which is other than temporary, we recognize an impairment equal to the difference between the fair value and the carrying amount of our investment. The carrying value of our investments in other entities is included within "Other non-current assets, net" on our consolidated balance sheets.
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Collaborative Arrangements | Collaborative Arrangements We record the elements of our collaboration agreements that represent joint operating activities in accordance with ASC 808, Collaborative Arrangements (“ASC 808”). Accordingly, the elements of our collaboration agreements that represent activities in which both parties are active participants, and to which both parties are exposed to the significant risks and rewards that are dependent on the commercial success of the activities, are recorded as collaborative arrangements. Generally, the classification of a transaction under a collaborative arrangement is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants. For transactions that are deemed to be a collaborative arrangement under ASC 808, costs incurred and revenues generated on sales to third parties will be reported in our consolidated statement of operations on a gross basis if the Company is deemed to be the principal in the transaction, or on a net basis if the Company is instead deemed to be the agent in the transaction, consistent with the guidance in ASC 606-10-55-36, Revenue From Contracts with Customers - Principal Agent Considerations.
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Deferred Charges | Deferred Charges Direct costs of obtaining a contract or fulfilling a contract in a transaction that results in the deferral of revenue may be either expensed as incurred or capitalized, depending on certain criteria. In conjunction with our adoption of ASC 606 effective January 1, 2018, we made a policy election to utilize the practical expedient related to costs of obtaining a contract where an entity may recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. If the amortization period is greater than one year, we capitalize direct costs incurred for the acquisition or fulfillment of a contract through the date of signing if they are directly related to a particular revenue arrangement and are expected to be recovered. The costs are amortized on a straight-line basis over the life of the patent license agreement. For example, from time to time, we use sales agents to assist us in our licensing and/or patent sale activities. In such cases, we may pay a commission. The commission rate varies from agreement to agreement. Commissions are normally paid shortly after our receipt of cash payments associated with the patent license or patent sale agreements. We defer recognition of commission expense and amortize these expenses in proportion to our recognition of the related revenue. Commission expense is included within the "Patent administration and licensing" line of our consolidated statements of income and was immaterial for the years presented. There were no new direct contract costs incurred during 2021, 2020 or 2019. Incremental direct costs incurred related to a debt financing transaction may be capitalized. In connection with our offering of the 2024 Notes and 2020 Notes, defined and discussed in detail within Note 9, "Obligations", we incurred directly related costs. The initial purchasers' transaction fees and related offering expenses were allocated to the liability and equity components of the debt in proportion to the allocation of proceeds and accounted for as debt issuance costs. The debt issuance costs allocated to the liability component of the debt were capitalized as deferred financing costs and recorded as a direct reduction of the debt. These costs are being amortized over the term of the debt using the effective interest method and are included within the "Interest expense" line of our consolidated statements of income. The costs allocated to the equity component of the debt were recorded as a reduction of the equity component of the debt.
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Research and Development | Research and DevelopmentResearch and development expenditures are expensed in the period incurred, except certain software development costs that are capitalized between the point in time that technological feasibility of the software is established and when the product is available for general release to customers. We did not have any capitalized software costs related to research and development in any period presented. |
Compensation Programs | Compensation Programs We use a variety of compensation programs to attract, retain and motivate our employees, and to align employee compensation more closely with company performance. These programs include, but are not limited to, short-term incentives tied to performance goals, cash awards to inventors for filed patent applications and patent issuances, and long-term incentives in the form of stock option awards, time-based restricted stock unit (“RSU”) awards, performance-based RSU awards and cash awards, noting equity awards are granted pursuant to the terms and conditions of our Equity Plans (as defined in Note 12, "Compensation Plans and Programs"). Our long-term incentives, including equity awards, typically include annual equity and cash award grants with to year vesting periods; as a result, in any one year, we are typically accounting for at least active cycles. We account for compensation costs associated with share-based compensation based on the fair value of the instruments issued. The estimated value of stock options includes assumptions around expected life, stock volatility and dividends. The expected life of our stock option awards is based on the simplified method as prescribed by Staff Accounting Bulletin Topic 14. In all periods, our policy has been to set the value of RSUs awards equal to the value of our underlying common stock on the date of measurement. For grants with graded vesting, we amortize the associated unrecognized compensation cost using an accelerated method. For grants that cliff vest, we amortize the associated unrecognized compensation cost on a straight-line basis over their vesting term. In the event of canceled awards, we adjust compensation expense recognized to date as they occur. Tax windfalls and shortfalls related to the tax effects of employee share-based compensation are included in our tax provision. On the consolidated statements of cash flows, tax windfalls and shortfalls related to employee share-based compensation awards are included within operating activities and cash paid to tax authorities for shares withheld are included within financing activities. The inclusion of windfalls and shortfalls in the tax provision could increase our earnings volatility between periods. Tax windfalls related to share-based compensation for the years ended 2021, 2020 and 2019 were $0.8 million, $0.2 million and $0.2 million, respectively.
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Restructuring | Restructuring Restructuring activities include, but are not limited to, costs associated with termination benefits such as severance costs and retention bonuses, contract termination costs, and other costs associated with an exit or disposal activity. The termination benefits included within restructuring activities are recognized in accordance with either ASC 420, Exit or Disposal Cost Obligations ("ASC 420") or ASC 712, Compensation – Nonretirement Postemployment Benefits ("ASC 712"), as applicable. Liabilities are recognized in accordance with ASC 420 when management commits to a plan of termination, the employees to be terminated are identified, the terms of the benefit arrangement are established, it was determined that either changes to the plan or withdrawal are unlikely, and the arrangements were communicated to employees. Liabilities that fall under ASC 712 are recognized when the liability was determined to be probable of being paid and reasonably estimable. The current liabilities are recorded within "Other accrued expenses" and long-term liabilities are included in "Other long-term liabilities" in the consolidated balance sheets. The restructuring expenses are included in "Restructuring activities" in the consolidated statements of income.
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Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statement of income in the period in which the change was enacted. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if management has determined that it is more likely than not that such assets will not be realized. In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. We are subject to examinations by the U.S. IRS and other taxing jurisdictions on various tax matters, including challenges to various positions we assert in our filings. In the event that the IRS or another taxing jurisdiction levies an assessment in the future, it is possible the assessment could have a material adverse effect on our consolidated financial condition or results of operations. The financial statement recognition of the benefit for an uncertain tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable tax authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50 percent likely of being realized upon ultimate settlement. In the event that the IRS or another taxing jurisdiction levies an assessment in the future, it is possible the assessment could have a material adverse effect on our consolidated financial condition or results of operations.
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New Accounting Guidance | New Accounting Guidance Accounting Standards Update: Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2019-12"). The amendments in this ASU are intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 with early adoption allowed. We adopted this guidance as of January 1, 2021, and the adoption did not have a material impact on our consolidated financial statements. Accounting Standards Update: Simplifying the Accounting for Convertible Instruments In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The amendments in this ASU are intended to simplify accounting for convertible debt instruments and convertible preferred stock by removing certain accounting models which separate the embedded conversion features from the host contract. ASU 2020-06 also amends certain guidance in ASC 260 on the computation of earnings per share for convertible instruments and contracts on an entity’s own equity. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and early adoption was permitted for fiscal years beginning after December 15, 2020. The ASU permits the use of either the modified retrospective or fully retrospective methods of transition. We elected to early adopt this standard on a modified retrospective approach as of January 1, 2021, which resulted in a $10.4 million, $50.2 million and $15.6 million increase to net deferred tax assets, long-term debt and retained earnings, respectively, and a $55.4 million decrease to additional paid-in capital. This $50.2 million increase to long-term debt, net was comprised of $51.6 million of unamortized interest discount partially offset by a net increase of $1.4 million in unamortized debt issuance costs following the reversal of the initially established equity component of deferred financing costs. This was due to the standard no longer requiring bifurcation of the embedded conversion feature from the host contract on the 2024 Notes, as defined in Note 9, "Obligations". This adoption also reduced non-cash interest expense starting in 2021 due to the removal of the accretion of the debt discount on the 2024 Notes. In addition, the adoption requires the use of the if-converted method of calculating diluted earnings per share rather than the treasury stock method for convertible instruments and requires the inclusion of the potential effect of shares settled in cash or shares in the diluted earnings per share calculation. Due to the reduction in non-cash interest expense, this adoption increased basic and diluted earnings per share by $0.35 and $0.34, respectively, in the year ended December 31, 2021. During fourth quarter 2021, we determined that in our early adoption of this accounting standard, we incorrectly accounted for the adoption by increasing debt and decreasing retained earnings by $50.2 million, which resulted in a $10.4 million understatement of deferred taxes, $65.8 million understatement of retained earnings and $55.4 million overstatement of additional paid-in capital. We have concluded that this error did not result in our previously issued 2021 interim financial statements being materially misstated. We will, however, correct the error by prospectively revising our previously issued financial statements as of and for the periods ended March 31, 2021, June 30, 2021 and September 30, 2021 in connection with our 2022 quarterly filings on Form 10-Q. The accompanying annual financial statements reflect the correct accounting for the adoption of this standard. Accounting Standards Update: Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options In May 2021, the FASB issued ASU No. 2021-04. The amendments in this ASU are intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options, including warrants, that remain equity classified after modification or exchange. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021, with early adoption allowed. We have determined that the adoption will not have a material impact on our consolidated financial statements.
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Fair Value Measurements | Fair Value Measurements We use various valuation techniques and assumptions when measuring the fair value of our assets and liabilities. We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. This guidance established a hierarchy that prioritizes fair value measurements based on the types of input used for the various valuation techniques (market approach, income approach and cost approach). The levels of the hierarchy are described below: Level 1 Inputs — Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 2 Inputs — Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets with insufficient volume or infrequent transactions (less active markets) or model-driven valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data, including market interest rate curves, referenced credit spreads and pre-payment rates. Level 3 Inputs — Level 3 includes financial instruments for which fair value is derived from valuation techniques including pricing models and discounted cash flow models in which one or more significant inputs are unobservable, including the company’s own assumptions. The pricing models incorporate transaction details such as contractual terms, maturity and, in certain instances, timing and amount of future cash flows, as well as assumptions related to liquidity and credit valuation adjustments of marketplace participants. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy. We use quoted market prices for similar assets to estimate the fair value of our Level 2 investments.
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Net Income Per Share | Basic Earnings Per Share ("EPS") is calculated by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if options or other securities with features that could result in the issuance of common stock were exercised or converted to common stock. |
Background and Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Cash Flow Information | The following table presents additional supplemental cash flow information for the year ended December 31, 2021, 2020 and 2019 (in thousands):
_____________ a. Effective January 1, 2019, we adopted ASU 2016-02, "Leases (Topic 842)", which outlines a comprehensive change to the lease accounting model.
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | The following table presents the disaggregation of our revenue for the year ended December 31, 2021, 2020 and 2019 (in thousands):
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 includes past patent royalties and royalties from static agreements, as well as patent sales.
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Schedule of Contracted Revenue | Based on contracts signed and committed Dynamic Fixed-Fee Agreement payments as of December 31, 2021, we expect to recognize the following amounts of revenue over the term of such contracts (in thousands):
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Geographic / Customer Concentration (Tables) |
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GEOGRAPHIC CUSTOMER CONCENTRATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The table below lists the countries of the headquarters of our licensees and customers and the total revenue derived from each country or region for the periods indicated (in thousands):
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Schedule of Revenue by Major Customers by Reporting Segments | During 2021, 2020 and 2019, the following licensees or customers accounted for 10% or more of total revenues:
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Cash, Cash Equivalents, Restricted Cash and Marketable Securities (Tables) |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash, Cash Equivalents and Restricted Cash | Cash, cash equivalents and restricted cash as of December 31, 2021 and 2020 consisted of the following (in thousands):
The following table provides a reconciliation of total cash, cash equivalents and restricted cash as of December 31, 2021 and 2020 within the consolidated balance sheets (in thousands):
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Restrictions on Cash and Cash Equivalents | Cash, cash equivalents and restricted cash as of December 31, 2021 and 2020 consisted of the following (in thousands):
The following table provides a reconciliation of total cash, cash equivalents and restricted cash as of December 31, 2021 and 2020 within the consolidated balance sheets (in thousands):
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Schedule of Marketable Securities | Marketable securities as of December 31, 2021 and 2020 consisted of the following (in thousands):
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Concentration of Credit Risk and Fair Value of Financial Assets and Financial Liabilities (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Assets and Liabilities at Fair Value on Recurring Basis | Our financial assets and liabilities that are accounted for at fair value on a recurring basis are presented in the tables below as of December 31, 2021 and December 31, 2020 (in thousands):
_______________ (a)Included within cash and cash equivalents. (b)As of December 31, 2021 and 2020, $7.5 million and $80.1 million of commercial paper was included within cash and cash equivalents, respectively.
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Schedule of Aggregate Fair Value | The principal amount, carrying value and related estimated fair value of the Company's senior convertible debt reported in the consolidated balance sheets as of December 31, 2021 and December 31, 2020 was as follows (in thousands). The aggregate fair value of the principal amount of the senior convertible long-term debt is a Level 2 fair value measurement.
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Property and Equipment (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment, net is comprised of the following (in thousands):
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Patents, Goodwill and Other Intangibles Assets (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | As of December 31, 2021 and 2020, patents consisted of the following (in thousands, except for useful life data):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated aggregate amortization expense for the next five years related to our patents balance as of December 31, 2021 is as follows (in thousands):
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Schedule of Goodwill | The following table shows the change in the carrying amount of our goodwill balance from December 31, 2019 to December 31, 2021, all of which is allocated to our one reportable segment (in thousands):
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Obligations (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OBLIGATIONS: [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Long-term debt obligations, excluding the long-term debt resulting from the Technicolor Patent Acquisition, are comprised of the following (in thousands):
_____________ a. Due to the adoption of ASU 2020-06 on January 1, 2021, the unamortized interest discount was reclassified back to the carrying value of the 2024 Notes. Refer to Note 2, "Summary of Significant Accounting Policies and New Accounting Guidance", for further information regarding this adoption.
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Schedule of Maturities of Long-term Debt | Maturities of principal of the long-term debt obligations of the Company as of December 31, 2021, excluding the long-term debt resulting from the Technicolor Patent Acquisition, are as follows (in thousands):
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Schedule of Interest Cost | The following table presents the amount of interest cost recognized for the years ended December 31, 2021, 2020 and 2019 related to the contractual interest coupon, accretion of the debt discount and the amortization of financing costs (in thousands):
_____________ a. Due to the adoption of ASU 2020-06 on January 1, 2021, the unamortized interest discount was reclassified back to the carrying value of the 2024 Notes. Refer to Note 2, "Summary of Significant Accounting Policies and New Accounting Guidance", for further information regarding this adoption.
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Commitments (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Payments For Accounts Payable and Other Purchase Commitments | Minimum future payments for accounts payable and other purchase commitments, excluding long-term operating leases for office space, as of December 31, 2021 were as follows (in thousands):
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Schedule of Defined Benefit Plans Disclosures | Expected future benefit payments under these plans as of December 31, 2021 were as follows (in thousands):
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Compensation Plans and Programs (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of RSU Award Vesting | Information with respect to current RSU activity is summarized as follows (in thousands, except per share amounts):
* These numbers include fewer than 0.1 million RSUs credited on unvested RSU awards as dividend equivalents. Dividend equivalents accrue with respect to unvested RSUs when and as cash dividends are paid on the Company's common stock, and vest if and when the underlying RSUs vest. Granted amounts include performance-based RSU awards at their maximum potential payout.
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Schedule of Weighted Average Option Assumptions | The weighted-average grant date fair value per option award granted during the years ended December 31, 2021, 2020 and 2019 was $23.04, $11.46, and $13.68, respectively, based upon the assumptions included in the table below:
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Schedule of Stock Option Activity | Information with respect to current year stock option activity is summarized as follows (in thousands, except per share amounts):
* Granted amounts include performance-based option awards at their maximum potential payout.
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Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | Our income tax provision (benefit) consists of the following components for 2021, 2020 and 2019 (in thousands):
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Schedule of Deferred Tax Assets and Liabilities | The deferred tax assets and liabilities were comprised of the following components at December 31, 2021 and 2020 (in thousands):
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Schedule of Effective Income Tax Rate Reconciliation | The following is a reconciliation of income taxes at the federal statutory rate with income taxes recorded by the Company for the years ended December 31, 2021, 2020 and 2019:
(a) In 2020, a net discrete benefit of $20.9 million was recorded that primarily relates to the expected amendment of prior year returns to utilize a tax asset generated in the current year. In 2021, when the returns were filed, there was an additional benefit recorded. (b) In 2019, we determined that we would not be able to utilize our state deferred tax assets for our parent company in Delaware and Pennsylvania, therefore we put a full valuation allowance on these assets.
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Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible | The following is a roll forward of our total gross unrecognized tax benefits, which if reversed would impact the effective tax rate, for the fiscal years 2021 through 2019 (in thousands):
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Net Income Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Numerator and the Denominator of the Basic and Diluted | The following table reconciles the numerator and the denominator of the basic and diluted net income per share computation (in thousands, except for per share data):
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Schedule of Excluded from Computation of EPS | Set forth below are the securities and the weighted average number of shares of common stock underlying such securities that were excluded from our computation of earnings per share for the periods presented (in thousands):
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Equity Transactions (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Shares Repurchased | The table below sets forth the total number of shares repurchased and the dollar value of shares repurchased under the 2014 Repurchase Program (in thousands). As of December 31, 2021, there was approximately $41.5 million remaining under the share repurchase authorization.
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Schedule of Cash Dividends | Cash dividends on outstanding common stock declared in 2021 and 2020 were as follows (in thousands, except per share data):
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Leases (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Lease Right-of-Use Assets and Operating Lease Liabilities | The table below includes the balances of operating lease right-of-use assets and operating lease liabilities as of December 31, 2021 and 2020 (in thousands):
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Schedule of Lease Costs | The components of lease costs which were included within operating expenses in our consolidated statement of income were as follows (in thousands):
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Schedule of Maturities Operating Lease Liabilities | The maturities of our operating lease liabilities as of December 31, 2021, excluding short-term leases with terms less than 12 months, were as follows (in thousands):
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Other Income, Net (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Income Expense, Net | The amounts included in "Other income, net" in the consolidated statements of income for the year ended December 31, 2021, 2020 and 2019 were as follows (in thousands):
|
Other Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prepaid and Other Current Assets | The amounts included in "Prepaid and other current assets" in the consolidated balance sheet as of December 31, 2021 and 2020 were as follows (in thousands):
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Schedule of Other Assets, Noncurrent | The amounts included in "Other non-current assets, net" in the consolidated balance sheet as of December 31, 2021 and 2020 were as follows (in thousands):
____________________________ (a)As discussed in Note 1, we revised our prior period presentation of "Prepaid and other current assets" and "Other non-current assets, net". This column represents the effect of the revision on the consolidated balance sheet.
|
Restructuring Activities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | The following table presents the change in our restructuring liability during the period (in thousands):
The restructuring expenses included in "Restructuring activities" in the consolidated statements of income for the year December 31, 2021 were as follows (in thousands):
|
Background and Basis of Presentation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Reclassification [Line Items] | |||
Tax receivables | $ (57,127) | $ (45,262) | |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Interest paid | 8,000 | 8,712 | $ 7,886 |
Income taxes paid, including foreign withholding taxes | 23,091 | 26,233 | 24,229 |
Non-cash investing and financing activities: | |||
Dividend payable | 10,741 | 10,786 | 10,746 |
Increases in noncontrolling interests | 0 | 0 | 13,750 |
Non-cash acquisition of patents | 0 | 33,300 | 22,500 |
Right-of-use assets obtained in exchange of operating lease liabilities | 739 | 2,524 | 14,427 |
Accrued capitalized patent costs and property and equipment | $ 2,021 | (436) | $ 1,619 |
Other noncurrent assets | Revision of Prior Period, Error Correction, Adjustment | |||
Reclassification [Line Items] | |||
Income tax receivable | 24,300 | ||
Other current assets | Revision of Prior Period, Error Correction, Adjustment | |||
Reclassification [Line Items] | |||
Tax receivables | $ 24,300 |
Summary of Significant Accounting Policies and New Accounting Guidance - Cash, Cash Equivalents, Restricted Cash and Marketable Securities (Details) |
Dec. 31, 2021 |
---|---|
Debt Securities, Available-for-sale [Line Items] | |
Contractual maturities (in years) | 2 years |
Maximum | |
Debt Securities, Available-for-sale [Line Items] | |
Contractual maturities (in years) | 2 years |
Summary of Significant Accounting Policies and New Accounting Guidance - Patents (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Developed Technology Rights | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average estimated useful life (years) | 10 years |
Patents Purchased | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted average estimated useful life (years) | 9 years 8 months 12 days |
Summary of Significant Accounting Policies and New Accounting Guidance - Goodwill and Other Intangible Assets (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Accounting Policies [Abstract] | |||
Goodwill | $ 22,421,000 | $ 22,421,000 | $ 22,421,000 |
Goodwill impairment | $ 0 | $ 0 | $ 0 |
Summary of Significant Accounting Policies and New Accounting Guidance - Property and Equipment (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Building | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 25 years |
Minimum | Machinery and Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 3 years |
Minimum | Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 5 years |
Maximum | Machinery and Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 5 years |
Maximum | Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 10 years |
Summary of Significant Accounting Policies and New Accounting Guidance - Internal Use Software Costs (Details) - Software Development |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 3 years |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 2 years |
Summary of Significant Accounting Policies and New Accounting Guidance - Accounts Receivable (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounting Policies [Abstract] | ||
Provision for doubtful accounts | $ 0.3 | $ 0.0 |
Summary of Significant Accounting Policies and New Accounting Guidance - Investment in Other Entities (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Accounting Policies [Abstract] | |||
Investments in other entities | $ 1.1 | $ 0.2 | $ 0.4 |
Carrying value of investments in other entities | $ 21.3 | $ 15.5 |
Summary of Significant Accounting Policies and New Accounting Guidance - Deferred Charges (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Accounting Policies [Abstract] | |||
Unamortized deferred financing costs | $ 4,368,000 | $ 4,612,000 | |
Debt issuance costs | 6,400,000 | 0 | $ 0 |
Amortization of financing costs | $ 1,600,000 | $ 1,200,000 | $ 1,500,000 |
Summary of Significant Accounting Policies and New Accounting Guidance - Research and Development (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Accounting Policies [Abstract] | |||
Development | $ 89,368 | $ 84,646 | $ 74,860 |
Summary of Significant Accounting Policies and New Accounting Guidance - Compensation Programs (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, tax windfalls | $ 0.8 | $ 0.2 | $ 0.2 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 5 years |
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 425,409 | $ 358,991 | $ 318,924 |
Patent licensing royalties | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 420,528 | 346,630 | 307,431 |
Patent licensing royalties | Current revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 346,819 | 325,048 | 287,649 |
Patent licensing royalties | Non-current revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 73,709 | 21,582 | 19,782 |
Technology solutions | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 4,881 | 11,761 | 10,518 |
Patent sales b | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 600 | 975 |
Variable patent royalty revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 32,234 | 26,587 | 30,428 |
Fixed-fee royalty revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 314,585 | $ 298,461 | $ 257,221 |
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized that had been included in deferred revenue as of the beginning of the period | $ 219.7 | |
Contract asset, current | 18.9 | $ 9.7 |
Non-current contract asset | $ 8.3 | $ 8.9 |
Geographic / Customer Concentration - Narrative (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021
USD ($)
segment
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019 |
|
Revenue from External Customer [Line Items] | |||
Number of reportable segments | segment | 1 | ||
United States | Long Lived Assets | Geographic Concentration Risk | |||
Revenue from External Customer [Line Items] | |||
Concentration risk | 90.00% | 90.00% | 90.00% |
United States | Property Plant and Equipment and Patents, net | |||
Revenue from External Customer [Line Items] | |||
Long-lived assets | $ 377.0 | $ 435.0 | |
Canada and Europe | |||
Revenue from External Customer [Line Items] | |||
Long-lived assets | $ 25.9 | $ 23.1 |
Geographic / Customer Concentration - Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Revenue from External Customer [Line Items] | |||
Total revenue | $ 425,409 | $ 358,991 | $ 318,924 |
United States | |||
Revenue from External Customer [Line Items] | |||
Total revenue | 169,044 | 128,238 | 139,162 |
China | |||
Revenue from External Customer [Line Items] | |||
Total revenue | 118,197 | 63,172 | 11,103 |
South Korea | |||
Revenue from External Customer [Line Items] | |||
Total revenue | 86,677 | 111,634 | 113,189 |
Japan | |||
Revenue from External Customer [Line Items] | |||
Total revenue | 24,689 | 23,694 | 35,614 |
Taiwan | |||
Revenue from External Customer [Line Items] | |||
Total revenue | 11,040 | 10,059 | 938 |
Europe | |||
Revenue from External Customer [Line Items] | |||
Total revenue | 15,762 | 22,194 | 18,639 |
Other Asia | |||
Revenue from External Customer [Line Items] | |||
Total revenue | $ 0 | $ 0 | $ 279 |
Geographic / Customer Concentration - Schedule of Revenue by Major Customers by Reporting Segments (Details) - Customer Concentration Risk - Revenue |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Customer A | |||
Revenue from External Customer [Line Items] | |||
Accounts receivable percentage | 28.00% | 31.00% | 35.00% |
Customer B | |||
Revenue from External Customer [Line Items] | |||
Accounts receivable percentage | 18.00% | 22.00% | 25.00% |
Customer C | |||
Revenue from External Customer [Line Items] | |||
Accounts receivable percentage | 14.00% | 0.00% | 0.00% |
Customer D | |||
Revenue from External Customer [Line Items] | |||
Accounts receivable percentage | 10.00% | 15.00% | 0.00% |
Customer E | |||
Revenue from External Customer [Line Items] | |||
Accounts receivable percentage | 10.00% | 10.00% | 10.00% |
Cash, Cash Equivalents, Restricted Cash and Marketable Securities - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 713,224 | $ 477,663 | $ 757,098 | $ 488,733 |
Money market and demand accounts | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 705,725 | 397,522 | ||
Commercial paper | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 7,500 | $ 80,100 |
Cash, Cash Equivalents, Restricted Cash and Marketable Securities - Reconciliation of Total Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 706,282 | $ 473,474 | ||
Restricted cash included within prepaid and other current assets | 5,861 | 3,108 | ||
Restricted cash included within other non-current assets | 1,081 | 1,081 | ||
Total cash, cash equivalents and restricted cash | $ 713,224 | $ 477,663 | $ 757,098 | $ 488,733 |
Cash, Cash Equivalents, Restricted Cash and Marketable Securities - Narrative (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Debt Securities, Available-for-sale [Line Items] | |||
Other than temporary impairment losses, investments | $ 0 | $ 0 | $ 0 |
Short-term investments with contractual maturities within one year | $ 210,800,000 | $ 517,400,000 | |
Contractual maturities (in years) | 2 years | ||
Minimum | |||
Debt Securities, Available-for-sale [Line Items] | |||
Contractual maturities (in years) | 1 year | ||
Maximum | |||
Debt Securities, Available-for-sale [Line Items] | |||
Contractual maturities (in years) | 2 years |
Concentration of Credit Risk and Fair Value of Financial Assets and Financial Liabilities - Fair Value of Long-Term Debt (Details) - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Long-term debt, gross | $ 400,000,000 | |
Technicolor Patent Acquisition Long-Term Debt | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Carrying Value | 27,113,000 | $ 24,171,000 |
Fair Value | 28,569,000 | 27,016,000 |
Senior Convertible Long-Term Debt | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Carrying Value | 395,632,000 | 343,821,000 |
Fair Value | 437,760,000 | 418,760,000 |
Long-term debt, gross | $ 400,000,000 | $ 400,000,000 |
Property and Equipment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Property, Plant and Equipment [Abstract] | |||
Computer equipment and software | $ 14,787 | $ 16,003 | |
Leasehold improvements | 11,743 | 11,076 | |
Building and improvements | 3,574 | 3,548 | |
Engineering and test equipment | 1,470 | 1,183 | |
Furniture and fixtures | 799 | 1,051 | |
Property and equipment, gross | 32,373 | 32,861 | |
Less: accumulated depreciation | (18,996) | (16,231) | |
Property and equipment, net | 13,377 | 16,630 | |
Depreciation expense | $ 5,600 | $ 5,300 | $ 3,900 |
Patents, Goodwill and Other Intangibles Assets - Patents (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Patents, net | $ 363,585 | $ 418,343 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average estimated useful life (years) | 9 years 10 months 24 days | 9 years 10 months 24 days |
Gross patents | $ 956,387 | $ 945,609 |
Accumulated amortization | (592,802) | (527,266) |
Patents, net | $ 363,585 | $ 418,343 |
Patents, Goodwill and Other Intangibles Assets - Amortization Expense (Details) - Patents - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 71,500 | $ 74,900 | $ 72,300 |
2022 | 69,436 | ||
2023 | 65,158 | ||
2024 | 54,690 | ||
2025 | 51,078 | ||
2026 | $ 42,646 |
Patents, Goodwill and Other Intangibles Assets - Goodwill (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021
USD ($)
segment
|
Dec. 31, 2020
USD ($)
|
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Number of reportable segments | segment | 1 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 22,421 | $ 22,421 |
Activity | 0 | 0 |
Goodwill, ending balance | $ 22,421 | $ 22,421 |
Commitments - Minimum Future Payments for Accounts Payable and Other Purchase Commitments (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 12,700 |
2023 | 33 |
2024 | 25 |
2025 | 0 |
2026 | 0 |
Thereafter | $ 0 |
Commitments - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Other Commitments [Line Items] | |||
Gain on curtailment | $ 2,300 | ||
Accumulated projected benefit obligation | 4,800 | $ 7,600 | |
Service and interest costs | $ 400 | $ 600 | $ 100 |
Weighted-average discount rate (as a percent) | 0.70% | ||
Assumed salary increase rate | 3.00% |
Commitments - Expected Future Benefit Plan Payments (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
2022 | $ 200 |
2023 | 225 |
2024 | 73 |
2025 | 110 |
2026 | 138 |
2027-2031 | $ 2,266 |
Litigation and Legal Proceedings (Details) - Pending Litigation |
Apr. 27, 2021
claim
|
Aug. 28, 2019
patent
|
Aug. 27, 2019
patent
|
---|---|---|---|
U.K. Proceedings | |||
Loss Contingencies [Line Items] | |||
Number of patents alleged infringement | patent | 5 | ||
District Of Delaware Proceedings | |||
Loss Contingencies [Line Items] | |||
Number of patents alleged infringement | patent | 8 | ||
German Proceedings | |||
Loss Contingencies [Line Items] | |||
Number of patents alleged infringement | 3 | ||
German Proceedings, Munich District Court | |||
Loss Contingencies [Line Items] | |||
Number of patents alleged infringement | 2 | ||
German Proceedings, Mannheim District Court | |||
Loss Contingencies [Line Items] | |||
Number of patents alleged infringement | 1 |
Compensation Plans and Programs - Schedule of RSU Award Vesting (Details) - $ / shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Number of Unvested RSUs | |||
Beginning balance (in shares) | 1,265 | ||
RSUs granted (in shares) | 491 | ||
RSUs forfeited (in shares) | (336) | ||
RSUs vested (in shares) | (361) | ||
Ending balance (in shares) | 1,059 | 1,265 | |
Weighted Average Per Share Grant Date Fair Value | |||
Beginning balance (in usd per share) | $ 53.53 | ||
RSUs granted (in usd per share) | 68.44 | ||
RSUs forfeited (in usd per share) | 53.46 | ||
RSUs vested (in usd per share) | 62.44 | $ 65.06 | $ 58.84 |
Ending balance (in usd per share) | $ 57.43 | $ 53.53 |
Compensation Plans and Programs - Schedule of Weighted Average Option Assumptions (Details) - Stock Options |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 7 years 8 months 12 days | 6 years 6 months | 4 years 6 months |
Expected volatility | 35.70% | 37.50% | 25.80% |
Risk-free interest rate | 1.30% | 0.60% | 2.40% |
Dividend yield | 1.90% | 3.10% | 2.00% |
Compensation Plans and Programs - Schedule of Stock Option Activity (Details) shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
$ / shares
shares
| |
Outstanding Options | |
Beginning balance (in shares) | shares | 711 |
Granted (in shares) | shares | 414 |
Forfeited (in shares) | shares | (360) |
Exercised (in shares) | shares | (194) |
Ending balance (in shares) | shares | 571 |
Weighted Average Exercise Price | |
Beginning balance (in usd per share) | $ / shares | $ 50.85 |
Granted (in usd per share) | $ / shares | 73.15 |
Forfeited (in usd per share) | $ / shares | 63.71 |
Exercised (in usd per share) | $ / shares | 49.70 |
Ending balance (in usd per share) | $ / shares | $ 59.31 |
Net Income Per Share - Numerator and Denominator of Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Numerator [Abstract] | |||
Net income applicable to common shareholders | $ 55,295 | $ 44,801 | $ 20,928 |
Weighted-average shares outstanding: | |||
Weighted-average shares outstanding: basic (in shares) | 30,764 | 30,776 | 31,546 |
Dilutive effect of stock options, RSUs, convertible securities (in shares) | 489 | 282 | 239 |
Weighted-average shares outstanding: diluted (in shares) | 31,253 | 31,058 | 31,785 |
Earnings Per Share: | |||
Net income per common share: basic (in USD per share) | $ 1.80 | $ 1.46 | $ 0.66 |
Dilutive effect of stock options, RSUs, and convertible securities (in USD per share) | (0.03) | (0.02) | 0 |
Net income per common share: diluted (in USD per share) | $ 1.77 | $ 1.44 | $ 0.66 |
Equity Transactions - Narrative (Details) - USD ($) |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
May 31, 2019 |
Sep. 30, 2017 |
Jun. 30, 2015 |
Dec. 31, 2019 |
Dec. 31, 2021 |
|
Equity [Abstract] | |||||
Share repurchase program authorized amount | $ 300,000,000 | $ 700,000,000 | |||
Increase in share repurchase program authorized amount | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | |
Remaining authorized repurchase amount | $ 41,500,000 |
Equity Transactions - Share Repurchases (Details) - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Accelerated Share Repurchases [Line Items] | ||||||||
Stock repurchased during period (in shares) | 11,705 | |||||||
Stock repurchased during period | $ 658,536 | |||||||
2014 Repurchase Program | ||||||||
Accelerated Share Repurchases [Line Items] | ||||||||
Stock repurchased during period (in shares) | 458 | 6 | 2,962 | 1,478 | 107 | 1,304 | 1,836 | 3,554 |
Stock repurchased during period | $ 30,000 | $ 349 | $ 196,269 | $ 110,505 | $ 7,693 | $ 64,685 | $ 96,410 | $ 152,625 |
Equity Transactions - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Equity [Abstract] | ||||||||||||||||
Cash dividends declared per common share (in usd per share) | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 1.40 | $ 1.40 | $ 1.40 | ||||
Cash Dividend | $ 10,741 | $ 10,740 | $ 10,794 | $ 10,766 | $ 10,786 | $ 10,782 | $ 10,781 | $ 10,762 | $ 21,560 | $ 21,543 | $ 32,300 | $ 32,325 | $ 43,041 | $ 43,111 |
Leases - Operating Lease Right-of-use Assets and Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Assets | ||
Operating lease right-of-use assets, net | $ 17,902 | $ 23,273 |
Liabilities | ||
Operating lease liabilities - Current | 3,844 | 3,170 |
Operating lease liabilities - Noncurrent | 17,780 | 23,043 |
Total Lease Liabilities | $ 21,624 | $ 26,213 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other accrued expenses | Other accrued expenses |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | OTHER LONG-TERM LIABILITIES | OTHER LONG-TERM LIABILITIES |
Prepaid and other current assets | ||
Assets | ||
Operating lease right-of-use assets, net | $ 51 | $ 817 |
Other noncurrent assets | ||
Assets | ||
Operating lease right-of-use assets, net | $ 17,851 | $ 22,456 |
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | |||
Operating lease cost | $ 5,188 | $ 5,442 | $ 4,776 |
Short-term lease cost | 442 | 726 | 925 |
Variable lease cost | $ 1,625 | $ 1,764 | $ 1,502 |
Leases - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | |||
Measurement of operating lease liabilities | $ 4,000 | $ 4,900 | |
Operating lease right-of-use assets | $ 739 | $ 2,524 | $ 14,427 |
Weighted average remaining operating lease term | 6 years 2 months 12 days | ||
Operating lease liabilities percentage | 5.40% |
Leases - Schedule of Future Minimum Lease Payments (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Maturity of Operating Lease Liabilities | |
2022 | $ 4,843 |
2023 | 4,333 |
2024 | 4,125 |
2025 | 3,270 |
2026 | 2,996 |
Thereafter | 5,827 |
Total lease payments | 25,394 |
Less: Imputed interest | (3,821) |
Present value of lease liabilities | $ 21,573 |
Other Income, Net - Other Income (Expense), Net (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Other Income and Expenses [Abstract] | |||
Interest and investment income | $ 1,690 | $ 5,661 | $ 13,458 |
Gain on asset acquisition and sale of business | 0 | 0 | 22,690 |
Loss on extinguishment of long-term debt | 0 | 0 | (5,488) |
Other | 9,885 | 11,263 | (1,598) |
Other income, net | $ 11,575 | $ 16,924 | $ 29,062 |
Other Income, Net - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Business Acquisition [Line Items] | |||
Gain on disposition of business | $ 8,500 | ||
Loss on extinguishment of debt | $ 0 | $ 0 | 5,488 |
Gain (loss) on foreign currency translation | (3,000) | 4,600 | 4,200 |
Gain on contract termination | 1,900 | ||
Gain on curtailment | 2,300 | ||
Gain (loss) on sale of investments | $ 7,600 | $ 5,600 | (2,600) |
R&I Acquisition | |||
Business Acquisition [Line Items] | |||
Gain on asset acquisition | 14,200 | ||
Contingent consideration liability | $ 20,500 |
Other Assets - Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Other Current Assets [Line Items] | ||
Tax receivables | $ 57,127 | $ 45,262 |
Prepaid assets | 11,340 | 10,899 |
Patents held for sale | 4,000 | 0 |
Other current assets | 5,078 | 3,733 |
Total Prepaid and other current assets | $ 77,545 | 59,894 |
As Reported | ||
Other Current Assets [Line Items] | ||
Tax receivables | 69,592 | |
Prepaid assets | 10,899 | |
Patents held for sale | 0 | |
Other current assets | 3,733 | |
Total Prepaid and other current assets | $ 84,224 |
Other Assets - Other Non-Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Other Non-Current Assets [Line Items] | |||
Tax receivables | $ 30,026 | $ 24,330 | |
Goodwill | 22,421 | 22,421 | $ 22,421 |
Operating lease right-of-use assets, net | 17,902 | 23,273 | |
Long-term investments | 21,280 | 15,489 | |
Other non-current assets | 10,923 | 13,677 | |
Total Other non-current assets, net | 102,501 | 98,373 | |
Other noncurrent assets | |||
Other Non-Current Assets [Line Items] | |||
Operating lease right-of-use assets, net | $ 17,851 | 22,456 | |
As Reported | |||
Other Non-Current Assets [Line Items] | |||
Tax receivables | 0 | ||
Goodwill | 22,421 | ||
Long-term investments | 15,489 | ||
Other non-current assets | 13,677 | ||
Total Other non-current assets, net | 74,043 | ||
As Reported | Other noncurrent assets | |||
Other Non-Current Assets [Line Items] | |||
Operating lease right-of-use assets, net | $ 22,456 |
Restructuring Activities - Restructuring Activity Included in Other Accrued Expenses (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 0 |
Accrual | 24,286 |
Cash payments | (5,212) |
Other | (793) |
Ending balance | $ 18,281 |
Restructuring Activities - Restructuring Activity Included in Operating Expenses (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Restructuring and Related Activities [Abstract] | |||
Severance and other benefits | $ 22,616 | ||
Outside services and other associated costs | 1,671 | ||
Reimbursement arrangements | (9,638) | ||
Total | $ 27,877 | $ 0 | $ 0 |
Label | Element | Value |
---|---|---|
Proceeds from Divestiture of Businesses | us-gaap_ProceedsFromDivestitureOfBusinesses | $ 10,000,000 |