Segments and Major Customers

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Segments and Major Customers

Segments and Major Customers

For the quarters ended March 31, 2013 and 2012, only MID and CTO were reportable segments. The remaining other operating segments were combined and shown under “All Other”.

The Company evaluates the performance of its segments based on segment operating income (loss), which is defined as customer licensing income ("CLI") minus segment operating expenses. Segment operating expenses are comprised of direct operating expenses and the allocation of certain engineering expenses.

CLI is defined as total cash royalties received from its customers under its licensing agreements with them. In addition, customer licensing income includes other patent royalties received but not recognizable as revenue. In the first quarter of 2013, certain customer patent royalty payments were not recognized as revenue as not all revenue recognition criteria were met during the period.  Additionally, since the third quarter of 2011, the Company has received patent royalty payments from certain patent license agreements assumed in the acquisition of CRI which were treated as favorable contracts. Cash received from these acquired favorable contracts reduced the favorable contract intangible asset on the Company's balance sheet. The Company has combined these cash royalty payments as CLI to reflect the total amounts received from its customers.

Segment operating expenses do not include marketing, general and administrative expenses and the allocation of certain expenses managed at the corporate level, such as stock-based compensation, amortization, and certain bonus and acquisition costs. The “Reconciling Items” category includes these unallocated marketing, general and administrative expenses as well as corporate level expenses. The presentation of the three months ended March 31, 2012 segment data has been updated to conform with the 2013 segment operating income (loss) definition applied starting in the fourth quarter of 2012.

The tables below present reported segment operating income (loss) for the three months ended March 31, 2013 and 2012, respectively.

	For the Three Months Ended March 31, 2013
	MID		CTO			All Other		Total
	(In thousands)
Revenues	$	59,674	$	—		$	7,192	$	66,866
Other patent royalties received	1,875		—			3,362		5,237
Customer licensing income	$	61,549	$	—		$	10,554	$	72,103
Segment operating expenses	8,924		7,858			10,075		26,857
Segment operating income (loss)	$	52,625	$	(7,858	)	$	479	$	45,246
Reconciling items								(43,805		)
Operating income								$	1,441
Interest and other income (expense), net								(7,332		)
Loss before income taxes								$	(5,891	)

	For the Three Months Ended March 31, 2012
	MID		CTO			All Other		Total
	(In thousands)
Revenues	$	57,088	$	—		$	5,775	$	62,863
Other patent royalties received	—		—			2,414		2,414
Customer licensing income	$	57,088	$	—		$	8,189	$	65,277
Segment operating expenses	11,550		6,503			8,072		26,125
Segment operating income (loss)	$	45,538	$	(6,503	)	$	117	$	39,152
Reconciling items								(56,710		)
Operating loss								$	(17,558	)
Interest and other income (expense), net								(6,482		)
Loss before income taxes								$	(24,040	)

The CODM does not review information regarding assets on an operating segment basis. Additionally, the Company does not record intersegment revenue or expense.

Revenue from the Company’s major customers representing 10% or more of total revenue for the three months ended March 31, 2013 and 2012, respectively, were as follows:

	Three Months Ended
	March 31,
Customer	2013		2012
Customer A	33	%	37	%
Customer B	15	%	*
Customer C	*		13	%
Customer D	10	%	10	%

_________________________________________

*    Customer accounted for less than 10% of total revenue in the period

Revenue from customers in the geographic regions based on the location of customers' headquarters is as follows:

	Three Months Ended
	March 31,
(In thousands)	2013		2012
USA	$	25,569	$	16,189
South Korea	22,025		23,247
Japan	14,609		17,569
Europe	2,127		1,129
Canada	1,786		1,979
Asia-Other	750		2,750
Total	$	66,866	$	62,863