InterDigital Inc (IDCC)

[rmarchma]

LG's revenues and accounting treatment thereof

I really like the fact that IDCC can take all of LG's $285m into the future revenue streams, rather than having to allocate some back to past years, as they initially indicated. This provides a greater quarterly recurring revenue base going forward from LG.

In order to get complete prospective treatment of the LG revenues, they had to begin it on the date of the actual contract signing of January 18, rather than retroactively back to January 1, 2006 as they initially indicated. Thus LG royalty for Q1 '06 will be a little over $11m, but at least $14.25m ($285m / 20 quarters) up to $14.42m per quarter ($285m - $11m for Q1 = $274m /19 remaining quarters) beginning in the Q2 '06. Good call Texb.