InterDigital Inc (IDCC)

[la-tsla-fan]

This is a very interesting discussion. I think it has less to do with accounting and more to do with one's fiscal philosophy. Some of us would like to be financially armed for that one-in-a-thousand chance, others are happy to have enough to get by unless hit by a catastrophe that has less than a 1-in-2 chance of happening.

We know that IDCC historically has been rather conservative with their money. Therefore they would definitely plan for events that may have a low probability of transpiring.

Let's look at IDCC's historical cash holdings:

Net Cash and Cash Equivalents at end of 2016 = $404 million

Net Cash and Cash Equivalents at end of 2015 = $510 million

Net Cash and Cash Equivalents at end of 2014 = $429 million

Net Cash and Cash Equivalents at end of 2013 = $497 million

Net Cash and Cash Equivalents at end of 2012 = $349 million

Net Cash and Cash Equivalents at end of 2011 = $342 million

Net Cash and Cash Equivalents at end of 2010 = $215 million

Net Cash and Cash Equivalents at end of 2009 = $210 million

(Cash numbers for 2014-2016 taken from http://ir.interdigital.com/Doc/Index?did=39582993 and numbers for 2009-2013 taken from http://www.snl.com/Cache/c34365817.html)

We see that net cash has grown by $194 million over the last six years.

Based on net cash on hand alone, I do not see them authorizing a dividend increase or special dividend any time soon.

However, there is another consideration. Net income after taxes has averaged over $120 million the last EIGHT YEARS. That may provide a justification for raising the dividend or a special dividend.

Another question that only an accountant can provide an answer to is: where did the money go? Net income over the last eight years was close to $1 BILLION. True some of it was non-cash, some came back to shareholders, but that left ONLY $194 MILLION?

jmo
LA