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InterDigital Concludes Strategic Alternatives Review Process
Board Affirms and Expands Business Strategy to Include Patent Sales and Licensing Partnerships
$800 Million Sustainable Annual Revenue Opportunity in Three to Five Years
Company to Hold Conference Call at 5:30 p.m. ET, January 23, 2012
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)-- InterDigital, Inc. (NASDAQ: IDCC) today announced that its Board of Directors
has concluded its review of strategic alternatives for the company. Following a comprehensive process, the Board determined
that it was in the best interests of the company and its shareholders to execute on the company's business plan and to expand
the plan to include patent sales and licensing partnerships.
"We entered into the review of strategic alternatives from a position of strength, in terms of both our patent portfolio and our
balance sheet," commented Terry Clontz, Chairman of InterDigital's Board of Directors. "The process over the past six months,
although not resulting in an offer for the whole of the company, has helped to reaffirm our belief in the breadth and depth of the
patent portfolio, the strength of the R&D team, and our technology vision for the future. The Board believes the company and
its shareholders are best served by our continued focus on the development of wireless technologies, and the monetization of
those assets through vigorous and comprehensive patent licensing and sales efforts."
Over the past three decades, InterDigital's R&D team has developed fundamental wireless technologies that have shaped the
cellular industry and has built a portfolio of over 19,500 patents and patent applications as of December 31, 2011—one of the
largest portfolios of cellular-related patents in the wireless industry. Moreover, InterDigital's inventions are used in every
cellular device that ships today. As of December 31, 2011, the company has disclosed to the European Telecommunications
Standards Institute approximately 50 percent of its worldwide patents and patent applications based on the company's belief, at
the time of disclosure, that these patents are or may be or may become essential to wireless communications standards.
Furthermore, InterDigital's substantial portfolio of patented inventions continues to grow. During 2011, the company filed
approximately 140 new patent applications with the U.S. patent office, covering its inventions related to the next generation of
advanced wireless networks. The company was also granted approximately 170 new U.S. patents and approximately 1,000
non-U.S. patents in 2011, positioning it as one of the leading inventors in wireless technology.
Based on its strength in innovation, the company has received nearly $3 billion in royalties from 2G and 3G licenses through
December 31, 2011. Furthermore, industry analysts estimate that only one-third of the total expected 3G devices have been
shipped to date. The company believes that the accelerating shipments of LTE devices, combined with InterDigital's position as
one of the leading LTE patent holders, sets the stage for the company's licensing program for LTE to be the strongest in its
history.
InterDigital's President and Chief Executive Officer, William J. Merritt, added, "I strongly believe that we can substantially
enhance the value of the enterprise through our continued successful execution of our 3G licensing program and the addition
of royalties from our very strong LTE portfolio. Moreover, we have identified potential opportunities to further enhance value
through targeted sales and/or partnering arrangements involving portions of our large and growing patent portfolio. For
example, we have a strong and largely unlicensed mobile infrastructure patent portfolio that we believe could generate
significant third party interest in terms of a sale or licensing partnership. Similarly, we believe we have a substantial number of
3G and LTE terminal unit patents that are not necessary to drive our core terminal unit licensing business but could be of
significant interest to third parties, again in terms of sales or licensing partnerships. In light of the outlook for market growth in
3G and 4G handsets, our deep and growing patent portfolio, our world class licensing team, and our leading team of
engineers, the company's long-term compensation will be tied to our business generating sustainable annual revenue of at
least $800 million in three to five years, which, if realized, is also expected to drive substantial growth in free cash flow."
