Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 13, 2017 | Jun. 30, 2016 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | PCO | ||
Entity Registrant Name | Pendrell Corp | ||
Entity Central Index Key | 1,359,555 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 88,766,026 | ||
Class A common stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 19,274,244 | ||
Class B common stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 5,366,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 174,631 | $ 162,457 |
Accounts receivable | 15,457 | 87 |
Other receivables | 669 | 1,329 |
Prepaid expenses and other current assets | 262 | 384 |
Total current assets | 191,019 | 164,257 |
Property in service – net of accumulated depreciation of $531 and $512, respectively | 74 | 118 |
Non-current accounts receivable | 16,555 | 1,502 |
Other assets | 29 | 638 |
Intangible assets – net of accumulated amortization of $62,884 and $54,523, respectively | 4,716 | 14,377 |
Total | 212,393 | 180,892 |
Current liabilities: | ||
Accounts payable | 125 | 140 |
Accrued expenses | 6,278 | 4,292 |
Other liabilities | 95 | 119 |
Total current liabilities | 6,498 | 4,551 |
Other non-current liabilities | 7,796 | |
Total liabilities | 14,294 | 4,551 |
Commitments and contingencies (Note 8) | ||
Shareholders’ equity and noncontrolling interest: | ||
Preferred stock, $0.01 par value, 75,000,000 shares authorized, no shares issued or outstanding | ||
Additional paid-in capital | 1,962,178 | 1,958,376 |
Accumulated deficit | (1,763,060) | (1,780,823) |
Total Pendrell shareholders’ equity | 201,806 | 180,234 |
Noncontrolling interest | (3,707) | (3,893) |
Total shareholders’ equity and noncontrolling interest | 198,099 | 176,341 |
Total | 212,393 | 180,892 |
Class A common stock | ||
Shareholders’ equity and noncontrolling interest: | ||
Common stock, value | 2,151 | 2,144 |
Class B common stock | ||
Shareholders’ equity and noncontrolling interest: | ||
Common stock, value | $ 537 | $ 537 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property in service, accumulated depreciation | $ 531 | $ 512 |
Intangible assets, accumulated amortization | $ 62,884 | $ 54,523 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 75,000,000 | 75,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 27,268,261 | 27,187,911 |
Common stock, shares outstanding | 21,491,373 | 21,410,896 |
Class B common stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 8,466,338 | 8,466,338 |
Common stock, shares outstanding | 5,366,000 | 5,366,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Income Statement [Abstract] | ||||
Revenue | $ 59,018 | $ 43,519 | $ 42,534 | |
Operating expenses: | ||||
Cost of revenues | 18,156 | 10,215 | 14,170 | |
Patent administration and related costs | 1,046 | 2,668 | 6,386 | |
Patent litigation | 4,169 | 13,076 | 9,880 | |
General and administrative | 7,508 | 16,750 | 27,467 | |
Stock-based compensation | 3,424 | 4,507 | 9,405 | |
Amortization of intangibles | 9,498 | 13,939 | 15,929 | |
Impairment of intangibles and goodwill | 103,499 | 11,013 | ||
Total operating expenses | 43,801 | 164,654 | 94,250 | |
Operating income (loss) | 15,217 | (121,135) | (51,716) | |
Interest income | 696 | 156 | 94 | |
Interest expense | (53) | (193) | ||
Gain on contingencies | 2,047 | 6,095 | ||
Other expense | (11) | (14) | (16) | |
Income (loss) before income taxes | 17,949 | (114,951) | (51,831) | |
Income tax expense | (2,631) | (6,303) | ||
Net income (loss) | 17,949 | (117,582) | (58,134) | |
Net income (loss) attributable to noncontrolling interests | 186 | (7,902) | (7,132) | |
Net income (loss) attributable to Pendrell | $ 17,763 | $ (109,680) | $ (51,002) | |
Basic income (loss) per share attributable to Pendrell | $ 0.66 | $ (4.13) | $ (1.93) | |
Diluted income (loss) per share attributable to Pendrell | $ 0.64 | $ (4.13) | $ (1.93) | |
Weighted average shares outstanding: | ||||
Basic | 26,758,985 | 26,570,733 | 26,440,750 | |
Diluted | [1] | 27,691,866 | 26,570,733 | 26,440,750 |
[1] | Stock options, restricted stock awards and units totaling 1,305,365, 2,784,787 and 2,811,354 for the years ended December 31, 2016, 2015 and 2014, respectively, were excluded from the calculation of diluted income (loss) per share as their inclusion was anti-dilutive. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Class A common stock | Class B common stock | Common stock | Common stockClass A common stock | Common stockClass B common stock | Additional paid-in capital | Accumulated deficit | Shareholder's equity | Noncontrolling interests |
Beginning Balance at Dec. 31, 2013 | $ 336,793 | $ 2,663 | $ 1,941,818 | $ (1,619,993) | $ 324,488 | $ 12,305 | ||||
Beginning Balance (in shares) at Dec. 31, 2013 | 21,244,998 | 5,366,000 | ||||||||
Vesting of Class A common stock issued for Ovidian acquisition | 2,229 | 2,229 | 2,229 | |||||||
Issuance of Class A common stock from exercise of stock options | 429 | 5 | 424 | 429 | ||||||
Issuance of Class A common stock from exercise of stock options (in shares) | 51,493 | |||||||||
Class A common stock withheld at vesting to cover statutory tax obligations | (775) | (2) | (633) | (140) | (775) | |||||
Class A common stock withheld at vesting to cover statutory tax obligations (in shares) | (16,182) | |||||||||
Stock-based compensation and issuance of restricted stock, net of forfeitures | 9,045 | 3 | 9,042 | 9,045 | ||||||
Stock-based compensation and issuance of restricted stock, net of forfeitures (in shares) | 17,215 | |||||||||
Net income (loss) | (58,134) | (51,002) | (51,002) | (7,132) | ||||||
Ending Balance at Dec. 31, 2014 | 289,587 | 2,669 | 1,952,880 | (1,671,135) | 284,414 | 5,173 | ||||
Ending Balance (in shares) at Dec. 31, 2014 | 21,297,524 | 5,366,000 | ||||||||
Issuance of Class A common stock from exercise of stock options | 219 | 4 | 215 | 219 | ||||||
Issuance of Class A common stock from exercise of stock options (in shares) | 35,835 | |||||||||
Class A common stock withheld at vesting to cover statutory tax obligations | (140) | (1) | (131) | (8) | (140) | |||||
Class A common stock withheld at vesting to cover statutory tax obligations (in shares) | (3,881) | |||||||||
Stock-based compensation and issuance of restricted stock, net of forfeitures | 4,705 | 12 | 4,693 | 4,705 | ||||||
Stock-based compensation and issuance of restricted stock, net of forfeitures (in shares) | 115,668 | |||||||||
Repurchase of restricted stock | (2) | (2) | (2) | |||||||
Repurchase of restricted stock (in shares) | (25,000) | |||||||||
Shares received through divesture of Ovidian | (46) | (1) | (45) | (46) | ||||||
Shares received through divesture of Ovidian (in shares) | (9,250) | |||||||||
Purchase of noncontrolling interest in Provitro Biosciences LLC | (400) | 764 | 764 | (1,164) | ||||||
Net income (loss) | (117,582) | (109,680) | (109,680) | (7,902) | ||||||
Ending Balance at Dec. 31, 2015 | 176,341 | 2,681 | 1,958,376 | (1,780,823) | 180,234 | (3,893) | ||||
Ending Balance (in shares) at Dec. 31, 2015 | 21,410,896 | 5,366,000 | 21,410,896 | 5,366,000 | ||||||
Class A common stock withheld at vesting to cover statutory tax obligations | (40) | (40) | (40) | |||||||
Class A common stock withheld at vesting to cover statutory tax obligations (in shares) | (6,352) | |||||||||
Stock-based compensation and issuance of restricted stock, net of forfeitures | 3,849 | 7 | 3,842 | 3,849 | ||||||
Stock-based compensation and issuance of restricted stock, net of forfeitures (in shares) | 86,829 | |||||||||
Net income (loss) | 17,949 | 17,763 | 17,763 | 186 | ||||||
Ending Balance at Dec. 31, 2016 | $ 198,099 | $ 2,688 | $ 1,962,178 | $ (1,763,060) | $ 201,806 | $ (3,707) | ||||
Ending Balance (in shares) at Dec. 31, 2016 | 21,491,373 | 5,366,000 | 21,491,373 | 5,366,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net income (loss) including noncontrolling interest | $ 17,949 | $ (117,582) | $ (58,134) |
Adjustments to reconcile net income (loss) to net cash provided (used) in operating activities: | |||
Stock-based compensation | 3,424 | 4,507 | 9,405 |
Amortization of prepaid compensation from Ovidian acquisition | 1,380 | ||
Amortization of intangible assets | 9,498 | 13,939 | 15,929 |
Impairment of intangible assets and goodwill | 103,499 | 11,013 | |
Depreciation | 51 | 351 | 523 |
Non-cash cost of patents monetized | 138 | 794 | |
Loss associated with the abandonment and/or disposition of patents | 163 | 958 | 2,765 |
Loss on the disposition of property | 1,015 | ||
Other | 4 | 3 | 222 |
Other changes in certain assets and liabilities: | |||
Accounts receivable, current and non-current | (30,423) | 44 | 271 |
Prepaid expenses and other current/non-current assets | 91 | (1,108) | 938 |
Accounts payable | (15) | (141) | 115 |
Accrued expenses and other current liabilities | 2,388 | (5,670) | 1,470 |
Non-current liabilities | 7,796 | ||
Net cash provided (used) in operating activities | 10,926 | (47) | (13,309) |
Investing activities: | |||
Payment received on note receivable | 1,300 | ||
Purchases of property and intangible assets | (12) | (2,077) | (119) |
Proceeds associated with disposition of property | 109 | ||
Net cash provided (used) in investing activities | 1,288 | (1,968) | (119) |
Financing activities: | |||
Proceeds from exercise of stock options | 219 | 429 | |
Payment of statutory taxes for stock awards | (40) | (140) | (775) |
Payment of accrued obligations for purchased intangible assets | (4,000) | (2,000) | |
Purchase of noncontrolling interest in Provitro Biosciences LLC | (400) | ||
Net cash used in financing activities | (40) | (4,321) | (2,346) |
Net increase (decrease) in cash and cash equivalents | 12,174 | (6,336) | (15,774) |
Cash and cash equivalents—beginning of period | 162,457 | 168,793 | 184,567 |
Cash and cash equivalents—end of period | $ 174,631 | 162,457 | 168,793 |
Supplemental disclosures: | |||
Income taxes paid | 4,125 | $ 6,272 | |
Supplemental disclosure of non-cash investing and financing activities: | |||
Note receivable for disposition of property | $ 1,900 |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Business | 1. Organization and Business Overview— These consolidated financial statements include the accounts of Pendrell Corporation (“Pendrell”) and its consolidated subsidiaries (collectively referred to as the “Company”). Since 2011, the Company’s strategy, through its consolidated subsidiaries, has been to invest in, acquire and develop businesses with unique technologies that are often protected by intellectual property (“IP”) rights, and that present the opportunity to address large, global markets. The Company’s subsidiaries focus on licensing the IP rights they hold to third parties. The Company regularly evaluates its existing investments to determine whether retention or disposition is appropriate, and investigates new investment and business acquisition opportunities. From 2011 through 2015, the Company also advised clients on various IP strategies and transactions through its consulting subsidiary Ovidian Group LLC (“Ovidian”). As of December 31, 2015, the Company sold Ovidian for nominal consideration. The Company was formed in 2000 to operate a next generation global mobile satellite communications system. The Company began its exit from the satellite business in 2011 with the sale of its interests in DBSD North America, Inc. and its subsidiaries to DISH Network Corporation. During 2012, the Company completed its exit with (i) the sale of its medium earth orbit (“MEO”) satellite assets (“MEO Assets”) that had been in storage for nominal consideration, (ii) the transfer of its in-orbit MEO satellite to a new operator who assumed responsibility for all related operating costs effective April 1, 2012, and (iii) the deconsolidation of its MEO-related international subsidiaries. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation— The consolidated financial statements of the Company include the assets and liabilities of its wholly-owned subsidiaries and subsidiaries it controls or in which it has a controlling financial interest. Noncontrolling interests on the consolidated balance sheets include third-party investments in entities that the Company consolidates, but does not wholly own. Noncontrolling interests are classified as part of equity and the Company allocates net income (loss), other comprehensive income (loss) and other equity transactions to its noncontrolling interests in accordance with their applicable ownership percentages. All intercompany transactions and balances have been eliminated in consolidation. All information in these financial statements is in U.S. dollars. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In February 2015, the Company acquired the minority partner’s interest in Provitro Biosciences LLC (“Provitro”) for nominal consideration resulting in 100% ownership of Provitro. The Company continues to have a minority partner in its ContentGuard Holdings, Inc. (“ContentGuard”) subsidiary. Capital Structure Change— At the Company’s annual meeting of shareholders on July 7, 2016, the Company’s shareholders approved a reverse split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of Class A common stock and Class B common stock within a range of one share of common stock for every three shares of common stock (1-for-3) to one share of common stock for every ten shares of common stock (1-for-10), with the exact Reverse Stock Split ratio to be set within this range as determined by the Company’s board of directors in its sole discretion. On September 20, 2016, the Company’s board of directors fixed the Reverse Stock Split ratio at 1-for-10. As a result of the Reverse Stock Split, the share counts and per share data reported in the historical financial statements have been adjusted retrospectively as if the Reverse Stock Split had been in effect for all periods presented. Additionally, the exercise prices and the number of shares issuable under the Company’s stock-based compensation plans have been adjusted retrospectively to reflect the Reverse Stock Split. Segment Information— The Company operates in and reports on one segment (IP management). Operating segments are based upon the Company’s internal organization structure, the manner in which its operations are managed, and the criteria used by its Chief Operating Decision Maker. Substantially all of the Company’s revenue is generated by operations located within the United States, and the Company does not have any long-lived assets located in foreign countries. 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including among others, those related to revenue share obligations for the purpose of determining cost of revenue, the fair value of acquired intangible assets and goodwill, the useful lives and potential impairment of intangible assets and property and equipment, the value of stock awards for the purpose of determining stock-based compensation expense, accrued liabilities (including bonus accruals), valuation allowances related to the ability to realize deferred tax assets, allowances for doubtful receivables and certain tax liabilities. Estimates are based on historical experience and other factors, including the current economic environment as deemed appropriate under the circumstances. Estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in estimates used to prepare these financial statements will be reflected in the financial statements in future periods. Cash and Cash Equivalents— Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities from the date of purchase of 90 days or less. Cash and cash equivalents are comprised of the following (in thousands): December 31, 2016 2015 Cash $ 13,485 $ 26,951 Money market funds 161,146 135,506 $ 174,631 $ 162,457 The fair value of money market funds at December 31, 2016 and 2015 was classified as Level 1 in the hierarchy established by the Financial Accounting Standards Board (“FASB”) as amounts were based on quoted prices available in active markets for identical investments as of the reporting date. Accounts Receivable— Accounts receivable consist primarily of amounts billed to customers under licensing arrangements. For the years ended December 31, 2016, 2015 and 2014, the Company did not incur any losses on its accounts receivable. Based upon historical collections experience and currently available information, the Company has determined that no allowance for doubtful accounts was required at either December 31, 2016 or December 31, 2015. Carrying amounts of such receivables approximate their fair value due to their short-term nature. Prepaid Expenses and Other Current Assets— As of December 31, 2016 and 2015, prepaid expenses and other current assets consisted primarily of insurance prepayments, prepayments of patent maintenance fees and prepayments of rent for leased facilities. Property in Service— Property in service consists primarily of computer equipment, software, furniture and fixtures and leasehold improvements. Property in service is recorded at cost, net of accumulated depreciation, and is depreciated using the straight-line method. Computer equipment and furniture and fixtures are depreciated over their estimated useful lives ranging from three to five years. Software is depreciated over the shorter of its contractual license period or three years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the respective lease. Significant additions and improvements to property in service are capitalized. Repair and maintenance costs are expensed as incurred. Business Combinations— The Company accounts for business combinations using the acquisition method and, accordingly, the identifiable assets acquired and liabilities assumed are recorded at their acquisition date fair values. This valuation requires management to make significant estimates and assumptions, especially with respect to intangible assets. Valuation methodologies may include the cost, market or income approach. Critical estimates in valuing intangible assets include but are not limited to estimates about: future expected cash flows from customers, proprietary technology, the acquired company’s brand awareness and market position and discount rates. The estimates are based upon assumptions the Company believes to be reasonable, but which are inherently uncertain and unpredictable. Goodwill is calculated as the excess of the purchase price over the fair value of net assets, including the amount assigned to identifiable intangible assets. Subsequent changes to assets, liabilities, valuation allowance or uncertain tax positions that relate to the acquired company and existed at the acquisition date that occur both within the measurement period and as a result of new information about facts and circumstances that existed at the acquisition date are recognized as an adjustment to goodwill. Acquisition-related costs, including advisory, legal, accounting, valuation and other costs, are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. Intangible Assets and Goodwill— The Company amortizes finite-lived intangible assets, including patents, acquired in purchase transactions over their expected useful lives. The Company assigns goodwill and indefinite-lived intangible assets to its reporting units based on the expected benefit from the synergies arising from each business combination. The Company evaluates finite-lived intangible assets when events or circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. These events or circumstances could include: a significant change in the business climate, legal factors, operating performance indicators, or changes in technology or customer requirements. Recoverability of an asset or asset group is measured by a comparison of the carrying amount to the future undiscounted net cash flows expected to be generated by the asset or asset group over its life. This comparison requires management to make judgments regarding estimated future cash flows. The Company’s ability to realize the estimated future cash flows may be affected by factors such as changes in operating performance, changes in business strategy, invalidation of patents, unfavorable judgments in legal proceedings and changes in economic conditions. If the Company’s estimates of the undiscounted cash flows do not equal or exceed the carrying value of the asset or asset group, an impairment charge equal to the amount by which the recorded value of the asset or asset group exceeds its fair value is recognized. The Company previously evaluated goodwill for impairment on an annual basis during the fourth quarter, or more frequently if circumstances indicated that the carrying value of a Company reporting unit may exceed its fair value. When evaluating goodwill and indefinite-lived intangible assets for impairment, the Company first performed a qualitative assessment to determine if fair value of the reporting unit was more likely than not greater than the carrying amount. If the assessment indicated that it was more likely than not that the fair value of a reporting unit was less than its carrying amount, then the Company further evaluated the estimated fair value of the reporting unit through the use of discounted cash flow models, which required management to make significant judgments as to the estimated future cash flows utilized. The Company’s ability to realize the future cash flows utilized in its fair value calculations could be affected by factors such as changes in its operating performance, changes in its business strategy, invalidation of its patents, unfavorable judgments in legal proceedings and changes in economic conditions. The results of the models were compared to the carrying amount of the reporting unit. If such comparison indicated that the fair value of the reporting unit was lower than the carrying amount, impairment would exist and the impairment charge would be measured by comparing the implied fair value of the reporting unit’s goodwill to its carrying value. During 2015, the Company determined that a portion of its intellectual property assets and the balance of its goodwill were impaired and recognized an impairment charge of $103.5 million for the year ended December 31, 2015. During 2014, the Company recognized an impairment charge of $11.0 million related to intangibles and goodwill of its Provitro asset group. See Note 5, “Intangible Assets and Goodwill” for further details. As a result of the impairments in 2015 and 2014, the Company no longer maintains balances for goodwill or indefinite-lived intangible assets in its financial statements. Fair Value of Financial Instruments— The Company determines the fair value of its financial instruments based on the fair value hierarchy established by the FASB. The three levels of inputs used to measure fair value are as follows: Level 1—Quoted prices in active markets for identical assets and liabilities. Level 2—Quoted prices in active markets for similar assets and liabilities or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3—Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. As of December 31, 2016 and 2015, the Company’s financial instruments included its cash and cash equivalents, accounts receivable, other receivables, accounts payable and certain other assets and liabilities. The Company has determined that the carrying value of its financial instruments, based on the hierarchy established by the FASB, approximates the fair value of the financial instruments as they are equivalent to cash or due to their short-term nature. Revenue Recognition— The Company derives its operating revenue from IP monetization activities, including patent licensing and patent sales; and, in years prior to 2016, from IP consulting services. Although the Company’s revenue may occur in different forms, it regards its IP monetization activities as integrated and not separate revenue streams. For example, a third party relationship could involve consulting and licensing activities, or the acquisition of a patent portfolio can lead to licensing, consulting and patent sales revenue. The Company’s patent licensing agreements often provide for the payment of contractually determined upfront license fees representing all or a majority of the revenue that will be generated from such agreements for nonexclusive, nontransferable, limited duration licenses. These agreements typically grant (i) a nonexclusive license to make, sell, distribute, and use certain specified products that read on the Company’s patents, (ii) a covenant not to enforce patent rights against the licensee based on such activities, and (iii) the release of the licensee from certain claims. Generally, the agreements provide no further obligation for the Company upon receipt of the minimum upfront license fee. As such, the earnings process is complete and revenue is recognized upon the execution of the agreement, when collectability is reasonably assured, or upon receipt of the minimum upfront license fee, and when all other revenue recognition criteria have been met. Certain of the Company’s patent licensing agreements provide for future royalties or future payment obligations triggered upon satisfaction of conditions. Future royalties and future payments are recognized in revenue upon satisfaction of any related conditions, provided that all revenue recognition criteria, as described below, have been met. The Company sells patents from its portfolios from time to time. These sales are part of the Company’s ongoing operations. Consequently, the related proceeds are recorded as revenue. The timing and amount of revenue recognized from IP monetization activities depend on the specific terms of each agreement and the nature of the deliverables and obligations. Fees earned from IP consulting services are generally recognized as the services are performed. For agreements that are deemed to contain multiple elements, consideration is allocated to each element of an agreement that has stand-alone value using the relative fair value method. The Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) all material obligations have been substantially performed pursuant to agreement terms, services have been rendered to the customer or delivery has occurred, (iii) amounts are fixed or determinable, and (iv) collectability is reasonably assured. As a result of the contractual terms of our patent monetization agreements and the unpredictable nature, form and frequency of monetizing transactions, our revenue may fluctuate substantially from period to period. Research and Development— The Company incurs costs associated with research and development activities and expenses the costs in the period incurred. Research and development expenses during the period were not material for separate disclosure and are included in general and administrative expenses. Stock-Based Compensation— The Company records stock-based compensation on stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock awards issued to employees, directors, consultants and/or advisors based on the estimated fair value on the date of grant and recognizes compensation cost over the requisite service period for awards expected to vest. The fair value of stock options and stock appreciation rights is estimated on the date of grant using the Black-Scholes option pricing model (“Black-Scholes Model”) based on the single option award approach. The fair value of restricted stock awards and restricted stock units is determined based on the number of shares granted and either the quoted market price of the Company’s Class A common stock on the date of grant for time-based and performance-based awards, or the fair value on the date of grant using the Monte Carlo Simulation model (“Monte Carlo Simulation”) for market-based awards. The fair value of stock options, restricted stock awards and restricted stock units with service conditions are amortized to expense on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair value of stock options, stock appreciation rights, restricted stock awards and restricted stock units with performance conditions deemed probable of being achieved and cliff vesting is amortized to expense over the requisite service period using the straight-line method of expense recognition. The fair value of restricted stock awards and restricted stock units with performance and market conditions are amortized to expense over the requisite service period using the straight-line method of expense recognition. The fair value of stock-based payment awards as determined by the Black-Scholes Model and the Monte Carlo Simulation are affected by the Company’s stock price as well as other assumptions. These assumptions include, but are not limited to, the expected stock price volatility over the term of the awards and actual and projected employee stock option exercise behaviors. Forfeitures are estimated at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company accounts for the modification of the terms or conditions of a stock-based payment award as an exchange of the original award for a new award. Compensation expense for modified stock-based payment awards is equal to the fair value of the original award plus the incremental cost conveyed as a result of the modification expensed over the remaining life of the award. Income Taxes— The Company accounts for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. A valuation allowance against deferred tax assets (“DTAs”) is recorded when it is more likely than not that the assets will not be realized. The Company records an unrecognized tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the tax authorities. The Company’s policy is to recognize interest and/or penalties related to unrecognized tax benefits as income tax expense. Contingencies— Outcomes of legal proceedings and claims brought by and against the Company are subject to significant uncertainty. The Company accrues an estimated loss from a loss contingency, such as a legal claim, by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. The Company discloses a contingency if there is at least a reasonable possibility that a loss has been incurred. In determining whether a contingent loss should be accrued or disclosed, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact the Company’s financial position, results of operations or cash flows. For contingencies that might result in a gain, the Company does not record the gain until realized. Income (Loss) Per Share —Basic income (loss) per share is calculated based on the weighted average number of Class A common stock and Class B common stock (the “Common Shares”) outstanding during the period. Diluted income (loss) per share is calculated by dividing the income (loss) allocable to common shareholders by the weighted average Common Shares outstanding plus dilutive potential Common Shares. Prior to the satisfaction of vesting conditions, unvested restricted stock awards are considered contingently issuable and are excluded from weighted average Common Shares outstanding used for computation of basic loss per share. Potential dilutive Common Shares consist of the incremental Class A common stock issuable upon the exercise of outstanding stock options (both vested and non-vested) and unvested restricted stock awards and units, calculated using the treasury stock method. The calculation of dilutive loss per share for the years ended December 31, 2015 and 2014 excludes all potential dilutive Common Shares as their inclusion would have been antidilutive. The following table sets forth the computation of basic and diluted income (loss) per share (in thousands, except share and per share data): Year ended December 31, 2016 2015 2014 Net income (loss) attributable to Pendrell $ 17,763 $ (109,680 ) $ (51,002 ) Weighted average common shares outstanding 26,827,699 26,713,685 26,633,662 Less: weighted average unvested restricted stock awards (68,714 ) (142,952 ) (192,912 ) Shares used for computation of basic income (loss) per share 26,758,985 26,570,733 26,440,750 Add back: weighted average unvested restricted stock awards and units 932,881 — — Shares used for computation of diluted income (loss) per share (1) 27,691,866 26,570,733 26,440,750 Basic income (loss) per share attributable to Pendrell $ 0.66 $ (4.13 ) $ (1.93 ) Diluted income (loss) per share attributable to Pendrell $ 0.64 $ (4.13 ) $ (1.93 ) (1) Stock options, restricted stock awards and units totaling 1,305,365, 2,784,787 and 2,811,354 for the years ended December 31, 2016, 2015 and 2014, respectively, were excluded from the calculation of diluted income (loss) per share as their inclusion was anti-dilutive. New Accounting Pronouncements —In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-02, Leases (Topic 842) , which requires companies that are lessees to recognize a right-of-use asset and lease liability for most leases that do not meet the definition of a short-term lease. For income statement purposes, leases will continue to be classified as either operating or financing. Classification will be based on criteria that are largely similar to those applied in current lease accounting. Compliance with this ASU is required for annual periods beginning after December 15, 2018, and interim periods therein. Early adoption is permitted. As the Company’s future minimum lease commitments as of December 31, 2016 are less than $1.0 million, the Company believes the future adoption of this ASU will not have a material impact on its financial position, results of operations or cash flows. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments Throughout the year ended December 31, 2016, the FASB has issued a number of ASUs which provide further clarification to ASU No. 2014-09, Revenue (Topic 606): Revenue from Contracts with Customers |
Provitro
Provitro | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Provitro | 3. Provitro In February 2013, the Company acquired a 68.75% interest in Provitro, the developer of the Provitro™ proprietary micro-propagation technology designed to facilitate the production on a commercial scale of certain plants, particularly timber bamboo. In February 2015, the Company acquired the minority partner’s interest in Provitro for nominal consideration resulting in 100% ownership of Provitro. From acquisition through the year ended December 31, 2014, the Company attempted to develop a strategy to commercialize the Provitro™ technology, but did not generate revenue from the technology. In January 2015, the Company suspended further development of the Provitro™ technology due to the Company’s inability to identify near-term opportunities for commercialization. The Company began seeking a buyer for Provitro’s assets and took an $11.0 million impairment charge during the fourth quarter of its year ended December 31, 2014. The impairment charge was equal to the sum of its unamortized investment in the Provitro™ technology and the goodwill associated with its acquisition of Provitro. In September 2015, the Company sold Provitro’s facility and related tangible assets for $2.0 million, resulting in a $0.7 million loss which is included in general and administrative expenses for the year ended December 31, 2015. The purchase price is payable in installments of which $0.1 million was paid immediately, $0.4 million was received in January 2016, $0.9 million was received in August 2016 and $0.6 million is scheduled to be paid no later than March 1, 2017. The installment payments are reflected in the balance sheet as follows (in thousands): December 31, 2016 December 31, 2015 Other receivables: Provitro note receivable $ 600 $ 1,300 Other 69 29 Total other receivables $ 669 $ 1,329 Other assets: Provitro note receivable $ — $ 600 Other 29 38 Total other assets $ 29 $ 638 Additionally, in December 2015, the Company sold its rights to the Provitro™ micro-propagation technology, resulting in a nominal amount of revenue. |
Accounts Receivable (Current an
Accounts Receivable (Current and Non-current) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Accounts Receivable (Current and Non-current) | 4. Accounts Receivable (Current and Non-current) The Company expects to receive the $15.5 million of current accounts receivable at December 31, 2016 no later than July 2017. The Company expects to receive payment of approximately $15.7 million of its non-current accounts receivable in 2018 and the remainder in 2019. A significant portion of the Company’s accounts receivable balance (current and noncurrent) is due from Toshiba Corporation. In December 2016, Toshiba announced that it expects to write-down its nuclear business by several billion dollars. The write-down could result in negative shareholder equity, which could make it difficult for Toshiba to obtain funding if needed. At this time, based on its review of currently available information, the Company believes that no allowance for doubtful accounts is required with regards to its receivable from Toshiba. The Company continues to evaluate its position as more information becomes available. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | 5. Intangible Assets and Goodwill 2015 Impairment of Intangibles and Goodwill In November 2015, as a result of the non-infringement verdicts in the Google Litigation and Apple Litigation (see Note 8), the Company revised its projected cash flows for its intangible assets, triggering an impairment analysis of its intangible assets and goodwill. The Company records an impairment charge on its intangible assets if it determines that their carrying value may not be recoverable. The carrying value is not recoverable if it exceeds the undiscounted cash flows resulting from the use of the asset and its eventual disposition. When the Company determines that the carrying value of its intangible assets may not be recoverable, the Company measures the potential impairment based on a projected discounted cash flow method using a discount rate determined by its management to be commensurate with the risk inherent in its current business model. An impairment loss is recognized only if the carrying amount of the intangible assets exceeds its estimated fair value. An impairment charge is recorded to reduce the pre-impairment carrying amount of the intangible assets to their estimated fair value. Determining the fair value is highly judgmental in nature and requires the use of significant estimates and assumptions considered to be Level 3 fair value inputs, including anticipated future revenue opportunities, operating margins, and discount rates, among others. The estimated fair value of the intangible assets was determined based on the income approach, as it was deemed to be most indicative of the Company's fair value in an orderly transaction between market participants. Under the income approach the Company determined fair value based on estimated future cash flows resulting from licensing its intangible assets. The estimated cash flows were discounted by an estimated weighted-average cost of capital which reflects the overall level of inherent risk of the Company and the rate of return an outside investor would expect to earn. Upon completion of the analysis, the Company concluded that the estimated fair value of its intangible assets was less than their carrying amount and recorded an impairment charge of $82.3 million, which is included in "Impairment of intangibles and goodwill" in the accompanying Consolidated Statements of Operations. The Company then evaluated the carrying value of its goodwill by estimating the fair value of the reporting unit through the use of discounted cash flow models, which required management to make significant judgments as to the estimated future cash flows resulting from licensing its intangible assets. Upon completion of the analysis, the Company concluded that the estimated fair value of its reporting unit was less than its carrying amount and recorded an additional $21.2 million impairment charge related to goodwill in the fourth quarter of 2015. 2014 Impairment of Intangibles and Goodwill In January 2015, the Company suspended further development of the Provitro™ technology as it had been unable to identify near-term opportunities to commercialize the technology. The Company determined that this suspension provided additional evidence about conditions that existed prior to December 31, 2014, triggering an impairment analysis of the intangibles associated with its Provitro asset group. In its impairment analysis, the Company compared the carrying amount of the Provitro™ technology to the future undiscounted net cash flows expected to be generated by the Provitro™ technology. The Company concluded that the anticipated undiscounted cash flows from the Provitro™ technology did not exceed the carrying value of the Provitro™ technology, and the Company recorded a $10.5 million non-cash impairment charge in its results of operations for the year ended December 31, 2014. Additionally, as of December 31, 2014, the company determined that the goodwill related to its acquisition of Provitro was impaired and recorded a $0.5 million non-cash impairment charge for the year ended December 31, 2014. Intangible Assets The following table presents details of the Company’s intangible assets and related amortization (in thousands): December 31, 2016 December 31, 2015 Cost: Patents $ 65,796 $ 67,096 Customer relationships 1,804 1,804 Total cost 67,600 68,900 Accumulated amortization: Patents (61,080 ) (52,719 ) Customer relationships (1,804 ) (1,804 ) Total accumulated amortization (62,884 ) (54,523 ) Intangible assets, net $ 4,716 $ 14,377 At December 31, 2016, the Company determined that the expected period of benefit of its patents is approximately two years. The Company has used, and may continue to use, different structures and forms of consideration for its acquisitions of intangible assets. Acquisitions may be consummated through the use of cash, equity, seller financing, third party debt, earn-out obligations, revenue sharing, profit sharing, or some combination of these types of consideration. Consequently, the acquisition values reflected in the Company’s investing activities may represent lower amounts than would be reflected, for example, in a situation where cash alone was utilized to complete the acquisition. During the year ended December 31, 2015, the Company further enhanced its existing memory and storage technologies patent portfolio for an additional $2.0 million. No patents were purchased during the years ended December 31, 2014 and 2016. During the years ended December 31, 2015 and 2014, the Company sold certain patents in several transactions and has included the gross proceeds in revenue. No patents were sold during the year ended December 31, 2016. Cost associated with the patents sold, including any remaining net book value, are included in cost of revenues in the Company’s consolidated statements of operations. Certain of the patents sold, as well as certain of those licensed, were subject to an obligation to pay a substantial portion of the net proceeds to a third party. These costs are also included in cost of revenues. In future periods, these third party payments as a percentage of revenues may vary significantly based on the structure utilized for any given acquisition. Costs associated with patents sold during the years ended December 31, 2016, 2015 and 2014 were as follows (in thousands): Year ended December 31, 2016 2015 2014 Cost of patents sold $ — $ 138 $ 794 The Company periodically abandons patents that are not part of existing licensing programs or for which the Company has determined that it would no longer allocate resources to their maintenance and enforcement. Costs associated with the abandonment of patents, including any remaining net book value, are included in patent administration and related costs in the Company’s consolidated statements of operations and were as follows for the years ended December 31, 2016, 2015 and 2014 (in thousands): Year ended December 31, 2016 2015 2014 Cost associated with the abandonment and/or disposition of patents $ 163 $ 958 $ 2,765 Amortization expense related to purchased intangible assets, reported as amortization of intangibles in the consolidated statements of operations, for the years ended December 31, 2016, 2015 and 2014 were as follows (in thousands): Year ended December 31, 2016 2015 2014 Amortization of intangibles $ 9,498 $ 13,939 $ 15,929 The estimated future amortization expense of purchased intangible assets as of December 31, 2016 is as follows (in thousands): Year ending December 31, Amount 2017 $ 2,358 2018 2,358 Total $ 4,716 |
Accrued expenses
Accrued expenses | 12 Months Ended |
Dec. 31, 2016 | |
Payables And Accruals [Abstract] | |
Accrued expenses | 6. Accrued expenses The following table summarizes accrued expenses (in thousands): December 31, 2016 December 31, 2015 Accrued payroll and related expenses $ 1,134 $ 1,742 Accrued legal, professional and other expenses 538 2,550 Accrued revenue share obligations 4,606 — $ 6,278 $ 4,292 |
Other non-current liabilities
Other non-current liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Payables And Accruals [Abstract] | |
Other non-current liabilities | 7. Other non-current liabilities At December 31, 2016, other non-current liabilities, primarily consisting of revenue share obligations, are estimated to be payable as follows (in thousands): Fiscal 2018 $ 7,362 Fiscal 2019 434 $ 7,796 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Lease and Commitments— The Company has operating lease agreements for its main office in Kirkland, Washington, and its office in Finland. The Company terminated its lease for office space in Plano, Texas effective June 30, 2016. Total rental expense included in general and administrative expenses in the Company’s consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014 was as follows (in thousands): Year ended December 31, 2016 2015 2014 Rent expense $ 245 $ 793 $ 662 As of December 31, 2016, future minimum payments under the Company’s lease agreements were as follows (in thousands): Operating leases 2017 $ 339 2018 348 2019 205 Total minimum payments $ 892 Litigation— In the opinion of management, except for those matters described below and elsewhere in this report, to the extent so described, litigation, contingent liabilities and claims against the Company in the normal course of business are not expected to involve any judgments or settlements that would be material to the Company’s financial condition, results of operations or cash flows. ContentGuard Enforcement Actions —In late 2013 and early 2014, in the Eastern District of Texas, ContentGuard filed patent infringement lawsuits against various manufacturers of mobile communication and computing devices, through which ContentGuard alleged that these manufacturers infringed and continue to infringe nine of ContentGuard’s patents by making, using, selling or offering for sale their devices. The lawsuits culminated in two trials in the Fall of 2015: one against Apple, Inc. (the “Apple Litigation”) and the other against Google, Inc. and manufacturers of Android devices (the “Google Litigation”). Settlements. In late 2015 and early 2016, ContentGuard agreed to license its patents to Amazon and DirecTV, thereby settling its claims against those two parties and releasing them from the Apple Litigation and Google Litigation. Google Litigation On September 23, 2015, a jury in the Google Litigation found that the patents asserted against Google and Samsung are valid, but that products accused in the Google Litigation do not infringe the patents. The judge entered judgment consistent with the verdict in October 2015. The non-infringement decision, if not overturned on appeal, applies to all defendants that manufacture, sell or distribute Android devices that run Google Play services. Apple Litigation Verdict. On November 20, 2015, a jury in the Apple Litigation found that the patents asserted against Apple in the Apple Litigation are valid, but that Apple products accused in the Apple Litigation do not infringe the patents. The judge entered judgment consistent with the verdict in December 2015. Appeals. ContentGuard appealed the juries’ findings in the Google Litigation and Apple Litigation to the Federal Circuit Court, which designated the appeals as companion cases. As such, the same panel of three judges will hear and decide both appeals. Briefing was completed in February 2017, and the Company anticipates that oral arguments will be heard in early June 2017. The Company cannot predict the outcome of the appeals. IPR and CBM Petitions. In December 2014, Apple and Google filed a total of 35 petitions with the USPTO, through which Apple and Google challenged the validity of all nine patents asserted in the Apple Litigation and Google Litigation. The USPTO terminated all but one petition. The lone remaining petition, relating to patent number 7,774,280, went to trial and was resolved in ContentGuard’s favor. Google appealed the trial finding to the Federal Circuit Court. The Company cannot predict the outcome of the appeal. ZTE —In early 2012, ContentGuard and its subsidiaries filed lawsuits in United States and German courts, alleging that ZTE Corporation, ZTE (USA) Inc. and ZTE Deutschland GmbH (collectively “ZTE”) infringed and continue to infringe ContentGuard patents by making, using, selling or offering for sale certain mobile communication and computing devices. In response, ZTE filed a nullity action against two of the patents and an opposition proceeding against the third patent. ZTE prevailed in the opposition proceeding, resulting in the revocation of one European patent, which ContentGuard has appealed. The infringement and nullity proceedings in Germany, along with all U.S. court actions, were “put to rest” or stayed as the result of a standstill agreement signed by ContentGuard and ZTE in December 2013. The standstill agreement has been extended through the end of 2017. MTL Enforcement Actions— In December 2016, the Company’s wholly-owned subsidiary, Memory Technologies LLC (“MTL”) filed patent infringement claims against SanDisk LLC and certain affiliated companies (collectively, “SanDisk”) at the International Trade Commission (the “ITC”) and in the Federal District Court for the Central District of California (the “District Court”), through which MTL alleged that SanDisk infringed and continues to infringe MTL’s patents. ITC Action. In its ITC filing, MTL requested that the ITC commence an investigation against SanDisk to bar the unlawful importation into the United States, the sale for importation, and the sale within the United States after importation of secure digital cards, microSD cards and components of such cards. The ITC instituted the investigation in January 2017, and MTL is cooperating with the investigation. District Court Action. In parallel with the ITC Action, MTL filed a District Court action against SanDisk alleging infringement of eight patents and seeking monetary damages for patent infringement. The District Court action has been stayed pending resolution of the ITC Action. The Company is unable to anticipate the timing or outcome of the ITC Action and the District Court Action. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Shareholders' Equity | 9. Shareholders’ Equity Common Stock— The Company’s Articles of Incorporation authorizes two classes of common stock, Class A and Class B. The rights of the holders of shares of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Holders of shares of Class A common stock are entitled to one vote per share. Holders of shares of Class B common stock are entitled to ten votes per share. The Class B common stock is convertible at any time at the option of its holder into shares of Class A common stock. Each share of Class B common stock is convertible into one share of Class A common stock. Additionally, subject to certain exceptions, shares of Class B common stock will automatically convert into shares of Class A common stock if the shares of Class B common stock are sold or transferred. Class A common stock is not convertible. Eagle River Satellite Holdings, LLC, the Company’s controlling shareholder, together with its affiliates Eagle River Investments, LLC, Eagle River, Inc. and Eagle River Partners, LLC held an economic interest of approximately 33.3% and a voting interest of approximately 65.0% in the Company as of December 31, 2016. Stock Incentive Plan— On November 14, 2012, the Company’s shareholders approved the Pendrell Corporation 2012 Equity Incentive Plan (the “2012 Plan”). Effective upon the approval of the 2012 Plan, the Company’s 2000 Stock Incentive Plan, as amended and restated (the “2000 Plan”) was terminated. No additional awards will be granted under the 2000 Plan. The purpose of the 2012 Plan is to assist the Company in securing and retaining the services of skilled employees, directors, consultants and/or advisors of the Company and to provide incentives for such individuals to exert maximum efforts toward the Company’s success. The 2012 Plan allows for the grant of stock options, stock appreciation rights, performance stock awards, performance cash awards, restricted stock awards, restricted stock unit awards and other stock awards (collectively, “Awards”) to employees, directors, consultants and/or advisors who provide services to the Company or its subsidiaries. Under the 2012 Plan, the aggregate number of shares of Class A common stock that may be issued pursuant to Awards from and after the effective date of the 2012 Plan will not exceed, in the aggregate, the sum of 3,795,254 shares, plus any shares subject to outstanding stock awards granted under the 2000 Plan that (i) expire or terminate for any reason prior to exercise or settlement; (ii) are forfeited, canceled or otherwise returned due to the failure to meet a condition required to vest such shares; or (iii) are reacquired, withheld or not issued to satisfy a tax withholding obligation in connection with an award. As of December 31, 2016, 2,449,419 shares were reserved and remain available for grant under the 2012 Plan. Stock-Based Compensation— The Company records stock-based compensation based on the estimated fair value on the date of grant and recognizes compensation cost over the requisite service period for awards expected to vest. The Company estimates its forfeiture rate for Awards based on the Company’s historical rate of forfeitures due to terminations and expectations for forfeitures in the future. The Company’s estimated forfeiture rate was 5% for the years ended December 31, 2016, 2015 and 2014. Stock-based compensation expense included in the Company’s consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014 was as follows (in thousands): Year ended December 31, 2016 2015 2014 Stock options (1) $ 1,193 $ 2,236 $ 7,268 Restricted stock awards (1) (2) 2,231 2,271 2,137 Total stock-based compensation expense $ 3,424 $ 4,507 $ 9,405 (1) On November 19, 2014, Benjamin G. Wolff resigned from his positions as President and Chief Executive Officer of the Company. The Company entered into a separation agreement in accordance with the terms of Mr. Wolff’s Amended and Restated Employment Letter Agreement (the "Agreement"). The Agreement provided for the vesting of all options, shares of restricted stock ("RSAs") and restricted stock units ("RSUs") in which Mr. Wolff would have vested had he remained actively employed by the Company through the second anniversary of his resignation, excluding any unvested performance-based RSAs or performance-based RSUs. The Agreement also provided for an extension of the exercise period for Mr. Wolff’s vested stock options until December 15, 2015. The extension of the exercise period is considered a modification and resulted in additional stock-based compensation expense of $0.7 million, as determined using a Black-Scholes model, which was recognized on the modification date as the options were vested pursuant to the Agreement. The accelerated vesting of the options, RSUs and RSAs resulted in $2.1 million of additional stock-based compensation expense in the year ended December 31, 2014. (2) Stock-based compensation expense for the year ended December 31, 2015 and 2014, includes $0.2 million and $0.8 million of expense, respectively, related to 250,000 Class A common stock restricted stock awards that are required to be treated as a liability. The Company settled the related liability with a $2.5 million payment in April 2015 and no further expense has been incurred. At December 31, 2016, the balance of stock-based compensation cost to be expensed in future years related to unvested stock-based awards, as adjusted for expected forfeitures, is as follows (in thousands): 2017 (1) $ 2,823 2018 (1) 1,859 2019 and thereafter — $ 4,682 (1) Future expense does not include expense related to 0.1 million performance-based stock options and 0.2 million performance-based restricted stock awards granted in 2015, as these awards vest upon the achievement of certain performance milestones for which the related performance targets have yet to be established. The fair value of these awards will not be known until the date the performance targets are established at which point expensing will commence. The weighted average period over which the unearned stock-based compensation expense is expected to be recognized is approximately 1.75 years. Stock Options and Stock Appreciation Rights— The Company has granted stock options and stock appreciation rights to employees, directors, consultants and advisors in connection with their service to the Company. Stock options to purchase the Company’s Class A common stock are granted at the fair market value of the stock on the date of grant. The Company has both service-based stock options and performance-based stock options. The majority of service-based stock options granted to employees become exercisable over a four year period, while stock options granted to non-employee directors generally vest over one year. Performance-based stock options become exercisable if the Company achieves specified performance goals during the performance period and the grantee remains employed during the subsequent vesting period. Stock options generally expire 10 years after the date of grant or up to three months after termination of employment, whichever occurs earlier. There are no stock appreciation rights currently outstanding. The weighted average fair value of stock options granted during the years ended December 31, 2016, 2015 and 2014 was estimated using the Black-Scholes Model with the following assumptions: Year ended December 31, 2016 2015 2014 Weighted average expected volatility 53 % 48 % 55 % Weighted average risk-free interest rate 1.2 % 1.9 % 1.9 % Expected dividend yield 0 % 0 % 0 % Weighted average expected term in years 5.5 6.0 6.2 Weighted average estimated fair value per option granted $ 3.32 $ 4.70 $ 7.90 The assumptions used to calculate the fair value are evaluated and revised, as necessary, to reflect market conditions and the Company’s experience. The Company’s expected stock price volatility rate is based on a peer group, which the Company believes is a reasonable representation of the Company’s business direction and expected future volatility as an IP investment and asset management business. The risk-free interest rate is based upon U.S. Treasury bond interest rates appropriate for the term of the Company’s employee stock options. The expected dividend yield is based on the Company’s history and expectation of dividend payments. The expected term has been estimated using the simplified method which permit entities, under certain circumstances, to continue to use the simplified method in developing estimates of the expected term of “plain-vanilla” share options. The Company’s stock option activity for the year ended December 31, 2016 is summarized as follows: Number of options Weighted average exercise price Weighted average remaining life (in years) Outstanding at December 31, 2015 1,731,732 $ 16.21 Granted (1) 24,000 6.91 Forfeited (450,367 ) 17.19 Outstanding at December 31, 2016 (2) 1,305,365 $ 15.70 6.72 Exercisable at December 31, 2016 (2) 800,140 $ 16.97 5.95 Vested and expected to vest at December 31, 2016 (2) 1,256,354 $ 15.64 6.81 (1) All options granted were to members of the Company’s board of directors. (2) Aggregate intrinsic value represents the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options, before applicable income taxes and represents the amount optionees would have realized if all in-the-money options had been exercised on December 31, 2016. As of December 31, 2016, the aggregate intrinsic values of stock options outstanding, exercisable, and vested and expected to vest were all zero as the closing stock price of the Company’s stock was lower than the exercise prices of its outstanding options. The total fair value of options which vested during the years ended December 31, 2016, 2015 and 2014 was approximately $2.0 million, $2.5 million and $7.3 million, respectively. The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2016: Outstanding stock options Exercisable stock options Range of exercise prices Number of options Weighted average exercise price Weighted average remaining life (in years) Number of options Weighted average exercise price $ 6.91—$12.90 268,125 $ 11.00 6.37 244,125 $ 11.40 $12.91—$13.25 176,090 13.10 8.38 88,050 13.10 $13.26—$14.05 400,000 13.40 8.52 100,000 13.40 $14.06—$19.60 232,500 16.24 5.75 167,002 16.60 $19.61—$42.20 228,650 26.67 4.06 200,963 27.49 1,305,365 $ 15.70 6.72 800,140 $ 16.97 Restricted Stock Awards— The Company has granted restricted stock awards to employees, directors and consultants in connection with their service to the Company. The Company’s stock grants can be categorized as either service-based awards, performance-based awards, and/or market-based awards. The Company’s restricted stock award activity for the year ended December 31, 2016 is summarized as follows: Number of restricted stock awards Weighted average grant date fair value Unvested—December 31, 2015 1,053,075 $ 8.40 Granted (1) 78,083 5.46 Vested (200,856 ) 10.52 Forfeited (39,547 ) 10.32 Unvested—December 31, 2016 890,755 $ 8.23 (1) Represents shares issued to the Company’s Board of Directors as compensation for service. These awards have a grant date fair value of $0.4 million and vest upon issuance. During the year ended December 31, 2016, 122,773 stock awards vested as a result of the Company’s employees achieving service and performance targets. Certain holders of the vested RSAs and RSUs exercised their right to have their awards net-share settled to cover statutory employee taxes related to the vesting of the RSAs and RSUs. The settlement of these awards resulted in the Company repurchasing and/or cancelling 6,352 shares for approximately $40,000. |
Gain on Contingencies
Gain on Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Gain on Contingencies | 10. Gain on Contingencies During 2012, as part of the Company’s exit from the satellite business, the Company sold its MEO Assets that had been in storage for nominal consideration. Under the sales agreement, the Company was entitled to a substantial portion of any proceeds that the buyer generated from the resale of the MEO Assets. In January 2015, the buyer resold the MEO Assets and the Company received two of three scheduled payments for these assets in 2015, resulting in the recognition of $3.9 million gain on contingency in the year ended December 31, 2015. The Company received the final scheduled payment in April 2016, resulting in the recognition of a $2.0 million gain on contingency in the year ended December 31, 2016. Due to the uncertainty of collection at December 31, 2015, the Company did not recognize the gain generated by the third scheduled payment for the MEO Assets in 2015. In March 2012, the Company asserted claims in arbitration in London against the J&J Group to recover approximately $2.7 million in costs that J&J was required to reimburse the Company pursuant to a MEO satellite asset purchase agreement that was signed in April 2011. During 2011, the Company recorded a receivable of $2.7 million to reflect the J&J Group’s reimbursement obligation and established a corresponding reserve in the full amount of the receivable pending resolution of the dispute. In November 2012, the Company obtained an arbitration judgment award for approximately $4.0 million, which included the requested reimbursement plus costs and fees of approximately $1.3 million. J&J Group submitted multiple appeals to the UK courts, and in December 2014, the Company obtained an enforcement judgment against J&J Group, and commenced collection efforts. In November 2015, the Company entered into a settlement agreement with the J&J Group whereby it received approximately $1.6 million, net of collection costs, in full and final settlement of all claims against the J&J Group which is included in gain on contingencies in the statements of operations for the year ended December 31, 2015. Additionally, the Company recorded a gain of $0.5 million during 2015 as a result of the release of a tax indemnification liability associated with the acquisition of Ovidian in June 2011. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes The Company’s income tax expense for the years ended December 31, 2016, 2015 and 2014 consists of the following (in thousands): Year ended December 31, 2016 2015 2014 United States—deferred $ — $ (1,497 ) $ 33 Foreign—current — 4,128 6,270 $ — $ 2,631 $ 6,303 For the year ended December 31, 2016, the Company did not record a provision for U.S. federal income tax due to available tax loss carryforwards. During the year ended December 31, 2015, as a result of the impairment of certain indefinite-lived intangibles, the deferred tax liability associated with these intangibles was decreased, resulting in a federal tax benefit of $1.5 million. For the years ended December 31, 2015 and 2014, the Company recorded tax provisions of $4.1 million and $6.3 million, respectively, related to foreign taxes withheld on revenue generated from license agreements executed with third party licensees domiciled in a foreign jurisdiction. The Company had no foreign taxes withheld during the year ended December 31, 2016. In general, foreign taxes withheld may be claimed as a deduction on future U.S. corporate income tax returns, or as a credit against future U.S. federal income tax liabilities, subject to certain limitations. However, due to uncertainty regarding the Company’s ability to utilize the deduction or credit resulting from the foreign withholding, the Company established a full valuation allowance against the related deferred tax asset. A reconciliation of the federal statutory income tax rate of 34% to the Company’s effective income tax rate is as follows: Year ended December 31, 2016 2015 2014 Statutory tax rate 34.00 % 34.00 % 34.00 % Change in valuation allowance (59.30 ) (22.59 ) (95.75 ) Release of uncertain tax position — — 62.77 Foreign withholding taxes — (2.37 ) (7.98 ) Goodwill impairment — (6.07 ) — Stock-based compensation 10.24 (3.23 ) — Loss on sale of subsidiary 13.70 — — Other 1.36 (2.03 ) (5.20 ) Effective tax rate 0 % (2.29 )% (12.16 )% The significant components of the Company’s net deferred tax assets and liabilities are as follows (in thousands): December 31, 2016 December 31, 2015 Deferred tax assets: Net operating losses $ 941,163 $ 956,181 Basis difference in Liquidating Trust 16,955 16,894 Accrued expenses and other 12,336 10,380 Total deferred tax assets 970,454 983,455 Valuation allowance (970,454 ) (981,096 ) Net deferred tax assets $ — $ 2,359 Deferred tax liabilities: Intangibles $ — $ (2,359 ) Total deferred tax liabilities $ — $ (2,359 ) Net deferred tax liabilities $ — $ — As of December 31, 2016, the Company had federal tax net operating loss carryforwards in the United States (“NOLs”) of approximately $2.5 billion. A significant portion of the NOL was generated when the Company disposed of its satellite business and transferred the MEO-related international subsidiaries to a liquidating trust. The Company believes the NOL can be carried forward to offset certain future taxable income that may be generated during the NOL carryforward period. The NOL carryforward period begins to expire in 2025 with a significant portion expiring in 2032. The use of the NOL will be significantly limited if the Company undergoes a Tax Ownership Change under Section 382 of the Internal Revenue Code (“Tax Ownership Change”). Broadly, the Company will have a Tax Ownership Change if, over a three year testing period, the portion of all stock of the Company, by value, owned by one or more 5% shareholder increases by more than 50 percentage points. For purposes of this test, shareholders that own less than 5% of the stock of the Company are aggregated into one or more separate “public groups”, each of which is treated as a 5% shareholder. In general, shares traded within a public group are not included in the Tax Ownership Change test. As discussed below, the Board of Directors adopted a Tax Benefits Preservation Plan designed to preserve shareholder value and the value of certain tax assets primarily associated with NOLs. As of December 31, 2016, the Company also had tax loss carryforwards in the state of California of approximately $1.3 billion, a portion of which will expire in 2017. A significant portion of the California loss carryforward was generated when the Company disposed of its satellite business and will expire in 2032. The impacts of a Tax Ownership Change, discussed above, would apply to the California tax losses as well. For all years presented, the Company has considered all available evidence, including the history of tax losses and the uncertainty around future taxable income. Based on the weight of the evidence available at December 31, 2016, a valuation allowance has been recorded to reduce the value of the Company’s DTA, including the DTA associated with the NOL, to an amount that is more likely than not to be realized. As of December 31, 2016, the Company had unrecognized tax benefits of $15.3 million related to income tax refund claims filed in various jurisdictions. Due to the uncertain nature of the refund claims, the uncertain tax positions have not been recorded as an income tax benefit. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): December 31, 2016 2015 2014 Beginning of period $ 15,594 $ 5,132 $ 37,665 Additions for tax positions taken during the current period — 10,462 — Reductions for tax positions taken during prior periods — — (32,533 ) Exchange rate fluctuations (271 ) — — End of period $ 15,323 $ 15,594 $ 5,132 All of the unrecognized tax benefits at December 31, 2016, if fully recognized, would affect the Company’s effective tax rate. The Company estimates that a reduction in its unrecognized tax benefits of approximately $15.3 million may occur within the next twelve months upon resolution of determinations by taxing authorities. The Company and its subsidiaries file U.S. federal income tax returns and tax returns in various state and foreign jurisdictions. The Company is open to examination for the years ended 2005 and forward with respect to NOLs generated and carried forward from those years. The Company is open to examination by foreign jurisdictions for tax years 2012 forward. Certain Taxes Payable Irrespective of NOLs —Under the Internal Revenue Code and related Treasury Regulations, the Company may “carry forward” its NOLs in certain circumstances to offset current and future income and thus reduce its federal income tax liability, subject to certain restrictions. To the extent that the NOLs do not otherwise become limited, the Company believes that it will be able to carry forward a significant amount of NOLs. However, these NOLs will not impact all taxes to which the Company may be subject. For instance, state or foreign income taxes and/or revenue based taxes may be payable if the Company’s income or revenue is attributed to jurisdictions that impose such taxes; the Company’s NOLs do not entirely offset its income for alternative minimum tax; and the NOLs will not offset federal personal holding company tax liability that Pendrell or one or more of its corporate subsidiaries may incur. This is not an exhaustive list, but merely illustrative of the types of taxes to which the Company’s NOLs are not applicable. Personal Holding Company Determination —The Internal Revenue Code imposes an additional tax on the undistributed income of a Personal Holding Company (“PHC”). In general, a corporation will be classified as a PHC if 50% or more of its outstanding shares, measured by value, are owned directly or indirectly by five or fewer individual shareholders at any time during the second half of the year (“Concentrated Ownership”) and at least 60% of its adjusted ordinary gross income is Personal Holding Company Income (“PHCI”). Broadly, PHCI includes items such as dividends, interest, rents and royalties, among others. For a corporate subsidiary, Concentrated Ownership is determined by reference to ownership of the parent corporation(s), and the subsidiary’s income is subject to additional tests to determine whether its income renders the subsidiary a PHC. If a corporation is a PHC, generates positive net PHCI and does not distribute to its shareholders a proportionate dividend in the full amount of the net PHCI, then the undistributed net PHCI is taxed (at 20% under current law). Due to the significant number of shares held by the Company’s largest shareholders and the type of income that the Company generates, the Company must continually assess share ownership of Pendrell and its consolidated subsidiary ContentGuard to determine whether or not there is Concentrated Ownership of either corporation. For 2016, the Company determined that Pendrell, the parent company, met the Concentrated Ownership test, but that ContentGuard has not yet met the Concentrated Ownership test due to the interest held by its minority shareholder. The Company does not expect to have a PHC liability for 2016 because Pendrell did not have undistributed net PHCI. If either Pendrell or ContentGuard is determined to be a PHC in the future, generates net PHCI, and does not distribute to its shareholders a proportionate dividend in the full amount of the net PHCI, then the undistributed net PHCI will be taxed. Tax Benefits Preservation Plan— Effective January 29, 2010, the Board of Directors adopted the Tax Benefits Preservation Plan (“Tax Benefits Plan”) to help the Company preserve its ability to utilize fully its NOLs and to help preserve potential future NOLs. As discussed above, if the Company experiences a “Tax Ownership Change,” as defined in Section 382 of the Internal Revenue Code, the Company’s ability to use the NOLs could be significantly limited. The Tax Benefits Plan is intended to act as a deterrent to any person or group acquiring, without the approval of the Company’s Board of Directors, beneficial ownership of 4.9% or more of the Company’s securities, defined to include: (i) shares of its Class A common stock and Class B common stock, (ii) shares of its preferred stock, (iii) warrants, rights, or options to purchase its securities, and (iv) any interest that would be treated as “stock” of the Company for purposes of Section 382 or pursuant to Treasury Regulation § 1.382-2T(f)(18). Holders of 4.9% or more of the Company’s securities outstanding as of the close of business on January 29, 2010 will not trigger the Tax Benefits Plan so long as they do not (i) acquire additional securities constituting one-half of one percent (0.5%) or more of the Company’s securities outstanding as of the date of the Tax Benefits Plan (as adjusted to reflect any stock splits, subdivisions and the like), or (ii) fall under 4.9% ownership of the Company’s securities and then re-acquire securities that increase their ownership to 4.9% or more of the Company’s securities. The Board of Directors may exempt certain persons whose acquisition of securities is determined by the Board of Directors not to jeopardize the Company’s tax benefits or to otherwise be in the best interest of the Company and its shareholders. The Board of Directors may also exempt certain transactions. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2016 | |
Postemployment Benefits [Abstract] | |
Employee Benefits | 12. Employee Benefits The Company provides its eligible employees with medical and dental benefits, insurance arrangements to cover death in service, long-term disability and personal accident, as well as a defined contribution retirement plan. Expense related to contributions by the Company under the defined contribution retirement plan included in general and administrative expenses in the Company’s consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014 was as follows (in thousands): Year ended December 31, 2016 2015 2014 Defined contribution expenses $ 80 $ 201 $ 264 |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Parties | 13. Related Parties The Company considers its related parties to be its principal shareholder and its affiliates. Eagle River Satellite Holdings, LLC (“ERSH”), Eagle River Investments, LLC (“ERI”), Eagle River, Inc. and Eagle River Partners, LLC (“ERP”)— ERSH is the Company’s controlling shareholder. ERSH, together with its affiliates ERI, Eagle River, Inc. and ERP (collectively, “Eagle River”) holds an economic interest of approximately 33.3% of the Company’s outstanding common stock and a voting interest of approximately 65.0% in the Company as of December 31, 2016. Craig O. McCaw, our Executive Chairman, is the sole manager and beneficial member of ERI, which is the sole member of ERSH. Mr. McCaw is the sole shareholder of Eagle River, Inc. and the beneficial member of ERP. Mr. McCaw disclaims beneficial ownership of the securities owned by ERSH, ERI and ERP, except to the extent of any pecuniary interest. |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | 14. Quarterly Financial Data (Unaudited) The following table contains selected unaudited statement of operations information for each quarter of the years ended December 31, 2016 and 2015. The quarterly financial data reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Unaudited quarterly results were as follows (in thousands, except per share data): Three months ended March 31, June 30, September 30, December 31, 2016 2015 2016 2015 2016 2015 2016 2015 Revenue $ 13,500 $ 25,245 $ 45,003 $ 2,147 $ — $ 15,465 $ 515 $ 662 Impairment of intangibles and goodwill — — — — — — — (103,499 ) Operating income (loss) 4,928 1,076 21,103 (8,021 ) (5,501 ) (2,129 ) (5,313 ) (112,061 ) Net income (loss) 7,110 (1,315 ) 21,257 (7,990 ) (5,341 ) 127 (5,077 ) (108,404 ) Net income (loss) attributable to Pendrell 6,565 (559 ) 21,420 (7,558 ) (5,254 ) 1 (4,968 ) (101,564 ) Basic income (loss) per share attributable to Pendrell (1) $ 0.25 $ (0.02 ) $ 0.80 $ (0.28 ) $ (0.20 ) $ — $ (0.19 ) $ (3.82 ) Diluted income (loss) per share attributable to Pendrell (1) $ 0.24 $ (0.02 ) $ 0.77 $ (0.28 ) $ (0.20 ) $ — $ (0.19 ) $ (3.82 ) (1) Per share amounts for the three months ended September 30, 2015 were less than $0.01. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events Pursuant to the 2013 agreement under which the Company acquired its memory and storage technologies portfolio, the Company shares a significant portion of the revenue generated from memory patents with the seller. On February 23, 2017, the seller agreed to relinquish its future revenue share in exchange for an up-front payment and future installment payments. Additionally, on March 9, 2017, the Company agreed to redeem 2,432,923 shares of the Company’s Class A common stock from Highland Crusader Offshore Partners, L.P. (“Crusader”) in a private transaction at a price of $6.55 per share, subject to possible adjustment if, on or before August 15, 2017, the Company buys or sells a substantial number of shares of Class A Stock for a higher price. Further, on March 10, 2017, the Board of Directors (the “Board”) of the Company approved and recommended that the Company’s shareholders approve a 1-for-100 reverse stock split (the “Reverse Split”) of the Company’s shares of Class A Stock and Class B common stock (collectively, the “Common Stock”). If approved by the shareholders at the Company’s 2017 annual meeting of shareholders, the Reverse Split will be effective at the close of trading on June 30, 2017 (the “Effective Date”), the Company’s Articles of Incorporation will be amended as of the Effective Date to reflect the Reverse Split, and any shareholder who holds less than 100 shares of Common Stock immediately prior to the Reverse Split will receive a cash payment in lieu of their fractionalized shares. The Board approved the Reverse Split based on a recommendation from a special committee of the Board’s independent directors (the “Committee”). The Committee recommended the Reverse Split to enable the Company to terminate the registration of the Class A Stock under the Securities Exchange Act of 1934 as amended (the “Exchange Act”), and cease to be a reporting company under the Exchange Act if, after the Reverse Split, there are fewer than 300 record holders of Class A Stock. This de-registration will eliminate the expenses related to the disclosure, reporting and compliance requirements of the Exchange Act and related federal securities laws and regulations. The Board may abandon the proposed Reverse Split at any time prior to the Effective Date if the Board determines that it is no longer in the best interests of the Company or its shareholders. However, if its shareholders approve the Reverse Split, the Company anticipates the termination of its registration and the termination of its Nasdaq listing as soon as practicable after the Effective Date. On March 10, 2017, at the recommendation of the Committee, the Board also authorized a share repurchase plan (the “Repurchase Plan”) for up to one million shares of Class A Stock. The Repurchase Plan contemplates the repurchase of shares from time to time at prevailing market prices, through open market or privately negotiated transactions, pursuant to one or more plans established pursuant to Rule 10b5-1 under the Exchange Act. The Committee recommended the Repurchase Plan, and the Board approved the Repurchase Plan, to provide shareholders with an opportunity for liquidity prior to the Effective Date of the Reverse Split. The Repurchase Plan does not require the Company to repurchase any minimum number of shares, and may be suspended, discontinued or modified at any time, for any reason and without notice. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation— The consolidated financial statements of the Company include the assets and liabilities of its wholly-owned subsidiaries and subsidiaries it controls or in which it has a controlling financial interest. Noncontrolling interests on the consolidated balance sheets include third-party investments in entities that the Company consolidates, but does not wholly own. Noncontrolling interests are classified as part of equity and the Company allocates net income (loss), other comprehensive income (loss) and other equity transactions to its noncontrolling interests in accordance with their applicable ownership percentages. All intercompany transactions and balances have been eliminated in consolidation. All information in these financial statements is in U.S. dollars. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In February 2015, the Company acquired the minority partner’s interest in Provitro Biosciences LLC (“Provitro”) for nominal consideration resulting in 100% ownership of Provitro. The Company continues to have a minority partner in its ContentGuard Holdings, Inc. (“ContentGuard”) subsidiary. |
Capital Structure Change | Capital Structure Change— At the Co mpany’s annual meeting of shareholders on July 7, 2016, the Company’s shareholders approved a reverse split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of Class A common stock and Class B common stock within a range of one share of common stock for every three shares of common stock (1-for-3) to one share of common stock for every ten shares of common stock (1-for-10), with the exact Reverse Stock Split ratio to be set within this range as determined by the Company’s board of directors in its sole discretion. On September 20, 2016, the Company’s board of directors fixed the Reverse Stock Split ratio at 1-for-10. As a result of the Reverse Stock Split, the share counts and per share data reported in the historical financial statements have been adjusted retrospectively as if the Reverse Stock Split had been in effect for all periods presented. Additionally, the exercise prices and the number of shares issuable under the Company’s stock-based compensation plans have been adjusted retrospectively to reflect the Reverse Stock Split. |
Segment Information | Segment Information— The Company operates in and reports on one segment (IP management). Operating segments are based upon the Company’s internal organization structure, the manner in which its operations are managed, and the criteria used by its Chief Operating Decision Maker. Substantially all of the Company’s revenue is generated by operations located within the United States, and the Company does not have any long-lived assets located in foreign countries. |
Use of Estimates | 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including among others, those related to revenue share obligations for the purpose of determining cost of revenue, the fair value of acquired intangible assets and goodwill, the useful lives and potential impairment of intangible assets and property and equipment, the value of stock awards for the purpose of determining stock-based compensation expense, accrued liabilities (including bonus accruals), valuation allowances related to the ability to realize deferred tax assets, allowances for doubtful receivables and certain tax liabilities. Estimates are based on historical experience and other factors, including the current economic environment as deemed appropriate under the circumstances. Estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in estimates used to prepare these financial statements will be reflected in the financial statements in future periods. |
Cash and Cash Equivalents | Cash and Cash Equivalents— Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities from the date of purchase of 90 days or less. Cash and cash equivalents are comprised of the following (in thousands): December 31, 2016 2015 Cash $ 13,485 $ 26,951 Money market funds 161,146 135,506 $ 174,631 $ 162,457 The fair value of money market funds at December 31, 2016 and 2015 was classified as Level 1 in the hierarchy established by the Financial Accounting Standards Board (“FASB”) as amounts were based on quoted prices available in active markets for identical investments as of the reporting date. |
Accounts Receivable | Accounts Receivable— Accounts re ceivable consist primarily of amounts billed to customers under licensing arrangements. For the years ended December 31, 2016, 2015 and 2014, the Company did not incur any losses on its accounts receivable. Based upon historical collections experience and currently available information, the Company has determined that no allowance for doubtful accounts was required at either December 31, 2016 or December 31, 2015. Carrying amounts of such receivables approximate their fair value due to their short-term nature. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets— As of December 3 1, 2016 and 2015, prepaid expenses and other current assets consisted primarily of insurance prepayments, prepayments of patent maintenance fees and prepayments of rent for leased facilities. |
Property in Service | Property in Service— Property in service consists prim arily of computer equipment, software, furniture and fixtures and leasehold improvements. Property in service is recorded at cost, net of accumulated depreciation, and is depreciated using the straight-line method. Computer equipment and furniture and fixtures are depreciated over their estimated useful lives ranging from three to five years. Software is depreciated over the shorter of its contractual license period or three years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the respective lease. Significant additions and improvements to property in service are capitalized. Repair and maintenance costs are expensed as incurred. |
Business Combinations | Business Combinations— The Company accounts for business combina tions using the acquisition method and, accordingly, the identifiable assets acquired and liabilities assumed are recorded at their acquisition date fair values. This valuation requires management to make significant estimates and assumptions, especially with respect to intangible assets. Valuation methodologies may include the cost, market or income approach. Critical estimates in valuing intangible assets include but are not limited to estimates about: future expected cash flows from customers, proprietary technology, the acquired company’s brand awareness and market position and discount rates. The estimates are based upon assumptions the Company believes to be reasonable, but which are inherently uncertain and unpredictable. Goodwill is calculated as the excess of the purchase price over the fair value of net assets, including the amount assigned to identifiable intangible assets. Subsequent changes to assets, liabilities, valuation allowance or uncertain tax positions that relate to the acquired company and existed at the acquisition date that occur both within the measurement period and as a result of new information about facts and circumstances that existed at the acquisition date are recognized as an adjustment to goodwill. Acquisition-related costs, including advisory, legal, accounting, valuation and other costs, are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. |
Intangible Assets and Goodwill | Intangible Assets and Goodwill— The Company amortizes finite-lived intangible assets, including patents, acquired in purchase transactions over their expected useful lives. The Company assigns goodwill and indefinite-lived intangible assets to its repor ting units based on the expected benefit from the synergies arising from each business combination. The Company evaluates finite-lived intangible assets when events or circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. These events or circumstances could include: a significant change in the business climate, legal factors, operating performance indicators, or changes in technology or customer requirements. Recoverability of an asset or asset group is measured by a comparison of the carrying amount to the future undiscounted net cash flows expected to be generated by the asset or asset group over its life. This comparison requires management to make judgments regarding estimated future cash flows. The Company’s ability to realize the estimated future cash flows may be affected by factors such as changes in operating performance, changes in business strategy, invalidation of patents, unfavorable judgments in legal proceedings and changes in economic conditions. If the Company’s estimates of the undiscounted cash flows do not equal or exceed the carrying value of the asset or asset group, an impairment charge equal to the amount by which the recorded value of the asset or asset group exceeds its fair value is recognized. The Company previously evaluated goodwill for impairment on an annual basis during the fourth quarter, or more frequently if circumstances indicated that the carrying value of a Company reporting unit may exceed its fair value. When evaluating goodwill and indefinite-lived intangible assets for impairment, the Company first performed a qualitative assessment to determine if fair value of the reporting unit was more likely than not greater than the carrying amount. If the assessment indicated that it was more likely than not that the fair value of a reporting unit was less than its carrying amount, then the Company further evaluated the estimated fair value of the reporting unit through the use of discounted cash flow models, which required management to make significant judgments as to the estimated future cash flows utilized. The Company’s ability to realize the future cash flows utilized in its fair value calculations could be affected by factors such as changes in its operating performance, changes in its business strategy, invalidation of its patents, unfavorable judgments in legal proceedings and changes in economic conditions. The results of the models were compared to the carrying amount of the reporting unit. If such comparison indicated that the fair value of the reporting unit was lower than the carrying amount, impairment would exist and the impairment charge would be measured by comparing the implied fair value of the reporting unit’s goodwill to its carrying value. During 2015, the Company determined that a portion of its intellectual property assets and the balance of its goodwill were impaired and recognized an impairment charge of $103.5 million for the year ended December 31, 2015. During 2014, the Company recognized an impairment charge of $11.0 million related to intangibles and goodwill of its Provitro asset group. See Note 5, “Intangible Assets and Goodwill” for further details. As a result of the impairments in 2015 and 2014, the Company no longer maintains balances for goodwill or indefinite-lived intangible assets in its financial statements. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments— The Company determines the fair value of its financial instruments based on the fair value hierarchy established by the FASB. The three levels of inputs used to measure fair value are as follows: Level 1—Quoted prices in active markets for identical assets and liabilities. Level 2—Quoted prices in active markets for similar assets and liabilities or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3—Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. As of December 31, 2016 and 2015, the Company’s financial instruments included its cash and cash equivalents, accounts receivable, other receivables, accounts payable and certain other assets and liabilities. The Company has determined that the carrying value of its financial instruments, based on the hierarchy established by the FASB, approximates the fair value of the financial instruments as they are equivalent to cash or due to their short-term nature. |
Revenue Recognition | Revenue Recognition— The Company derives its operating revenue from IP monetization activities, including patent licensi ng and patent sales; and, in years prior to 2016, from IP consulting services. Although the Company’s revenue may occur in different forms, it regards its IP monetization activities as integrated and not separate revenue streams. For example, a third party relationship could involve consulting and licensing activities, or the acquisition of a patent portfolio can lead to licensing, consulting and patent sales revenue. The Company’s patent licensing agreements often provide for the payment of contractually determined upfront license fees representing all or a majority of the revenue that will be generated from such agreements for nonexclusive, nontransferable, limited duration licenses. These agreements typically grant (i) a nonexclusive license to make, sell, distribute, and use certain specified products that read on the Company’s patents, (ii) a covenant not to enforce patent rights against the licensee based on such activities, and (iii) the release of the licensee from certain claims. Generally, the agreements provide no further obligation for the Company upon receipt of the minimum upfront license fee. As such, the earnings process is complete and revenue is recognized upon the execution of the agreement, when collectability is reasonably assured, or upon receipt of the minimum upfront license fee, and when all other revenue recognition criteria have been met. Certain of the Company’s patent licensing agreements provide for future royalties or future payment obligations triggered upon satisfaction of conditions. Future royalties and future payments are recognized in revenue upon satisfaction of any related conditions, provided that all revenue recognition criteria, as described below, have been met. The Company sells patents from its portfolios from time to time. These sales are part of the Company’s ongoing operations. Consequently, the related proceeds are recorded as revenue. The timing and amount of revenue recognized from IP monetization activities depend on the specific terms of each agreement and the nature of the deliverables and obligations. Fees earned from IP consulting services are generally recognized as the services are performed. For agreements that are deemed to contain multiple elements, consideration is allocated to each element of an agreement that has stand-alone value using the relative fair value method. The Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) all material obligations have been substantially performed pursuant to agreement terms, services have been rendered to the customer or delivery has occurred, (iii) amounts are fixed or determinable, and (iv) collectability is reasonably assured. As a result of the contractual terms of our patent monetization agreements and the unpredictable nature, form and frequency of monetizing transactions, our revenue may fluctuate substantially from period to period. |
Research and Development | Research and Development— The Company incurs costs associated with research and development activities and expenses the costs in the period incurred. Research and development expenses during the period were not material for separate disclosure and are included in general and administrative expenses. |
Stock-Based Compensation | Stock-Based Compensation— The Company records stock-based compensation on stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock awards issued to employees, directors, consultants and/or advisors based on the estimated fair value on the date of grant and recognizes compensation cost over the requisite service period for awards expected to vest. The fair value of stock options and stock appreciation rights is estimated on the date of grant using the Black-Scholes option pricing model (“Black-Scholes Model”) based on the single option award approach. The fair value of restricted stock awards and restricted stock units is determined based on the number of shares granted and either the quoted market price of the Company’s Class A common stock on the date of grant for time-based and performance-based awards, or the fair value on the date of grant using the Monte Carlo Simulation model (“Monte Carlo Simulation”) for market-based awards. The fair value of stock options, restricted stock awards and restricted stock units with service conditions are amortized to expense on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair value of stock options, stock appreciation rights, restricted stock awards and restricted stock units with performance conditions deemed probable of being achieved and cliff vesting is amortized to expense over the requisite service period using the straight-line method of expense recognition. The fair value of restricted stock awards and restricted stock units with performance and market conditions are amortized to expense over the requisite service period using the straight-line method of expense recognition. The fair value of stock-based payment awards as determined by the Black-Scholes Model and the Monte Carlo Simulation are affected by the Company’s stock price as well as other assumptions. These assumptions include, but are not limited to, the expected stock price volatility over the term of the awards and actual and projected employee stock option exercise behaviors. Forfeitures are estimated at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company accounts for the modification of the terms or conditions of a stock-based payment award as an exchange of the original award for a new award. Compensation expense for modified stock-based payment awards is equal to the fair value of the original award plus the incremental cost conveyed as a result of the modification expensed over the remaining life of the award. |
Income Taxes | Income Taxes— The Company accounts for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. A valuation allowance against deferred tax assets (“DTAs”) is recorded when it is more likely than not that the assets will not be realized. The Company records an unrecognized tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the tax authorities. The Company’s policy is to recognize interest and/or penalties related to unrecognized tax benefits as income tax expense. |
Contingencies | Contingencies— Outcomes of legal proceedings and claims brought by and against the Company are subject to significant uncertainty. The Company accrues an estim ated loss from a loss contingency, such as a legal claim, by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. The Company discloses a contingency if there is at least a reasonable possibility that a loss has been incurred. In determining whether a contingent loss should be accrued or disclosed, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact the Company’s financial position, results of operations or cash flows. For contingencies that might result in a gain, the Company does not record the gain until realized. |
Income (Loss) Per Share | Income (Loss) Per Share —Basic income (loss) per share is calculated based on the weighted average number of Class A common stock and Class B common stock (the “Common Shares”) outstanding during the period. Diluted income (loss) per share is calculated by dividing the income (loss) allocable to common shareholders by the weighted average Common Shares outstanding plus dilutive potential Common Shares. Prior to the satisfaction of vesting conditions, unvested restricted stock awards are considered contingently issuable and are excluded from weighted average Common Shares outstanding used for computation of basic loss per share. Potential dilutive Common Shares consist of the incremental Class A common stock issuable upon the exercise of outstanding stock options (both vested and non-vested) and unvested restricted stock awards and units, calculated using the treasury stock method. The calculation of dilutive loss per share for the years ended December 31, 2015 and 2014 excludes all potential dilutive Common Shares as their inclusion would have been antidilutive. The following table sets forth the computation of basic and diluted income (loss) per share (in thousands, except share and per share data): Year ended December 31, 2016 2015 2014 Net income (loss) attributable to Pendrell $ 17,763 $ (109,680 ) $ (51,002 ) Weighted average common shares outstanding 26,827,699 26,713,685 26,633,662 Less: weighted average unvested restricted stock awards (68,714 ) (142,952 ) (192,912 ) Shares used for computation of basic income (loss) per share 26,758,985 26,570,733 26,440,750 Add back: weighted average unvested restricted stock awards and units 932,881 — — Shares used for computation of diluted income (loss) per share (1) 27,691,866 26,570,733 26,440,750 Basic income (loss) per share attributable to Pendrell $ 0.66 $ (4.13 ) $ (1.93 ) Diluted income (loss) per share attributable to Pendrell $ 0.64 $ (4.13 ) $ (1.93 ) (1) Stock options, restricted stock awards and units totaling 1,305,365, 2,784,787 and 2,811,354 for the years ended December 31, 2016, 2015 and 2014, respectively, were excluded from the calculation of diluted income (loss) per share as their inclusion was anti-dilutive. |
New Accounting Pronouncements | New Accounting Pronouncements —In February 2016, the Financial Accountin g Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-02, Leases (Topic 842) , which requires companies that are lessees to recognize a right-of-use asset and lease liability for most leases that do not meet the definition of a short-term lease. For income statement purposes, leases will continue to be classified as either operating or financing. Classification will be based on criteria that are largely similar to those applied in current lease accounting. Compliance with this ASU is required for annual periods beginning after December 15, 2018, and interim periods therein. Early adoption is permitted. As the Company’s future minimum lease commitments as of December 31, 2016 are less than $1.0 million, the Company believes the future adoption of this ASU will not have a material impact on its financial position, results of operations or cash flows. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments Throughout the year ended December 31, 2016, the FASB has issued a number of ASUs which provide further clarification to ASU No. 2014-09, Revenue (Topic 606): Revenue from Contracts with Customers |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Cash and Cash Equivalents | Cash and cash equivalents are comprised of the following (in thousands): December 31, 2016 2015 Cash $ 13,485 $ 26,951 Money market funds 161,146 135,506 $ 174,631 $ 162,457 |
Computation of Basic and Diluted Income (Loss) Per Share | The following table sets forth the computation of basic and diluted income (loss) per share (in thousands, except share and per share data): Year ended December 31, 2016 2015 2014 Net income (loss) attributable to Pendrell $ 17,763 $ (109,680 ) $ (51,002 ) Weighted average common shares outstanding 26,827,699 26,713,685 26,633,662 Less: weighted average unvested restricted stock awards (68,714 ) (142,952 ) (192,912 ) Shares used for computation of basic income (loss) per share 26,758,985 26,570,733 26,440,750 Add back: weighted average unvested restricted stock awards and units 932,881 — — Shares used for computation of diluted income (loss) per share (1) 27,691,866 26,570,733 26,440,750 Basic income (loss) per share attributable to Pendrell $ 0.66 $ (4.13 ) $ (1.93 ) Diluted income (loss) per share attributable to Pendrell $ 0.64 $ (4.13 ) $ (1.93 ) (1) Stock options, restricted stock awards and units totaling 1,305,365, 2,784,787 and 2,811,354 for the years ended December 31, 2016, 2015 and 2014, respectively, were excluded from the calculation of diluted income (loss) per share as their inclusion was anti-dilutive. |
Provitro (Tables)
Provitro (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Schedule of Installment Payments Reflected in Balance Sheet | The installment payments are reflected in the balance sheet as follows (in thousands): December 31, 2016 December 31, 2015 Other receivables: Provitro note receivable $ 600 $ 1,300 Other 69 29 Total other receivables $ 669 $ 1,329 Other assets: Provitro note receivable $ — $ 600 Other 29 38 Total other assets $ 29 $ 638 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Related Amortization | The following table presents details of the Company’s intangible assets and related amortization (in thousands): December 31, 2016 December 31, 2015 Cost: Patents $ 65,796 $ 67,096 Customer relationships 1,804 1,804 Total cost 67,600 68,900 Accumulated amortization: Patents (61,080 ) (52,719 ) Customer relationships (1,804 ) (1,804 ) Total accumulated amortization (62,884 ) (54,523 ) Intangible assets, net $ 4,716 $ 14,377 |
Summary of Costs Associated with Patents Sold | Costs associated with patents sold during the years ended December 31, 2016, 2015 and 2014 were as follows (in thousands): Year ended December 31, 2016 2015 2014 Cost of patents sold $ — $ 138 $ 794 |
Summary of Cost Associated with Abandonment and Disposition of Patents | Costs associated with the abandonment of patents, including any remaining net book value, are included in patent administration and related costs in the Company’s consolidated statements of operations and were as follows for the years ended December 31, 2016, 2015 and 2014 (in thousands): Year ended December 31, 2016 2015 2014 Cost associated with the abandonment and/or disposition of patents $ 163 $ 958 $ 2,765 |
Summary of Amortization Expense Related to Purchased Intangible Assets | Amortization expense related to purchased intangible assets, reported as amortization of intangibles in the consolidated statements of operations, for the years ended December 31, 2016, 2015 and 2014 were as follows (in thousands): Year ended December 31, 2016 2015 2014 Amortization of intangibles $ 9,498 $ 13,939 $ 15,929 |
Estimated Future Amortization Expense of Purchased Intangible Assets | The estimated future amortization expense of purchased intangible assets as of December 31, 2016 is as follows (in thousands): Year ending December 31, Amount 2017 $ 2,358 2018 2,358 Total $ 4,716 |
Accrued expenses (Tables)
Accrued expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables And Accruals [Abstract] | |
Summary of Accrued Expenses | The following table summarizes accrued expenses (in thousands): December 31, 2016 December 31, 2015 Accrued payroll and related expenses $ 1,134 $ 1,742 Accrued legal, professional and other expenses 538 2,550 Accrued revenue share obligations 4,606 — $ 6,278 $ 4,292 |
Other non-current liabilities (
Other non-current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables And Accruals [Abstract] | |
Schedule of Other Non-current Liabilities Primarily Consisting of Revenue Share Obligations | At December 31, 2016, other non-current liabilities, primarily consisting of revenue share obligations, are estimated to be payable as follows (in thousands): Fiscal 2018 $ 7,362 Fiscal 2019 434 $ 7,796 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Rental Expense | Total rental expense included in general and administrative expenses in the Company’s consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014 was as follows (in thousands): Year ended December 31, 2016 2015 2014 Rent expense $ 245 $ 793 $ 662 |
Future Minimum Payment Under Lease Agreements | As of December 31, 2016, future minimum payments under the Company’s lease agreements were as follows (in thousands): Operating leases 2017 $ 339 2018 348 2019 205 Total minimum payments $ 892 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation Expense Included in Consolidated Statements of Operations | Stock-based compensation expense included in the Company’s consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014 was as follows (in thousands): Year ended December 31, 2016 2015 2014 Stock options (1) $ 1,193 $ 2,236 $ 7,268 Restricted stock awards (1) (2) 2,231 2,271 2,137 Total stock-based compensation expense $ 3,424 $ 4,507 $ 9,405 (1) On November 19, 2014, Benjamin G. Wolff resigned from his positions as President and Chief Executive Officer of the Company. The Company entered into a separation agreement in accordance with the terms of Mr. Wolff’s Amended and Restated Employment Letter Agreement (the "Agreement"). The Agreement provided for the vesting of all options, shares of restricted stock ("RSAs") and restricted stock units ("RSUs") in which Mr. Wolff would have vested had he remained actively employed by the Company through the second anniversary of his resignation, excluding any unvested performance-based RSAs or performance-based RSUs. The Agreement also provided for an extension of the exercise period for Mr. Wolff’s vested stock options until December 15, 2015. The extension of the exercise period is considered a modification and resulted in additional stock-based compensation expense of $0.7 million, as determined using a Black-Scholes model, which was recognized on the modification date as the options were vested pursuant to the Agreement. The accelerated vesting of the options, RSUs and RSAs resulted in $2.1 million of additional stock-based compensation expense in the year ended December 31, 2014. (2) Stock-based compensation expense for the year ended December 31, 2015 and 2014, includes $0.2 million and $0.8 million of expense, respectively, related to 250,000 Class A common stock restricted stock awards that are required to be treated as a liability. The Company settled the related liability with a $2.5 million payment in April 2015 and no further expense has been incurred. |
Stock-Based Compensation Cost to be Expensed in Future Years Related to Unvested Stock-Based Awards, as Adjusted for Expected Forfeitures | At December 31, 2016, the balance of stock-based compensation cost to be expensed in future years related to unvested stock-based awards, as adjusted for expected forfeitures, is as follows (in thousands): 2017 (1) $ 2,823 2018 (1) 1,859 2019 and thereafter — $ 4,682 (1) Future expense does not include expense related to 0.1 million performance-based stock options and 0.2 million performance-based restricted stock awards granted in 2015, as these awards vest upon the achievement of certain performance milestones for which the related performance targets have yet to be established. The fair value of these awards will not be known until the date the performance targets are established at which point expensing will commence. |
Estimated Weighted Average Fair Value of Stock Options Granted Using Black-Scholes Model | The weighted average fair value of stock options granted during the years ended December 31, 2016, 2015 and 2014 was estimated using the Black-Scholes Model with the following assumptions: Year ended December 31, 2016 2015 2014 Weighted average expected volatility 53 % 48 % 55 % Weighted average risk-free interest rate 1.2 % 1.9 % 1.9 % Expected dividend yield 0 % 0 % 0 % Weighted average expected term in years 5.5 6.0 6.2 Weighted average estimated fair value per option granted $ 3.32 $ 4.70 $ 7.90 |
Stock Option Activity | The Company’s stock option activity for the year ended December 31, 2016 is summarized as follows: Number of options Weighted average exercise price Weighted average remaining life (in years) Outstanding at December 31, 2015 1,731,732 $ 16.21 Granted (1) 24,000 6.91 Forfeited (450,367 ) 17.19 Outstanding at December 31, 2016 (2) 1,305,365 $ 15.70 6.72 Exercisable at December 31, 2016 (2) 800,140 $ 16.97 5.95 Vested and expected to vest at December 31, 2016 (2) 1,256,354 $ 15.64 6.81 (1) All options granted were to members of the Company’s board of directors. (2) Aggregate intrinsic value represents the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options, before applicable income taxes and represents the amount optionees would have realized if all in-the-money options had been exercised on December 31, 2016. As of December 31, 2016, the aggregate intrinsic values of stock options outstanding, exercisable, and vested and expected to vest were all zero as the closing stock price of the Company’s stock was lower than the exercise prices of its outstanding options. |
Summary of Significant Ranges of Outstanding and Exercisable Stock Options | The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2016: Outstanding stock options Exercisable stock options Range of exercise prices Number of options Weighted average exercise price Weighted average remaining life (in years) Number of options Weighted average exercise price $ 6.91—$12.90 268,125 $ 11.00 6.37 244,125 $ 11.40 $12.91—$13.25 176,090 13.10 8.38 88,050 13.10 $13.26—$14.05 400,000 13.40 8.52 100,000 13.40 $14.06—$19.60 232,500 16.24 5.75 167,002 16.60 $19.61—$42.20 228,650 26.67 4.06 200,963 27.49 1,305,365 $ 15.70 6.72 800,140 $ 16.97 |
Restricted Stock Award Activity | The Company’s restricted stock award activity for the year ended December 31, 2016 is summarized as follows: Number of restricted stock awards Weighted average grant date fair value Unvested—December 31, 2015 1,053,075 $ 8.40 Granted (1) 78,083 5.46 Vested (200,856 ) 10.52 Forfeited (39,547 ) 10.32 Unvested—December 31, 2016 890,755 $ 8.23 (1) Represents shares issued to the Company’s Board of Directors as compensation for service. These awards have a grant date fair value of $0.4 million and vest upon issuance. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense | The Company’s income tax expense for the years ended December 31, 2016, 2015 and 2014 consists of the following (in thousands): Year ended December 31, 2016 2015 2014 United States—deferred $ — $ (1,497 ) $ 33 Foreign—current — 4,128 6,270 $ — $ 2,631 $ 6,303 |
Reconciliation of Federal Statutory Income Tax Rate of 34% to Effective Income Tax Rate | A reconciliation of the federal statutory income tax rate of 34% to the Company’s effective income tax rate is as follows: Year ended December 31, 2016 2015 2014 Statutory tax rate 34.00 % 34.00 % 34.00 % Change in valuation allowance (59.30 ) (22.59 ) (95.75 ) Release of uncertain tax position — — 62.77 Foreign withholding taxes — (2.37 ) (7.98 ) Goodwill impairment — (6.07 ) — Stock-based compensation 10.24 (3.23 ) — Loss on sale of subsidiary 13.70 — — Other 1.36 (2.03 ) (5.20 ) Effective tax rate 0 % (2.29 )% (12.16 )% |
Significant Components of Net Deferred Tax Assets and Liabilities | The significant components of the Company’s net deferred tax assets and liabilities are as follows (in thousands): December 31, 2016 December 31, 2015 Deferred tax assets: Net operating losses $ 941,163 $ 956,181 Basis difference in Liquidating Trust 16,955 16,894 Accrued expenses and other 12,336 10,380 Total deferred tax assets 970,454 983,455 Valuation allowance (970,454 ) (981,096 ) Net deferred tax assets $ — $ 2,359 Deferred tax liabilities: Intangibles $ — $ (2,359 ) Total deferred tax liabilities $ — $ (2,359 ) Net deferred tax liabilities $ — $ — |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): December 31, 2016 2015 2014 Beginning of period $ 15,594 $ 5,132 $ 37,665 Additions for tax positions taken during the current period — 10,462 — Reductions for tax positions taken during prior periods — — (32,533 ) Exchange rate fluctuations (271 ) — — End of period $ 15,323 $ 15,594 $ 5,132 |
Employee Benefits (Tables)
Employee Benefits (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Postemployment Benefits [Abstract] | |
Expense Related to Contributions under Defined Contribution Retirement Included in General and Administrative Expense | Expense related to contributions by the Company under the defined contribution retirement plan included in general and administrative expenses in the Company’s consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014 was as follows (in thousands): Year ended December 31, 2016 2015 2014 Defined contribution expenses $ 80 $ 201 $ 264 |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Results | Unaudited quarterly results were as follows (in thousands, except per share data): Three months ended March 31, June 30, September 30, December 31, 2016 2015 2016 2015 2016 2015 2016 2015 Revenue $ 13,500 $ 25,245 $ 45,003 $ 2,147 $ — $ 15,465 $ 515 $ 662 Impairment of intangibles and goodwill — — — — — — — (103,499 ) Operating income (loss) 4,928 1,076 21,103 (8,021 ) (5,501 ) (2,129 ) (5,313 ) (112,061 ) Net income (loss) 7,110 (1,315 ) 21,257 (7,990 ) (5,341 ) 127 (5,077 ) (108,404 ) Net income (loss) attributable to Pendrell 6,565 (559 ) 21,420 (7,558 ) (5,254 ) 1 (4,968 ) (101,564 ) Basic income (loss) per share attributable to Pendrell (1) $ 0.25 $ (0.02 ) $ 0.80 $ (0.28 ) $ (0.20 ) $ — $ (0.19 ) $ (3.82 ) Diluted income (loss) per share attributable to Pendrell (1) $ 0.24 $ (0.02 ) $ 0.77 $ (0.28 ) $ (0.20 ) $ — $ (0.19 ) $ (3.82 ) (1) Per share amounts for the three months ended September 30, 2015 were less than $0.01. |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Additional Information (Detail) | Sep. 20, 2016 | Jul. 07, 2016 | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016USD ($)Segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Mar. 31, 2017USD ($) | Feb. 28, 2015 |
Significant Accounting Policies [Line Items] | |||||||||
Description of reverse stock split | At the Company’s annual meeting of shareholders on July 7, 2016, the Company’s shareholders approved a reverse split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of Class A common stock and Class B common stock within a range of one share of common stock for every three shares of common stock (1-for-3) to one share of common stock for every ten shares of common stock (1-for-10), with the exact Reverse Stock Split ratio to be set within this range as determined by the Company’s board of directors in its sole discretion. On September 20, 2016, the Company’s board of directors fixed the Reverse Stock Split ratio at 1-for-10. | ||||||||
Number of operating and reporting segments | Segment | 1 | ||||||||
Allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | ||||||
Impairment of intangibles and goodwill | $ 103,499,000 | $ 103,499,000 | $ 11,013,000 | ||||||
Future minimum lease commitments | $ 892,000 | ||||||||
Software | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Property in Service, estimated useful life | 3 years | ||||||||
Property in service, estimated useful lives, description | Software is depreciated over the shorter of its contractual license period or three years. | ||||||||
Minimum | Furniture and Fixtures | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Property in Service, estimated useful life | 3 years | ||||||||
Maximum | Accounting Standards Update 2016-02 | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Future minimum lease commitments | $ 1,000,000 | ||||||||
Maximum | Furniture and Fixtures | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Property in Service, estimated useful life | 5 years | ||||||||
Common stock | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Reverse stock split ratio | 0.10 | ||||||||
Common stock | Minimum | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Reverse stock split ratio | 0.3333 | ||||||||
Common stock | Maximum | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Reverse stock split ratio | 0.10 | ||||||||
Additional Paid-in Capital | Accounting Standards Update 2016-09 | Scenario, Forecast | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Adjustment to retained earnings and additional paid in capital due to change in accounting for forfeitures | $ 200,000 | ||||||||
Accumulated deficit | Accounting Standards Update 2016-09 | Scenario, Forecast | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Adjustment to retained earnings and additional paid in capital due to change in accounting for forfeitures | $ 200,000 | ||||||||
Provitro Biosciences LLC | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Ownership percentage | 100.00% | ||||||||
Impairment of intangibles and goodwill | $ 11,000,000 | $ 11,000,000 |
Summary of Cash and Cash Equiva
Summary of Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 174,631 | $ 162,457 | $ 168,793 | $ 184,567 |
Cash | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 13,485 | 26,951 | ||
Money Market Funds | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 161,146 | $ 135,506 |
Computation of Basic and Dilute
Computation of Basic and Diluted Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||
Net income (loss) attributable to Pendrell | $ (4,968) | $ (5,254) | $ 21,420 | $ 6,565 | $ (101,564) | $ 1 | $ (7,558) | $ (559) | $ 17,763 | $ (109,680) | $ (51,002) | ||||||||
Weighted average common shares outstanding | 26,827,699 | 26,713,685 | 26,633,662 | ||||||||||||||||
Less: weighted average unvested restricted stock awards | (68,714) | (142,952) | (192,912) | ||||||||||||||||
Shares used for computation of basic income (loss) per share | 26,758,985 | 26,570,733 | 26,440,750 | ||||||||||||||||
Add back: weighted average unvested restricted stock awards and units | 932,881 | ||||||||||||||||||
Shares used for computation of diluted income (loss) per share | [1] | 27,691,866 | 26,570,733 | 26,440,750 | |||||||||||||||
Basic income (loss) per share attributable to Pendrell | $ (0.19) | [2] | $ (0.20) | [2] | $ 0.80 | [2] | $ 0.25 | [2] | $ (3.82) | [2] | $ (0.28) | [2] | $ (0.02) | [2] | $ 0.66 | $ (4.13) | $ (1.93) | ||
Diluted income (loss) per share attributable to Pendrell | $ (0.19) | [2] | $ (0.20) | [2] | $ 0.77 | [2] | $ 0.24 | [2] | $ (3.82) | [2] | $ (0.28) | [2] | $ (0.02) | [2] | $ 0.64 | $ (4.13) | $ (1.93) | ||
[1] | Stock options, restricted stock awards and units totaling 1,305,365, 2,784,787 and 2,811,354 for the years ended December 31, 2016, 2015 and 2014, respectively, were excluded from the calculation of diluted income (loss) per share as their inclusion was anti-dilutive. | ||||||||||||||||||
[2] | Per share amounts for the three months ended September 30, 2015 were less than $0.01. |
Computation of Basic and Dilu36
Computation of Basic and Diluted Income (Loss) Per Share (Parenthetical) (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||
Securities excluded from calculation of diluted income (loss) per share | 1,305,365 | 2,784,787 | 2,811,354 |
Provitro - Additional Informati
Provitro - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 28, 2015 | Feb. 28, 2013 | |
Business Acquisition [Line Items] | ||||||
Impairment charges | $ 103,499 | $ 103,499 | $ 11,013 | |||
Provitro Biosciences LLC | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of business acquisition interest | 68.75% | |||||
Ownership percentage | 100.00% | |||||
Impairment charges | $ 11,000 | $ 11,000 |
Provitro - Additional Informa38
Provitro - Additional Information1 (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2016 | Jan. 31, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||||
Proceeds associated with disposition of property | $ 109 | ||||
Other receivables | $ 1,329 | $ 669 | |||
Provitro Biosciences LLC | |||||
Property, Plant and Equipment [Line Items] | |||||
Proceeds associated with disposition of property | $ 900 | $ 400 | $ 100 | ||
Provitro Biosciences LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Property, Plant and Equipment [Line Items] | |||||
Considerations paid and payable under the sale of assets | 2,000 | ||||
Other receivables | $ 600 | ||||
Provitro Biosciences LLC | General and Administrative Expenses | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Property, Plant and Equipment [Line Items] | |||||
Loss related to tangible assets | $ 700 |
Provitro - Installment Payments
Provitro - Installment Payments Reflected in Balance Sheet (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total other receivables | $ 669 | $ 1,329 |
Total other assets | 29 | 638 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total other assets | 29 | 38 |
Provitro note receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total other receivables | 600 | 1,300 |
Total other assets | 600 | |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total other receivables | $ 69 | $ 29 |
Accounts Receivable (Current 40
Accounts Receivable (Current and Non-current) - Additional Information (Detail) - USD ($) | Dec. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | $ 15,457,000 | $ 87,000 | |
Non-current accounts receivable | 16,555,000 | 1,502,000 | |
Allowance for doubtful accounts | 0 | $ 0 | |
Toshiba Corporation | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for doubtful accounts | $ 0 | ||
Scenario, Forecast | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Non-current accounts receivable | $ 15,700,000 |
Intangible Assets and Goodwil41
Intangible Assets and Goodwill - Additional Information (Detail) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2016Patent | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)Patent | |
Impairment of Intangible Assets [Line Items] | ||||
Non-cash impairment charge on infinite and finite lived intangible assets | $ 82.3 | $ 82.3 | ||
Impairment of goodwill | $ 21.2 | $ 0.5 | ||
Non-cash impairment charge | $ 10.5 | |||
Cost incurred to enhance the existing patent | $ 2 | |||
Number of patents purchased | Patent | 0 | 0 | ||
Number of patents sold | Patent | 0 | |||
Patents | ||||
Impairment of Intangible Assets [Line Items] | ||||
Finite lived intangible asset, useful lives | 2 years |
Intangible Assets and Related A
Intangible Assets and Related Amortization (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Intangible assets, gross | $ 67,600 | $ 68,900 |
Intangible assets, accumulated amortization | (62,884) | (54,523) |
Intangible assets, net | 4,716 | 14,377 |
Patents | ||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Intangible assets, gross | 65,796 | 67,096 |
Intangible assets, accumulated amortization | (61,080) | (52,719) |
Customer relationships | ||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Intangible assets, gross | 1,804 | 1,804 |
Intangible assets, accumulated amortization | $ (1,804) | $ (1,804) |
Summary of Costs Associated wit
Summary of Costs Associated with Patents Sold (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Cost of patents sold | $ 0 | $ 138 | $ 794 |
Summary of Cost Associated with
Summary of Cost Associated with Abandonment and Disposition of Patents (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Loss associated with the abandonment and/or disposition of patents | $ 163 | $ 958 | $ 2,765 |
Summary of Amortization Expense
Summary of Amortization Expense Related to Purchased Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Amortization of intangibles | $ 9,498 | $ 13,939 | $ 15,929 |
Estimated Future Amortization E
Estimated Future Amortization Expense of Purchased Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2,017 | $ 2,358 | |
2,018 | 2,358 | |
Intangible assets, net | $ 4,716 | $ 14,377 |
Summary of Accrued Expenses (De
Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables And Accruals [Abstract] | ||
Accrued payroll and related expenses | $ 1,134 | $ 1,742 |
Accrued legal, professional and other expenses | 538 | 2,550 |
Accrued revenue share obligations | 4,606 | |
Accrued expenses | $ 6,278 | $ 4,292 |
Schedule of Other Non-current L
Schedule of Other Non-current Liabilities Primarily Consisting of Revenue Share Obligations (Detail) $ in Thousands | Dec. 31, 2016USD ($) |
Other Commitments [Line Items] | |
Other non-current liabilities | $ 7,796 |
Revenue Share Obligations | |
Other Commitments [Line Items] | |
Fiscal 2,018 | 7,362 |
Fiscal 2,019 | 434 |
Other non-current liabilities | $ 7,796 |
Rent Expense (Detail)
Rent Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Rent expense | $ 245 | $ 793 | $ 662 |
Future Minimum Payment under Le
Future Minimum Payment under Lease Agreements (Detail) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,017 | $ 339 |
2,018 | 348 |
2,019 | 205 |
Total minimum payments | $ 892 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2014Patent | Jan. 31, 2014Patent | Dec. 31, 2016Patent | Dec. 31, 2015Trial | |
ContentGuard enforcement Actions | ||||
Gain And Loss Contingencies [Line Items] | ||||
Number of alleged patents infringed | 9 | |||
Number of trials lawsuits culminated | Trial | 2 | |||
IPR and CBM Petitions by Apple and Google | ||||
Gain And Loss Contingencies [Line Items] | ||||
Number of alleged patents infringed | 9 | |||
Number of filed petitions | 35 | |||
Number of patents terminated | 1 | |||
ZTE | ||||
Gain And Loss Contingencies [Line Items] | ||||
Number of patents against nullity action filed | 2 | |||
Number of revocation of patent | 1 | |||
Number of patents with opposition | 1 | |||
District Court Action | ||||
Gain And Loss Contingencies [Line Items] | ||||
Number of alleged patents infringed | 8 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2016USD ($)Voter / sharesClassshares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Class Of Stock [Line Items] | |||
Number of classes of common stock | Class | 2 | ||
Estimated forfeiture rate | 5.00% | 5.00% | 5.00% |
Unearned stock-based compensation expense, weighted average period recognition | 1 year 9 months | ||
Stock options vested, total fair value | $ | $ 2,000,000 | $ 2,500,000 | $ 7,300,000 |
Repurchasing and/or cancelling value related to the vesting of the restricted stock awards | $ | $ 40,000 | $ 140,000 | $ 775,000 |
Directors Consultants And Employee Stock Option | |||
Class Of Stock [Line Items] | |||
Stock options expiration period | 10 years | ||
Stock Appreciation Rights | |||
Class Of Stock [Line Items] | |||
Number of rights outstanding | 0 | ||
Restricted stock awards | |||
Class Of Stock [Line Items] | |||
Stock-awards vested | 200,856 | ||
Service- based | Directors Consultants And Employee Stock Option | |||
Class Of Stock [Line Items] | |||
Stock options exercisable period | 4 years | ||
Service and performance- based | Restricted stock awards | |||
Class Of Stock [Line Items] | |||
Stock-awards vested | 122,773 | ||
Repurchasing and/or cancelling shares related to the vesting of the restricted stock awards | 6,352 | ||
Repurchasing and/or cancelling value related to the vesting of the restricted stock awards | $ | $ 40,000 | ||
Stock options issued as Board of Director compensation | Directors Consultants And Employee Stock Option | |||
Class Of Stock [Line Items] | |||
Stock options exercisable period | 1 year | ||
Maximum | Termination Of Employment | Directors Consultants And Employee Stock Option | |||
Class Of Stock [Line Items] | |||
Stock options expiration period | 3 months | ||
Equity Incentive Plan Twenty Twelve | |||
Class Of Stock [Line Items] | |||
Maximum number of shares to be issued | 3,795,254 | ||
Shares reserved and available for grant | 2,449,419 | ||
Principal Owner | |||
Class Of Stock [Line Items] | |||
Eagle River's economic interest percentage | 33.30% | ||
Eagle River's voting interest percentage | 65.00% | ||
Class A common stock | |||
Class Of Stock [Line Items] | |||
Number of vote entitled per share | Voter / shares | 1 | ||
Class B common stock | |||
Class Of Stock [Line Items] | |||
Number of vote entitled per share | Voter / shares | 10 | ||
Common Stock, Conversion Basis | Each share of Class B common stock is convertible into one share of Class A common stock. |
Stock-Based Compensation Expens
Stock-Based Compensation Expense Included in Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | $ 3,424 | $ 4,507 | $ 9,405 | |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | [1] | 1,193 | 2,236 | 7,268 |
Restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | [1],[2] | $ 2,231 | $ 2,271 | $ 2,137 |
[1] | On November 19, 2014, Benjamin G. Wolff resigned from his positions as President and Chief Executive Officer of the Company. The Company entered into a separation agreement in accordance with the terms of Mr. Wolff’s Amended and Restated Employment Letter Agreement (the "Agreement"). The Agreement provided for the vesting of all options, shares of restricted stock ("RSAs") and restricted stock units ("RSUs") in which Mr. Wolff would have vested had he remained actively employed by the Company through the second anniversary of his resignation, excluding any unvested performance-based RSAs or performance-based RSUs. The Agreement also provided for an extension of the exercise period for Mr. Wolff’s vested stock options until December 15, 2015. The extension of the exercise period is considered a modification and resulted in additional stock-based compensation expense of $0.7 million, as determined using a Black-Scholes model, which was recognized on the modification date as the options were vested pursuant to the Agreement. The accelerated vesting of the options, RSUs and RSAs resulted in $2.1 million of additional stock-based compensation expense in the year ended December 31, 2014. | |||
[2] | Stock-based compensation expense for the year ended December 31, 2015 and 2014, includes $0.2 million and $0.8 million of expense, respectively, related to 250,000 Class A common stock restricted stock awards that are required to be treated as a liability. The Company settled the related liability with a $2.5 million payment in April 2015 and no further expense has been incurred. |
Stock-Based Compensation Expe54
Stock-Based Compensation Expense Included in Consolidated Statements of Operations (Parenthetical) (Detail) - USD ($) $ in Thousands | Nov. 19, 2014 | Apr. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Stock-based compensation | $ 3,424 | $ 4,507 | $ 9,405 | |||
Mr Wolff's Amended and Restated Employment Letter Agreement | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Additional stock based compensation expense, accelerated vesting of options | $ 2,100 | |||||
Stock-based compensation option exercise period | Dec. 15, 2015 | |||||
Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Stock-based compensation | [1] | $ 1,193 | 2,236 | $ 7,268 | ||
Stock options | Mr Wolff's Amended and Restated Employment Letter Agreement | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Additional stock based compensation | $ 700 | |||||
Restricted stock awards liability | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Stock-based compensation | $ 200 | $ 800 | ||||
Restricted stock awards accounted for liability awards | 250,000 | |||||
Payment to settle related liability | $ 2,500 | |||||
[1] | On November 19, 2014, Benjamin G. Wolff resigned from his positions as President and Chief Executive Officer of the Company. The Company entered into a separation agreement in accordance with the terms of Mr. Wolff’s Amended and Restated Employment Letter Agreement (the "Agreement"). The Agreement provided for the vesting of all options, shares of restricted stock ("RSAs") and restricted stock units ("RSUs") in which Mr. Wolff would have vested had he remained actively employed by the Company through the second anniversary of his resignation, excluding any unvested performance-based RSAs or performance-based RSUs. The Agreement also provided for an extension of the exercise period for Mr. Wolff’s vested stock options until December 15, 2015. The extension of the exercise period is considered a modification and resulted in additional stock-based compensation expense of $0.7 million, as determined using a Black-Scholes model, which was recognized on the modification date as the options were vested pursuant to the Agreement. The accelerated vesting of the options, RSUs and RSAs resulted in $2.1 million of additional stock-based compensation expense in the year ended December 31, 2014. |
Stock-Based Compensation Cost t
Stock-Based Compensation Cost to be Expensed in Future Years Related to Unvested Stock-Based Awards, as Adjusted for Expected Forfeitures (Detail) $ in Thousands | Dec. 31, 2016USD ($) | |
Equity [Abstract] | ||
2,017 | $ 2,823 | [1] |
2,018 | 1,859 | [1] |
Stock-based compensation cost to be expensed in future years related to unvested stock-based awards | $ 4,682 | |
[1] | Future expense does not include expense related to 0.1 million performance-based stock options and 0.2 million performance-based restricted stock awards granted in 2015, as these awards vest upon the achievement of certain performance milestones for which the related performance targets have yet to be established. The fair value of these awards will not be known until the date the performance targets are established at which point expensing will commence. |
Stock-Based Compensation Cost56
Stock-Based Compensation Cost to be Expensed in Future Years Related to Unvested Stock-Based Awards, as Adjusted for Expected Forfeitures (Parenthetical) (Detail) - Performance- based shares in Millions | 12 Months Ended |
Dec. 31, 2015shares | |
Performance Based Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options, Vest upon achievement of performance milestones | 0.1 |
Performance-based | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock awards, Vest upon achievement of performance milestones | 0.2 |
Estimated Weighted Average Fair
Estimated Weighted Average Fair Value of Stock Options Granted Using Black-Scholes Model (Detail) - Stock options - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average expected volatility | 53.00% | 48.00% | 55.00% |
Weighted average risk-free interest rate | 1.20% | 1.90% | 1.90% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Weighted average expected term in years | 5 years 6 months | 6 years | 6 years 2 months 12 days |
Weighted average estimated fair value per option granted | $ 3.32 | $ 4.70 | $ 7.90 |
Stock Option Activity (Detail)
Stock Option Activity (Detail) | 12 Months Ended | |
Dec. 31, 2016$ / sharesshares | ||
Number of options | ||
Outstanding at beginning of period | shares | 1,731,732 | |
Granted | shares | 24,000 | [1] |
Forfeited | shares | (450,367) | |
Outstanding at end of period | shares | 1,305,365 | [2] |
Exercisable at end of period | shares | 800,140 | [2] |
Vested and expected to vest at end of period | shares | 1,256,354 | [2] |
Weighted average exercise price | ||
Outstanding at beginning of period | $ / shares | $ 16.21 | |
Granted | $ / shares | 6.91 | [1] |
Forfeited | $ / shares | 17.19 | |
Outstanding at end of period | $ / shares | 15.70 | [2] |
Exercisable at end of period | $ / shares | 16.97 | [2] |
Vested and expected to vest at end of period | $ / shares | $ 15.64 | [2] |
Weighted average remaining life (in years) | ||
Outstanding at end of period | 6 years 8 months 19 days | [2] |
Exercisable at end of period | 5 years 11 months 12 days | [2] |
Vested and expected to vest at end of period | 6 years 9 months 22 days | [2] |
[1] | All options granted were to members of the Company’s board of directors. | |
[2] | Aggregate intrinsic value represents the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options, before applicable income taxes and represents the amount optionees would have realized if all in-the-money options had been exercised on December 31, 2016. As of December 31, 2016, the aggregate intrinsic values of stock options outstanding, exercisable, and vested and expected to vest were all zero as the closing stock price of the Company’s stock was lower than the exercise prices of its outstanding options. |
Stock Option Activity (Parenthe
Stock Option Activity (Parenthetical) (Detail) - Stock options | Dec. 31, 2016USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate intrinsic values of stock options outstanding | $ 0 |
Aggregate intrinsic values of stock options exercisable | 0 |
Aggregate intrinsic values of stock vested and expected to vest | $ 0 |
Summary of Significant Ranges o
Summary of Significant Ranges of Outstanding and Exercisable Stock Options (Detail) - $ / shares | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding stock options, Number of options | 1,305,365 | [1] | 1,731,732 | |
Outstanding stock options, Weighted average exercise price | $ 15.70 | [1] | $ 16.21 | |
Outstanding at end of period | [1] | 6 years 8 months 19 days | ||
Exercisable stock options, Number of options | [1] | 800,140 | ||
Exercisable stock options, Weighted average exercise price | [1] | $ 16.97 | ||
$ 6.91—$12.90 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Range of exercise prices, lower limit | 6.91 | |||
Range of exercise prices, upper limit | $ 12.90 | |||
Outstanding stock options, Number of options | 268,125 | |||
Outstanding stock options, Weighted average exercise price | $ 11 | |||
Outstanding at end of period | 6 years 4 months 13 days | |||
Exercisable stock options, Number of options | 244,125 | |||
Exercisable stock options, Weighted average exercise price | $ 11.40 | |||
$12.91—$13.25 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Range of exercise prices, lower limit | 12.91 | |||
Range of exercise prices, upper limit | $ 13.25 | |||
Outstanding stock options, Number of options | 176,090 | |||
Outstanding stock options, Weighted average exercise price | $ 13.10 | |||
Outstanding at end of period | 8 years 4 months 17 days | |||
Exercisable stock options, Number of options | 88,050 | |||
Exercisable stock options, Weighted average exercise price | $ 13.10 | |||
$13.26—$14.05 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Range of exercise prices, lower limit | 13.26 | |||
Range of exercise prices, upper limit | $ 14.05 | |||
Outstanding stock options, Number of options | 400,000 | |||
Outstanding stock options, Weighted average exercise price | $ 13.40 | |||
Outstanding at end of period | 8 years 6 months 7 days | |||
Exercisable stock options, Number of options | 100,000 | |||
Exercisable stock options, Weighted average exercise price | $ 13.40 | |||
$14.06—$19.60 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Range of exercise prices, lower limit | 14.06 | |||
Range of exercise prices, upper limit | $ 19.60 | |||
Outstanding stock options, Number of options | 232,500 | |||
Outstanding stock options, Weighted average exercise price | $ 16.24 | |||
Outstanding at end of period | 5 years 9 months | |||
Exercisable stock options, Number of options | 167,002 | |||
Exercisable stock options, Weighted average exercise price | $ 16.60 | |||
$19.61—$42.20 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Range of exercise prices, lower limit | 19.61 | |||
Range of exercise prices, upper limit | $ 42.20 | |||
Outstanding stock options, Number of options | 228,650 | |||
Outstanding stock options, Weighted average exercise price | $ 26.67 | |||
Outstanding at end of period | 4 years 22 days | |||
Exercisable stock options, Number of options | 200,963 | |||
Exercisable stock options, Weighted average exercise price | $ 27.49 | |||
[1] | Aggregate intrinsic value represents the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options, before applicable income taxes and represents the amount optionees would have realized if all in-the-money options had been exercised on December 31, 2016. As of December 31, 2016, the aggregate intrinsic values of stock options outstanding, exercisable, and vested and expected to vest were all zero as the closing stock price of the Company’s stock was lower than the exercise prices of its outstanding options. |
Restricted Stock Activity (Deta
Restricted Stock Activity (Detail) - Restricted stock awards | 12 Months Ended | |
Dec. 31, 2016$ / sharesshares | ||
Number of restricted stock awards | ||
Unvested Beginning Balance | shares | 1,053,075 | |
Granted | shares | 78,083 | [1] |
Vested | shares | (200,856) | |
Forfeited | shares | (39,547) | |
Unvested Ending Balance | shares | 890,755 | |
Weighted average grant date fair value | ||
Unvested Beginning Balance | $ / shares | $ 8.40 | |
Granted | $ / shares | 5.46 | [1] |
Vested | $ / shares | 10.52 | |
Forfeited | $ / shares | 10.32 | |
Unvested Ending Balance | $ / shares | $ 8.23 | |
[1] | Represents shares issued to the Company’s Board of Directors as compensation for service. These awards have a grant date fair value of $0.4 million and vest upon issuance. |
Restricted Stock Activity (Pare
Restricted Stock Activity (Parenthetical) (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Restricted stock awards | Board of Directors | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock awards grant date fair value | $ 0.4 |
Gain on Contingency - Additiona
Gain on Contingency - Additional Information (Detail) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2015USD ($) | Nov. 30, 2012USD ($) | Mar. 31, 2012USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)Payment | Dec. 31, 2011USD ($) | |
Gain Contingencies [Line Items] | ||||||
Number of contingent scheduled payments received | Payment | 2 | |||||
Number of contingent scheduled payments | Payment | 3 | |||||
Gain on contingencies | $ 2,047 | $ 6,095 | ||||
Ovidian | ||||||
Gain Contingencies [Line Items] | ||||||
Gain on release of a tax indemnification liability | 500 | |||||
J&J Arbitration | ||||||
Gain Contingencies [Line Items] | ||||||
Gain on contingencies | $ 1,600 | |||||
Reimbursement of satellite system expenses other from J&J Group | $ 2,700 | |||||
Claims in arbitration, damages awarded | $ 4,000 | |||||
Claims in arbitration, costs and fees | $ 1,300 | |||||
Claims in arbitration, damages sought amount | $ 2,700 | |||||
First and Second Scheduled MEO Sale Payments | ||||||
Gain Contingencies [Line Items] | ||||||
Gain on contingencies | $ 3,900 | |||||
Final Scheduled MEO Sale Payments | ||||||
Gain Contingencies [Line Items] | ||||||
Gain on contingencies | $ 2,000 |
Income Tax Expense (Detail)
Income Tax Expense (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
United States—deferred | $ (1,497,000) | $ 33,000 | |
Foreign—current | $ 0 | 4,128,000 | 6,270,000 |
Income tax benefit | $ 2,631,000 | $ 6,303,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 12 Months Ended | |||
Dec. 31, 2016USD ($)Stockholder | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Income Tax Contingency [Line Items] | ||||
Foreign income tax provision | $ 0 | $ 4,128,000 | $ 6,270,000 | |
Federal tax benefit (expense) | $ 1,497,000 | $ (33,000) | ||
Federal income tax provision | $ 0 | |||
Statutory tax rate | 34.00% | 34.00% | 34.00% | |
Net operating loss carry forwards | $ 2,500,000,000 | |||
Net operating loss carry forwards, year expiration begins | 2,025 | |||
Net operating loss carry forwards, year expiration | 2,032 | |||
Income tax description | Broadly, the Company will have a Tax Ownership Change if, over a three year testing period, the portion of all stock of the Company, by value, owned by one or more 5% shareholder increases by more than 50 percentage points. For purposes of this test, shareholders that own less than 5% of the stock of the Company are aggregated into one or more separate “public groups”, each of which is treated as a 5% shareholder. | |||
Tax ownership change testing period, year | 3 years | |||
Tax ownership change, shareholder ownership percentage | 5.00% | |||
Unrecognized tax benefit | $ 15,323,000 | $ 15,594,000 | $ 5,132,000 | $ 37,665,000 |
Estimated reduction of unrecognized tax benefits | $ 15,300,000 | |||
Personal holding company determination, number of shareholders limit | Stockholder | 5 | |||
Ownership percentage of individual shareholders in a personal holding company | 50.00% | |||
Percentage of adjusted ordinary gross income pertaining to individual shareholders | 60.00% | |||
Personal holding company tax rate on net personal holding company income | 20.00% | |||
Additional percentage of beneficial interest acquired to trigger tax benefit preservation plan | 0.50% | |||
Tax Benefits Preservation Plan | Holders of 4.9% or more of the Company’s securities outstanding as of the close of business on January 29, 2010 will not trigger the Tax Benefits Plan so long as they do not (i) acquire additional securities constituting one-half of one percent (0.5%) or more of the Company’s securities outstanding as of the date of the Tax Benefits Plan (as adjusted to reflect any stock splits, subdivisions and the like), or (ii) fall under 4.9% ownership of the Company’s securities and then re-acquire securities that increase their ownership to 4.9% or more of the Company’s securities. The Board of Directors may exempt certain persons whose acquisition of securities is determined by the Board of Directors not to jeopardize the Company’s tax benefits or to otherwise be in the best interest of the Company and its shareholders. The Board of Directors may also exempt certain transactions. | |||
Income Tax Refund Claim [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Unrecognized tax benefit | $ 15,300,000 | |||
California Franchise Tax Board | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carry forwards | $ 1,300,000,000 | |||
Net operating loss carry forwards, year expiration | 2,017 | |||
Minimum | ||||
Income Tax Contingency [Line Items] | ||||
Tax ownership change, number of shareholders | Stockholder | 1 | |||
Tax ownership change, shareholder ownership percentage increase | 50.00% | |||
Tax Benefits Preservation Plan trigger, ownership percentage | 4.90% |
Reconciliation of Federal Statu
Reconciliation of Federal Statutory Income Tax Rate of 34% to Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Statutory tax rate | 34.00% | 34.00% | 34.00% |
Change in valuation allowance | (59.30%) | (22.59%) | (95.75%) |
Release of uncertain tax position | 62.77% | ||
Foreign withholding taxes | (2.37%) | (7.98%) | |
Goodwill impairment | (6.07%) | ||
Stock-based compensation | 10.24% | (3.23%) | |
Loss on sale of subsidiary | 13.70% | ||
Other | 1.36% | (2.03%) | (5.20%) |
Effective tax rate | 0.00% | (2.29%) | (12.16%) |
Significant Components of Net D
Significant Components of Net Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 941,163 | $ 956,181 |
Basis difference in Liquidating Trust | 16,955 | 16,894 |
Accrued expenses and other | 12,336 | 10,380 |
Total deferred tax assets | 970,454 | 983,455 |
Valuation allowance | $ (970,454) | (981,096) |
Net deferred tax assets | 2,359 | |
Intangibles | (2,359) | |
Total deferred tax liabilities | $ (2,359) |
Reconciliation of Beginning and
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Total liability, Beginning of period | $ 15,594 | $ 5,132 | $ 37,665 |
Additions for tax positions taken during the current period | 10,462 | ||
Reductions for tax positions taken during prior periods | (32,533) | ||
Exchange rate fluctuations | (271) | ||
Total liability, End of period | $ 15,323 | $ 15,594 | $ 5,132 |
Expense Related to Contribution
Expense Related to Contributions under Defined Contribution Retirement Included in General and Administrative Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Postemployment Benefits [Abstract] | |||
Defined contribution expenses | $ 80 | $ 201 | $ 264 |
Related Parties - Additional In
Related Parties - Additional Information (Detail) - Principal Owner | Dec. 31, 2016 |
Related Party Transaction [Line Items] | |
Eagle River's economic interest percentage | 33.30% |
Eagle River's voting interest percentage | 65.00% |
Unaudited Quarterly Results (De
Unaudited Quarterly Results (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||
Revenue | $ 515 | $ 45,003 | $ 13,500 | $ 662 | $ 15,465 | $ 2,147 | $ 25,245 | $ 59,018 | $ 43,519 | $ 42,534 | ||||||||
Impairment of intangibles and goodwill | (103,499) | (103,499) | (11,013) | |||||||||||||||
Operating income (loss) | (5,313) | $ (5,501) | 21,103 | 4,928 | (112,061) | (2,129) | (8,021) | 1,076 | 15,217 | (121,135) | (51,716) | |||||||
Net income (loss) | (5,077) | (5,341) | 21,257 | 7,110 | (108,404) | 127 | (7,990) | (1,315) | 17,949 | (117,582) | (58,134) | |||||||
Net income (loss) attributable to Pendrell | $ (4,968) | $ (5,254) | $ 21,420 | $ 6,565 | $ (101,564) | $ 1 | $ (7,558) | $ (559) | $ 17,763 | $ (109,680) | $ (51,002) | |||||||
Basic income (loss) per share attributable to Pendrell | $ (0.19) | [1] | $ (0.20) | [1] | $ 0.80 | [1] | $ 0.25 | [1] | $ (3.82) | [1] | $ (0.28) | [1] | $ (0.02) | [1] | $ 0.66 | $ (4.13) | $ (1.93) | |
Diluted income (loss) per share attributable to Pendrell | $ (0.19) | [1] | $ (0.20) | [1] | $ 0.77 | [1] | $ 0.24 | [1] | $ (3.82) | [1] | $ (0.28) | [1] | $ (0.02) | [1] | $ 0.64 | $ (4.13) | $ (1.93) | |
[1] | Per share amounts for the three months ended September 30, 2015 were less than $0.01. |
Unaudited Quarterly Results (Pa
Unaudited Quarterly Results (Parenthetical) (Detail) - $ / shares | 3 Months Ended | 12 Months Ended | ||||||||||||||||
Dec. 31, 2016 | [1] | Sep. 30, 2016 | [1] | Jun. 30, 2016 | [1] | Mar. 31, 2016 | [1] | Dec. 31, 2015 | [1] | Sep. 30, 2015 | Jun. 30, 2015 | [1] | Mar. 31, 2015 | [1] | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information [Line Items] | ||||||||||||||||||
Basic income (loss) per share attributable to Pendrell | $ (0.19) | $ (0.20) | $ 0.80 | $ 0.25 | $ (3.82) | $ (0.28) | $ (0.02) | $ 0.66 | $ (4.13) | $ (1.93) | ||||||||
Diluted income (loss) per share attributable to Pendrell | $ (0.19) | $ (0.20) | $ 0.77 | $ 0.24 | $ (3.82) | $ (0.28) | $ (0.02) | $ 0.64 | $ (4.13) | $ (1.93) | ||||||||
Maximum | ||||||||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||||||||
Basic income (loss) per share attributable to Pendrell | $ 0.01 | |||||||||||||||||
Diluted income (loss) per share attributable to Pendrell | $ 0.01 | |||||||||||||||||
[1] | Per share amounts for the three months ended September 30, 2015 were less than $0.01. |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) $ / shares in Units, $ in Millions | Mar. 10, 2017Stockholdershares | Mar. 09, 2017$ / sharesshares | Sep. 20, 2016 | Jul. 07, 2016 | Mar. 31, 2017USD ($) | Dec. 31, 2016 |
Subsequent Event [Line Items] | ||||||
Description of reverse stock split | At the Company’s annual meeting of shareholders on July 7, 2016, the Company’s shareholders approved a reverse split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of Class A common stock and Class B common stock within a range of one share of common stock for every three shares of common stock (1-for-3) to one share of common stock for every ten shares of common stock (1-for-10), with the exact Reverse Stock Split ratio to be set within this range as determined by the Company’s board of directors in its sole discretion. On September 20, 2016, the Company’s board of directors fixed the Reverse Stock Split ratio at 1-for-10. | |||||
Common stock | ||||||
Subsequent Event [Line Items] | ||||||
Reverse stock split ratio | 0.10 | |||||
Common stock | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Reverse stock split ratio | 0.10 | |||||
Subsequent Event | Common stock | ||||||
Subsequent Event [Line Items] | ||||||
Reverse stock split ratio | 0.01 | |||||
Effective date of reverse stock split | Jun. 30, 2017 | |||||
Description of reverse stock split | If approved by the shareholders at the Company’s 2017 annual meeting of shareholders, the Reverse Split will be effective at the close of trading on June 30, 2017 (the “Effective Date”), the Company’s Articles of Incorporation will be amended as of the Effective Date to reflect the Reverse Split, and any shareholder who holds less than 100 shares of Common Stock immediately prior to the Reverse Split will receive a cash payment in lieu of their fractionalized shares. | |||||
Subsequent Event | Common stock | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares held by shareholders who will receive cash payment in lieu of share | 100 | |||||
Subsequent Event | Class A common stock | ||||||
Subsequent Event [Line Items] | ||||||
Repurchase plan, shares authorized to be repurchased | 1,000,000 | |||||
Subsequent Event | Class A common stock | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Number of record holders of Class A Stock after Reverse Split | Stockholder | 300 | |||||
Subsequent Event | Class A common stock | Crusader | ||||||
Subsequent Event [Line Items] | ||||||
Number of common stock redeemed | 2,432,923 | |||||
Common stock, redemption price per share | $ / shares | $ 6.55 | |||||
Scenario, Forecast | ||||||
Subsequent Event [Line Items] | ||||||
Up-front payment for memory patents | $ | $ 3.2 |