Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 04, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-33579 | |
Entity Registrant Name | INTERDIGITAL, INC. | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 82-4936666 | |
Entity Address, Address Line One | 200 Bellevue Parkway | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Wilmington | |
Entity Address, State or Province | DE | |
Entity Address, Postal Zip Code | 19809-3727 | |
City Area Code | 302 | |
Local Phone Number | 281-3600 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | IDCC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,805,968 | |
Entity Central Index Key | 0001405495 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 670,292 | $ 745,491 |
Short-term investments | 168,953 | 179,204 |
Accounts receivable, less allowances of $0 and $537 | 19,380 | 28,272 |
Prepaid and other current assets | 62,387 | 63,365 |
Total current assets | 921,012 | 1,016,332 |
PROPERTY AND EQUIPMENT, NET | 11,918 | 10,217 |
PATENTS, NET | 447,194 | 436,339 |
DEFERRED TAX ASSETS | 79,897 | 73,168 |
OTHER NON-CURRENT ASSETS | 78,744 | 76,026 |
Total non-current assets | 617,753 | 595,750 |
TOTAL ASSETS | 1,538,765 | 1,612,082 |
CURRENT LIABILITIES: | ||
Current portion of long-term debt | 0 | 94,170 |
Accounts payable | 11,394 | 13,393 |
Accrued compensation and related expenses | 24,002 | 29,162 |
Deferred revenue | 141,528 | 146,654 |
Taxes payable | 102 | 51 |
Dividends payable | 10,781 | 10,746 |
Other accrued expenses | 16,123 | 11,382 |
Total current liabilities | 203,930 | 305,558 |
LONG-TERM DEBT | 359,119 | 350,588 |
LONG-TERM DEFERRED REVENUE | 139,396 | 123,653 |
OTHER LONG-TERM LIABILITIES | 45,614 | 46,002 |
TOTAL LIABILITIES | 748,059 | 825,801 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ EQUITY: | ||
Preferred Stock, $0.10 par value, 14,399 shares authorized, 0 shares issued and outstanding | 0 | 0 |
Common Stock, $0.01 par value, 100,000 shares authorized, 71,377 and 71,268 shares issued and 30,804 and 30,701 shares outstanding | 713 | 712 |
Additional paid-in capital | 734,565 | 727,402 |
Retained earnings | 1,413,382 | 1,412,779 |
Accumulated other comprehensive income (loss) | 370 | (74) |
TOTAL SHAREHOLDERS’ EQUITY | 2,149,030 | 2,140,819 |
Treasury stock, 40,573 and 40,567 shares of common held at cost | 1,379,611 | 1,379,262 |
Total InterDigital, Inc. shareholders’ equity | 769,419 | 761,557 |
Noncontrolling interest | 21,287 | 24,724 |
Total equity | 790,706 | 786,281 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 1,538,765 | $ 1,612,082 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 537 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 71,377,000 | 71,268,000 |
Common stock, shares outstanding (in shares) | 30,804,000 | 30,701,000 |
Preferred stock, par value (in USD per share) | $ 0.1 | $ 0.1 |
Preferred stock, shares authorized (in shares) | 14,399,000 | 14,399,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Treasury stock, shares of common held at cost (in shares) | 40,573,000 | 40,567,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
REVENUES | $ 104,498 | $ 75,609 | $ 180,708 | $ 144,240 |
OPERATING EXPENSES: | ||||
Patent administration and licensing | 38,695 | 37,353 | 78,803 | 73,424 |
Development | 22,092 | 17,027 | 40,910 | 35,522 |
Selling, general and administrative | 11,794 | 12,314 | 24,397 | 26,529 |
TOTAL OPERATING EXPENSES | 72,581 | 66,694 | 144,110 | 135,475 |
Income from operations | 31,917 | 8,915 | 36,598 | 8,765 |
INTEREST EXPENSE | (9,971) | (9,907) | (20,516) | (19,385) |
OTHER INCOME, NET | 3,789 | 12,354 | 9,812 | 15,969 |
Income before income taxes | 25,735 | 11,362 | 25,894 | 5,349 |
INCOME TAX PROVISION | (5,144) | (4,984) | (6,964) | (3,185) |
NET INCOME | 20,591 | 6,378 | 18,930 | 2,164 |
Net loss attributable to noncontrolling interest | (1,660) | (1,365) | (3,437) | (2,776) |
NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC. | $ 22,251 | $ 7,743 | $ 22,367 | $ 4,940 |
NET INCOME PER COMMON SHARE — BASIC (in USD per share) | $ 0.72 | $ 0.25 | $ 0.73 | $ 0.15 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC (in shares) | 30,757 | 31,547 | 30,740 | 32,076 |
NET INCOME PER COMMON SHARE — DILUTED (in USD per share) | $ 0.72 | $ 0.24 | $ 0.72 | $ 0.15 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED (in shares) | 31,045 | 31,776 | 30,982 | 32,366 |
Patent licensing royalties | ||||
REVENUES | $ 101,184 | $ 73,567 | $ 174,182 | $ 139,945 |
Technology solutions | ||||
REVENUES | 3,314 | 2,042 | 6,526 | 4,070 |
Patent sales | ||||
REVENUES | $ 0 | $ 0 | $ 0 | $ 225 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 20,591 | $ 6,378 | $ 18,930 | $ 2,164 |
Unrealized gain on investments, net of tax | 412 | 1,076 | 444 | 2,121 |
Comprehensive income | 21,003 | 7,454 | 19,374 | 4,285 |
Comprehensive loss attributable to noncontrolling interest | (1,660) | (1,365) | (3,437) | (2,776) |
Total comprehensive income attributable to InterDigital, Inc. | $ 22,663 | $ 8,819 | $ 22,811 | $ 7,061 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Non-Controlling Interest |
Beginning balance (in shares) at Dec. 31, 2018 | 71,134 | 37,605 | |||||
Beginning balance at Dec. 31, 2018 | $ 938,013 | $ 711 | $ 685,512 | $ 1,435,970 | $ (2,471) | $ (1,182,993) | $ 1,284 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to InterDigital, Inc. | (2,803) | (2,803) | |||||
Proceeds from and increases in noncontrolling interests | 12,834 | 12,834 | |||||
Net loss attributable to noncontrolling interest | (1,411) | (1,411) | |||||
Net change in unrealized gain (loss) on short-term investments | 1,045 | 1,045 | |||||
Dividends declared ($0.35 per share) | (11,180) | 103 | (11,283) | ||||
Exercise of common stock options | 2 | 2 | |||||
Issuance of common stock, net (in shares) | 116 | ||||||
Issuance of common stock, net | (4,097) | $ 1 | (4,098) | ||||
Amortization of unearned compensation | 2,096 | 2,096 | |||||
Repurchase of common stock (in shares) | 1,585 | ||||||
Repurchase of common stock | (108,986) | $ (108,986) | |||||
Ending balance (in shares) at Mar. 31, 2019 | 71,250 | 39,190 | |||||
Ending balance at Mar. 31, 2019 | 825,513 | $ 712 | 683,615 | 1,421,884 | (1,426) | $ (1,291,979) | 12,707 |
Beginning balance (in shares) at Dec. 31, 2018 | 71,134 | 37,605 | |||||
Beginning balance at Dec. 31, 2018 | 938,013 | $ 711 | 685,512 | 1,435,970 | (2,471) | $ (1,182,993) | 1,284 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to InterDigital, Inc. | 4,940 | ||||||
Net loss attributable to noncontrolling interest | (2,776) | ||||||
Net change in unrealized gain (loss) on short-term investments | 2,121 | ||||||
Ending balance (in shares) at Jun. 30, 2019 | 71,260 | 40,134 | |||||
Ending balance at Jun. 30, 2019 | 800,240 | $ 712 | 724,170 | 1,418,628 | (350) | $ (1,354,262) | 11,342 |
Beginning balance (in shares) at Mar. 31, 2019 | 71,250 | 39,190 | |||||
Beginning balance at Mar. 31, 2019 | 825,513 | $ 712 | 683,615 | 1,421,884 | (1,426) | $ (1,291,979) | 12,707 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to InterDigital, Inc. | 7,743 | 7,743 | |||||
Net loss attributable to noncontrolling interest | (1,365) | (1,365) | |||||
Net change in unrealized gain (loss) on short-term investments | 1,076 | 1,076 | |||||
Dividends declared ($0.35 per share) | (10,895) | 104 | (10,999) | ||||
Issuance of common stock, net (in shares) | 10 | ||||||
Issuance of common stock, net | (40) | (40) | |||||
Amortization of unearned compensation | 2,116 | 2,116 | |||||
Repurchase of common stock (in shares) | 944 | ||||||
Repurchase of common stock | (62,283) | $ (62,283) | |||||
Equity component of debt, net of tax | 56,917 | 56,917 | |||||
Net convertible note hedge transactions, net of tax | (49,740) | (49,740) | |||||
Net warrant transactions | 43,416 | 43,416 | |||||
Deferred financing costs allocated to equity, net of tax | (1,569) | (1,569) | |||||
Reacquisition of equity component of debt due to prepayment, net of tax | (10,649) | (10,649) | |||||
Ending balance (in shares) at Jun. 30, 2019 | 71,260 | 40,134 | |||||
Ending balance at Jun. 30, 2019 | 800,240 | $ 712 | 724,170 | 1,418,628 | (350) | $ (1,354,262) | 11,342 |
Beginning balance (in shares) at Dec. 31, 2019 | 71,268 | 40,567 | |||||
Beginning balance at Dec. 31, 2019 | 786,281 | $ 712 | 727,402 | 1,412,779 | (74) | $ (1,379,262) | 24,724 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to InterDigital, Inc. | 116 | 116 | |||||
Net loss attributable to noncontrolling interest | (1,777) | (1,777) | |||||
Net change in unrealized gain (loss) on short-term investments | 32 | 32 | |||||
Dividends declared ($0.35 per share) | (10,763) | 84 | (10,847) | ||||
Exercise of common stock options (in shares) | 27 | ||||||
Exercise of common stock options | 778 | $ 1 | 777 | ||||
Issuance of common stock, net (in shares) | 27 | ||||||
Issuance of common stock, net | (725) | (725) | |||||
Amortization of unearned compensation | 2,003 | 2,003 | |||||
Repurchase of common stock (in shares) | 6 | ||||||
Repurchase of common stock | (349) | $ (349) | |||||
Ending balance (in shares) at Mar. 31, 2020 | 71,322 | 40,573 | |||||
Ending balance at Mar. 31, 2020 | 775,596 | $ 713 | 729,541 | 1,402,048 | (42) | $ (1,379,611) | 22,947 |
Beginning balance (in shares) at Dec. 31, 2019 | 71,268 | 40,567 | |||||
Beginning balance at Dec. 31, 2019 | 786,281 | $ 712 | 727,402 | 1,412,779 | (74) | $ (1,379,262) | 24,724 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to InterDigital, Inc. | 22,367 | ||||||
Net loss attributable to noncontrolling interest | (3,437) | ||||||
Net change in unrealized gain (loss) on short-term investments | 444 | ||||||
Ending balance (in shares) at Jun. 30, 2020 | 71,377 | 40,573 | |||||
Ending balance at Jun. 30, 2020 | 790,706 | $ 713 | 734,565 | 1,413,382 | 370 | $ (1,379,611) | 21,287 |
Beginning balance (in shares) at Mar. 31, 2020 | 71,322 | 40,573 | |||||
Beginning balance at Mar. 31, 2020 | 775,596 | $ 713 | 729,541 | 1,402,048 | (42) | $ (1,379,611) | 22,947 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to InterDigital, Inc. | 22,251 | 22,251 | |||||
Net loss attributable to noncontrolling interest | (1,660) | (1,660) | |||||
Net change in unrealized gain (loss) on short-term investments | 412 | 412 | |||||
Dividends declared ($0.35 per share) | (10,781) | 136 | (10,917) | ||||
Exercise of common stock options (in shares) | 19 | ||||||
Exercise of common stock options | 1,014 | 1,014 | |||||
Issuance of common stock, net (in shares) | 36 | ||||||
Issuance of common stock, net | (755) | (755) | |||||
Amortization of unearned compensation | 4,629 | 4,629 | |||||
Ending balance (in shares) at Jun. 30, 2020 | 71,377 | 40,573 | |||||
Ending balance at Jun. 30, 2020 | $ 790,706 | $ 713 | $ 734,565 | $ 1,413,382 | $ 370 | $ (1,379,611) | $ 21,287 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared (in USD per share) | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 18,930 | $ 2,164 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 40,367 | 37,642 |
Non-cash interest expense, net | 8,649 | 8,563 |
Non-cash change in fair-value | (5,501) | 710 |
Gain on asset acquisition | 0 | (14,175) |
Change in deferred revenue | (22,683) | (62,754) |
Loss on extinguishment of debt | 0 | 5,488 |
Deferred income taxes | (6,920) | (5,714) |
Share-based compensation | 6,631 | 4,212 |
Other | 259 | 623 |
(Increase) decrease in assets: | ||
Receivables | 8,892 | (22,169) |
Deferred charges and other assets | (1,470) | (6,463) |
Increase (decrease) in liabilities: | ||
Accounts payable | (3,575) | (3,105) |
Accrued compensation and other expenses | (760) | 2,326 |
Accrued taxes payable and other tax contingencies | 51 | (871) |
Net cash provided by (used in) operating activities | 42,870 | (53,523) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of short-term investments | (120,977) | (92,074) |
Sales of short-term investments | 132,363 | 267,289 |
Purchases of property and equipment | (3,771) | (2,862) |
Capitalized patent costs | (13,849) | (17,840) |
Net cash provided by (used in) investing activities | (6,234) | 154,513 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from exercise of stock options | 1,792 | 2 |
Payments on long-term debt | (94,909) | (221,091) |
Proceeds from issuance of convertible senior notes | 0 | 400,000 |
Purchase of convertible bond hedge | 0 | (72,000) |
Payment for warrant unwind | 0 | (4,184) |
Prepayment penalty on long-term debt | 0 | (10,763) |
Proceeds from hedge unwind | 0 | 9,038 |
Proceeds from issuance of warrants | 0 | 47,600 |
Payments of debt issuance costs | 0 | (7,300) |
Proceeds from non-controlling interests | 0 | 10,333 |
Dividends paid | (21,509) | (22,789) |
Taxes withheld upon restricted stock unit vestings | (1,480) | (4,137) |
Repurchase of common stock | (349) | (171,269) |
Net cash used in financing activities | (116,455) | (46,560) |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (79,819) | 54,430 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 757,098 | 488,733 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ 677,279 | $ 543,163 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION In the opinion of management, the accompanying unaudited, condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial position of InterDigital, Inc. (individually and/or collectively with its subsidiaries referred to as “InterDigital,” the “Company,” “we,” “us” or “our,” unless otherwise indicated) as of June 30, 2020 , the results of our operations for the three and six months ended June 30, 2020 and 2019 and our cash flows for the six months ended June 30, 2020 and 2019 . The accompanying unaudited, condensed consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and, accordingly, do not include all of the detailed schedules, information and notes necessary to state fairly the financial condition, results of operations and cash flows in conformity with United States generally accepted accounting principles (“GAAP”). The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP for year-end financial statements. Therefore, these financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (our “ 2019 Form 10-K ”) as filed with the Securities and Exchange Commission (“SEC”) on February 20, 2020. Definitions of capitalized terms not defined herein appear within our 2019 Form 10-K. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year. We have one reportable segment. 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 disclosures of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. InterDigital has analyzed the impact of the Coronavirus pandemic ("COVID-19") on its financial statements as of June 30, 2020. InterDigital has determined that the changes to its significant judgments and estimates as a result of COVID-19 did not have a material impact on its financial statements. The potential impact of COVID-19 will continue to be analyzed going forward. Change in Accounting Policies There have been no material changes or updates to our existing accounting policies from the disclosures included in our 2019 Form 10-K . Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. Supplemental Cash Flow Information The following table presents additional supplemental cash flow information for the six months ended June 30, 2020 and 2019 (in thousands): FOR THE SIX MONTHS ENDED JUNE 30, SUPPLEMENTAL CASH FLOW INFORMATION: 2020 2019 Interest paid $ 4,712 $ 3,218 Income taxes paid, including foreign withholding taxes 13,788 9,770 Non-cash investing and financing activities: Dividend payable 10,781 10,895 Increases in noncontrolling interests — 2,500 Accrued debt issuance costs — (1,075 ) Non-cash acquisition of patents 33,300 — Accrued capitalized patent costs and property and equipment (742 ) (1,910 ) New Accounting Guidance Accounting Standards Update: Financial Instruments - Credit Losses In June 2016, the FASB issued ASU No. 2016-13, " Financial Instruments - Credit Losses ". This ASU introduced a new accounting model for recognizing credit losses on certain financial instruments and financial assets, including trade receivables, based upon an estimate of current expected credit losses, otherwise known as CECL. The new guidance requires the recognition of an allowance that reflects the current estimate of credit losses expected to be incurred over the life of the financial asset, based not only on historical experience and current conditions, but also on reasonable forecasts. Additionally, ASU No. 2016-13 made several changes to the available-for-sale impairment model. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We adopted this guidance as of January 1, 2020 and the adoption did not have a material impact on our consolidated financial statements. Accounting Standards Update: Cloud Computing Arrangements In August 2018, the FASB issued ASU No. 2018-15 “ Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract ”. The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We adopted this guidance as of January 1, 2020 and the adoption did not have a material impact on our consolidated financial statements. Accounting Standards Update: Collaborative Arrangements In November 2018, the FASB issued ASU No. 2018-18, " Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606 ". The amendments in this ASU provide guidance on how to assess whether certain transactions between collaborative arrangement participants should be accounted for within the revenue recognition standard. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted for entities who have previously adopted the new revenue recognition guidance. We adopted this guidance as of January 1, 2020 and the adoption did not have a material impact on our consolidated financial statements. Accounting Standards Update: Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2019-12"). The amendments in this ASU are intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 with early adoption allowed. The Company is currently evaluating the impact of the adoption of ASU 2019-12 on its consolidated financial statements. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Disaggregated Revenue The following table presents the disaggregation of our revenue for the three and six months ended June 30, 2020 and 2019 (in thousands): Three months ended June 30, 2020 2019 Increase/(Decrease) Variable patent royalty revenue $ 4,597 $ 8,594 $ (3,997 ) (47 )% Fixed-fee royalty revenue 77,338 63,736 13,602 21 % Current patent royalties a 81,935 72,330 9,605 13 % Non-current patent royalties b 19,249 1,237 18,012 1,456 % Total patent royalties 101,184 73,567 27,617 38 % Current technology solutions revenue a 3,314 2,042 1,272 62 % Patent sales b — — — — % Total revenue $ 104,498 $ 75,609 $ 28,889 38 % Six months ended June 30, 2020 2019 Increase/(Decrease) Variable patent royalty revenue $ 10,543 $ 17,874 $ (7,331 ) (41 )% Fixed-fee royalty revenue 143,685 126,609 17,076 13 % Current patent royalties a 154,228 144,483 9,745 7 % Non-current patent royalties b 19,954 (4,538 ) 24,492 540 % Total patent royalties 174,182 139,945 34,237 24 % Current technology solutions revenue a 6,526 4,070 2,456 60 % Patent sales b — 225 (225 ) — % Total revenue $ 180,708 $ 144,240 $ 36,468 25 % a. Recurring revenues are comprised of current patent royalties, inclusive of Dynamic Fixed-Fee Agreement royalties, and current technology solutions revenue. b. Non-recurring revenues are comprised of non-current patent royalties, which primarily include past patent royalties and royalties from static agreements, as well as patent sales. During first half 2020 , we recognized $103.7 million of revenue that had been included in deferred revenue as of the beginning of the period. As of June 30, 2020 , we had contract assets of $10.2 million and $9.5 million included within " Accounts receivable " and " Other non-current assets " in the condensed consolidated balance sheet, respectively. As of December 31, 2019 , we had contract assets of $16.2 million and $10.2 million included within " Accounts receivable " and " Other non-current assets " in the condensed consolidated balance sheet, respectively. Contracted Revenue Based on contracts signed and committed as of June 30, 2020 , we expect to recognize the following revenue from Dynamic Fixed-Fee Agreement payments over the term of such contracts (in thousands): Revenue Remainder 2020 $ 152,143 2021 235,357 2022 130,650 2023 43,922 2024 — |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES In first half 2020 , based on the statutory federal tax rate net of discrete federal and state taxes, we had an effective tax rate of 26.9% . The effective tax rate for the first half 2020 was impacted by losses in certain jurisdictions where the Company presently has recorded a valuation allowance against the related tax benefit. Excluding this valuation allowance, the effective tax rate for first half 2020 would have been 12.5% . This is compared to an effective tax rate of 59.5% based on the statutory federal tax rate net of discrete federal and state taxes during first half 2019 . During first half 2019 , we recorded discrete net expense of $3.0 million primarily related to both the acquisition of the Research & Innovation unit of Technicolor SA and extinguishment of long-term debt. The Company believes that outcomes which are reasonably possible within the next 12 months may result in the reduction in the liability for unrecognized tax benefits of $1.8 million , excluding interest and penalties. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was signed into law. We are currently evaluating its impact, if any, on us. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "Tax Reform Act") was signed into law. The Tax Reform Act imposes a 13.125% tax rate on income that qualifies as Foreign Derived Intangible Income ("FDII"). On July 9, 2020, the IRS issued final regulations for FDII. The Company is currently evaluating and will record the impact, if any, as applicable. The effective tax rate reported in any given year will continue to be influenced by a variety of factors, including timing differences between the recognition of book and tax revenue, the level of pre-tax income or loss, the foreign vs. domestic classification of the Company’s customers, and any discrete items that may occur. With the FDII regulations being released as final on July 9, 2020, the Company does not believe any proposed or pending regulations will have a significant impact on its tax positions. During first half 2020 and 2019 , we paid approximately $13.4 million and $5.1 million , respectively, of foreign source withholding tax. Additionally, as of each June 30, 2020 and December 31, 2019 , we included approximately $0.1 million of foreign source withholding tax within our taxes payable and deferred tax asset balances. These amounts are related to receivables from foreign licensees. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE Basic Earnings Per Share ("EPS") is calculated by dividing net income or loss available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if options or other securities with features that could result in the issuance of common stock were exercised or converted to common stock. The following tables reconcile the numerator and the denominator of the basic and diluted net income (loss) per share computation (in thousands, except for per share data): Three months ended June 30, 2020 2019 Basic Diluted Basic Diluted Numerator: Net income applicable to InterDigital, Inc. $ 22,251 $ 22,251 $ 7,743 $ 7,743 Denominator: Weighted-average shares outstanding: Basic 30,757 30,757 31,547 31,547 Dilutive effect of stock options, RSUs, convertible securities and warrants 288 229 Weighted-average shares outstanding: Diluted 31,045 31,776 Earnings Per Share: Net income per common share: Basic $ 0.72 $ 0.72 $ 0.25 $ 0.25 Dilutive effect of stock options, RSUs, convertible securities and warrants — (0.01 ) Net income per common share: Diluted $ 0.72 $ 0.24 Six months ended June 30, 2020 2019 Basic Diluted Basic Diluted Numerator: Net income applicable to InterDigital, Inc. $ 22,367 $ 22,367 $ 4,940 $ 4,940 Denominator: Weighted-average shares outstanding: Basic 30,740 30,740 32,076 32,076 Dilutive effect of stock options, RSUs, convertible securities and warrants 242 290 Weighted-average shares outstanding: Diluted 30,982 32,366 Earnings Per Share: Net income per common share: Basic $ 0.73 $ 0.73 $ 0.15 $ 0.15 Dilutive effect of stock options, RSUs, convertible securities and warrants (0.01 ) — Net income per common share: Diluted $ 0.72 $ 0.15 Shares of common stock issuable upon the exercise or conversion of certain securities have been excluded from our computation of EPS because the strike price or conversion rate, as applicable, of such securities was greater than the average market price of our common stock and, as a result, the effect of such exercise or conversion would have been anti-dilutive. Set forth below are the securities and the weighted average number of shares of common stock underlying such securities that were excluded from our computation of EPS for the periods presented (in thousands). Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Restricted stock units and stock options 218 153 219 102 Convertible securities 4,921 4,986 5,597 4,715 Warrants 6,273 4,986 7,620 4,715 Total 11,412 10,125 13,436 9,532 Convertible Notes and Warrants Refer to Note 8, " Long-Term Debt ," for information about the Company's convertible notes and warrants and related conversion and strike prices. During periods in which the average market price of the Company's common stock is above the applicable conversion price of the Company's convertible notes, or above the strike price of our outstanding warrants, the impact of conversion or exercise, as applicable, would be dilutive and such dilutive effect is reflected in diluted EPS. As a result, in periods where the average market price of the Company's common stock is above the conversion price or strike price, as applicable, under the treasury stock method, the Company calculates the number of shares issuable under the terms of the convertible notes and the warrants based on the average market price of the stock during the period, and includes that number in the total diluted shares outstanding for the period. |
Litigation and Legal Proceeding
Litigation and Legal Proceedings | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION AND LEGAL PROCEEDINGS | LITIGATION AND LEGAL PROCEEDINGS COURT PROCEEDINGS Huawei On April 28, 2020, the Company announced that it and certain of its subsidiaries had entered into a multi-year, worldwide, non-exclusive, fixed-fee patent license agreement (the "Huawei PLA") with Huawei Investment & Holding Co., Ltd. In connection with the Huawei PLA, the parties have agreed to terms for dismissal of all outstanding litigation and other proceedings among them and their affiliates, including, without limitation, the actions in the Shenzhen Intermediate People’s Court (the "Shenzhen Court") and the High Court of Justice, Business and Property Courts of England and Wales, Intellectual Property List (Chancery Division), Patents Court (the "High Court"), as more fully described below. China Proceeding Information regarding the legal proceeding that Huawei Technologies Co., Ltd. and certain of its subsidiaries filed against the Company and certain of its subsidiaries in the Shenzhen Court can be found in the description of legal proceedings contained in the Company's 2019 Form 10-K. On June 8, 2020, Huawei filed an application with the Shenzhen Court to dismiss the legal proceeding, and on June 9, 2020, the Company filed an application with the IP Tribunal of the China Supreme People's Court (the "SPC") to dismiss the Company's jurisdictional appeal. On July 1, 2020, the SPC dismissed the Company's jurisdictional appeal, and on July 31, 2020, the Shenzhen Court granted Huawei’s petition to dismiss the legal proceeding. Accordingly, there are no further proceedings in this matter. U.K. Proceeding Information regarding the legal proceeding that the Company and certain of its subsidiaries filed against Huawei Technologies Co., Ltd. and Huawei Technologies (UK) Co., Ltd. in the High Court can be found in the description of legal proceedings contained in the Company's 2019 Form 10-K. On June 10, 2020, the parties submitted a draft consent order to the High Court dismissing the legal proceeding, and on June 12, 2020, the High Court formally dismissed the legal proceeding, with the consent order being sealed on June 15, 2020. Accordingly, there are no further proceedings in this matter. Lenovo U.K. Proceeding Information regarding the legal proceeding that the Company and certain of its subsidiaries filed against Lenovo Group Limited and certain of its subsidiaries in the High Court can be found in the description of legal proceedings contained in the Company's 2019 Form 10-K. On May 20, 2020, the High Court held a case management conference and hearing regarding Lenovo's challenges to the High Court's jurisdiction over the legal proceeding. The High Court (i) granted the Company's request to have the FRAND trial listed third after the first two technical trials with the remaining three technical trials to follow the FRAND trial, (ii) adjourned Lenovo's jurisdictional challenge until October 2020 and (iii) set other dates leading up to the trials. The five technical patent trials are each scheduled to commence within a 5-day window starting on March 1, 2021, June 21, 2021, May 9, 2022, October 3, 2022 and January 16, 2023, respectively. The non-technical FRAND trial is scheduled to commence within a 5-day window starting on January 11, 2022. District of Delaware Patent Proceeding Information regarding the legal proceeding that the Company and certain of its subsidiaries filed against Lenovo Holding Company, Inc. and certain of its subsidiaries in the United States District Court for the District of Delaware (the "Delaware District Court") can be found in the description of legal proceedings contained in the Company's 2019 Form 10-K. On July 14, 2020, the Delaware District Court heard the parties' oral arguments regarding Lenovo's motion to dismiss six of the eight patents-at-issue in the case. The Delaware District Court denied Lenovo's motion to dismiss in its entirety, finding in the Company's favor that the challenged claims of all six patents cover patent-eligible subject matter under Section 101 of the Patent Act. District of Delaware Antitrust Proceeding On April 9, 2020, Lenovo (United States) Inc. ("Lenovo") and Motorola Mobility LLC filed a complaint in the Delaware District Court against the Company and certain of its subsidiaries. The complaint alleges that the Company defendants have violated Sections 1 and 2 of the Sherman Act in connection with, among other things, their licensing of 3G and 4G standards essential patents ("SEPs"). The complaint further alleges that the Company defendants have violated their commitment to the European Telecommunications Standards Institute ("ETSI") with respect to the licensing of 3G and 4G SEPs on fair, reasonable and non-discriminatory ("FRAND") terms and conditions. The complaint seeks, among other things (i) rulings that the Company defendants have violated Sections 1 and 2 of the Sherman Act and are liable for breach of their ETSI FRAND commitments, (ii) a judgment that the plaintiffs are entitled to a license with respect to the Company's 3G and 4G SEPs on FRAND terms and conditions, and (iii) injunctions against any demand for allegedly excessive royalties or enforcement of the Company defendants' 3G and 4G U.S. SEPs against the plaintiffs or their customers via patent infringement proceedings. On June 22, 2020, the Company filed a motion to dismiss Lenovo's Sherman Act claims with prejudice, and to dismiss Lenovo's breach of contract claim with leave to re-file as a counterclaim in the Company's legal proceeding against Lenovo in the Delaware District Court discussed above. On July 17, 2020, the United States Department of Justice filed a statement of interest supporting the Company's motion to dismiss Lenovo's antitrust claims. On July 20, 2020, Lenovo filed its response to the Company's motion to dismiss, and ACT | The App Association filed a motion for leave to file an amicus brief in support of Lenovo's antitrust claims. On August 5, 2020, the Company filed its reply in support of its motion to dismiss. China Proceeding On June 8, 2020, the Company confirmed that, on April 10, 2020, Lenovo (Beijing) Ltd. and certain of its affiliates filed a complaint against the Company and certain of its subsidiaries in the Beijing Intellectual Property Court seeking a determination of the FRAND royalty rates payable for the Company's Chinese 3G, 4G and 5G SEPs. The Company has not yet been served with the complaint. Xiaomi India Proceeding On July 29, 2020, the Company and certain of its subsidiaries filed two patent infringement actions in the Delhi High Court in New Delhi, India (the "Delhi High Court") against Xiaomi Corporation and certain of its subsidiaries ("Xiaomi"). The first complaint alleges infringement of five of the Company's patents related to 3G and/or 4G/LTE standards: Indian Patent Nos. 262910; 295912; 298719; 313036; and 320182. The second complaint alleges infringement of three of the Company's patents related to H.265/HEVC standards: Indian Patent Nos. 242248; 299448; and 308108. In these proceedings, the Company is seeking compensatory and punitive damages for Xiaomi's infringement of the asserted patents. The Company is further seeking, among other remedies, injunctive relief to prevent further infringement of the litigated patents in India, unless Xiaomi elects to take a license on terms determined to be FRAND by the Delhi High Court. China Proceeding On August 5, 2020, the Company was informed in writing by Xiaomi that, on June 3, 2020, Xiaomi Communication Technology Co., Ltd. and certain of its affiliates filed a complaint against the Company and one of its subsidiaries in the Wuhan Intermediate People's Court seeking a determination of the FRAND royalty terms payable for the Company's 3G and 4G SEPs. The Company has not yet been provided with a copy of, or served with, the complaint. REGULATORY PROCEEDING Investigation by National Development and Reform Commission of China Information regarding the Company's ongoing licensing commitments to Chinese manufacturers of cellular terminal units resulting from the now-suspended investigation initiated by China’s National Development and Reform Commission can be found in the description of legal proceedings contained in the Company's 2019 Form 10-K. OTHER We are party to certain other disputes and legal actions in the ordinary course of business, including arbitrations and legal proceedings with licensees regarding the terms of their agreements and the negotiation thereof. We do not currently believe that these matters, even if adversely adjudicated or settled, would have a material adverse effect on our financial condition, results of operations or cash flows. None of the preceding matters have met the requirements for accrual or disclosure of a potential range as of June 30, 2020 . |
Business Combinations and Other
Business Combinations and Other Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS AND OTHER TRANSACTIONS | BUSINESS COMBINATIONS AND OTHER TRANSACTIONS Acquisition of Technicolor's Patent Licensing Business On July 30, 2018, we completed our acquisition of the patent licensing business of Technicolor, a worldwide technology leader in the media and entertainment sector (the "Technicolor Patent Acquisition"). The Technicolor Patent Acquisition included the acquisition by the Company of approximately 18,000 patents and applications, across a broad range of technologies, including approximately 3,000 worldwide video coding patents and applications. Refer to our 2019 Form 10-K for further information on the Technicolor Patent Acquisition. The Technicolor Patent Acquisition met the definition of a business combination, and, as such, was accounted for using the acquisition method of accounting. We allocated the fair value of consideration transferred to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. We recorded the excess of the fair value of consideration transferred over the net values of these assets and liabilities as goodwill. Acquisition of Technicolor's Research & Innovation Unit On May 31, 2019, we completed the acquisition of the Research & Innovation unit of Technicolor SA (the "R&I Acquisition"). The R&I Acquisition expanded the Company’s research capabilities in video coding, Internet of Things ("IoT") and smart home, imaging sciences, augmented reality and virtual reality, and artificial intelligence and machine learning technologies. The Technicolor R&I unit was the driving creative force behind the patent portfolio that was acquired in the Technicolor Patent Acquisition discussed above. Refer to our 2019 Form 10-K for further information on the R&I Acquisition. The R&I Acquisition met the definition of an asset acquisition and was accounted for using the cost accumulation and allocation model. There was no cash consideration for the R&I Acquisition. As consideration for the R&I Acquisition, the jointly funded R&D collaboration that was entered into as part of the Technicolor Patent Acquisition was terminated. Technicolor will continue to fund research to be performed by the R&I unit (which is now part of InterDigital R&I) for certain limited projects for a specified time period, subject to renewal. The Company also assumed certain employee-related liabilities, including obligations for certain defined benefit post-retirement plans for the acquired R&I unit employees, which are further discussed below. Additionally, Technicolor agreed to reduce its rights under the revenue-sharing arrangement entered into as part of the Technicolor Patent Acquisition, as further discussed below. Contingent Consideration The original revenue-sharing arrangement between the Company and Technicolor created a contingent consideration liability upon closing of the Technicolor Patent Acquisition in third quarter 2018. Refer to our 2019 Form 10-K for further information on the initial contingent consideration liability which was accounted for at fair value each reporting period. Under the amended revenue-sharing arrangement described above, Technicolor will now receive 42.5% of future cash receipts from new licensing efforts from the Madison Arrangement (as defined below) only, subject to certain conditions and hurdles, but will no longer receive revenue-sharing from other licensing efforts in the consumer electronics field outside of the Madison Arrangement. We determined that the initial contingent consideration liability from the Technicolor Patent Acquisition was significantly modified in conjunction with the R&I Acquisition, and, as such, the contingent consideration liability is now accounted for under ASC 450 - Contingencies under the asset acquisition framework when the liability is deemed probable and estimable. As of June 30, 2020 , the contingent consideration liability from the amended revenue-sharing arrangement was deemed not probable and estimable and is therefore not reflected within the consolidated financial statements. Defined Benefit Plans In connection with the Technicolor Patent Acquisition and the R&I Acquisition, we assumed certain defined benefit plans which are accounted for in accordance with ASC 715 - Compensation - Retirement Benefits . These plans include a retirement lump sum indemnity plan and jubilee plan, both of which provide benefit payments to employees based upon years of service and compensation levels. As of June 30, 2020 , the combined accumulated projected benefit obligation related to these plans totaled $6.4 million . Service cost and interest cost for the combined plans totaled $0.2 million for the six months ended June 30, 2020 . These plans are not required to be funded and were not funded as of June 30, 2020 . Madison Arrangement In conjunction with the Technicolor Patent Acquisition, effective July 30, 2018, we assumed Technicolor’s rights and obligations under a joint licensing program with Sony Corporation ("Sony") relating to digital televisions and standalone computer display monitors, which commenced in 2015 and is referred to as the "Madison Arrangement." We also assumed Technicolor's role as sole licensing agent for the Madison Arrangement. As licensing agent, we are responsible for making decisions regarding the prosecution and maintenance of the combined patent portfolio and the licensing and enforcement of the combined patent portfolio in the field of use of digital TVs and computer display monitors on an exclusive basis during the specified term in exchange for an agent fee. The Madison Arrangement falls under the scope of ASC 808, Collaborative Arrangements ("ASC 808"). Refer to our 2019 Form 10-K for further information on the Madison Arrangement. Long-term debt An affiliate of CPPIB Credit Investments Inc. ("CPPIB Credit"), a wholly owned subsidiary of Canada Pension Plan Investment Board, is a third-party investor in the Madison Arrangement. CPPIB Credit has made certain payments to Technicolor and Sony and has agreed to contribute cash to fund certain capital reserve obligations under the arrangement in exchange for a percentage of future revenues, specifically through September 11, 2030 in regard to the Technicolor patents. Upon our assumption of Technicolor’s rights and obligations under the Madison Arrangement, our relationship with CPPIB Credit meets the criteria in ASC 470-10-25 - Sales of Future Revenues or Various Other Measures of Income ("ASC 470"), which relates to cash received from an investor in exchange for a specified percentage or amount of revenue or other measure of income of a particular product line, business segment, trademark, patent, or contractual right for a defined period. Under this guidance, we recognized the fair value of our contingent obligation to CPPIB Credit, as of the acquisition date, as long-term debt in our condensed consolidated balance sheet. This initial fair value measurement was based on the perspective of a market participant and included significant unobservable inputs which are classified as Level 3 inputs within the fair value hierarchy. The fair value of the long-term debt as of June 30, 2020 and December 31, 2019 is disclosed within Note 7. Our repayment obligations are contingent upon future royalty revenues generated from the Madison Arrangement and there are no minimum or maximum payments under the arrangement. Under ASC 470, amounts recorded as debt are amortized under the interest method. At each reporting period, we will review the discounted expected future cash flows over the life of the obligation. The Company made an accounting policy election to utilize the catch-up method when there is a change in the estimated future cash flows, whereby we will adjust the carrying amount of the debt to the present value of the revised estimated future cash flows, discounted at the original effective interest rate, with a corresponding adjustment recognized as interest expense within “ Interest Expense ” in the condensed consolidated statements of income. The effective interest rate as of the acquisition date was approximately 14.5% . This rate represents the discount rate that equates the estimated future cash flows with the fair value of the debt as of the acquisition date, and is used to compute the amount of interest to be recognized each period based on the estimated life of the future revenue streams. During the three and six months ended June 30, 2020 , we recognized $0.7 million and $1.5 million , respectively, of interest expense related to this debt and during the three and six months ended June 30, 2019 , we recognized $0.6 million and $1.3 million , respectively. This was included within “ Interest Expense ” in the condensed consolidated statements of income. Any future payments made to CPPIB Credit, or additional proceeds received from CPPIB Credit, will decrease or increase the long-term debt balance accordingly. Restricted cash Under the Madison Arrangement, the parties reserve cash in bank accounts to fund our activities to manage the portfolios. These accounts are custodial accounts for which the funds are restricted for this purpose. Refer to Note 7, " Cash, Concentration of Credit Risk and Fair Value of Financial Instruments, " for a reconciliation of total cash, cash equivalents and restricted cash as of June 30, 2020 and December 31, 2019 to the captions within the condensed consolidated balance sheets. Commitments To receive consent from both Sony and CPPIB Credit to assume the rights and responsibilities of Technicolor under the Madison Arrangement, we committed to contributing cash to fund shortfalls in the Madison Arrangement, up to a maximum of $25.0 million , through 2020. A shortfall funding is only required in the scenario where the restricted cash is not sufficient to fund current obligations. In the event that we fund a shortfall, any surplus cash resulting from subsequent royalty receipts would be used to repay our shortfall funding plus 25% interest in advance of distributions of royalties to either Sony or CPPIB Credit, assuming they have not participated in the funding of the shortfall. As of June 30, 2020 , we have not contributed any shortfall funding. Transaction costs Transaction and integration related costs related to the above transactions for the three months ended June 30, 2020 and 2019 were $0.6 million and $1.7 million , respectively. Transaction and integration related costs related to the above transactions for the six months ended June 30, 2020 and 2019 were $1.2 million and $4.8 million , respectively. The majority of these costs were recorded within “ Patent administration and licensing ” and “ Selling, general and administrative ” expenses in the condensed consolidated statements of income. |
Cash, Concentration of Credit R
Cash, Concentration of Credit Risk and Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
CASH, CONCENTRATION OF CREDIT RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS | CASH, CONCENTRATION OF CREDIT RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash currently consists of money market and demand accounts. The following table provides a reconciliation of total cash, cash equivalents and restricted cash as of June 30, 2020 , December 31, 2019 and June 30, 2019 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands). June 30, December 31, June 30, 2020 2019 2019 Cash and cash equivalents $ 670,292 $ 745,491 $ 531,698 Restricted cash included within prepaid and other current assets 5,906 10,526 11,465 Restricted cash included within other non-current assets 1,081 1,081 — Total cash, cash equivalents and restricted cash $ 677,279 $ 757,098 $ 543,163 Concentration of Credit Risk and Fair Value of Financial Instruments Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash equivalents, short-term investments, and accounts receivable. We place our cash equivalents and short-term investments only in highly rated financial instruments and in United States government instruments. Our accounts receivable and contract assets are derived principally from patent license and technology solutions agreements. As of June 30, 2020 and December 31, 2019 , seven licensees comprised 71% and 73% , respectively, of our net accounts receivable balance. We perform ongoing credit evaluations of our licensees, who generally include large, multinational, wireless telecommunications equipment manufacturers. We believe that the book values of our financial instruments approximate their fair values. Fair Value Measurements We use various valuation techniques and assumptions when measuring the fair value of our assets and liabilities. We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. This guidance established a hierarchy that prioritizes fair value measurements based on the types of input used for the various valuation techniques (market approach, income approach and cost approach). The levels of the hierarchy are described below: Level 1 Inputs — Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 2 Inputs — Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets with insufficient volume or infrequent transactions (less active markets) or model-driven valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data, including market interest rate curves, referenced credit spreads and pre-payment rates. Level 3 Inputs — Level 3 includes financial instruments for which fair value is derived from valuation techniques including pricing models and discounted cash flow models in which one or more significant inputs are unobservable, including the Company’s own assumptions. The pricing models incorporate transaction details such as contractual terms, maturity and, in certain instances, timing and amount of future cash flows, as well as assumptions related to liquidity and credit valuation adjustments of marketplace participants. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy. We use quoted market prices for similar assets to estimate the fair value of our Level 2 investments. Recurring Fair Value Measurements Our financial assets are generally included within short-term investments on our condensed consolidated balance sheets, unless otherwise indicated. Our financial assets and liabilities that are accounted for at fair value on a recurring basis are presented in the tables below as of June 30, 2020 and December 31, 2019 (in thousands): Fair Value as of June 30, 2020 Level 1 Level 2 Level 3 Total Assets: Money market and demand accounts (a) $ 677,279 $ — $ — $ 677,279 Commercial paper (b) — 26,296 — 26,296 U.S. government securities — 53,047 — 53,047 Corporate bonds, asset backed and other securities — 89,609 — 89,609 Total $ 677,279 $ 168,952 $ — $ 846,231 Fair Value as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market and demand accounts (a) $ 757,098 $ — $ — $ 757,098 Commercial paper (b) — — — — U.S. government securities — 105,702 — 105,702 Corporate bonds, asset backed and other securities — 73,502 — 73,502 Total $ 757,098 $ 179,204 $ — $ 936,302 ______________________________ (a) Primarily included within cash and cash equivalents. (b) As of June 30, 2020 and December 31, 2019 , zero commercial paper was included within cash and cash equivalents. Level 3 Fair Value Measurements Contingent consideration As discussed in Note 6, " Business Combinations and Other Transactions ," we completed the Technicolor Patent Acquisition during third quarter 2018. In conjunction with the Technicolor Patent Acquisition, we initially recognized a contingent consideration liability which was measured at fair value on a recurring basis using significant unobservable inputs classified as Level 3 measurements within the fair value hierarchy. We utilized a Monte Carlo simulation model to determine the estimated fair value of the contingent consideration liability through first quarter 2019. A Monte Carlo simulation uses random numbers together with volatility assumptions to generate individual paths, or trials, for variables of interest governed by a Geometric Brownian Motion in a risk-neutral framework. As discussed in Note 6, " Business Combinations and Other Transactions ," we completed the R&I Acquisition during second quarter 2019. The transaction met the definition of an asset acquisition and was accounted for using the cost accumulation and allocation model. As part of the R&I Acquisition, Technicolor reduced its rights to the revenue-sharing arrangement that created the initial contingent consideration liability from the Technicolor Patent Acquisition. We determined that the initial contingent consideration liability from the Technicolor Patent Acquisition was significantly modified in conjunction with the R&I Acquisition, and, as such, the contingent consideration liability will now be accounted for under ASC 450 - Contingencies under the asset acquisition framework when the liability is deemed probable and estimable. Since the contingent consideration liability arising from the amended revenue-sharing arrangement was not probable and estimable as of the acquisition date, the carrying value of the previous contingent consideration liability was derecognized, which resulted in a $20.5 million gain which was included within " Other Income, Net ” in the condensed consolidated statement of income for second quarter 2019. Therefore, effective as of the completion of the R&I Acquisition on May 31, 2019, the contingent consideration liability was no longer a Level 3 fair value recurring measurement. Non-Recurring Fair Value Measurements Investments in Other Entities During first quarter 2020, we recognized a $5.5 million unrealized gain resulting from observable price changes in orderly transactions of one of our long-term strategic investments, which was included within “ Other Income, Net ” in the condensed consolidated statement of income. Lease Assets During first quarter 2020, we recognized a $1.1 million impairment, comprised of $0.8 million of Property, Plant, and Equipment, and $0.3 million of Right of Use Asset related to the abandonment of one of our leased properties, which was included within “ Operating Expense ” in the condensed consolidated statement of income. Fair Value of Long-Term Debt 2024 and 2020 Senior Convertible Notes The principal amount, carrying value and related estimated fair value of the Company's senior convertible debt reported in the condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019 was as follows (in thousands). The aggregate fair value of the principal amount of the senior convertible long-term debt is a Level 2 fair value measurement. June 30, 2020 December 31, 2019 Principal Amount Carrying Value Fair Value Principal Amount Carrying Fair Value Senior Convertible Long-Term Debt $ 400,000 $ 336,544 $ 396,240 $ 494,909 $ 423,657 $ 492,969 Technicolor Patent Acquisition Long-term Debt As more fully disclosed in Note 6, " Business Combinations and Other Transactions ," we recognized long-term debt in conjunction with the Technicolor Patent Acquisition. The carrying value and related estimated fair value of the Technicolor Patent Acquisition long-term debt reported in the condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019 was as follows (in thousands). The aggregate fair value of the Technicolor Patent Acquisition long-term debt is a Level 3 fair value measurement. June 30, 2020 December 31, 2019 Carrying Value Fair Value Carrying Fair Value Technicolor Patent Acquisition Long-Term Debt $ 22,576 $ 26,241 $ 21,101 $ 23,305 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Technicolor Patent Acquisition Long-Term Debt Refer to Note 6, " Business Combinations and Other Transactions ," and Note 7, " Cash, Concentration of Credit Risk and Fair Value of Financial Instruments ," for information regarding the long-term debt recognized in conjunction with the Technicolor Patent Acquisition. 2024 Senior Convertible Notes, and Related Note Hedge and Warrant Transactions On June 3, 2019 we issued $400.0 million in aggregate principal amount of 2.00% Senior Convertible Notes due 2024 (the "2024 Notes"). The net proceeds from the issuance of the 2024 Notes, after deducting the initial purchasers' transaction fees and offering expenses, were approximately $391.6 million . The 2024 Notes bear interest at a rate of 2.00% per year, payable in cash on June 1 and December 1 of each year, commencing on December 1, 2019, and mature on June 1, 2024, unless earlier converted or repurchased. The 2024 Notes are convertible into cash, shares of our common stock or a combination thereof, at our election, at an initial conversion rate of 12.3018 shares of common stock per $1,000 principal amount of 2024 Notes (which is equivalent to an initial conversion price of approximately $81.29 per share), as adjusted pursuant to the terms of the indenture governing the 2024 Notes (the "Indenture"). The conversion rate of the 2024 Notes, and thus the conversion price, may be adjusted in certain circumstances, including in connection with a conversion of the 2024 Notes made following certain fundamental changes and under other circumstances set forth in the Indenture. It is our current intent and policy to settle all conversions of the 2024 Notes through combination settlements of cash and shares of common stock, with a specified dollar amount of $1,000 per $1,000 principal amount of 2024 Notes and any remaining amounts in shares of common stock. The 2024 Notes are senior unsecured obligations and rank equally in right of payment with any of our current and any future senior unsecured indebtedness. The 2024 Notes are effectively subordinated to all of our future secured indebtedness to the extent of the value of the related collateral, and the 2024 Notes are structurally subordinated to indebtedness and other liabilities, including trade payables, of our subsidiaries. On May 29 and May 31, 2019, in connection with the offering of the 2024 Notes, we entered into convertible note hedge transactions (collectively, the “2024 Note Hedge Transactions”) that cover, subject to customary anti-dilution adjustments, approximately 4.9 million shares of common stock, in the aggregate, at a strike price that initially corresponds to the initial conversion price of the 2024 Notes, subject to adjustment, and are exercisable upon any conversion of the 2024 Notes. On May 29 and May 31, 2019, we also entered into privately negotiated warrant transactions (collectively, the “2024 Warrant Transactions” and, together with the 2024 Note Hedge Transactions, the “2024 Call Spread Transactions”), whereby we sold warrants to acquire, subject to customary anti-dilution adjustments, approximately 4.9 million shares of common stock at an initial strike price of approximately $109.43 per share, subject to adjustment. Refer to Note 10, "Obligations" within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of the 2019 Form 10-K for further information regarding the 2024 Notes and 2024 Call Spread Transactions, including the accounting treatment of these transactions. 2020 Senior Convertible Notes, and Related Note Hedge and Warrant Transactions On March 11, 2015, we issued $316.0 million in aggregate principal amount of 1.50% Senior Convertible Notes due 2020 (the "2020 Notes"). The 2020 Notes bore interest at a rate of 1.50% per year, payable in cash on March 1 and September 1 of each year, which commenced September 1, 2015, and matured on March 1, 2020. In connection with the initial offering of the 2020 Notes, on March 5 and March 9, 2015, we entered into convertible note hedge transactions (the “2020 Note Hedge Transactions”) that initially covered approximately 4.4 million shares of common stock at a strike price that initially corresponded to the initial conversion price of the 2020 Notes and are exercisable upon any conversion of the 2020 Notes. On March 5 and March 9, 2015, we also entered into warrant transactions (collectively, the "2020 Warrant Transactions" and, together with the 2020 Note Hedge Transactions, the "2020 Call Spread Transactions") to initially acquire, subject to customary anti-dilution adjustments, approximately 4.4 million shares of common stock. The warrants became exercisable and expire in daily tranches over a three and a half month period which started in June 2020. On May 29, 2019, in connection with the partial repurchase of $221.1 million in aggregate principal amount of the 2020 Notes, the Company entered into partial unwind agreements that, among other things, reduced the number of warrants exercisable under the 2020 Warrant Transactions. As a result of the partial unwind transactions, approximately 1.3 million shares of common stock in the aggregate were covered under each of the 2020 Note Hedge Transactions and the 2020 Warrant Transactions as of June 30, 2020 . As of June 30, 2020 , the warrants under the 2020 Warrant Transactions had a strike price of approximately $85.81 per share, as adjusted. Refer to Note 10, "Obligations" within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of the 2019 Form 10-K for further information regarding the 2020 Notes and 2020 Call Spread Transactions. As described above, the 2020 Notes matured on March 1, 2020. On the maturity date, the outstanding balance of $94.9 million under the 2020 Notes was repaid in full. The following table reflects the carrying value of the 2024 Notes and 2020 Notes as of June 30, 2020 and December 31, 2019 (in thousands): June 30, 2020 December 31, 2019 2024 Notes 2024 Notes 2020 Notes Total Principal $ 400,000 $ 400,000 $ 94,909 $ 494,909 Less: Unamortized interest discount (58,246 ) (64,724 ) (669 ) $ (65,393 ) Deferred financing costs (5,210 ) (5,789 ) (70 ) $ (5,859 ) Net carrying amount of 2024 and 2020 Notes $ 336,544 $ 329,487 $ 94,170 $ 423,657 The following table presents the amount of interest cost recognized, which is included within " Interest Expense" in our condensed consolidated statements of income, for the three and six months ended June 30, 2020 and June 30, 2019 relating to the contractual interest coupon, accretion of the debt discount, and the amortization of deferred financing costs (in thousands): Three months ended June 30, 2020 2019 2024 Notes 2024 Notes 2020 Notes Total Contractual coupon interest $ 2,000 $ 600 $ 927 $ 1,527 Accretion of debt discount 3,255 1,101 2,520 3,621 Amortization of deferred financing costs 291 98 266 364 Total $ 5,546 $ 1,799 $ 3,713 $ 5,512 Six months ended June 30, 2020 2019 2024 Notes 2020 Notes Total 2024 Notes 2020 Notes Total Contractual coupon interest $ 4,000 $ 237 $ 4,237 $ 600 $ 2,112 $ 2,712 Accretion of debt discount 6,477 669 7,146 1,101 5,735 6,836 Amortization of deferred financing costs 579 70 649 98 613 711 Total $ 11,056 $ 976 $ 12,032 $ 1,799 $ 8,460 $ 10,259 |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES As further discussed below, we are the primary beneficiary of three variable interest entities. As of June 30, 2020 , the combined book values of the assets and liabilities associated with these variable interest entities included in our condensed consolidated balance sheet were $62.7 million and $5.3 million , respectively. Assets included $22.3 million of cash and cash equivalents, $2.3 million of accounts receivable and prepaid assets, and $38.1 million of patents, net. As of December 31, 2019 , the combined book values of the assets and liabilities associated with these variable interest entities included in our condensed consolidated balance sheet were $60.6 million and $5.4 million , respectively. Assets included $18.5 million of cash and cash equivalents, $1.7 million of accounts receivable, $39.3 million of patents, net, and $1.3 million of other non-current assets. Chordant On January 31, 2019, we launched the Company’s Chordant™ business as a standalone company. The spinout of the unit, which now includes an affiliate of Sony as an investor along with the Company, gives Chordant added independence and flexibility in driving into its core operator and smart city markets. Chordant is a variable interest entity and we have determined that we are the primary beneficiary for accounting purposes and consolidate Chordant. For the three and six months ended June 30, 2020 , we have allocated approximately $0.2 million and $0.5 million , respectively, of Chordant's net loss to noncontrolling interests held by other parties and for the three and six months ended June 30, 2019 , we allocated approximately $0.4 million and $0.7 million , respectively. Convida Wireless Convida Wireless was launched in 2013 and most recently renewed in 2018 to combine Sony's consumer electronics expertise with our pioneering IoT expertise to drive IoT communications and connectivity. Based on the terms of the agreement, the parties will contribute funding and resources for additional research and platform development, which we will perform. SCP IP Investment LLC, an affiliate of Stephens Inc., is a minority investor in Convida Wireless. Convida Wireless is a variable interest entity. Based on our provision of research and platform development services to Convida Wireless, we have determined that we remain the primary beneficiary for accounting purposes and will continue to consolidate Convida Wireless. For the three and six months ended June 30, 2020 , we have allocated approximately $1.5 million and $2.9 million , respectively, of Convida Wireless's net loss to noncontrolling interests held by other parties and for the three and six months ended June 30, 2019 , we allocated approximately $1.0 million and $2.1 million , respectively. Signal Trust for Wireless Innovation During 2013, we announced the establishment of the Signal Trust for Wireless Innovation (the “Signal Trust”), the goal of which is to monetize a large InterDigital patent portfolio related to cellular infrastructure. The more than 500 patents and patent applications transferred from InterDigital to the Signal Trust focus primarily on 3G and LTE technologies, and were developed by InterDigital's engineers and researchers over more than a decade, with a number of the innovations contributing to the worldwide standards process. InterDigital is the primary beneficiary of the Signal Trust. The distributions from the Signal Trust will support continued research related to cellular wireless technologies. A small portion of the proceeds from the Signal Trust will be used to fund, through the Signal Foundation for Wireless Innovation, scholarly analysis of intellectual property rights and the technological, commercial and creative innovations they facilitate. The Signal Trust is a variable interest entity. Based on the terms of the trust agreement, we have determined that we are the primary beneficiary for accounting purposes and must consolidate the Signal Trust. |
Other Income (Expense), Net
Other Income (Expense), Net | 6 Months Ended |
Jun. 30, 2020 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | OTHER INCOME (EXPENSE), NET The amounts included in " Other income, net " in the condensed consolidated statements of income for the three and six months ended June 30, 2020 and 2019 were as follows (in thousands): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Interest and investment income $ 1,342 $ 2,590 $ 4,219 $ 6,486 Gain on asset acquisition and sale of business — 14,175 — 14,175 Loss on extinguishment of long-term debt — (5,488 ) — (5,488 ) Other 2,447 1,077 5,593 796 Other income, net $ 3,789 $ 12,354 $ 9,812 $ 15,969 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. |
New Accounting Guidance | New Accounting Guidance Accounting Standards Update: Financial Instruments - Credit Losses In June 2016, the FASB issued ASU No. 2016-13, " Financial Instruments - Credit Losses ". This ASU introduced a new accounting model for recognizing credit losses on certain financial instruments and financial assets, including trade receivables, based upon an estimate of current expected credit losses, otherwise known as CECL. The new guidance requires the recognition of an allowance that reflects the current estimate of credit losses expected to be incurred over the life of the financial asset, based not only on historical experience and current conditions, but also on reasonable forecasts. Additionally, ASU No. 2016-13 made several changes to the available-for-sale impairment model. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We adopted this guidance as of January 1, 2020 and the adoption did not have a material impact on our consolidated financial statements. Accounting Standards Update: Cloud Computing Arrangements In August 2018, the FASB issued ASU No. 2018-15 “ Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract ”. The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We adopted this guidance as of January 1, 2020 and the adoption did not have a material impact on our consolidated financial statements. Accounting Standards Update: Collaborative Arrangements In November 2018, the FASB issued ASU No. 2018-18, " Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606 ". The amendments in this ASU provide guidance on how to assess whether certain transactions between collaborative arrangement participants should be accounted for within the revenue recognition standard. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted for entities who have previously adopted the new revenue recognition guidance. We adopted this guidance as of January 1, 2020 and the adoption did not have a material impact on our consolidated financial statements. Accounting Standards Update: Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2019-12"). The amendments in this ASU are intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 with early adoption allowed. The Company is currently evaluating the impact of the adoption of ASU 2019-12 on its consolidated financial statements. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of supplemental cash flow information | The following table presents additional supplemental cash flow information for the six months ended June 30, 2020 and 2019 (in thousands): FOR THE SIX MONTHS ENDED JUNE 30, SUPPLEMENTAL CASH FLOW INFORMATION: 2020 2019 Interest paid $ 4,712 $ 3,218 Income taxes paid, including foreign withholding taxes 13,788 9,770 Non-cash investing and financing activities: Dividend payable 10,781 10,895 Increases in noncontrolling interests — 2,500 Accrued debt issuance costs — (1,075 ) Non-cash acquisition of patents 33,300 — Accrued capitalized patent costs and property and equipment (742 ) (1,910 ) |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following table presents the disaggregation of our revenue for the three and six months ended June 30, 2020 and 2019 (in thousands): Three months ended June 30, 2020 2019 Increase/(Decrease) Variable patent royalty revenue $ 4,597 $ 8,594 $ (3,997 ) (47 )% Fixed-fee royalty revenue 77,338 63,736 13,602 21 % Current patent royalties a 81,935 72,330 9,605 13 % Non-current patent royalties b 19,249 1,237 18,012 1,456 % Total patent royalties 101,184 73,567 27,617 38 % Current technology solutions revenue a 3,314 2,042 1,272 62 % Patent sales b — — — — % Total revenue $ 104,498 $ 75,609 $ 28,889 38 % Six months ended June 30, 2020 2019 Increase/(Decrease) Variable patent royalty revenue $ 10,543 $ 17,874 $ (7,331 ) (41 )% Fixed-fee royalty revenue 143,685 126,609 17,076 13 % Current patent royalties a 154,228 144,483 9,745 7 % Non-current patent royalties b 19,954 (4,538 ) 24,492 540 % Total patent royalties 174,182 139,945 34,237 24 % Current technology solutions revenue a 6,526 4,070 2,456 60 % Patent sales b — 225 (225 ) — % Total revenue $ 180,708 $ 144,240 $ 36,468 25 % a. Recurring revenues are comprised of current patent royalties, inclusive of Dynamic Fixed-Fee Agreement royalties, and current technology solutions revenue. b. Non-recurring revenues are comprised of non-current patent royalties, which primarily include past patent royalties and royalties from static agreements, as well as patent sales. |
Schedule of contracted revenue | Based on contracts signed and committed as of June 30, 2020 , we expect to recognize the following revenue from Dynamic Fixed-Fee Agreement payments over the term of such contracts (in thousands): Revenue Remainder 2020 $ 152,143 2021 235,357 2022 130,650 2023 43,922 2024 — |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of numerator and the denominator of the basic and diluted | The following tables reconcile the numerator and the denominator of the basic and diluted net income (loss) per share computation (in thousands, except for per share data): Three months ended June 30, 2020 2019 Basic Diluted Basic Diluted Numerator: Net income applicable to InterDigital, Inc. $ 22,251 $ 22,251 $ 7,743 $ 7,743 Denominator: Weighted-average shares outstanding: Basic 30,757 30,757 31,547 31,547 Dilutive effect of stock options, RSUs, convertible securities and warrants 288 229 Weighted-average shares outstanding: Diluted 31,045 31,776 Earnings Per Share: Net income per common share: Basic $ 0.72 $ 0.72 $ 0.25 $ 0.25 Dilutive effect of stock options, RSUs, convertible securities and warrants — (0.01 ) Net income per common share: Diluted $ 0.72 $ 0.24 Six months ended June 30, 2020 2019 Basic Diluted Basic Diluted Numerator: Net income applicable to InterDigital, Inc. $ 22,367 $ 22,367 $ 4,940 $ 4,940 Denominator: Weighted-average shares outstanding: Basic 30,740 30,740 32,076 32,076 Dilutive effect of stock options, RSUs, convertible securities and warrants 242 290 Weighted-average shares outstanding: Diluted 30,982 32,366 Earnings Per Share: Net income per common share: Basic $ 0.73 $ 0.73 $ 0.15 $ 0.15 Dilutive effect of stock options, RSUs, convertible securities and warrants (0.01 ) — Net income per common share: Diluted $ 0.72 $ 0.15 |
Schedule of excluded from our computation of EPS | Set forth below are the securities and the weighted average number of shares of common stock underlying such securities that were excluded from our computation of EPS for the periods presented (in thousands). Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Restricted stock units and stock options 218 153 219 102 Convertible securities 4,921 4,986 5,597 4,715 Warrants 6,273 4,986 7,620 4,715 Total 11,412 10,125 13,436 9,532 |
Cash, Concentration of Credit_2
Cash, Concentration of Credit Risk and Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of cash and cash equivalents | The following table provides a reconciliation of total cash, cash equivalents and restricted cash as of June 30, 2020 , December 31, 2019 and June 30, 2019 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands). June 30, December 31, June 30, 2020 2019 2019 Cash and cash equivalents $ 670,292 $ 745,491 $ 531,698 Restricted cash included within prepaid and other current assets 5,906 10,526 11,465 Restricted cash included within other non-current assets 1,081 1,081 — Total cash, cash equivalents and restricted cash $ 677,279 $ 757,098 $ 543,163 |
Schedule of restricted cash and cash equivalents | The following table provides a reconciliation of total cash, cash equivalents and restricted cash as of June 30, 2020 , December 31, 2019 and June 30, 2019 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands). June 30, December 31, June 30, 2020 2019 2019 Cash and cash equivalents $ 670,292 $ 745,491 $ 531,698 Restricted cash included within prepaid and other current assets 5,906 10,526 11,465 Restricted cash included within other non-current assets 1,081 1,081 — Total cash, cash equivalents and restricted cash $ 677,279 $ 757,098 $ 543,163 |
Schedule of fair value on a recurring basis | Our financial assets and liabilities that are accounted for at fair value on a recurring basis are presented in the tables below as of June 30, 2020 and December 31, 2019 (in thousands): Fair Value as of June 30, 2020 Level 1 Level 2 Level 3 Total Assets: Money market and demand accounts (a) $ 677,279 $ — $ — $ 677,279 Commercial paper (b) — 26,296 — 26,296 U.S. government securities — 53,047 — 53,047 Corporate bonds, asset backed and other securities — 89,609 — 89,609 Total $ 677,279 $ 168,952 $ — $ 846,231 Fair Value as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market and demand accounts (a) $ 757,098 $ — $ — $ 757,098 Commercial paper (b) — — — — U.S. government securities — 105,702 — 105,702 Corporate bonds, asset backed and other securities — 73,502 — 73,502 Total $ 757,098 $ 179,204 $ — $ 936,302 ______________________________ (a) Primarily included within cash and cash equivalents. (b) As of June 30, 2020 and December 31, 2019 , zero commercial paper was included within cash and cash equivalents. |
Schedule of aggregate fair value | The aggregate fair value of the principal amount of the senior convertible long-term debt is a Level 2 fair value measurement. June 30, 2020 December 31, 2019 Principal Amount Carrying Value Fair Value Principal Amount Carrying Fair Value Senior Convertible Long-Term Debt $ 400,000 $ 336,544 $ 396,240 $ 494,909 $ 423,657 $ 492,969 June 30, 2020 December 31, 2019 Carrying Value Fair Value Carrying Fair Value Technicolor Patent Acquisition Long-Term Debt $ 22,576 $ 26,241 $ 21,101 $ 23,305 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of carrying value of the 2024 Notes and 2020 Notes | The following table reflects the carrying value of the 2024 Notes and 2020 Notes as of June 30, 2020 and December 31, 2019 (in thousands): June 30, 2020 December 31, 2019 2024 Notes 2024 Notes 2020 Notes Total Principal $ 400,000 $ 400,000 $ 94,909 $ 494,909 Less: Unamortized interest discount (58,246 ) (64,724 ) (669 ) $ (65,393 ) Deferred financing costs (5,210 ) (5,789 ) (70 ) $ (5,859 ) Net carrying amount of 2024 and 2020 Notes $ 336,544 $ 329,487 $ 94,170 $ 423,657 |
Schedule of accretion of the debt discount, and the amortization of financing costs | The following table presents the amount of interest cost recognized, which is included within " Interest Expense" in our condensed consolidated statements of income, for the three and six months ended June 30, 2020 and June 30, 2019 relating to the contractual interest coupon, accretion of the debt discount, and the amortization of deferred financing costs (in thousands): Three months ended June 30, 2020 2019 2024 Notes 2024 Notes 2020 Notes Total Contractual coupon interest $ 2,000 $ 600 $ 927 $ 1,527 Accretion of debt discount 3,255 1,101 2,520 3,621 Amortization of deferred financing costs 291 98 266 364 Total $ 5,546 $ 1,799 $ 3,713 $ 5,512 Six months ended June 30, 2020 2019 2024 Notes 2020 Notes Total 2024 Notes 2020 Notes Total Contractual coupon interest $ 4,000 $ 237 $ 4,237 $ 600 $ 2,112 $ 2,712 Accretion of debt discount 6,477 669 7,146 1,101 5,735 6,836 Amortization of deferred financing costs 579 70 649 98 613 711 Total $ 11,056 $ 976 $ 12,032 $ 1,799 $ 8,460 $ 10,259 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of other income expense, net | The amounts included in " Other income, net " in the condensed consolidated statements of income for the three and six months ended June 30, 2020 and 2019 were as follows (in thousands): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Interest and investment income $ 1,342 $ 2,590 $ 4,219 $ 6,486 Gain on asset acquisition and sale of business — 14,175 — 14,175 Loss on extinguishment of long-term debt — (5,488 ) — (5,488 ) Other 2,447 1,077 5,593 796 Other income, net $ 3,789 $ 12,354 $ 9,812 $ 15,969 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 1 |
Basis of Presentation - Schedul
Basis of Presentation - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Interest paid | $ 4,712 | $ 3,218 | |
Income taxes paid, including foreign withholding taxes | 13,788 | 9,770 | |
Non-cash investing and financing activities: | |||
Dividend payable | 10,781 | 10,895 | $ 10,746 |
Increases in noncontrolling interests | 0 | 2,500 | |
Accrued debt issuance costs | 0 | (1,075) | |
Non-cash acquisition of patents | 33,300 | 0 | |
Accrued capitalized patent costs and property and equipment | $ (742) | $ (1,910) |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 104,498 | $ 75,609 | $ 180,708 | $ 144,240 |
Increase/(decrease) in disaggregated revenue | $ 28,889 | $ 36,468 | ||
Percentage increase/(decrease) in disaggregated revenue | 38.00% | 25.00% | ||
Variable patent royalty revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 4,597 | 8,594 | $ 10,543 | 17,874 |
Increase/(decrease) in disaggregated revenue | $ (3,997) | $ (7,331) | ||
Percentage increase/(decrease) in disaggregated revenue | (47.00%) | (41.00%) | ||
Fixed-fee royalty revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 77,338 | 63,736 | $ 143,685 | 126,609 |
Increase/(decrease) in disaggregated revenue | $ 13,602 | $ 17,076 | ||
Percentage increase/(decrease) in disaggregated revenue | 21.00% | 13.00% | ||
Current patent royalties | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 81,935 | 72,330 | $ 154,228 | 144,483 |
Increase/(decrease) in disaggregated revenue | $ 9,605 | $ 9,745 | ||
Percentage increase/(decrease) in disaggregated revenue | 13.00% | 7.00% | ||
Non-current patent royalties | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 19,249 | 1,237 | $ 19,954 | (4,538) |
Increase/(decrease) in disaggregated revenue | $ 18,012 | $ 24,492 | ||
Percentage increase/(decrease) in disaggregated revenue | 1456.00% | 540.00% | ||
Total patent royalties | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 101,184 | 73,567 | $ 174,182 | 139,945 |
Increase/(decrease) in disaggregated revenue | $ 27,617 | $ 34,237 | ||
Percentage increase/(decrease) in disaggregated revenue | 38.00% | 24.00% | ||
Current technology solutions revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 3,314 | 2,042 | $ 6,526 | 4,070 |
Increase/(decrease) in disaggregated revenue | $ 1,272 | $ 2,456 | ||
Percentage increase/(decrease) in disaggregated revenue | 62.00% | 60.00% | ||
Patent sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 225 |
Increase/(decrease) in disaggregated revenue | $ 0 | $ (225) | ||
Percentage increase/(decrease) in disaggregated revenue | 0.00% | 0.00% |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized that had been included in deferred revenue as of the beginning of the period | $ 103.7 | |
Contract assets, current | 10.2 | $ 16.2 |
Contract assets, non-current | $ 9.5 | $ 10.2 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligation (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 152,143 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 235,357 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 130,650 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 43,922 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 0 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Income Tax Contingency [Line Items] | |||||
Effective tax rate | 26.90% | 59.50% | |||
Estimated annual effective tax benefit rate | 12.50% | ||||
Discrete net benefits | $ (5,144) | $ (4,984) | $ (6,964) | $ (3,185) | |
Unrecognized tax benefits, period decrease | 1,800 | ||||
Income taxes paid, including foreign withholding taxes | 13,788 | 9,770 | |||
Taxes payable | $ 102 | 102 | $ 51 | ||
Share-based Payment Arrangement | |||||
Income Tax Contingency [Line Items] | |||||
Discrete net benefits | 3,000 | ||||
Foreign Country | |||||
Income Tax Contingency [Line Items] | |||||
Income taxes paid, including foreign withholding taxes | $ 13,400 | $ 5,100 |
Net Income (Loss) Per Share - N
Net Income (Loss) Per Share - Numerator and Denominator of Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | ||||||
Net income applicable to InterDigital, Inc. | $ 22,251 | $ 116 | $ 7,743 | $ (2,803) | $ 22,367 | $ 4,940 |
Denominator: | ||||||
Weighted-average shares outstanding: Basic (in shares) | 30,757 | 31,547 | 30,740 | 32,076 | ||
Dilutive effect of stock options, RSUs, convertible securities and warrants (in shares) | 288 | 229 | 242 | 290 | ||
Weighted-average shares outstanding: Diluted (in shares) | 31,045 | 31,776 | 30,982 | 32,366 | ||
Earnings Per Share: | ||||||
Net income per common share: Basic (in USD per share) | $ 0.72 | $ 0.25 | $ 0.73 | $ 0.15 | ||
Dilutive effect of stock options, RSUs, convertible securities and warrants (in USD per share) | 0 | (0.01) | (0.01) | 0 | ||
Net income per common share: Diluted (in USD per share) | $ 0.72 | $ 0.24 | $ 0.72 | $ 0.15 |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Antidilutive Securities Excluded from Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 11,412 | 10,125 | 13,436 | 9,532 |
Restricted stock units and stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 218 | 153 | 219 | 102 |
Convertible securities | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 4,921 | 4,986 | 5,597 | 4,715 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 6,273 | 4,986 | 7,620 | 4,715 |
Litigation and Legal Proceedi_2
Litigation and Legal Proceedings (Details) | 6 Months Ended | |||
Jun. 30, 2020 | Jul. 29, 2020patent | Jul. 14, 2020patent | May 20, 2020trials | |
Loss Contingencies [Line Items] | ||||
Loss contingency number of trials, FRAND trial | trials | 5 | |||
Pending Litigation | U.K. Proceedings | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, number of trials before FRAND trial | trials | 2 | |||
Loss contingency, number of trials after FRAND trial | trials | 3 | |||
Expected Trial Commencement Period Beginning March 1, 2021 | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, expected trial commencement time period | 5 days | |||
Expected Trial Commencement Period Beginning June 21, 2021 | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, expected trial commencement time period | 5 days | |||
Expected Trial Commencement Period Beginning May 9, 2022 | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, expected trial commencement time period | 5 days | |||
Expected Trial Commencement Period Beginning October 3, 2022 | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, expected trial commencement time period | 5 days | |||
Expected Trial Commencement Period Beginning January 16, 2023 | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, expected trial commencement time period | 5 days | |||
Expected Trial Commencement Period Beginning June 11, 2022 | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, expected trial commencement time period, non-technical | 5 days | |||
Subsequent Event | Pending Litigation | District Of Delaware Proceedings | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, number of patents allegedly infringed, motion to dismiss | 6 | |||
Loss contingency, number of patents alleged infringement | 8 | |||
Loss contingency, number of patents allegedly infringed, denied motion to dismiss in company favor | 6 | |||
Subsequent Event | Pending Litigation | India Proceedings | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, number of patents alleged infringement | 2 | |||
Loss contingency, number of patents alleged infringement, first complaint | 5 | |||
Loss contingency, number of patents alleged infringement, second complaint | 3 |
Business Combinations and Oth_2
Business Combinations and Other Transactions - Narrative (Details) patent_and_application in Thousands, coding_patent_and_application in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | May 31, 2019 | Jul. 30, 2018patent_and_application | Jul. 30, 2018coding_patent_and_application | |
Business Acquisition [Line Items] | |||||||
Interest expense debt | $ 5,512,000 | $ 12,032,000 | $ 10,259,000 | ||||
Technicolor | |||||||
Business Acquisition [Line Items] | |||||||
Number of patents and applications | 18 | 3 | |||||
Receive future cash receipts percentage | 42.50% | ||||||
Combined accumulated projected benefit obligation | $ 6,400,000 | 6,400,000 | |||||
Service cost and interest cost | $ 200,000 | ||||||
Effective interest rate acquisition percentage | 14.50% | 14.50% | |||||
Interest expense debt | $ 700,000 | 600,000 | $ 1,500,000 | 1,300,000 | |||
Transaction and integration related costs | 600,000 | $ 1,700,000 | 1,200,000 | $ 4,800,000 | |||
Technicolor | Shortfalls funding | |||||||
Business Acquisition [Line Items] | |||||||
Shortfalls funding amount | $ 25,000,000 | $ 25,000,000 | |||||
Shortfall funding plus percentage | 25.00% |
Cash, Concentration of Credit_3
Cash, Concentration of Credit Risk and Fair Value of Financial Instruments - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Fair Value Disclosures [Abstract] | |||
Cash and cash equivalents | $ 670,292 | $ 745,491 | $ 531,698 |
Restricted cash included within prepaid and other current assets | 5,906 | 10,526 | 11,465 |
Restricted cash included within other non-current assets | 1,081 | 1,081 | 0 |
Total cash, cash equivalents and restricted cash | $ 677,279 | $ 757,098 | $ 543,163 |
Cash, Concentration of Credit_4
Cash, Concentration of Credit Risk and Fair Value of Financial Instruments - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)property | Jun. 30, 2019USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of long-term strategic investments | $ 5.5 | |||
Lease asset impairment | 1.1 | |||
Lease property, plant and equipment impairment | 0.8 | |||
Lease right of use asset impairment | $ 0.3 | |||
Number of abandoned leased properties | property | 1 | |||
Accounts Receivable | Licensee Concentration Risk | Seven Largest Licensees | ||||
Concentration Risk [Line Items] | ||||
Accounts receivable percentage | 71.00% | 73.00% | ||
Technicolor | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration liability | $ 20.5 |
Cash, Concentration of Credit_5
Cash, Concentration of Credit Risk and Fair Value of Financial Instruments - Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Assets: | |||
Money market and demand accounts | $ 677,279 | $ 757,098 | $ 543,163 |
Commercial paper | 26,296 | 0 | |
Total | 846,231 | 936,302 | |
Money market and demand accounts | |||
Assets: | |||
Money market and demand accounts | 677,279 | 757,098 | |
U.S. government securities | |||
Assets: | |||
Securities | 53,047 | 105,702 | |
Corporate bonds, asset backed and other securities | |||
Assets: | |||
Securities | 89,609 | 73,502 | |
Level 1 | |||
Assets: | |||
Commercial paper | 0 | 0 | |
Total | 677,279 | 757,098 | |
Level 1 | Money market and demand accounts | |||
Assets: | |||
Money market and demand accounts | 677,279 | 757,098 | |
Level 1 | U.S. government securities | |||
Assets: | |||
Securities | 0 | 0 | |
Level 1 | Corporate bonds, asset backed and other securities | |||
Assets: | |||
Securities | 0 | 0 | |
Level 2 | |||
Assets: | |||
Commercial paper | 26,296 | 0 | |
Total | 168,952 | 179,204 | |
Level 2 | Money market and demand accounts | |||
Assets: | |||
Money market and demand accounts | 0 | 0 | |
Level 2 | U.S. government securities | |||
Assets: | |||
Securities | 53,047 | 105,702 | |
Level 2 | Corporate bonds, asset backed and other securities | |||
Assets: | |||
Securities | 89,609 | 73,502 | |
Level 3 | |||
Assets: | |||
Commercial paper | 0 | 0 | |
Total | 0 | 0 | |
Level 3 | Money market and demand accounts | |||
Assets: | |||
Money market and demand accounts | 0 | 0 | |
Level 3 | U.S. government securities | |||
Assets: | |||
Securities | 0 | 0 | |
Level 3 | Corporate bonds, asset backed and other securities | |||
Assets: | |||
Securities | $ 0 | $ 0 |
Cash, Concentration of Credit_6
Cash, Concentration of Credit Risk and Fair Value of Financial Instruments - Fair Value of Long-Term Debt (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Technicolor Patent Acquisition Long-Term Debt | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Carrying Value | $ 22,576,000 | $ 21,101,000 |
Fair Value | 26,241,000 | 23,305,000 |
Senior Convertible Long-Term Debt | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Principal Amount | 400,000,000 | 494,909,000 |
Carrying Value | 336,544,000 | 423,657,000 |
Fair Value | $ 396,240,000 | $ 492,969,000 |
Long-Term Debt - 2024 and 2020
Long-Term Debt - 2024 and 2020 Senior Convertible Notes, and Related Note Hedge and Warrant Transactions (Details) $ / shares in Units, shares in Millions | Jun. 03, 2019USD ($)$ / shares | May 29, 2019USD ($) | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($) | Mar. 01, 2020USD ($) | Dec. 31, 2019USD ($) | May 31, 2019$ / sharesshares | Mar. 11, 2015USD ($) | Mar. 09, 2015shares |
Debt Instrument [Line Items] | |||||||||
Initial strike price (in USD per share) | $ / shares | $ 109.43 | ||||||||
Payments on long-term debt | $ 221,100,000 | $ 94,909,000 | $ 221,091,000 | ||||||
Unwind transactions (in shares) | shares | 1.3 | ||||||||
Convertible Notes 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Unamortized debt discount and issuance costs | $ 94,900,000 | ||||||||
Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ 400,000,000 | $ 494,909,000 | |||||||
Convertible Debt | Convertible Notes 2024 | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ 400,000,000 | 400,000,000 | 400,000,000 | ||||||
Debt instrument interest rate, stated percentage | 2.00% | ||||||||
Transaction fees and offering expenses | $ 391,600,000 | ||||||||
Initial conversion rate | 12.3018 | ||||||||
Debt conversion converted instrument amount | $ 1,000 | $ 1,000 | |||||||
Initial conversion price (in USD per share) | $ / shares | $ 81.29 | ||||||||
Convertible note hedge (in shares) | shares | 4.9 | ||||||||
Anti-dilution adjustments of common stock (in shares) | shares | 4.9 | ||||||||
Convertible Debt | Convertible Notes 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ 94,909,000 | $ 316,000,000 | |||||||
Debt instrument interest rate, stated percentage | 1.50% | ||||||||
Convertible note hedge (in shares) | shares | 4.4 | ||||||||
Anti-dilution adjustments of common stock (in shares) | shares | 4.4 | ||||||||
Initial strike price (in USD per share) | $ / shares | $ 85.81 |
Long-Term Debt - Carrying Value
Long-Term Debt - Carrying Value of 2024 Notes and 2020 Notes (Details) - Convertible Debt - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 03, 2019 | Mar. 11, 2015 |
Debt Instrument [Line Items] | ||||
Principal | $ 400,000,000 | $ 494,909,000 | ||
Unamortized interest discount | (65,393,000) | |||
Deferred financing costs | (5,859,000) | |||
Net carrying amount of 2024 and 2020 Notes | 336,544,000 | 423,657,000 | ||
Convertible Notes 2024 | ||||
Debt Instrument [Line Items] | ||||
Principal | 400,000,000 | 400,000,000 | $ 400,000,000 | |
Unamortized interest discount | (58,246,000) | (64,724,000) | ||
Deferred financing costs | (5,210,000) | (5,789,000) | ||
Net carrying amount of 2024 and 2020 Notes | $ 336,544,000 | 329,487,000 | ||
Convertible Notes 2020 | ||||
Debt Instrument [Line Items] | ||||
Principal | 94,909,000 | $ 316,000,000 | ||
Unamortized interest discount | (669,000) | |||
Deferred financing costs | (70,000) | |||
Net carrying amount of 2024 and 2020 Notes | $ 94,170,000 |
Long-Term Debt - Accretion of D
Long-Term Debt - Accretion of Debt Discount and Amortization of Financing Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Contractual coupon interest | $ 1,527 | $ 4,237 | $ 2,712 | |
Accretion of debt discount | 3,621 | 7,146 | 6,836 | |
Amortization of deferred financing costs | 364 | 649 | 711 | |
Total | 5,512 | 12,032 | 10,259 | |
Convertible Debt | Convertible Notes 2024 | ||||
Debt Instrument [Line Items] | ||||
Contractual coupon interest | $ 2,000 | 600 | 4,000 | 600 |
Accretion of debt discount | 3,255 | 1,101 | 6,477 | 1,101 |
Amortization of deferred financing costs | 291 | 98 | 579 | 98 |
Total | $ 5,546 | 1,799 | 11,056 | 1,799 |
Convertible Debt | Convertible Notes 2020 | ||||
Debt Instrument [Line Items] | ||||
Contractual coupon interest | 927 | 237 | 2,112 | |
Accretion of debt discount | 2,520 | 669 | 5,735 | |
Amortization of deferred financing costs | 266 | 70 | 613 | |
Total | $ 3,713 | $ 976 | $ 8,460 |
Variable Interest Entities (Det
Variable Interest Entities (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2020USD ($)variable_interest_entity | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2013patent | |
Variable Interest Entity [Line Items] | ||||||||
Assets | $ 1,538,765 | $ 1,538,765 | $ 1,612,082 | |||||
Liabilities | 748,059 | 748,059 | 825,801 | |||||
Cash and cash equivalents | 670,292 | $ 531,698 | 670,292 | $ 531,698 | 745,491 | |||
Patents, net | 447,194 | 447,194 | 436,339 | |||||
Accounts receivable | 19,380 | 19,380 | 28,272 | |||||
Other non-currents assets | 78,744 | 78,744 | 76,026 | |||||
Noncontrolling interests | (1,660) | $ (1,777) | (1,365) | $ (1,411) | (3,437) | (2,776) | ||
Chordant | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Noncontrolling interests | 200 | 400 | 500 | 700 | ||||
Convida | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Noncontrolling interests | 1,500 | $ 1,000 | $ 2,900 | $ 2,100 | ||||
Primary Beneficiary | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Number of variable interest entities | variable_interest_entity | 3 | |||||||
Assets | 62,700 | $ 62,700 | 60,600 | |||||
Liabilities | 5,300 | 5,300 | 5,400 | |||||
Cash and cash equivalents | 22,300 | 22,300 | 18,500 | |||||
Accounts receivable and prepaid assets | 2,300 | 2,300 | ||||||
Patents, net | $ 38,100 | $ 38,100 | 39,300 | |||||
Accounts receivable | 1,700 | |||||||
Other non-currents assets | $ 1,300 | |||||||
Number of patents (more than) | patent | 500 |
Other Income (Expense), Net - O
Other Income (Expense), Net - Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other Income and Expenses [Abstract] | ||||
Interest and investment income | $ 1,342 | $ 2,590 | $ 4,219 | $ 6,486 |
Gain on asset acquisition and sale of business | 0 | 14,175 | 0 | 14,175 |
Loss on extinguishment of long-term debt | 0 | (5,488) | 0 | (5,488) |
Other | 2,447 | 1,077 | 5,593 | 796 |
Other income, net | $ 3,789 | $ 12,354 | $ 9,812 | $ 15,969 |