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NOMURA CASE STUDY COMPETITION Technology Case Study: Plexonix

Amit Rander Lokesh Bahety DMS, IIT Delhi

Industry Landscape (Computer and Peripherals) OVERVIEW

GLOBAL COMPUTER AND PERIPHERALS MARKET

• Computers and peripherals market has grown at a CAGR of 5.5% from 2005 to record $218.5bn in 2010 • China is all set to outpace USA in the next couple of years with a high population using computers and a CAGR of 11.7% in the last five years as against 3.6% achieved by the US • Emerging economies like India and Brazil set to be major players with 5 year CAGRs of 16.6% and 21.2% respectively • The top five companies in this sector in US are HewlettPackard, Dell, Apple, Acer and Canon while those in China are Logitech (China), Microsoft (China), Dongguan Zhongyu Electronics, Lenovo and Hewlett-Packard Asia

$bn 230 220 210 200 190 180 170 160 150

CAGR: 5.5%

218.5 210.2 194.3

197.4 179.5 167.1

2005

2006

2007

2008

2009

FORECAST SALES IN DEVELOPED COUNTRIES

FORECAST SALES IN DEVELOPING COUNTRIES

$bn 50.0

$bn 60.0

USA

Japan

UK

CAGR: (2.4%) CAGR: 1.2%

CAGR: (0.8%)

40.0

50.0

China

Latin America

CAGR: (2.4%) CAGR: 1.2%

2010

India

CAGR: (0.8%)

40.0

30.0

30.0 20.0

20.0

10.0

10.0 0.0

0.0 2011

2012

2013

2014

2015

2011

2012

2013

2014

2015

With the developed world struggling, the Emerging Economies are set to take Center-stage as evident from the sales forecast Source: Euromonitor International Note: Computers and Peripherals include desktops, portable computers, laptops, netbooks, tablets, monitors, printers and otherperipherals

Amit Rander, Lokesh Bahety

2 DMS, IIT Delhi

Industry Landscape (Smart Phones) OVERVIEW

GLOBAL MOBILE PHONE SALES

• For quarter ending March ’11, smartphone sales accounted for 25% of all mobile sales, up 17% year on year • For the same period, global smartphone sales were at 100 million, up 85% year on year • Considerable sales increase in developing market, specially China and Brazil with CAGR in excess of 100% • Top 5 vendors in the smartphone sector globally (by Q2’11 sales results) are Nokia, Samsung, LG, Apple and ZTE, whereas Android, Symbian, iOS, RIM and Bada dominate the OS market for smartphones

SHIFTING COMPETITIVE ADVANTAGE (SHIPMENTS:MM UNITS) Vendor Nokia Samsung LG Electronics Apple ZTE Others Total

2Q'11 2Q'11 2Q'10 2Q'10 2Q'11/2Q'10 Shipments Mkt. Share Shipments Mkt. Share change 88.5 24.2% 111.1 33.8% (20.3%) 70.2 19.2% 63.8 19.4% 10.0% 24.8 20.3 16.6 145 365.4

6.8% 5.6% 4.5% 39.7% 100.0%

30.6 8.4 12.2 102.3 328.4

9.3% 2.6% 3.7% 31.2% 100.0%

(19.0%) 141.7% 36.1% 41.7% 11.3%

$bn 220 197.0

CAGR: 12.2%

200 180

170.7

166.9

2008

2009

153.3

160 140

126.8 111.0

120 100

2005

2006

2007

2010

SMARTPHONE SALES FORECAST (MM UNITS) US

China

India

Brazil

250,000 200,000 150,000 100,000 50,000 0 2010

2011

2012

2013

2014

2015

2016

• Smart phone market is poised to see some major upheavals as Wireless mobile access will continue to impact all aspects of consumer behaviour and high-speed connectivity becomes a requirement of both business and personal use • Feature phones category is expected to continue to decline over the forecast period, as OS-based smartphones become the industry standard Source: Euromonitor International

Amit Rander, Lokesh Bahety

3 DMS, IIT Delhi

The Acquirer: Plexonix OVERVIEW

CHALLENGES

• PC, mobile & digital music player manufacturer • Sells software, 3rd party digital content and applications • Online and retail stores (300). Online reach of more than 25 countries • Target customers: retail , small & mid-sized businesses • Market cap of $300 billion

• Under-penetration in emerging market . Seeks foray in Chinese and Indian markets • Mired by patent infringement • Dependence on third party IP and digital content Looking at geographical leaders in design and distribution

Desktop & Laptop

P O R T F O L I O

Revenue break up by geography Music player

Software

America Aggressive price wars

FINANCIAL METRICS (IN $ BILLION EXCEPT EPS) Year

2010

2009

Total revenue

59.3

39.0

Total assets

68.3

43.1

EBITDA

17.6

11.4

Cash and near cash

10.2

4.8

EPS

15.15

9.08

Amit Rander, Lokesh Bahety

15%

27%

EMEA

25%

Japan Asia Pacific Online Retail

Decreasing brand loyalty

Tablet

Source: Nomura Technology Case Study

20%

Changing technology

Smart phone

Hardware

13%

Revenue break-up by product segment

Increased focus on R&D

15% 10% 10%

Software

6% 13%

Desktop Laptop Music Player

32%

14%

Smart phone Tablet Other Hardware

4 DMS, IIT Delhi

Target 1: InterDigital Inc. KEY FINANCIAL METRICS ($MN EXCEPT PER SHARE DATA)

Source: Company Annual Filing, yahoo finance

Amit Rander, Lokesh Bahety

908

Total revenue

394

297

EBITDA

260

135

Total debt

468

1,052

P/E

8.34

12.45

SHARE PRICE MOVEMENT Share price 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 11/4/2011

9/4/2011

0

5 DMS, IIT Delhi

'000

Volume

7/4/2011

80 70 60 50 40 30 20 10 0

5/4/2011

Total revenue: $394 mn

Other Asia

874

3/4/2011

31%

Total Assets

1/4/2011

North America

1.97

11/4/2010

Japan

3.43

9/4/2010

44%

EPS (diluted)

7/4/2010

15%

Korea

2009

5/4/2010

10%

2010

3/4/2010

REVENUE BREAKUP BY GEOGRAPHY (2010)

Year

1/4/2010

• Provides advanced technologies that enable wireless communications • Portfolio comprises of 1,300 US and 7,500 non US patents of technologies enabling wireless communications • More than 90% of the revenue comes from patent licensing operations • Offers licenses of their patents to equipment producers that manufacture, use and sell digital cellular products • Products incorporating their patented inventions include: mobile devices, tablets, notebook, wireless PDA • Works on technology including next-generation wireless air interfaces and technologies to enhance connectivity and mobility across networks

11/4/2009

COMPANY OVERVIEW

Target 2: ARM Holdings KEY FINANCIAL METRICS (£MN EXCEPT PER SHARE DATA) 2010

2009

EPS(diluted)

9.34

5.45

Total assets

1,084

844

Total revenue

406

305

EBITDA

184

120

Total debt

Nil

Nil

31.90

22.56

P/E

SHARE PRICE MOVEMENT

South Korea Japan

8% 11%

13% 12%

Total revenue: £406 mn Source: Company Annual Filing, yahoo finance

Amit Rander, Lokesh Bahety

600 500 400 300

China

200

Others

100 0 7/2/2010

32%

Taiwan

5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 9/2/2009 11/2/2009 1/2/2010 3/2/2010 5/2/2010

24%

700

1/2/2009 3/2/2009 5/2/2009 7/2/2009

United States

Volume

6 DMS, IIT Delhi

Millions

Share price

9/2/2011 11/2/2011

REVENUE BREAKUP BY GEOGRAPHY (2010)

Year

5/2/2011 7/2/2011

• Chip designer of mobiles, digital music players, and other digital devices • Builds processor designs for consumer electronics and embedded devices, such as computing, digital TV, microcontrollers, networking and smartcard • World’s leading semiconductor intellectual property supplier • Cheaper for semiconductor companies to license ARM technology than reproduce it in-house • 75% of global devices use 32-bit processors use ARM tech • More than 800 processor licenses • On an average, there are 2.5 ARM processor-based chips in every mobile phone handset

9/2/2010 11/2/2010 1/2/2011 3/2/2011

COMPANY OVERVIEW

Target 3: A8 Music COMPANY OVERVIEW

KEY FINANCIAL METRICS ($MN EXCEPT PER SHARE DATA)*

• Digital music service provider • Focus on music business which consists of music content, distribution channel and music service rendered to users • Based on research data from Ovium, global market size of digital music will reach $20bn by 2015 • Mobile internet market in China, with a market size of RMB20.25 billion which represents a YoY growth of 31.1% • Holds original music contest and positions A8.com as an online theme collection platform to gather music contents • Provides B2B and B2C content platform • Strategy to focus on various end user devices focusing on cloud computing • Plans to expand cooperation with domestic handset manufacturer

2010

2009

EPS

0.01

0.03

Total assets

94

88

Total revenue

100

103

7

18

Nil

Nil

6.20

2.26

EBITDA Total debt P/E

SHARE PRICE MOVEMENT Share price

20

4

15

Ringback tone

3

IVR Music

2

Other

1

5

0

0

Source: Company Annual Filing, yahoo finance *Note: All figures converted from RMB to USD using average of yearly RMB/USD quotes

11/4/2011

9/4/2011

7/4/2011

5/4/2011

3/4/2011

1/4/2011

11/4/2010

9/4/2010

10

7/4/2010

Total revenue: $100 mn

Amit Rander, Lokesh Bahety

25

5

5/4/2010

47%

Ringtone

6

3/4/2010

23%

30

1/4/2010

23%

7

11/4/2009

7%

Volume

Millions

REVENUE BREAKUP BY BUSINESS (2010)

Year

7 DMS, IIT Delhi

Target 4: TiVo COMPANY OVERVIEW

KEY FINANCIAL METRICS ($MN EXCEPT PER SHARE DATA)

• Live television, Internet video, and Video of Demand services under one package • Generates revenues through consumer service (direct subscribers), developing technology for television service providers and media services • Advertisement solutions including interactive advertisement and audience measurement services • Detailed anonymous aggregated reporting on actual viewing and screen by screen interaction by consumers • Owns around 200 patents, 370 patents pending • Big spender in R&D ($81.6 mn), and wants to continue the spend despite losses ($84.5 mn) in the last quarter • Outsource manufacturing of their products to third-parties

2010($)

2009($)

EPS(diluted)

(0.22)

1.01

Total assets

310

266

Total revenue

238

250

EBITDA

(16)

97

Total debt

Nil

Nil

P/E

NA

10.14

SHARE PRICE MOVEMENT

Source: Company Annual Filing, yahoo finance Note: All figures have been converted from RMB to $ using average of yearly RMB/$ quotes

Amit Rander, Lokesh Bahety

11/4/2011

9/4/2011

7/4/2011

5/4/2011

1/4/2011

11/4/2010

Total revenue: $238 mn

9/4/2010

Hardware

7/4/2010

Technology

5/4/2010

64%

3/4/2010

12%

80 70 60 50 40 30 20 10 0 1/4/2010

Service

20 18 16 14 12 10 8 6 4 2 0 11/4/2009

24%

Volume

Millions

Share price

3/4/2011

REVENUE BREAKUP BY BUSINESS (2010)

Year

8 DMS, IIT Delhi

Zeroing Down on InterDigital PLEXONIX REVENUE

ALL ABOUT PATENTS/IPR

Smart phones

• IDCC owns patents in mobile, tablets and notebooks • 19000 (patents + patents pending) • One of the largest LTE/4G patent portfolios • LTE/4G technology expected to be the dominant technology by the second half of this decade

ASSUMPTION

42%

Tablet

Plexonix licenses some or most of its patents from IDCC

BENEFITS

• Most major smart phone and tablet players license patents from IDCC • List includes: HTC, Samsung, RIM, Apple

• Plexonix will save on licensing fees (based on assumption) • Offset patent assertions by competitors • Better chances of winning litigations • License to competitors with favorable terms for Plexonix

• IDCC’s top 3 customers by revenue: Samsung: 34% RIM: 15% HTC: 15%

R&D IDCC continues high quality invention

187

Number of engineers

Number of patents produced in 2011

500

IDCC has stated publicly (Sep/Oct) that it is open for bids Source: IDCC Investor presentation, Annual filing, Equity Research

Amit Rander, Lokesh Bahety

9 DMS, IIT Delhi

Many players fight the IPR battle… 250.00

IDCC

QCOM

ACTG

TSRA

RMBS

DLB

MIPS

ARMH

MSD

200.00 79.8% 68.4% 45.2% 24.6% 19.0% (10.2%)

150.00 100.00

(32.7%) (53.0%) (63.1%)

50.00 0.00

I P R



Has emerged as an asset class • Large chunk of revenues from licensing



Patent acquisitions changing landscape • Large corporate consortiums hunting patents



IPR lawsuits proliferating • The more the patents, stronger the fight



Wireless IPR Market very competitive • Many players to eat from the pie

Source: IDCC Investor Presentation, Yahoo finance

Amit Rander, Lokesh Bahety

Diversified Technology Leaders

Leading Wireless Companies

Financial and IP-Focused Entities

10 DMS, IIT Delhi

And recent activities suggest further consolidation 15th Aug, 2011 Google’s acquisition of Motorola Mobility for $12.5bn • New patents (14,600) acquired thwart anti-competitive threats from Microsoft, Apple etc.

30th Jun, 2011 Bankrupt Nortel’s patent bid war • Patents on 3G, wireless networking, semiconductor • Winning bid ($4.5bn) from a consortium including Apple, Microsoft and RIM

Samsung’s license renewal • $100mn per annum 3G renewal with IDCC in 2012 • Renewal more damaging if rivals (Apple, Google) take over IDCC

Apple’s license renewal • Apple 3G renewals in 2014. • Competitive acquisition might lead to punitive renewal

OTHER ACQUISITIONS 8th April, 2011: Novell • Provides network operating system, system management solutions and collaboration solutions • Acquired by a software holding company, The Attachment Group for $2.2bn • 882 patents to be sold to CTPN holdings (a consortium of Microsoft, EMC, Apple and Oracle) 27th Oct, 2011: Mosaid • A patent licenser in semiconductor and communication technology • Mosaid turned down a$500.6mn bid ($42 per share) hostile takeover bid by rival patent house Wi-Lan • Acquired by Sterling Partners for $590mn Source: Company press release

Amit Rander, Lokesh Bahety

11 DMS, IIT Delhi

3G Patents give IDCC an Edge SOLID 3G LICENSE BASE • As of December 31, 2010, 49% of the global 3G handset market (Samsung, Apple, LG, RIM, HTC) was under license by IDCC • 13% of the market which belongs to regional and local players contains companies under the 3G license base of IDCC • The company targets to license 100% of 3G market • The 3G/4G market would present a 1.2 bn unit , hence licensing opportunity by 2015 for which IDCC is in a good position to handle.

Global 3G Handset Market Share Others 13%

3% 3%

20%

4% 10%

5%

8%

23% 5%

6%

STRONG POSITION IN LTE GIVES IDCC THE EDGE OVER OTHER COMPETITORS 400 300

"No of IDCC Patents and applicationsdeclared to ETSI for E-UMTS (LTE)"

1000

Cumulative No of LTE Patents Cumulative No of UMTS (WCDMA) Patents

800 600

200

400

100

200

0 2007

2008

2009

2010

0 2007

2008

2009

2010

Significantly bigger opportunity in LTE as more devices available (tablets, e-readers, etc.) Source: IDCC Investor Presentation Note: UMTS and E-UMTS stand for Universal Mobile Telecommunications System and Evolved Universal Mobile Telecommunications System, respectively. Some patents and applications have been declared to ETSI by InterDigital for both UMTS and E-UMTS and therefore are included in both the UMTS and the E-UMTS data above. The data above has been adjusted to reflect withdrawals of, and corrections made to, declarations of patents and applicationsasof October 27, 2010.

Amit Rander, Lokesh Bahety

12 DMS, IIT Delhi

Financial Considerations CAPITAL STRUCTURE

OVERVIEW

Senior Convertible Notes

$mn

Market Value of Equity

Net revenues

1

2500

Net Margins

450

45.0%

400

40.0%

350

39%

300

30.0% 29%

250

2000

25.0%

200 150 100

1500

20.0% 15.0%

9%

10.0%

11%

50

91.3% 1000

35.0%

5.0%

0

– 2007

2008

2009

2010

LIQUIDITY ANALYSIS 500

0

8.7% Total = $2,191mn

• The company has cash and cash equivalents worth $409.7mn as of September 30, 2011. In addition, it also had $280.9mn in short term investments • The senior convertible notes ($190.6mn) which were issued in April 2011 would mature in March 2016 • Licensing Contracts give rise to a predictable revenue stream and hence the cash flows to accrue in future years

Source: IDCC 10Q 30/09/2011 1 Market value of equity as of 08/11/11 Note: Net Margins represent net income applicable to common shareholders divided by revenues

Amit Rander, Lokesh Bahety

13 DMS, IIT Delhi

Brokers are bullish on IDCC INDUSTRY

BROKER RECOMMENDATION*

Company

P/E

EV/EBITDA

Market Cap/ Sales

Mosaid

21.5

9.7

5.0

Acacia Research

26.1

16.1

5.5

Tessera Technologies

22.4

21.7

NA

Qualcomm

15.5

10.4

5.1

Rambus

NM

NA

6.2

Dolby

11.0

5.4

3.4

MIPS

30.5

17.4

4.0

ARM Holdings

53.3

47.2

17.6

Average (all companies) IDCC FY1

25.7

18.3

6.7

24.8

13.2

6.8

IDCC FY2

14.9

8.5

5.0

TARGET PRICE Mean 64.6 Median 66 High 118 Low 26

60% 50% 40% 30%

Brokers

20% 10% 0% Buy

Hold

Sell

ANALYST COMMENTARY M Partners, Nov 9, 2011: “We reiterate our BUY recommendation and our takeout share price target of $118.0” The outlook for IDCC’s patent is positive as the report goes on to say, “Essential patent royalties are long lasting, consistent and guaranteed revenue streams that can benefit a patent holder in one of two ways for many years. First it can be used to offset patent assertion made by competitors. Secondly, FRAND royalties can be used to bleed Competitors of gross margin, while at the same time enriching earnings. Barclays Capital Equity Research, 27 Oct, 2011: “We believe that the company’s asymmetric licensing model supported by its rigorous internal R&D processes is well positioned to capitalize on the mass adoption of 3G devices, the transition to 4G and the broader adoption of wireless technologies by Non-traditional devices.” It has been given a stock rating of “overweight” which implies the stock is expected to outperform the un-weighted expected total return of the sector coverage universe over a 12 month investment horizon. Source: Equity Research, Thomson First Call *Total no. of brokers: 5

Amit Rander, Lokesh Bahety

14 DMS, IIT Delhi

IDCC Valuation – Discounted Cash Flow analysis Free Cash Flow EBIT Tax on EBIT Profit After Tax Depreciation and Amortization (Inc) Dec in Operating Working Capital (Inc) Dec in Deferred tax assets (net) (Inc) Dec in Other Long Term Assets (net) Inc (Dec) in Long Term Deferred Revenue Inc (Dec) in Other Long Term Liabilities (Inc)/Dec in Short Term Investments Capital Expenditures on Patents Free Cash Flow Weighted Average Capital Cost Risk Free rate Market Risk Premium Levered Beta Equity Cost

WACC Terminal Growth rate Discounting Model Year Count PV of FCF Terminal Value NPV Intrinsic Value

2011E

2012E

2013E

2014E

2015E

2016E

2017E

2018E

2019E

2020E

127 (39)

208 (65)

237 (75)

270 (86)

304 (97)

392 (129)

431 (142)

474 (157)

512 (169)

553 (183)

88

142

162

184

207

263

289

318

343

371

50 (9) (5) (107)

60 (8) (5) (158)

76 (7) (5) (31) (170)

91 (7) (4) (184)

217

207

206

267

23 (21) 20 (0) (152) 4 45 (30)

24 4 (54) (40)

(23)

76

3.1% 5.7% 0.90 8.2%

27 (13) (6) (46) 123

30 (12) (6) (62) 133

Effective tax rate Credit Spread Debt Cost Pre Tax Debt Cost Post Tax

35 (11) (6) (28) (70) 127

41 (10) (5) (98) 190

33.0% 0.52% 3.6% 2.4%

Share Price Shares Outstanding (Diluted) Market Capitalization Total Debt Total Capital EV Capital Structure (% Equity) Capital Structure (% Debt)

43.97 45 2,000 191 2,191 1,976 91.3% 8.7%

7.7% 1.75%

0.5 (22)

1.5 68

2.5 103

3.5 103

4.5 91

5.5 127

6.5 134

7.5 119

8.5 110

9.5 132

4,584.92 3,236 71.12

Source: Company reports, Note: The data is just a sample of one pair of values of Beta and Terminal growth rate. Please refer to the excel sheet for the entire valuation

15 DMS, IIT Delhi

Sensitivity Analysis Beta

Terminal growth rate 0.65

0.75

0.85

0.95

1.05

1.15

0.50%

78.6

71.1

64.7

59.3

54.6

50.5

0.75%

81.3

73.2

66.5

60.7

55.8

51.5

1.00%

84.1

75.5

68.3

62.3

57.1

52.6

1.25%

87.3

78.0

70.4

63.9

58.4

53.7

1.50%

90.8

80.8

72.6

65.7

59.9

55.0

1.75%

94.6

83.8

74.9

67.6

61.5

56.3

The values denote the intrinsic share price of the company. DEAL DYNAMICS

FINANCIAL METRICS @ ACQUISITION PRICE Low

High

62.3

70.4

Market Value

2,791.4

3,154.0

Enterprise Value

2,625.4

2,988.0

P/E

21.0

23.8

EV/EBITDA

11.3

12.9

Share Price

• With $10.2bn of cash and cash equivalents and another $13.1bn in short-term marketable securities, the deal should be an All-Cash deal with Plexonix buying out the entire stake • the projected share price represents a premium of 9% 23% to the average price of Interdigital over the last 3 months • The premium reflects the inherent value of the patents of IDCC. The premium also reflects the tug of war between various technology companies for acquiring IPR assets

Source: Company reports, Capitaline Note: The P/E and EV/EBITDA are forward multiples. They represent the FY12 ie December’12 multiples

(#)

16 DMS, IIT Delhi

Past patent transactions render IDCC still undervalued RECENT TRANSACTIONS IN THE IPR DOMAIN IN NORTH AMERICA Target

Acquiror

Date

Mosaid

Sterling Partners

October, 2011

594

3,489

170,249

Motorola

Google

August, 2011

12,500

24,500

510,204

Nortel

Apple, Microsoft, RIM, Sony, EMC, Ericcson

July, 2011

4,500

6,000

750,000

Novell

CPTN Holdings

April, 2011

450

882

510,204

DEMAND SCENARIO IN THE IPR MARKET

Acquisition Price ($mn) No of Patents Price/Patent

INTERDIGITAL PATENT PORTFOLIO VALUATION

• Essential patents, although encumbered by FRAND (Fair Reasonable and Non-Discriminatory pricing) bring consistent and long term patent royalties. They can be used to • Offset patent assertions by competitors • Shrink Gross Margins of competitors while enhancing earnings. (By 2015, 1% GM would be worth ~ $3-4bn per annum in the wireless industry) • Since the closing of the Nortel transaction, the last few months have seen elevated patent litigation amongst the global device manufacturers • With 19,000 patents (~90% in the wireless domain), IDCC is the most significant IP portfolio currently available

No of patents held (as of 3Q’11)

19,000

Current EV1 ($mn)

1,781.4

Price per Patent

93,757 High

Low

Acquisition Price ($mn)

2,625.4

2,988.0

Price per patent

138,177

157,261

Source: Company filings for the respective transaction, Equity Research for the Demand Scenario Note: The acquisition price range is the mean Enterprise value calculated using DCF method keeping Beta at 0.85 and 0.95 and terminal growth rate at 1.00% and 1.25% respectively 1TCurrent EV is as of 08/11/2011

(#)

17 DMS, IIT Delhi

Other Key Considerations IDCC TOP MANAGEMENT

TOP INSTITUTIONAL SHAREHOLDERS Institutional Holding BlackRock Institutional Trust Company, N.A. Vanguard Group, Inc. The Roosevelt Investment Group, Inc. State Street Global Advisors (US) Opus Capital Management, Inc. Emerald Advisers, Inc. C.S. McKee, L.P. Cardinal Capital Management, L.L.C. Mellon Capital Management Corporation Wells Capital Management Inc. Hussman Econometrics Advisors, Inc. JP Morgan Asset Management Managed Account Advisors LLC Wentworth, Hauser & Violich, Inc. Dimensional Fund Advisors, LP Top 15 shareholders

Shares % Outstanding Value ($mn) 2,275,769 2,210,001 1,396,491 968,269 692,835 666,476 638,700 626,098 515,623 503,902 500,000 460,430 439,733 436,860 417,114 12,748,301

5.00 4.86 3.07 2.13 1.52 1.46 1.40 1.38 1.13 1.11 1.10 1.01 0.97 0.96 0.92 28.02

93.0 102.9 57.1 45.1 32.3 31.0 26.1 25.6 24.0 20.6 23.3 18.8 18.0 17.9 17.0 552.59

Name

Age Designation

Steven Clontz William Merritt Scott McQuilkin

60 Chairman of the Board 52 President & CEO 56 Chief Financial Officer

James Nolan

Gary Isaacs

50 EVP - Research and Development EVP - Intellectual Property & Chief IP 52 Counsel; President of InterDigital Patent Holding Sub 38 VP, Chief Accounting Officer, Controller VP, Strategic Engineering, Chief 52 Technology Officer 51 Chief Administrative Officer

Steven (Steve) Sprecher

55 General Counsel, Secretary

Lawrence Shay Richard Brezski Naresh Soni

RISK FACTORS • Challenges related to the company’s ability to enter into new license agreements could cause the revenue and cash flow to decline • Revenue may be impacted by the deployment of 4G or other technologies in place of 2g and 3g technologies or by the need to extend or modify certain existing license agreements to cover additional later patents • Royalty rates could decrease for future license agreements • Revenues are derived primarily from a limited number of customers. • Delays in renewing or an inability to renew existing license agreements and challenges in defending and enforcing patent rights could cause the revenue and cash flow to decline • The wireless IPR industry is subject to rapid technological change, uncertainty and shifting market opportunities. • The technologies created by the company may not be adopted by the market or widely deployed Source: Company Filings, proxy

Amit Rander, Lokesh Bahety

18 DMS, IIT Delhi