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 $bn
5.5% from 2005 to record $218.5bn in 2010 230 CAGR: 5.5% 218.5
China is all set to outpace USA in the next couple of years 220
with a high population using computers and a CAGR of 11.7% 210 210.2
in the last five years as against 3.6% achieved by the US 200 197.4 194.3
Emerging economies like India and Brazil set to be major 190 179.5
players with 5 year CAGRs of 16.6% and 21.2% respectively 180
167.1
The top five companies in this sector in US are Hewlett- 170
Packard, Dell, Apple, Acer and Canon while those in China are 160
Logitech (China), Microsoft (China), Dongguan Zhongyu 150
2005 2006 2007 2008 2009 2010
Electronics, Lenovo and Hewlett-Packard Asia

FORECAST SALES IN DEVELOPED COUNTRIES FORECAST SALES IN DEVELOPING COUNTRIES

$bn $bn
USA Japan UK China Latin America India
50.0 60.0
CAGR: (2.4%) CAGR: 1.2% CAGR: (0.8%) CAGR: (2.4%) CAGR: 1.2% CAGR: (0.8%)
50.0
40.0
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

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Amit Rander, Lokesh Bahety DMS, IIT Delhi
 Industry Landscape (Smart Phones)
OVERVIEW GLOBAL MOBILE PHONE SALES
For quarter ending March 11, smartphone sales accounted for $bn

25% of all mobile sales, up 17% year on year 220

197.0
For the same period, global smartphone sales were at 100 200 CAGR: 12.2%
million, up 85% year on year 180 170.7 166.9
Considerable sales increase in developing market, specially 160
153.3

China and Brazil with CAGR in excess of 100% 140 126.8

Top 5 vendors in the smartphone sector globally (by Q211 120 111.0
sales results) are Nokia, Samsung, LG, Apple and ZTE,
100
whereas Android, Symbian, iOS, RIM and Bada dominate the 2005 2006 2007 2008 2009 2010
OS market for smartphones

SHIFTING COMPETITIVE ADVANTAGE (SHIPMENTS:MM UNITS) SMARTPHONE SALES FORECAST (MM UNITS)

2Q'11 2Q'11 2Q'10 2Q'10 2Q'11/2Q'10 US China India Brazil

Vendor Shipments Mkt. Share Shipments Mkt. Share change 250,000
Nokia 88.5 24.2% 111.1 33.8% (20.3%) 200,000
Samsung 70.2 19.2% 63.8 19.4% 10.0%
150,000
LG
Electronics 24.8 6.8% 30.6 9.3% (19.0%) 100,000
Apple 20.3 5.6% 8.4 2.6% 141.7% 50,000
ZTE 16.6 4.5% 12.2 3.7% 36.1% 0
Others 145 39.7% 102.3 31.2% 41.7% 2010 2011 2012 2013 2014 2015 2016
Total 365.4 100.0% 328.4 100.0% 11.3%

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

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Amit Rander, Lokesh Bahety DMS, IIT Delhi
 The Acquirer: Plexonix
OVERVIEW CHALLENGES
PC, mobile & digital music player manufacturer Under-penetration in emerging market . Seeks foray
Sells software, 3rd party digital content and in Chinese and Indian markets
applications Mired by patent infringement
Online and retail stores (300). Online reach of more Dependence on third party IP and digital content
than 25 countries
Target customers: retail , small & mid-sized Looking at geographical leaders in design and distribution
businesses
Market cap of $300 billion

P Desktop &
Laptop Revenue break up by geography
O
R Music America
Software player
T Aggressive 13% 27% EMEA
F price wars 20%
O Changing 15% 25% Japan
L Smart technology
Hardware Asia Pacific
I phone
Decreasing Online Retail
O brand
Tablet
loyalty

FINANCIAL METRICS (IN $ BILLION EXCEPT EPS) Revenue break-up by product segment

Year 2010 2009 Software

15% 10% 6%
Desktop
Total revenue 59.3 39.0 Increased focus on R&D
10% Laptop
13%
Total assets 68.3 43.1 Music Player
EBITDA 17.6 11.4 14% Smart phone
32%
Cash and near cash 10.2 4.8 Tablet
Other Hardware
EPS 15.15 9.08
Source: Nomura Technology Case Study
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Amit Rander, Lokesh Bahety DMS, IIT Delhi
 Target 1: InterDigital Inc.
COMPANY OVERVIEW KEY FINANCIAL METRICS ($MN EXCEPT PER SHARE DATA)
Provides advanced technologies that enable wireless
communications Year 2010 2009
Portfolio comprises of 1,300 US and 7,500 non US patents of
technologies enabling wireless communications EPS (diluted) 3.43 1.97
More than 90% of the revenue comes from patent licensing
operations Total Assets 874 908
Offers licenses of their patents to equipment producers
Total revenue 394 297
that manufacture, use and sell digital cellular products
Products incorporating their patented inventions include:
EBITDA 260 135
mobile devices, tablets, notebook, wireless PDA
Works on technology including next-generation wireless air
Total debt 468 1,052
interfaces and technologies to enhance connectivity and
mobility across networks P/E 8.34 12.45

REVENUE BREAKUP BY GEOGRAPHY (2010) SHARE PRICE MOVEMENT

Volume Share price
80 16,000

'000
10% 70 14,000
Korea
60 12,000

15% 50 10,000
44% Japan 40 8,000
30 6,000
North America 20 4,000
10 2,000
31% 0 0
Other Asia
1/4/2010

3/4/2010

5/4/2010

7/4/2010

9/4/2010

1/4/2011

3/4/2011

5/4/2011

7/4/2011

9/4/2011
11/4/2009

11/4/2010

11/4/2011
Total revenue: $394 mn

Source: Company Annual Filing, yahoo finance

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Amit Rander, Lokesh Bahety DMS, IIT Delhi
 Target 2: ARM Holdings
COMPANY OVERVIEW KEY FINANCIAL METRICS (MN EXCEPT PER SHARE DATA)
Chip designer of mobiles, digital music players, and other
digital devices Year 2010 2009
Builds processor designs for consumer electronics and
embedded devices, such as computing, digital TV, EPS(diluted) 9.34 5.45
microcontrollers, networking and smartcard
Worlds leading semiconductor intellectual property Total assets 1,084 844
supplier
Cheaper for semiconductor companies to license ARM Total revenue 406 305
technology than reproduce it in-house
75% of global devices use 32-bit processors use ARM tech EBITDA 184 120
More than 800 processor licenses
On an average, there are 2.5 ARM processor-based chips in Total debt Nil Nil
every mobile phone handset
P/E 31.90 22.56

REVENUE BREAKUP BY GEOGRAPHY (2010) SHARE PRICE MOVEMENT

Share price Volume

United States 700 5,000

Millions
600 4,500
24% Taiwan 4,000
32% 500 3,500
South Korea 3,000
400
Japan 2,500
300 2,000
8% China 200 1,500
1,000
Others 100 500
11% 13% 0 0
1/2/2009
3/2/2009
5/2/2009
7/2/2009
9/2/2009

1/2/2010
3/2/2010
5/2/2010
7/2/2010
9/2/2010

1/2/2011
3/2/2011
5/2/2011
7/2/2011
9/2/2011
11/2/2009

11/2/2010

11/2/2011
12%

Total revenue: 406 mn

Source: Company Annual Filing, yahoo finance

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Amit Rander, Lokesh Bahety DMS, IIT Delhi
 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, Year 2010 2009
distribution channel and music service rendered to users
Based on research data from Ovium, global market size of EPS 0.01 0.03
digital music will reach $20bn by 2015
Mobile internet market in China, with a market size of Total assets 94 88
RMB20.25 billion which represents a YoY growth of 31.1%
Total revenue 100 103
Holds original music contest and positions A8.com as an
online theme collection platform to gather music contents
EBITDA 7 18
Provides B2B and B2C content platform
Strategy to focus on various end user devices focusing on Total debt Nil Nil
cloud computing
Plans to expand cooperation with domestic handset P/E 6.20 2.26
manufacturer

REVENUE BREAKUP BY BUSINESS (2010) SHARE PRICE MOVEMENT

Share price Volume
7 30

Millions
6 25
7%
23% 5
Ringtone 20
23% 4
Ringback tone 15
3
IVR Music 10
2
Other 1 5
47%
0 1/4/2010 0
3/4/2010

5/4/2010

7/4/2010

9/4/2010

1/4/2011

3/4/2011

5/4/2011

7/4/2011

9/4/2011
11/4/2009

11/4/2010

11/4/2011
Total revenue: $100 mn

Source: Company Annual Filing, yahoo finance

*Note: All figures converted from RMB to USD using average of yearly RMB/USD quotes 7
Amit Rander, Lokesh Bahety DMS, IIT Delhi
 Target 4: TiVo
COMPANY OVERVIEW KEY FINANCIAL METRICS ($MN EXCEPT PER SHARE DATA)
Live television, Internet video, and Video of Demand
services under one package Year 2010($) 2009($)
Generates revenues through consumer service (direct
subscribers), developing technology for television service EPS(diluted) (0.22) 1.01
providers and media services
Advertisement solutions including interactive advertisement Total assets 310 266
and audience measurement services
Total revenue 238 250
Detailed anonymous aggregated reporting on actual viewing
and screen by screen interaction by consumers
EBITDA (16) 97
Owns around 200 patents, 370 patents pending
Big spender in R&D ($81.6 mn), and wants to continue the spend
Total debt Nil Nil
despite losses ($84.5 mn) in the last quarter
Outsource manufacturing of their products to third-parties P/E NA 10.14

REVENUE BREAKUP BY BUSINESS (2010) SHARE PRICE MOVEMENT

Share price Volume
20 80

Millions
18 70
16
24% 14
60
12 50
Service
10 40
Technology 8 30
12%
64% 6
Hardware 20
4
2 10
0 1/4/2010 0
3/4/2010

5/4/2010

7/4/2010

9/4/2010

1/4/2011

3/4/2011

5/4/2011

7/4/2011

9/4/2011
11/4/2009

11/4/2010

11/4/2011
Total revenue: $238 mn

Source: Company Annual Filing, yahoo finance

Note: All figures have been converted from RMB to $ using average of yearly RMB/$ quotes 8
Amit Rander, Lokesh Bahety DMS, IIT Delhi
 Zeroing Down on InterDigital
PLEXONIX REVENUE ALL ABOUT PATENTS/IPR
IDCC owns patents in mobile, tablets and
notebooks
Smart 19000 (patents + patents pending)
phones Tablet 42% One of the largest LTE/4G patent portfolios
LTE/4G technology expected to be the dominant
technology by the second half of this decade

Plexonix licenses some or

ASSUMPTION most of its patents from IDCC BENEFITS
Most major smart phone and tablet players Plexonix will save on licensing fees (based on
license patents from IDCC assumption)
List includes: HTC, Samsung, RIM, Apple Offset patent assertions by competitors
Better chances of winning litigations
IDCCs top 3 customers by revenue:
License to competitors with favorable terms for
Samsung: 34%
Plexonix
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 9

Amit Rander, Lokesh Bahety DMS, IIT Delhi
 Many players fight the IPR battle
IDCC QCOM ACTG TSRA RMBS DLB MIPS ARMH MSD
250.00

200.00
79.8%
68.4%
150.00 45.2%
24.6%
19.0%
100.00
(10.2%)
(32.7%)
50.00 (53.0%)
(63.1%)

0.00

Has emerged as an asset class Leading

I
Diversified Financial and
Large chunk of revenues from licensing Technology Wireless IP-Focused
Leaders Companies Entities
Patent acquisitions changing landscape
Large corporate consortiums hunting patents

P IPR lawsuits proliferating

The more the patents, stronger the fight

R Wireless IPR Market very competitive

Many players to eat from the pie

Source: IDCC Investor Presentation, Yahoo finance 10

Amit Rander, Lokesh Bahety DMS, IIT Delhi
 And recent activities suggest further consolidation
15th Aug, 2011

Googles acquisition of Motorola Mobility for $12.5bn

New patents (14,600) acquired thwart anti-competitive
threats from Microsoft, Apple etc. 30th Jun, 2011

Bankrupt Nortels patent bid war

Patents on 3G, wireless networking, semiconductor
Winning bid ($4.5bn) from a consortium including
Apple, Microsoft and RIM

Samsungs license renewal

$100mn per annum 3G renewal with IDCC in 2012
Renewal more damaging if rivals Apples license renewal
(Apple, Google) take over IDCC 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 11

Amit Rander, Lokesh Bahety DMS, IIT Delhi
 3G Patents give IDCC an Edge
SOLID 3G LICENSE BASE
Global 3G Handset Market Share As of December 31, 2010, 49% of the
global 3G handset market (Samsung,
Others
Apple, LG, RIM, HTC) was under license
by IDCC
13%
3% 20% 13% of the market which belongs to
3% regional and local players contains
4% companies under the 3G license base of
IDCC
5% 10%
The company targets to license 100% of 3G
8% market
23%
6% The 3G/4G market would present a 1.2 bn
5% unit , hence licensing opportunity by 2015
for which IDCC is in a good position to
handle.

STRONG POSITION IN LTE GIVES IDCC THE EDGE OVER OTHER COMPETITORS

"No of IDCC Patents and Cumulative No of LTE Patents

applicationsdeclared to ETSI for E-UMTS 1000
400 Cumulative No of UMTS (WCDMA) Patents
(LTE)" 800
300
600
200
400
100 200
0 0
2007 2008 2009 2010 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. 12
Amit Rander, Lokesh Bahety DMS, IIT Delhi
 Financial Considerations
CAPITAL STRUCTURE OVERVIEW

1 Net revenues Net Margins

Senior Convertible Notes Market Value of Equity
$mn 450 45.0%
2500 400 40.0%
350 39% 35.0%
300 30.0%
2000 250 29% 25.0%
200 20.0%
150 15.0%
9%
1500 100 10.0%
11%
50 5.0%
91.3% 0
2007 2008 2009 2010
1000

LIQUIDITY ANALYSIS
500 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
8.7%
0 in April 2011 would mature in March 2016
Total = $2,191mn 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
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Amit Rander, Lokesh Bahety DMS, IIT Delhi
 Brokers are bullish on IDCC
INDUSTRY BROKER RECOMMENDATION*
Market Cap/ TARGET PRICE
Company P/E EV/EBITDA
Sales
60% Mean 64.6
Mosaid 21.5 9.7 5.0
Median 66
Acacia Research 26.1 16.1 5.5 50% High 118
Tessera Technologies 22.4 21.7 NA Low 26
40%
Qualcomm 15.5 10.4 5.1
Rambus NM NA 6.2 30% Brokers
Dolby 11.0 5.4 3.4
30.5 17.4 4.0
20%
MIPS
ARM Holdings 53.3 47.2 17.6 10%
Average (all companies) 25.7 18.3 6.7
IDCC FY1 24.8 13.2 6.8 0%
IDCC FY2 14.9 8.5 5.0
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 IDCCs 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 companys 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

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Amit Rander, Lokesh Bahety DMS, IIT Delhi
 IDCC Valuation Discounted Cash Flow analysis
2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E
Free Cash Flow
EBIT 127 208 237 270 304 392 431 474 512 553
Tax on EBIT (39) (65) (75) (86) (97) (129) (142) (157) (169) (183)
Profit After Tax 88 142 162 184 207 263 289 318 343 371

Depreciation and Amortization 23 24 27 30 35 41 50 60 76 91

(Inc) Dec in Operating Working Capital (21) 4 (13) (12) (11) (10) (9) (8) (7) (7)
(Inc) Dec in Deferred tax assets (net) 20 - - - - - - - - -
(Inc) Dec in Other Long Term Assets (net) (0) - - - - - - - - -
Inc (Dec) in Long Term Deferred Revenue (152) (54) (6) (6) (6) (5) (5) (5) (5) (4)
Inc (Dec) in Other Long Term Liabilities 4 - - - - - - - - -
(Inc)/Dec in Short Term Investments 45 - - - (28) - - - (31) -
Capital Expenditures on Patents (30) (40) (46) (62) (70) (98) (107) (158) (170) (184)
Free Cash Flow (23) 76 123 133 127 190 217 207 206 267

Weighted Average Capital Cost

Risk Free rate 3.1% Effective tax rate 33.0% Share Price 43.97
Market Risk Premium 5.7% Credit Spread 0.52% Shares Outstanding (Diluted) 45
Levered Beta 0.90 Debt Cost Pre Tax 3.6% Market Capitalization 2,000
Equity Cost 8.2% Debt Cost Post Tax 2.4% Total Debt 191
Total Capital 2,191
EV 1,976
Capital Structure (% Equity) 91.3%
Capital Structure (% Debt) 8.7%
WACC 7.7%
Terminal Growth rate 1.75%

Discounting Model
Year Count 0.5 1.5 2.5 3.5 4.5 5.5 6.5 7.5 8.5 9.5
PV of FCF (22) 68 103 103 91 127 134 119 110 132
Terminal Value 4,584.92
NPV 3,236
Intrinsic Value 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

Terminal growth rate Beta

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.

FINANCIAL METRICS @ ACQUISITION PRICE DEAL DYNAMICS

Low High With $10.2bn of cash and cash equivalents and another
$13.1bn in short-term marketable securities, the deal
Share Price 62.3 70.4 should be an All-Cash deal with Plexonix buying out the
entire stake
Market Value 2,791.4 3,154.0 the projected share price represents a premium of 9% -
Enterprise Value 2,625.4 2,988.0 23% to the average price of Interdigital over the last 3
months
P/E 21.0 23.8 The premium reflects the inherent value of the
EV/EBITDA 11.3 12.9 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 December12 multiples

16
(#) DMS, IIT Delhi
 Past patent transactions render IDCC still undervalued
RECENT TRANSACTIONS IN THE IPR DOMAIN IN NORTH AMERICA

Target Acquiror Date Acquisition Price ($mn) No of Patents Price/Patent

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 INTERDIGITAL PATENT PORTFOLIO VALUATION

Essential patents, although encumbered by FRAND (Fair

No of patents held (as of 3Q11) 19,000
Reasonable and Non-Discriminatory pricing) bring consistent
and long term patent royalties. They can be used to Current EV1 ($mn) 1,781.4
Offset patent assertions by competitors
Shrink Gross Margins of competitors while enhancing Price per Patent 93,757
earnings. (By 2015, 1% GM would be worth ~ $3-4bn
High Low
per annum in the wireless industry)
Since the closing of the Nortel transaction, the last few Acquisition Price ($mn) 2,625.4 2,988.0
months have seen elevated patent litigation amongst the
global device manufacturers Price per patent 138,177 157,261
With 19,000 patents (~90% in the wireless domain), IDCC is
the most significant IP portfolio currently available

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
TOP INSTITUTIONAL SHAREHOLDERS IDCC TOP MANAGEMENT
Institutional Holding Shares % Outstanding Value ($mn) Name Age Designation
BlackRock Institutional Trust Company, N.A. 2,275,769 5.00 93.0
Vanguard Group, Inc. 2,210,001 4.86 102.9 Steven Clontz 60 Chairman of the Board
The Roosevelt Investment Group, Inc. 1,396,491 3.07 57.1
William Merritt 52 President & CEO
State Street Global Advisors (US) 968,269 2.13 45.1
Opus Capital Management, Inc. 692,835 1.52 32.3 Scott McQuilkin 56 Chief Financial Officer
Emerald Advisers, Inc. 666,476 1.46 31.0 James Nolan 50 EVP - Research and Development
C.S. McKee, L.P. 638,700 1.40 26.1
EVP - Intellectual Property & Chief IP
Cardinal Capital Management, L.L.C. 626,098 1.38 25.6
Lawrence Shay 52 Counsel; President of InterDigital
Mellon Capital Management Corporation 515,623 1.13 24.0
Wells Capital Management Inc. 503,902 1.11 20.6 Patent Holding Sub
Hussman Econometrics Advisors, Inc. 500,000 1.10 23.3 Richard Brezski 38 VP, Chief Accounting Officer, Controller
JP Morgan Asset Management 460,430 1.01 18.8 VP, Strategic Engineering, Chief
Naresh Soni 52
Managed Account Advisors LLC 439,733 0.97 18.0 Technology Officer
Wentworth, Hauser & Violich, Inc. 436,860 0.96 17.9 Gary Isaacs 51 Chief Administrative Officer
Dimensional Fund Advisors, LP 417,114 0.92 17.0
Top 15 shareholders 12,748,301 28.02 552.59 Steven (Steve) Sprecher 55 General Counsel, Secretary

RISK FACTORS
Challenges related to the companys 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

18
Amit Rander, Lokesh Bahety DMS, IIT Delhi