Slide 1: InterDigital NASDAQ 35th Investor Program
InterDigital NASDAQ 35th Investor Program November 29, 2016 © 2016 InterDigital, Inc. All Rights Reserved.
Slide 2: Forward-looking Statements
Forward-looking Statements • This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding InterDigital, Inc.’s current beliefs, plans and expectations,
Slide 3: A Long History of Leadership in Mobile Technology
A Long History of Leadership in Mobile Technology • Over four decades of mobile innovation, and pioneers in digital wireless • ~160 R&D staff in six R&D locations around the world • Our engineers have contributed inventions to IEEE, IETF, 3GPP, ITU, ETSI and MPEG standards, among others • InterDigit
Slide 4: A Presence Focused on the World's Wireless Centers
A Presence Focused on the World’s Wireless Centers ASIA LABS: SEOUL 4 © 2016 InterDigital, Inc. All rights reserved.
Slide 5: InterDigital Leadership in 3GPP Standards
InterDigital Leadership in 3GPP Standards Our leadership and participation is comparable to much larger companies RAN WG1 RAN WG2 RAN WG3 Physical Layer MAC Protocol & Above Radio Network Architecture Chairman Chairman Chairman Satoshi Nagata Richard Burbidge Philippe Reininger NTT Docomo Intel Huaw
Slide 6: A Track Record of Wireless Innovation, Participation & Leadership in Key Standards Organizations
A Track Record of Wireless Innovation, Participation & Leadership in Key Standards Organizations • We cover a broad but Recent Leadership Positions related group of standards • Vice Chair 3GPP RAN2: 2013 – present bodies and industry • Vice Chair 3GPP RAN3: 2001-2009 forums • OMA Board of Directors/
Slide 7: InterDigital's Main Focus Areas, Driving Opportunities in Broad, Horizontal Markets
InterDigital’s 3 Main Focus Areas, Driving Opportunities in Broad, Horizontal Markets HANDSETS & INTERNET OF ADVANCED CONNECTED DEVICES THINGS PLATFORMS TECHNOLOGY LICENSING AND LICENSING INCUBATION 7 © 2016 InterDigital, Inc. All Rights Reserved.
Slide 8: Leadership in Key Existing Technologies
Leadership in Key Existing Technologies • 3G: InterDigital accounted for close to 10% of the patents and patent applications judged likely to be essential to WCDMA – the third-highest share out of more than 40 companies (May 2015) • 4G: InterDigital accounted for close to 10% of the patents and pate
Slide 9: …And Continued Leadership in Future Standards
…And Continued Leadership in Future Standards InterDigital RAN1 Contributions InterDigital RAN2 Contributions 90 Total Number of InterDigital Contributions 8000 250 80 7000 70 200 Total number 6000 In-meeting joint contributions 60 5000 150 50 4000 Pre-Meeting Contributions 40 100 3000 30 2000 Total
Slide 10: …And Continued Leadership in Future Standards
…And Continued Leadership in Future Standards R12 Dual Connectivity (RAN1) R13 Low Cost MTC (RAN1) 80 400 70 350 60 300 50 250 40 200 30 150 20 100 10 50 0 0 All Contributions All Contributions InterDigital Ericsson Huawei InterDigital Ericsson Qualcomm Qualcomm LG Samsung LG NTT docomo ZTE ZTE Inte
Slide 11: New Licensees Added to a Strong Base, with Opportunities that Remain
New Licensees Added to a Strong Base, with Opportunities that Remain SOME INCLUDING RESEARCH …AND AN EXCITING PLATFORM NEW AND RENEWED LICENSES… COLLABORATION… FOR NEW MARKETS LAYERED ONTO A STRONG EXISTING BASE All third party trademarks, service marks and/or tradenames used herein are the property
Slide 12: Moderate Penetration – Outsized Gains
Moderate Penetration – Outsized Gains 3G/4G Handset Shipments (in millions) 2,000 In a market expected to 1,600 see continued moderate 1,200 growth, an additional 25% 800 of market penetration 400 would double the number - of handsets and terminal ~40% 2016 2020 units licensed MARKET IN 65% OF 2020
Slide 13: Where We Play in the IoT Ecosystem
Where We Play in the IoT Ecosystem IoT Connectivity and IoT SW & Services ANALYTICS and APPLICATION Middleware & data mgmt., Data Management Services / network & cloud mgmt. are NETWORK and CLOUD MANAGEMENT Analytics / Middleware projected to be $3B & $8B Enabling Technology IoT markets by 2021 (Ber
Slide 14: Avanci Patent Licensing Platform
Avanci Patent Licensing Platform • Separate entity formed to aggregate Avanci… 2G/3G/4G standard essential patents for IoT connectivity patent licensing programs • Seeks to license some end-user products not addressed by InterDigital’s current licensing • Initial licensing programs: manufacturers of
Slide 15: Where We Play in the IoT Ecosystem
Where We Play in the IoT Ecosystem IoT Connectivity and IoT SW & Services ANALYTICS and APPLICATION oneMPOWERTM - a oneM2M standards-based IoT services platform NETWORK and CLOUD MANAGEMENT • Future-proofs deployments • SW in sensors, devices, gateways and servers • Interworks with many other DATA a
Slide 16: Where We Play in the IoT Ecosystem
Where We Play in the IoT Ecosystem IoT Connectivity and IoT SW & Services ANALYTICS and APPLICATION Unique IoT operating environment that: • Enables public/private cloud as- a-service solutions NETWORK and CLOUD MANAGEMENT • Easy/rapid integration of 3rd party value added sources • Agile – rapid tim
Slide 17: Award-winning IoT Solutions
Award-winning IoT Solutions 2015 ABI Research Hot Tech Innovator 2016 Global IoT Platform 2015 IoT Nexus Competitive Strategy Innovation & Power Players and Innovators Leadership Shortlist – 2016 World Best IoT Product at ARM 2016 Communication TechCon 2014 MarketsandMarkets Awards Key Innovator Sma
Slide 18: The Result: Expanded Revenue Opportunities – With Outsized Profit Potential
The Result: Expanded Revenue Opportunities – With Outsized Profit Potential HANDSETS & CONNECTED ASSUMING THE SAME OPERATING COST BASIS AS TODAY DEVICES A $100M increase in …could drive a A $441M Business in 2015 revenue… ~50% increase in operating income INTERNET OF THINGS Our Goal: A $75-$100M Bus
Slide 19: Growing Recurring Revenues, Careful Expense Control
Growing Recurring Revenues, Careful Expense Control $400 $263M in $350 recurring revenues $300 through Q3 2016, $250 $358-362M expected $200 through Q4 2016* $150 $487-491M in total $100 revenues expected $50 through Q4 2016* millions $0 2012 2013 2014 2015 Expected total Recurring Revenue Pro Forma
Slide 20: Continued Efforts to Return Value to Shareholders
Continued Efforts to Return Value to Shareholders Return of Capital Since 2012 through $250.0 October 2016, the company has returned a $200.0 $83.1 total of ~$675M in capital $23.7 to shareholders through a $150.0 combination of buybacks, $100.0 $28.9 regular dividends and a $152.7 $152.6 $30.1 spec
Slide 21: Strong Performance of Our Buyback Program
Strong Performance of Our Buyback Program $60.00 2.500 • Since 2012 we’ve paid $50.00 2.000 $495.5 million to buy back our own stock Shares Repurchased (M's) $40.00 • That “portfolio” would now Average Price 1.500 $30.00 be valued at just under $1B 1.000 $20.00 • Our program’s Buyback ROI is 0.500 c
Slide 22: Reconciliation of Pro Forma Operating Expense to Total Operating Expense
2012 2013 2014 2015 Operating Expenses: Patent administration and licensing $ 126.3 $ 143.1 $ 133.8 $ 120.4 Development 67.9 64.7 75.3 72.7 Reconciliation Selling, general and administrative Repositioning 37.4 12.5 31.3 1.5 37.8 - 39.8 - of Pro Forma Total Operating Expenses $ 244.1 $ 240.6 $ 246.9
Slide 23: Thank you
Thank you © 2016 InterDigital, Inc. All Rights Reserved.