10-Q 1 idcc-20220331.htm 10-Q idcc-20220331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the quarterly period ended March 31, 2022
OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the transition period from                      to                     
Commission File Number 1-33579
INTERDIGITAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
Pennsylvania82-4936666
(State or Other Jurisdiction of
Incorporation or Organization)
 (I.R.S. Employer
Identification No.)
200 Bellevue Parkway, Suite 300, Wilmington, DE 19809-3727
(Address of Principal Executive Offices and Zip Code)
(302281-3600
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareIDCCNasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, par value $0.01 per share30,870,021
Title of ClassOutstanding at May 3, 2022



INDEX
  
 PAGES
InterDigital® is a registered trademark of InterDigital, Inc. All other trademarks, service marks and/or trade names appearing in this Quarterly Report on Form 10-Q are the property of their respective holders.




PART I — FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
INTERDIGITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
MARCH 31,
2022
DECEMBER 31,
2021
ASSETS  
CURRENT ASSETS:  
Cash and cash equivalents$783,016 $706,282 
Short-term investments116,204 235,345 
Accounts receivable, less allowances of $322 and $322
23,638 31,113 
Prepaid and other current assets78,355 77,545 
Total current assets1,001,213 1,050,285 
PROPERTY AND EQUIPMENT, NET12,315 13,377 
PATENTS, NET382,286 363,585 
DEFERRED TAX ASSETS95,998 98,408 
OTHER NON-CURRENT ASSETS, NET104,215 102,501 
Total non-current assets594,814 577,871 
TOTAL ASSETS$1,596,027 $1,628,156 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
CURRENT LIABILITIES:  
Accounts payable$6,013 $7,155 
Accrued compensation and related expenses20,754 32,638 
Deferred revenue238,626 291,673 
Dividends payable10,803 10,741 
Other accrued expenses32,416 29,354 
Total current liabilities308,612 371,561 
LONG-TERM DEBT424,100 422,745 
LONG-TERM DEFERRED REVENUE51,869 19,463 
OTHER LONG-TERM LIABILITIES50,780 61,470 
TOTAL LIABILITIES835,361 875,239 
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:  
Preferred Stock, $0.10 par value, 14,399 shares authorized, 0 shares issued and outstanding
  
Common Stock, $0.01 par value, 100,000 shares authorized, 71,883 and 71,720 shares issued and 30,852 and 30,689 shares outstanding
718 717 
Additional paid-in capital715,342 713,599 
Retained earnings1,448,138 1,441,105 
Accumulated other comprehensive loss(881)(571)
2,163,317 2,154,850 
Treasury stock, 41,031 and 41,031 shares of common stock held at cost
1,409,611 1,409,611 
Total InterDigital, Inc. shareholders’ equity753,706 745,239 
Noncontrolling interest6,960 7,678 
Total equity760,666 752,917 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,596,027 $1,628,156 
The accompanying notes are an integral part of these statements.
3

INTERDIGITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
For the Three Months Ended March 31,
20222021
REVENUES:
Patent licensing royalties$101,079 $80,173 
Technology solutions239 2,190 
Total Revenue101,318 82,363 
OPERATING EXPENSES:
Patent administration and licensing42,095 36,574 
Development17,612 22,583 
Selling, general and administrative10,884 11,217 
Restructuring activities542  
Total Operating expenses71,133 70,374 
Income from operations30,185 11,989 
INTEREST EXPENSE(5,515)(6,990)
OTHER (EXPENSE) INCOME, NET(1,005)724 
Income before income taxes23,665 5,723 
INCOME TAX PROVISION(5,961)(1,765)
NET INCOME$17,704 $3,958 
Net loss attributable to noncontrolling interest(290)(1,613)
NET INCOME ATTRIBUTABLE TO INTERDIGITAL, INC.$17,994 $5,571 
NET INCOME PER COMMON SHARE — BASIC$0.59 $0.18 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — BASIC30,703 30,836 
NET INCOME PER COMMON SHARE — DILUTED$0.58 $0.18 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING — DILUTED31,275 31,195 

The accompanying notes are an integral part of these statements.
4

INTERDIGITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 For the Three Months Ended March 31,
 20222021
Net income$17,704 $3,958 
Unrealized loss on investments, net of tax(310)(70)
Comprehensive income$17,394 $3,888 
Comprehensive loss attributable to noncontrolling interest(290)(1,613)
Total comprehensive income attributable to InterDigital, Inc.$17,684 $5,501 
The accompanying notes are an integral part of these statements.

5

INTERDIGITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands, except per share data)
(unaudited)
Common StockAdditional
 Paid-In Capital
Retained EarningsAccumulated
Other
Comprehensive
 Loss
Treasury StockNon-Controlling
Interest
Total
Shareholders'
Equity
 SharesAmount SharesAmount
BALANCE, DECEMBER 31, 2020
71,389 $714 $738,481 $1,413,969 $(184)40,573 $(1,379,611)$23,197 $796,566 
Adjustment to Retained Earnings related to adoption of ASU 2020-06— — (55,349)15,587 — — — — (39,762)
Net income attributable to InterDigital, Inc.— — — 5,571 — — — — 5,571 
Net loss attributable to noncontrolling interest— — — — — — — (1,613)(1,613)
Noncontrolling interest distribution— — — — — — — (1,109)(1,109)
Net change in unrealized loss on short-term investments— — — — (70)— — — (70)
Dividends declared ($0.35 per share)
— — 210 (10,976)— — — — (10,766)
Exercise of common stock options32 — 737 — — — — — 737 
Issuance of common stock, net55 — (2,962)— — — — — (2,962)
Amortization of unearned compensation— — 2,153 — — — — — 2,153 
Repurchase of common stock  —   91 (5,750)— (5,750)
BALANCE, MARCH 31, 2021
71,476 $714 $683,270 $1,424,151 $(254)40,664 $(1,385,361)$20,475 $742,995 

Common StockAdditional
 Paid-In Capital
Retained EarningsAccumulated
Other
Comprehensive
 Loss
Treasury StockNon-Controlling
Interest
Total
Shareholders'
Equity
 SharesAmount SharesAmount
BALANCE, DECEMBER 31, 202171,720 $717 $713,599 $1,441,105 $(571)41,031 $(1,409,611)$7,678 $752,917 
Net income attributable to InterDigital, Inc.— — — 17,994 — — — — 17,994 
Net loss attributable to noncontrolling interest— — — — — — — (290)(290)
Noncontrolling interest distribution— — — — — — — (1,928)(1,928)
Noncontrolling interest contribution— — — — — — — 1,500 1,500 
Net change in unrealized loss on short-term investments— — — — (310)— — — (310)
Dividends declared ($0.35 per share)
— — 158 (10,961)— — — — (10,803)
Exercise of common stock options24 — 1,226 — — — — — 1,226 
Issuance of common stock, net139 1 (5,027)— — — — — (5,026)
Amortization of unearned compensation— — 5,386 — — — — — 5,386 
BALANCE, MARCH 31, 2022
71,883 $718 $715,342 $1,448,138 $(881)41,031 $(1,409,611)$6,960 $760,666 
The accompanying notes are an integral part of these statements.
6


INTERDIGITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
For the Three Months Ended March 31,
 20222021
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income$17,704 $3,958 
Adjustments to reconcile net income to net cash used in operating activities: 
Depreciation and amortization19,282 19,861 
Non-cash interest expense, net1,498 1,819 
Change in deferred revenue(50,741)(23,429)
Deferred income taxes2,492 (1,817)
Share-based compensation5,386 2,153 
Decrease (Increase) in assets
Receivables7,475 3,507 
Deferred charges and other assets(2,772)631 
Increase (Decrease) increase in liabilities:
Accounts payable420 (291)
Accrued compensation and other expenses(18,716)(16,234)
Net cash used in operating activities(17,972)(9,842)
CASH FLOWS FROM INVESTING ACTIVITIES:  
Purchases of short-term investments(2,139)(173,120)
Sales of short-term investments119,950 137,174 
Purchases of property and equipment(337)(387)
Capitalized patent costs(9,872)(9,602)
Long-term investments (1,091)
Net cash provided by (used in) investing activities107,602 (47,026)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Net proceeds from exercise of stock options1,226 737 
Repurchase of common stock (5,750)
Non-controlling interest contribution1,500  
Non-controlling interest distribution (1,109)
Taxes withheld upon restricted stock unit vestings(5,026)(2,962)
Dividends paid(10,741)(10,786)
Net cash used in financing activities(13,041)(19,870)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH76,589 (76,738)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD713,224 477,663 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD$789,813 $400,925 
Refer to Note 1, "Basis of Presentation," for additional supplemental cash flow information. Additionally, refer to Note 6, "Cash, Concentration of Credit Risk and Fair Value of Financial Instruments" for a reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets.
The accompanying notes are an integral part of these statements.
7

INTERDIGITAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
1. 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 March 31, 2022, the results of our operations for the three months ended March 31, 2022 and 2021 and our cash flows for the three months ended March 31, 2022 and 2021. The accompanying unaudited, condensed consolidated financial statements have been prepared in accordance with the instructions to 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, 2021 (our “2021 Form 10-K”) as filed with the Securities and Exchange Commission (“SEC”) on February 17, 2022. Definitions of capitalized terms not defined herein appear within our 2021 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 ongoing Coronavirus pandemic (“COVID-19”) on its financial statements as of March 31, 2022.  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 2021 Form 10-K, except as indicated below in "New Accounting Guidance".
Prior Periods' Financial Statement Revision
As previously disclosed in our 2021 Form 10-K filed with the SEC on February 17, 2022, during the fourth quarter of 2021, we determined that in our first quarter 2021 adoption of ASU 2020-06, Accounting for Convertible Debt, we incorrectly accounted for the adoption by increasing debt and decreasing retained earnings by $50.2 million, which resulted in a $10.4 million understatement of deferred taxes, $65.8 million understatement of retained earnings and $55.4 million overstatement of additional paid-in capital as of March 31, 2021. While we concluded that this error did not result in our previously issued 2021 interim financial statements being materially misstated, we have corrected the misstatement by revising the accompanying Condensed Consolidated Statement of Shareholder’s Equity as of and for the three months ended March 31, 2021. We will prospectively revise our previously issued financial statements as of and for the interim periods ended June 30, 2021 and September 30, 2021 in connection with our second quarter and third quarter 2022 quarterly filings on Form 10-Q. The accompanying annual footnotes have also been adjusted to reflect such correction.
Reclassifications
Certain reclassifications have been made to prior year amounts to conform to the current year presentation.
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Supplemental Cash Flow Information
The following table presents additional supplemental cash flow information for the three months ended March 31, 2022 and 2021 (in thousands):
For the Three Months Ended March 31,
SUPPLEMENTAL CASH FLOW INFORMATION:20222021
Income taxes paid, including foreign withholding taxes$3,349 $4,328 
Non-cash investing and financing activities:
Dividend payable10,803 10,766 
Non-cash acquisition of patents30,100  
Non-cash distribution of patents1,928  
Accrued capitalized patent costs and property and equipment1,562 2,096 
Unsettled repurchase of common stock 1,994 
New Accounting Guidance
Accounting Standards Update: Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options
In May 2021, the FASB issued ASU No. 2021-04. The amendments in this ASU are intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options, including warrants, that remain equity classified after modification or exchange. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021, with early adoption allowed. We adopted this guidance as of January 1, 2022 and the adoption did not have a material impact on our consolidated financial statements.
2. REVENUE
Disaggregated Revenue
The following table presents the disaggregation of our revenue for the three months ended March 31, 2022 and 2021 (in thousands):
Three months ended March 31,
 20222021 Increase/(Decrease)
Variable patent royalty revenue$9,045 $7,096 $1,949 27 %
Fixed-fee royalty revenue89,843 69,296 20,547 30 %
Current patent royalties a
98,888 76,392 22,496 29 %
Non-current patent royalties b
2,191 3,781 (1,590)(42)%
Total patent royalties101,079 80,173 20,906 26 %
Current technology solutions revenue a
239 2,190 (1,951)(89)%
Total revenue$101,318 $82,363 $18,955 23 %
a.    Recurring revenues are comprised of current patent royalties, inclusive of dynamic fixed-fee royalty payments, and current technology solutions revenue.
b.    Non-recurring revenues are comprised of non-current patent royalties, which include past patent royalties and royalties from static agreements, as well as patent sales.
During the three months ended March 31, 2022, we recognized $83.8 million of revenue that had been included in deferred revenue as of the beginning of the period. As of March 31, 2022, we had contract assets of $18.9 million and $7.9 million included within "Accounts receivable" and "Other non-current assets, net" in the condensed consolidated balance sheet, respectively. As of December 31, 2021, we had contract assets of $18.9 million and $8.3 million included within "Accounts receivable" and "Other non-current assets, net" in the condensed consolidated balance sheet, respectively.
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Contracted Revenue
Based on contracts signed and committed as of March 31, 2022, we expect to recognize the following revenue from dynamic fixed-fee royalty payments over the term of such contracts (in thousands):
Revenue
Remainder of 2022$234,529 
2023121,711 
202473,297 
202560,920 
2026 and thereafter 
Total Revenue$490,457 
3. INCOME TAXES
In the three months ended March 31, 2022 and 2021, the Company had an effective tax rate of 25.2% and 30.8%, respectively. The effective tax rate in both periods 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, our effective tax rate for the three months ended March 31, 2022 and 2021 would have been 19.2% and 12.0% respectively. During both the three months ended March 31, 2022 and 2021, the Company recorded a discrete net benefit of $0.3 million primarily related to share-based compensation and changes in uncertain tax positions.
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.
During the three months ended March 31, 2022 and 2021, the Company paid approximately $3.2 million and $3.6 million, respectively, in foreign source creditable withholding tax.
4. NET INCOME 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 or resulting from the unvested outstanding restricted stock units ("RSUs"). The following tables reconcile the numerator and the denominator of the basic and diluted net income per share computation (in thousands, except for per share data):

Three months ended March 31,
20222021
Net income applicable to InterDigital, Inc.$17,994 $5,571 
Weighted-average shares outstanding:
Basic30,703 30,836 
Dilutive effect of stock options, RSUs, convertible securities and warrants572 359 
Diluted31,275 31,195 
Earnings per share:
Basic$0.59 $0.18 
Dilutive effect of stock options, RSUs, convertible securities and warrants(0.01) 
Diluted$0.58 $0.18 

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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 March 31,
20222021
Restricted stock units and stock options414 120 
Warrants4,921 4,921 
Total5,335 5,041 
Convertible Notes and Warrants
Refer to Note 7, "Obligations," 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 the Company's 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 if-converted 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.
5. LITIGATION AND LEGAL PROCEEDINGS
COURT PROCEEDINGS

Lenovo

UK Proceeding

On August 27, 2019, the Company and certain of its subsidiaries filed a claim in the UK High Court against Lenovo Group Limited and certain of its subsidiaries. The claim, as amended, alleges infringement of five of the Company's patents relating to 3G and/or 4G/LTE standards: European Patent (UK) Nos. 2,363,008; 2,421,318; 2,485,558; 2,557,714; and 3,355,537. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.

The UK High Court held case management conferences on October 6, 2020, and December 16, 2020, a disclosure hearing on January 19, 2021, and pre-trial review hearings for the first trial on January 28, 2021, and February 8, 2021. At those hearings, the UK High Court entered a schedule for the technical and non-technical FRAND proceedings. Two technical trials were scheduled for March 2021 and June 2021, and the non-technical FRAND trial was scheduled for January 2022. There are three additional technical trials scheduled for the remaining patents following the FRAND trial. The first and second technical trials were completed, and on July 29, 2021, the UK High Court issued its decision regarding the first technical trial finding European Patent (UK) No. 2,485,558 valid, infringed, and essential to Release 8 of LTE. Lenovo is appealing this decision. On January 6, 2022, the UK High Court issued its decision regarding the second technical trial finding European Patent (UK) No. 3,355,537 invalid, but essential and infringed but for the finding of invalidity. The Company plans to appeal the second technical trial decision as legally erroneous. The FRAND trial commenced on January 11, 2022 and concluded on February 11, 2022. The third technical trial is scheduled to commence on May 10, 2022, to be completed by May 18, 2022.

District of Delaware Patent Proceeding

On August 28, 2019, the Company and certain of its subsidiaries filed a complaint in the United States District Court for the District of Delaware (the “Delaware District Court”) against Lenovo Holding Company, Inc. and certain of its subsidiaries alleging that Lenovo infringes eight of InterDigital’s U.S. patents-U.S. Patent Nos. 8,085,665; 8,199,726; 8,427,954; 8,619,747; 8,675,612; 8,797,873; 9,203,580; and 9,456,449-by making, using, offering for sale, and/or selling Lenovo wireless devices with 3G and/or 4G LTE capabilities. As relief, InterDigital is seeking: (a) a declaration that InterDigital is not in breach of its relevant FRAND commitments with respect to Lenovo; (b) to the extent Lenovo does not agree to negotiate a worldwide patent license, does not agree to enter into binding international arbitration to set the terms of a FRAND license, and does not agree to be bound by the FRAND terms to be set by the UK High Court in the separately filed UK proceedings described above, an injunction prohibiting Lenovo from continued infringement; (c) damages, including enhanced damages for willful infringement and supplemental damages; and (d) attorneys’ fees and costs.

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On September 16, 2020, the Delaware District Court entered a schedule for the case, setting a patent jury trial. On March 8, 2021, the Delaware District Court held a claim construction hearing, and the court issued its order on May 10, 2021, construing various disputed terms. On March 24, 2021, the Delaware District Court consolidated the antitrust proceeding discussed below with this patent proceeding. Trial for the consolidated proceedings is scheduled for March 6, 2023. On April 25, 2022, the parties filed a stipulation to stay only the claims relating to U.S. Patent No. 8,199,726.

District of Delaware Antitrust Proceeding

On April 9, 2020, Lenovo (United States) Inc. 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 ETSI with respect to the licensing of 3G and 4G SEPs on 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. Oral argument on the Company's motion to dismiss was held on October 27, 2020.

On March 24, 2021, the Delaware District Court ruled on the Company’s motion to dismiss. The Delaware District Court dismissed the Sherman Act Section 1 claim without prejudice, denied the motion to dismiss the Sherman Act Section 2 claim, and consolidated the Section 2 and breach of contract claims with Company’s Delaware patent proceeding discussed above.

China Proceedings

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 (the “Beijing IP Court”) seeking a determination of the FRAND royalty rates payable for the Company's Chinese 3G, 4G and 5G SEPs. On February 20, 2021, the Company filed an application challenging the jurisdiction of the Beijing IP Court to take up Lenovo’s complaint. On November 15, 2021, the Beijing IP Court denied the jurisdictional challenge, and the Company filed an appeal with the Supreme People’s Court of the People’s Republic of China (SPC) on December 14, 2021. The appeal remains pending.

On November 26, 2021, the Company was informed that Lenovo had purportedly filed an additional complaint against the Company in the Wuhan Intermediate People’s Court (the “Wuhan Court”) seeking a determination of a global FRAND royalty rate for the period from 2024 to 2029 for the Company’s 3G, 4G, and 5G SEPs. On April 16, 2022, the Company filed an application challenging, among other things, process of service and the jurisdiction of the Wuhan Court. That application remains pending.

German Proceedings

On March 25, 2022, March 28, 2022, and April 6, 2022, the Company and certain of its subsidiaries filed patent infringement claims in the Munich and Mannheim Regional Courts against Lenovo and certain of its affiliates, alleging infringement of European Patent Nos. 2,449,782; 2,452,498; 3,624,447 and 3,267,684 relating to HEVC standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.

Oppo, OnePlus and realme

UK Proceeding

On December 20, 2021, the Company filed a patent infringement claim in the UK High Court against Guangdong Oppo Mobile Telecommunications Corp., Ltd. (“Oppo”) and certain of its affiliates, OnePlus Technology (Shenzhen) Co., Ltd. (“OnePlus”) and certain of its affiliates, and realme Mobile Telecommunications (Shenzhen) Co., Ltd. (“realme”) and certain of its affiliates, alleging infringement of European Patent (UK) Nos. 2,127,420; 2,421,318; 2,485,558; and 3,355,537 relating to cellular 3G, 4G/LTE or 5G standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.

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On January 19, 2022, Oppo filed a jurisdictional challenge with the UK High Court which is scheduled for a two-day hearing starting October 25, 2022.

India Proceeding

On December 20, 2021 and December 22, 2021, the Company and certain of its subsidiaries filed patent infringement claims in the Delhi High Court in New Delhi, India against Oppo and certain of its affiliates, OnePlus and certain of its affiliates, and realme Mobile Telecommunication (India) Private Limited, alleging infringement of Indian Patent Nos. 262910, 295912, 313036, 320182, 319673, 242248, 299448, and 308108 relating to cellular 3G, 4G/LTE, and/or 5G, and HEVC standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.

Germany Proceeding

On December 20, 2021, a subsidiary of the Company filed three patent infringement claims, two in the Munich Regional Court and one in the Mannheim Regional Court, against Oppo and certain of its affiliates, OnePlus and certain of its affiliates, and realme and certain of its affiliates, alleging infringement of European Patent Nos. 2,485,558; 2,127,420; and 2,421,318 relating to cellular 3G, 4G/LTE and/or 5G standards. The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. The Munich Regional Court has schedule hearings for November 17, 2022, and December 14, 2022.

China Proceeding

On January 19, 2022, the Company was informed that Oppo had purportedly filed a complaint against the Company in the Guangzhou Intellectual Property Court (the “Guangzhou IP Court”) seeking a determination of a global FRAND royalty rate for the Company’s 3G, 4G, 5G, 802.11 and HEVC SEPs.

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 March 31, 2022.

6. 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 March 31, 2022, December 31, 2021 and March 31, 2021 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands):
 March 31,December 31,March 31,
 202220212021
Cash and cash equivalents$783,016 $706,282 $396,156 
Restricted cash included within prepaid and other current assets5,716 5,861 3,688 
Restricted cash included within other non-current assets1,081 1,081 1,081 
Total cash, cash equivalents and restricted cash$789,813 $713,224 $400,925 
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.
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Our accounts receivable and contract assets are derived principally from patent license and technology solutions agreements. As of March 31, 2022 three licensees comprised 66% and as of December 31, 2021 four licensees comprised 66% 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.
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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 March 31, 2022 and December 31, 2021 (in thousands):
 Fair Value as of March 31, 2022
 Level 1Level 2Level 3Total
Assets:    
Money market and demand accounts (a)
$789,813 $ $ $789,813 
Commercial paper (b)
 48,151  48,151 
U.S. government securities 46,591  46,591 
Corporate bonds, asset backed and other securities 21,462  21,462 
  Total$789,813 $116,204 $ $906,017 
 Fair Value as of December 31, 2021
 Level 1Level 2Level 3Total
Assets:    
Money market and demand accounts (a)
$705,725 $ $ $705,725 
Commercial paper(b)
 158,452  158,452 
U.S. government securities 51,301  51,301 
Corporate bonds, asset backed and other securities 33,091  33,091 
  Total$705,725 $242,844 $ $948,569 
______________________________
(a)Primarily included within cash and cash equivalents.
(b)As of March 31, 2022 and December 31, 2021, $0.0 million and $7.5 million, respectively, of commercial paper was included within cash and cash equivalents.
Non-Recurring Fair Value Measurements
Patents
During second quarter 2021, a non-controlled subsidiary that we consolidate for financial statement purposes approved a plan to sell certain patent assets, which were classified as held-for sale. These patents held for sale are recorded at fair value on March 31, 2022 and are included within "Prepaid and other current assets" in the condensed consolidated balance sheet. We determined the fair value based upon evaluation of market conditions.
During fourth quarter 2021, we renewed our multi-year, worldwide, non-exclusive patent license agreement with Sony Corporation of America ("Sony"). A portion of the consideration for the agreement was in the form of patents, which we received in March 2022. We have determined the estimated fair value of the patents for determining the transaction price for revenue recognition purposes, which was estimated to be $30.1 million utilizing the income and market approaches. The value is amortized as a non-cash expense over the patents' estimated useful lives.
Fair Value of Long-Term Debt
2024 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 March 31, 2022 and December 31, 2021 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.
March 31, 2022December 31, 2021
Principal
Amount
Carrying
Value
Fair
Value
Principal
Amount
Carrying
Value
Fair
Value
Senior Convertible Long-Term Debt$400,000 $396,056 $410,240 $400,000 $395,632 $437,760 
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Technicolor Patent Acquisition Long-term Debt
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 March 31, 2022 and December 31, 2021 was as follows (in thousands). The aggregate fair value of the Technicolor Patent Acquisition long-term debt is a Level 3 fair value measurement.
March 31, 2022December 31, 2021
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Technicolor Patent Acquisition Long-Term Debt$28,044 $28,731 $27,113 $28,569 
7. OBLIGATIONS
Technicolor Patent Acquisition Long-Term Debt
On July 30, 2018, we completed our acquisition of the patent licensing business of Technicolor SA ("Technicolor"), a worldwide technology leader in the media and entertainment sector (the "Technicolor Patent Acquisition"). In conjunction with the Technicolor Patent Acquisition we assumed Technicolor’s rights and obligations under a joint licensing program with Sony relating to digital televisions and standalone computer display monitors, which commenced in 2015 and is referred to as the "Madison Arrangement." 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 March 31, 2022 and December 31, 2021 is disclosed within Note 6, "Cash, Concentration of Credit Risk and Fair Value of Financial Instruments." 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 months ended March 31, 2022 and 2021, we recognized $0.9 million and $0.8 million, respectively, of interest expense related to this debt. 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.
2024 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 (i) 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 (ii) mature on June 1, 2024, unless earlier converted or repurchased. The effective interest rate of the 2024 Notes is 2.02%.
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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 our 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. As of December 31, 2020, we made the irrevocable election to settle all conversions of the 2024 Notes through combination settlements of cash and shares of our 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 our common stock.
The 2024 Notes are senior unsecured obligations of the Company 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.
There have been no material changes regarding the 2024 Notes and 2024 Call Spread Transactions from the disclosures included in Note 9, "Obligations" within the notes to the consolidated financial statements included in Part II, Item 8 of the 2021 Form 10-K.
The following table reflects the carrying value of our convertible notes long-term debt as of March 31, 2022 and December 31, 2021 (in thousands):
March 31, 2022December 31, 2021
Principal$400,000 $400,000 
Less:
Deferred financing costs(3,944)(4,368)
Net carrying amount of the 2024 Notes$396,056 $395,632 
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 months ended March 31, 2022 and 2021 relating to the contractual interest coupon and the amortization of deferred financing costs of the 2024 Notes (in thousands):
Three months ended March 31,
20222021
Contractual coupon interest$2,000 $2,000 
Amortization of deferred financing costs424 398 
Total$2,424 $2,398 

Technicolor Contingent Consideration
As part of the Technicolor Patent Acquisition, we entered into a revenue-sharing arrangement with Technicolor that created a contingent consideration liability. Under the revenue-sharing arrangement, Technicolor receives 42.5% of future cash receipts from new licensing efforts from the Madison Arrangement only, subject to certain conditions and hurdles. As of March 31, 2022, the contingent consideration liability from the revenue-sharing arrangement was deemed not probable and is therefore not reflected within the consolidated financial statements.
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8. VARIABLE INTEREST ENTITIES
As further discussed below, we are the primary beneficiary of three variable interest entities. As of March 31, 2022, the combined book values of the assets and liabilities associated with these variable interest entities included in our condensed consolidated balance sheet were $20.8 million and $2.3 million, respectively. Assets included $7.3 million of cash and cash equivalents, $4.1 million of accounts receivable and prepaid and other current assets, and $9.4 million of patents, net. As of December 31, 2021, the combined book values of the assets and liabilities associated with these variable interest entities included in our condensed consolidated balance sheet were $27.1 million and $2.5 million, respectively. Assets included $5.1 million of cash and cash equivalents, $4.0 million of accounts receivable and prepaid and other current assets, and $18.0 million of patents, net.
Chordant
On January 31, 2019, we launched the Company’s Chordant™ business as a standalone company. 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 months ended March 31, 2022 and 2021, we have allocated approximately $0.0 million and $0.1 million, respectively, of Chordant's net loss to noncontrolling interests held by other parties. Chordant ceased operations during 2021.
Convida Wireless
Convida Wireless was launched in 2013 and most recently renewed in 2021 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.
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 months ended March 31, 2022 and 2021, we allocated $0.3 million and $1.5 million, respectively, of Convida Wireless's net loss to noncontrolling interests held by other parties.
Signal Trust for Wireless Innovation
During 2013, we announced the establishment of the Signal Trust for Wireless Innovation (the “Trust”), the goal of which was to monetize a patent portfolio primarily related to 3G and LTE cellular infrastructure. During fourth quarter 2021, the Trust was fully dissolved and all remaining assets were transferred to us as majority beneficiary.
The Trust was accounted for as a variable interest entity. Based on the terms of the trust agreement, we determined that we were the primary beneficiary for accounting purposes and included the Trust in our consolidated financial statements up to the date of dissolution.
9. OTHER (EXPENSE) INCOME, NET
The amounts included in "Other (expense) income, net" in the condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 were as follows (in thousands):
Three months ended March 31,
20222021
Interest and investment income$209 $553 
Other(1,214)171 
Other (expense) income, net$(1,005)$724 
Other (expense) income, net changed $1.7 million primarily due to a $1.9 million gain on a contract termination recognized in first quarter 2021.
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10.    OTHER ASSETS
The amounts included in "Prepaid and other current assets" in the consolidated balance sheet as of March 31, 2022 and December 31, 2021 were as follows (in thousands):
March 31, 2022December 31, 2021
Tax receivables$55,290 $57,127 
Prepaid assets8,662 5,479 
Restricted cash5,716 5,861 
Patents held for sale4,000 4,000 
Other current assets4,687 5,078 
Total Prepaid and other current assets$78,355 $77,545 
The amounts included in "Other non-current assets, net" in the consolidated balance sheet as of March 31, 2022 and December 31, 2021 were as follows (in thousands):
March 31, 2022December 31, 2021
Tax receivables$32,252 $30,026 
Goodwill22,421 22,421 
Right-of-use assets17,009 17,851 
Long-term investments21,280 21,280 
Other non-current assets11,253 10,923 
Total Other non-current assets, net$104,215 $102,501 
11.    RESTRUCTURING ACTIVITIES
During second quarter 2021, the Company began the process of a strategic review and undertook certain actions in order to increase focus on core technologies and markets.
On June 10, 2021, the Company announced that, as a result of a strategic review of its research and innovation priorities, it commenced the process of a collective economic layoff in which it proposed a reduction in force of its research and innovation unit. All notices of termination have been issued to the impacted employees.
During 2021, Chordant ceased operations. The Company implemented a reduction in workforce action in second quarter 2021.
Additionally, in June 2021, a non-controlled subsidiary that we consolidate for financial statement purposes approved a plan to sell certain patents. The proceeds from the sale of these patents will contribute to funding the non-controlled subsidiary's operations. These assets were evaluated as a separate asset group and reclassified as assets held for sale. We determined the fair value based upon evaluation of market conditions. The patents held for sale are included within "Prepaid and other current assets" in the consolidated balance sheet.
In October 2021, we expanded our restructuring efforts to include general and administrative functions largely centered in the U.S., which resulted in a further reduction in force as well as cuts to our non-labor expenses. These employees were provided notification of termination during fourth quarter 2021.
Restructuring charges are estimated based on information available at the time such charges are recorded. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts incurred for such activities may differ from amounts initially estimated. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the reduction in force or other restructuring activities.
The restructuring charges associated with the above activities totaling $0.5 million and $0.0 million in the three months ended March 31, 2022 and 2021, respectively. We expect additional restructuring charges of $3.0 million to $4.0 million largely related to aligning our facilities with our current needs.
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As of March 31, 2022, the Company's restructuring liability was $14.3 million and was included in "Other accrued expenses" on our condensed consolidated balance sheet. As of December 31, 2021, the Company's restructuring liability was $18.3 million, of which $12.5 million was included in "Other accrued expenses" and $5.8 million was included in "Other long-term liabilities" on our condensed consolidated balance sheet. The following table presents the change in our restructuring liability during the period (in thousands):
Balance as of December 31, 2021$18,281 
Accrual542 
Cash payments(4,519)
Other42 
Balance as of March 31, 2022$14,346 
The restructuring expenses included in "Restructuring activities" in the condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 were as follows (in thousands):
Three months ended March 31,
20222021
Severance and other benefits527  
Outside services and other associated costs15  
Total$542 $ 
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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
OVERVIEW
The following discussion should be read in conjunction with the unaudited, condensed consolidated financial statements and notes thereto contained in Part I, Item 1 of this Quarterly Report on Form 10-Q, in addition to our 2021 Form 10-K, other reports filed with the SEC and the Statement Pursuant to the Private Securities Litigation Reform Act of 1995 — Forward-Looking Statements below.
Throughout the following discussion and elsewhere in this Form 10-Q, we refer to “recurring revenues” and “non-recurring revenues.”  Recurring revenues are comprised of “current patent royalties” and “current technology solutions revenue.”  Non-recurring revenues are comprised of “non-current patent royalties,” which include past patent royalties and royalties from static agreements, as well as “patent sales.”
Cash & Short-term Investments
As of March 31, 2022, we had $906.0 million of cash, cash equivalents, restricted cash and short-term investments and an additional $198.6 million of cash payments due under contracted fixed price agreements, including $6.1 million recorded in our $23.6 million accounts receivable balance. The remaining accounts receivable is primarily related to variable patent royalty revenue.
Over 90% of our revenue comes from fixed price agreements. Such agreements often have prescribed payment schedules that are uneven and sometimes front-loaded, resulting in timing differences between when we collect the cash payments and recognize the related revenue. As a result, our cash receipts due in 2022 from existing agreements are expected to be lower than revenue to be recognized in 2022 from such agreements as noted in the deferred revenue amortization table below.
The following table reconciles the timing differences between cash receipts and recognized revenue during the three months ended March 31, 2022 and 2021, including the resulting operating cash flow (in thousands):
Three months ended March 31,
Cash vs. Non-cash revenue:20222021
Fixed fee cash receipts (a)
$42,280 $47,312 
Other cash receipts (b)
10,115 10,676 
Change in deferred revenue50,741 23,429 
Change in receivables(7,475)(3,507)
Other5,657 4,453 
Total Revenue$101,318 $82,363 
Net cash used in operating activities$(17,972)$(9,842)
(a) Fixed fee cash receipts are comprised of cash receipts from Dynamic Fixed-Fee Agreement royalties, including the associated past patent royalties
(b) Other cash receipts are comprised of cash receipts related to our variable patent royalty revenue, including the associated past patent royalties, current technology solutions revenue, royalties from static agreements, and patent sales.
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When we collect payments on a front-loaded basis, we recognize a deferred revenue liability equal to the cash received and accounts receivable recorded which relate to revenue expected to be recognized in future periods. That liability is then reduced as we recognize revenue over the balance of the agreement. The following table shows the projected amortization of our current and long term deferred revenue as of March 31, 2022 (in thousands):
Revenue
Remainder of 2022$225,542 
202357,331 
20246,702 
2025920 
2026 and thereafter— 
Total Revenue$290,495 
Revenue
First quarter 2022 recurring revenue was $99.1 million, compared to recurring revenue of $78.6 million in first quarter 2021, a 26% year-over-year increase due primarily to previously disclosed new patent license agreements, as well as a new agreement with Sharp signed in first quarter 2022. In first quarter 2022, revenues (in descending order) from Apple, Samsung, Xiaomi, and Huawei each comprised 10% or more of our consolidated revenues. Refer to "Results of Operations --First Quarter 2022 Compared to First Quarter 2021" for further discussion of our 2022 revenue.
Restructuring Activities
On June 10, 2021, we announced that, as a result of a strategic review of our research and innovation priorities, we commenced the process of a collective economic layoff in which we proposed a reduction in force of our research and innovation unit. Additionally, in October 2021, we expanded our restructuring efforts to include general and administrative functions largely centered in the U.S. All impacted employees have been provided notification of termination.
During first quarter 2022, we recognized $0.5 million of restructuring expenses including $0.5 million of severance and other benefits which are included within “Restructuring Activities” in the condensed consolidated statement of income.
We expect additional restructuring charges of $3.0 million to $4.0 million largely related to aligning our facilities with our current needs. We expect to see approximately $2.0 million of related, annual cash savings as new leases begin in the second half of this year.
Impact of COVID-19 Pandemic
The COVID-19 pandemic continues to significantly impact the United States and the rest of the world. Though the COVID-19 pandemic and the measures taken to reduce its transmission, such as the imposition of social distancing and orders to work-from-home and shelter-in-place, have altered our business environment and overall working conditions, we continue to believe that our strategic strengths, including talent, our strong balance sheet, stable revenue base, and the strength of our patent portfolio, will allow us to weather a rapidly changing marketplace.
While the environment in which we conduct our business and our overall working conditions have changed as a result of the COVID-19 pandemic, we experienced a limited impact on our operations and financial position during first quarter 2022. Fixed-fee royalties accounted for 89% of our recurring revenues in fiscal year 2021. These fixed-fee revenues are not directly affected by our related licensees’ success in the market or the general economic climate. To that end, in first quarter 2022, we did not experience a significant impact on our contracted revenue due to COVID-19. Meanwhile, we have taken steps to protect the health and safety of our employees and their families, with the majority of our workforce continuing to work remotely or on a hybrid basis. We returned to in-person work as of April 2022 and all of our locations are open. Despite any remote working conditions, our business activities have continued to operate with minimal interruption, and we expect them to continue to operate efficiently. Although we have resumed work-related travel, a portion of our licensing negotiations, investor presentations and participation in standards organizations and industry events virtually. Between March 12, 2020, when we began to work almost entirely remotely, and March 31, 2022, we successfully concluded nineteen new patent license agreements that we estimate will result in revenues exceeding $570.0 million over their respective lives. Our financial position remains strong, we believe we have sufficient access to capital if needed, and we remain committed to our efforts around cost discipline.

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Comparability of Financial Results
When comparing first quarter 2022 financial results against other periods, the following items should be taken into consideration:
Our first quarter 2022 revenue includes $2.2 million of non-recurring revenue primarily related to a new agreement with Sharp signed in first quarter 2022.
During first quarter 2022, we recognized $0.5 million of restructuring expenses. These costs resulted from our restructuring activities as described in Note 11, "Restructuring Activities", within the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, and are included within “Restructuring activities” in the condensed consolidated statement of income.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our significant accounting policies are described in Note 2, "Summary of Significant Accounting Policies and New Accounting Guidance", in the notes to consolidated financial statements included in our 2021 Form 10-K. A discussion of our critical accounting policies, and the estimates related to them, are included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Form 10-K. There have been no material changes to our existing critical accounting policies from the disclosures included in our 2021 Form 10-K. In addition, we have analyzed the impact of COVID-19 on our financial statements as of March 31, 2022, and we have determined that the changes to our significant judgments and estimates did not have a material impact on our financial statements. Refer to Note 1, “Basis of Presentation,” in the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for updates related to new accounting pronouncements and changes in accounting policies.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity are cash, cash equivalents and short-term investments, as well as cash generated from operations. We believe we have the ability to obtain additional liquidity through debt and equity financings. From time to time, we may engage in a variety of transactions to augment our liquidity position as our business dictates and to take advantage of favorable interest rate environments or other market conditions, including the incurrence or issuance of debt and the refinancing or restructuring of existing debt. Based on our past performance and current expectations, we believe our available sources of funds, including cash, cash equivalents and short-term investments and cash generated from our operations, will be sufficient to finance our operations, capital requirements, debt obligations, existing stock repurchase program, dividend program, and other contractual obligations discussed below in both the short-term over the next twelve months, and the long-term beyond twelve months.
Cash, cash equivalents, restricted cash and short-term investments
As of March 31, 2022 and December 31, 2021, we had the following amounts of cash, cash equivalents, restricted cash and short-term investments (in thousands):
March 31, 2022December 31, 2021Increase /
(Decrease)
Cash and cash equivalents$783,016 $706,282 $76,734 
Restricted cash included within prepaid and other current assets5,716 5,861 (145)
Restricted cash included within other non-current assets1,081 1,081 — 
Short-term investments116,204 235,345 (119,141)
Total cash, cash equivalents, restricted cash and short-term investments$906,017 $948,569 $(42,552)
The net decrease in cash, cash equivalents, restricted cash and short-term investments was primarily attributable to cash used in financing activities of $13.0 million, primarily related to dividend payments, cash used in investing activities of $10.2 million, excluding sales and purchases of short-term investments, and cash used in operating activities of $18.0 million. Refer to the sections below for further discussion of these items.
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Cash flows used in operating activities
Cash flows used in operating activities in the first quarter 2022 and 2021 (in thousands) were as follows: