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Segments and Major Customers
 9 Months Ended
Sep. 30, 2013
Segment Reporting [Abstract]  
Segments and Major Customers
Segments and Major Customers
For the three and nine months ended September 30, 2013 and 2012, MID and CTO were reportable segments as each of them met the quantitative thresholds for disclosure as a reportable segment. The results of the remaining other operating segments were combined and shown under “All Other.”
The Company evaluates the performance of its segments based on segment operating income (loss), which is defined as customer licensing income ("CLI") minus segment operating expenses. Segment operating expenses are comprised of direct operating expenses and the allocation of certain engineering expenses.
CLI is defined as total cash royalties received from its customers under its licensing agreements with them and any product sales. Beginning in the third quarter of 2013, the Company bifurcated royalty payments that it received from SK hynix between revenue and gain from settlement, which was reflected as a credit to operating expenses. The Company has combined revenue from its customers, including SK hynix, and the gain from the SK hynix settlement as customer licensing income to reflect the total amounts received from all of its customers for the periods presented. In addition, customer licensing income includes other patent royalties received but not recognizable as revenue and proceeds from sale of intellectual property. In certain periods presented, certain patent royalties received from a customer were not recognized as revenue as not all revenue recognition criteria were met. Additionally, since the third quarter of 2011, the Company has received patent royalty payments from certain patent license agreements assumed in the acquisition of CRI which were treated as favorable contracts. Cash received from these acquired favorable contracts reduced the favorable contract intangible asset on the Company's balance sheet. The Company has combined these cash royalty payments as CLI to reflect the total amounts received from its customers.
Segment operating expenses do not include marketing, general and administrative expenses and the allocation of certain expenses managed at the corporate level, such as stock-based compensation, amortization, and certain bonus and acquisition costs. The “Reconciling Items” category includes these unallocated marketing, general and administrative expenses as well as corporate level expenses. The presentation of the three and nine months ended September 30, 2012 segment data has been updated to conform with the 2013 segment operating income (loss) definition applied starting in the fourth quarter of 2012.
The tables below present reported segment operating income (loss) for the three and nine months ended September 30, 2013 and 2012, respectively.
 
For the Three Months Ended September 30, 2013
 
For the Nine Months Ended September 30, 2013
 
MID
 
CTO
 
All Other
 
Total
 
MID
 
CTO
 
All Other
 
Total
 
(In thousands)
 
(In thousands)
Revenues
$
66,103

 
$
—

 
$
7,191

 
$
73,294

 
$
175,233

 
$
—

 
$
22,846

 
$
198,079

Other patent royalties received
179

 
—

 
850

 
1,029

 
5,179

 
—

 
4,479

 
9,658

Customer licensing income
$
66,282

 
$
—

 
$
8,041

 
$
74,323

 
$
180,412

 
$
—

 
$
27,325

 
$
207,737

Segment operating expenses
7,730

 
6,530

 
11,475

 
25,735

 
26,001

 
21,462

 
33,765

 
81,228

Segment operating income (loss)
$
58,552

 
$
(6,530
)
 
$
(3,434
)
 
$
48,588

 
$
154,411

 
$
(21,462
)
 
$
(6,440
)
 
$
126,509

Reconciling items
 

 
 
 
 

 
(39,523
)
 
 

 
 
 
 

 
(110,259
)
Operating income
 

 
 
 
 

 
$
9,065

 
 

 
 
 
 

 
$
16,250

Interest and other income (expense), net
 

 
 
 
 

 
(8,486
)
 
 

 
 
 
 

 
(24,663
)
Income (loss) before income taxes
 

 
 
 
 

 
$
579

 
 

 
 
 
 

 
$
(8,413
)

 
For the Three Months Ended September 30, 2012
 
For the Nine Months Ended September 30, 2012
 
MID
 
CTO
 
All Other
 
Total
 
MID
 
CTO
 
All Other
 
Total
 
(In thousands)
 
(In thousands)
Revenues
$
54,044

 
$
—

 
$
3,486

 
$
57,530

 
$
163,269

 
$
—

 
$
13,339

 
$
176,608

Other patent royalties received
3,750

 
—

 
1,125

 
4,875

 
3,750

 
—

 
4,740

 
8,490

Customer licensing income
$
57,794

 
$
—

 
$
4,611

 
$
62,405

 
$
167,019

 
$
—

 
$
18,079

 
$
185,098

Segment operating expenses
7,147

 
6,801

 
7,247

 
21,195

 
28,741

 
21,169

 
23,435

 
73,345

Segment operating income (loss)
$
50,647

 
$
(6,801
)
 
$
(2,636
)
 
$
41,210

 
$
138,278

 
$
(21,169
)
 
$
(5,356
)
 
$
111,753

Reconciling items
 

 
 
 
 

 
(88,310
)
 
 

 
 
 
 

 
(198,160
)
Operating loss
 

 
 
 
 

 
$
(47,100
)
 
 

 
 
 
 

 
$
(86,407
)
Interest and other income (expense), net
 

 
 
 
 

 
(7,133
)
 
 

 
 
 
 

 
(20,245
)
Loss before income taxes
 

 
 
 
 

 
$
(54,233
)
 
 

 
 
 
 

 
$
(106,652
)
The CODM does not review information regarding assets on an operating segment basis. Additionally, the Company does not record intersegment revenue or expense.
Revenue from the Company’s major customers representing 10% or more of total revenue for the three and nine months ended September 30, 2013 and 2012, respectively, was as follows:
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
Customer 
 
2013
 
2012
 
2013
 
2012
Customer A
 
31
%
 
38
%
 
34
%
 
38
%
Customer B
 
16
%
 
*

 
*

 
*

Customer C
 
10
%
 
*

 
*

 
*

Customer D
 
*

 
*

 
*

 
10
%
_________________________________________
*    Customer accounted for less than 10% of total revenue in the period
Revenue from customers in the geographic regions based on the location of customers' headquarters is as follows:
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
(In thousands)
 
2013
 
2012
 
2013
 
2012
South Korea
 
$
34,343

 
$
21,648

 
$
78,871

 
$
66,363

USA
 
15,880

 
14,309

 
56,555

 
45,778

Japan
 
15,943

 
17,347

 
42,812

 
50,818

Europe
 
4,098

 
1,493

 
11,658

 
3,564

Canada
 
2,280

 
1,983

 
5,928

 
5,835

Asia-Other
 
750

 
750

 
2,255

 
4,250

Total
 
$
73,294

 
$
57,530

 
$
198,079

 
$
176,608