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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): December 21, 2004
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InterDigital Communications Corporation
(Exact name of registrant as specified in its charter)
Pennsylvania 1-11152 23-1882087
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
781 Third Avenue, King of Prussia, Pennsylvania 19406-1409
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 610-878-7800
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01. Entry into a Material Definitive Agreement.
InterDigital Communications Corporation (the "Company" or "InterDigital") has
entered into an agreement with General Dynamics Decision Systems, Inc. ("General
Dynamics"), to serve as a subcontractor on the Mobile User Objective System
("MUOS") program for the U.S. military. MUOS is an advanced tactical terrestrial
and satellite communications system utilizing Third Generation ("3G") commercial
cellular technology to provide significantly improved high data rate and assured
communications for U.S. warfighters. Lockheed Martin leads the MUOS program
team.
The Software License Agreement requires InterDigital to deliver its
standards-compliant Wideband Code Division Multiple Access ("WCMDA") modem
technology to General Dynamics for incorporation into handheld terminals. The
MUOS 3G WCDMA waveform is the air interface technology that will transmit text,
voice, video, and multimedia to a wide range of platforms, including handheld
terminals with an "always-on" connection that is expected to be significantly
faster than previous systems.
Under the agreement, InterDigital expects to receive $18.5 million for delivery
and a limited license of its commercial technology solution for use within the
government's MUOS and Joint Tactical Radio System programs, maintenance and
product training. The agreement also includes options that are exercisable by
General Dynamics at various times through March 2006 for additional deliverables
for up to $4.0 million, and contains a termination for convenience provision,
penalties for delays, and other provisions typical for contracts involving
government procurements. The Company anticipates that at least a majority of its
MUOS program deliverables and related payments will occur in 2005, excluding the
exercise of options for additional deliverables. InterDigital will provide
maintenance and support to General Dynamics for three (3) years following
delivery of the technology. In addition to the deliverables specifically
identified in the agreement, InterDigital has agreed to provide additional
future services as requested by General Dynamics under an agreed to pricing
structure.
Given the complexity of accounting for revenue associated with the agreement,
the Company has not finalized the manner in which revenue will be recognized for
payments to be received under the agreement. The Company will provide
appropriate guidance after the revenue recognition evaluation is complete.
Item 7.01 Regulation FD Disclosure.
Due to actual and anticipated cash receipts from new and amended patent license
agreements, the Company now expects fourth quarter 2004 book tax expense to
exceed previous guidance of $1.0 to $1.5 million, the amount of which is
dependent on the finalization of taxable financial results for 2004. The final
book tax expense also could be affected by higher than previously anticipated
taxable fiscal year 2004 per-unit patent license royalties.
This Form 8-K contains forward-looking statements regarding our expectations as
to anticipated cash receipts from patent licensing activity and the agreement
with General Dynamics, and the anticipated timing of deliverables and related
payments under the agreement with General Dynamics. Such forward-looking
statements are subject to risks and uncertainties and actual outcomes could
differ materially from those expressed in the forward-looking statements due to
a variety of factors including, but not limited to: (i) timing and amounts of
actual cash receipts received; (ii) exercise of termination for convenience
rights under the agreement with General Dynamics; and (iii) unanticipated delays
in connection with performance under the agreement with General Dynamics,
including delays associated with performance of third parties. We undertake no
duty to publicly update any forward-looking statements, whether as a result of
new information, future events or otherwise.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
INTERDIGITAL COMMUNICATIONS CORPORATION
By: /s/ Lawrence F. Shay
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Lawrence F. Shay
General Counsel
Dated: December 22, 2004