Acacia Research Reports Second Quarter Financial Results and Announces Payment of Quarterly Dividend

  Acacia Research Reports Second Quarter Financial Results and Announces
  Payment of Quarterly Dividend

Business Wire

NEWPORT BEACH, Calif. -- July 18, 2013

Acacia Research Corporation^(1) (Nasdaq: ACTG) today reported results for the
three months ended June30, 2013.

  *Revenues in the second quarter of 2013 were $23,110,000, as compared to
    $50,484,000 in the comparable prior year quarter.
  *Revenues for the six months ended June30, 2013 were $99,971,000, as
    compared to $149,524,000 in the comparable prior year period.
  *GAAP net loss in the second quarter of 2013 was $12,503,000, or $0.26 per
    diluted share, as compared to GAAP net income of $6,321,000, or $0.13 per
    diluted share for the comparable prior year quarter.
  *Non-GAAP net income in the second quarter of 2013 was $6,481,000, or $0.13
    per diluted share, as compared to Non-GAAP net income of $20,953,000, or
    $0.43 per diluted share for the comparable prior year quarter. See below
    for information regarding non-GAAP measures.
  *Trailing twelve-month revenues as of the end of the second quarter of 2013
    were $201,174,000, as compared to $233,355,000 as of the end of the prior
    year quarter.

Approval of Quarterly Dividend. In addition, pursuant to the quarterly cash
dividend policy announced on April 23, 2013, Acacia Research Corporation
announced today that its Board of Directors has approved a second quarterly
cash dividend, payable in the amount of $0.125 per share, which will be paid
on August 30, 2013, to shareholders of record at the close of business on
August 1, 2013. Future cash dividends are expected to be paid on a quarterly
basis and will be at the discretion of the Board of Directors.

Acacia Research Corporation President, Matt Vella commented, "We invite
shareholders and analysts to attend our previously announced 2013 Analyst &
Investor Day at the New York Palace Hotel from 8:00 AM until 1:30 PM on
Wednesday, July 24th."

Consolidated Financial Results - Overview

Financial highlights and operating activities during the periods presented
included the following:

               Three Months Ended June 30,     Six Months Ended June 30,
                 2013            2012              2013          2012
                                                                     
Revenues (in     $  23,110         $ 50,484          $  99,971       $ 149,524
thousands)
Net income
(loss) (in       $  (12,503  )     $ 6,321           $  (7,390 )     $ 56,249
thousands)
Non-GAAP net
income (in       $  6,481          $ 20,953          $  29,191       $ 88,708
thousands)
Diluted
earnings         $  (0.26    )     $ 0.13            $  (0.15  )     $ 1.19
(loss) per
share
Pro forma
non-GAAP net
earnings per     $  0.13           $ 0.43            $  0.60         $ 1.88
common share
- diluted
New
agreements       43                38                72              78
executed
Licensing
and
enforcement      28                27                40              45
programs
generating
revenues
Licensing
and
enforcement      3                 7                 14              13
programs
with initial
revenues
New patent       7                 27                16              32
portfolios
                                                                     

As of June30, 2013, trailing twelve-month revenues were as follows (in
thousands):

As of Date:            Trailing Twelve-       % Change
                           Month Revenues^(*)
                                                      
June 30, 2013              $    201,174               (12  )%
March 31, 2013             $    228,548               (9   )%
December 31, 2012          $    250,727               22   %
September 30, 2012         $    205,258               (12  )%
June 30, 2012              $    233,355               —    %

______________________________
* Includes “other operating income.”

As of June30, 2013, on a consolidated basis, we have generated revenues from
157 technology licensing and enforcement programs, as compared to 125 programs
as of the end of the prior year quarter.

Summary Financial Results
For the Three Months Ended June 30, 2013 and 2012

Revenues (in thousands):
                  Three Months Ended June 30,     Change
                    2013            2012              $             %
                                                                        
Revenues            $   23,110        $ 50,484          $ (27,374 )     (54 )%
                                                                        
New revenue         43                38                —               —
agreements
Licensing
programs            28                27                —               —
generating
revenues
Licensing
programs with       3                 7                 —               —
initial
revenues
                                                                            

In the second quarter of 2013, three licensees individually accounted for 41%,
20% and 12% of revenues recognized, as compared to one licensee individually
accounting for 72% of revenues recognized during the second quarter of 2012.

Cost of Revenues (in thousands):

                   Three Months Ended June 30,     Change
                     2013            2012              $            %
                     
Inventor             $   5,610         $  9,573          $ (3,963 )     (41 )%
royalties
Contingent legal     4,024             6,607             (2,583   )     (39 )%
fees
                                                                            

Second quarter 2013 total revenues, less inventor royalties expense and
contingent legal fees expense was $13,476,000, or 58% of second quarter 2013
revenues, as compared to $34,304,000, or 68% of revenues in the comparable
prior year quarter. The decrease in total revenues, less inventor royalties
expense and contingent legal fees expense as a percentage of total revenues
was primarily due to a significantly higher percentage of revenues recognized
during the three months ended June 30, 2012 having lower or no corresponding
contingent legal fee obligations, as compared to the revenues recognized
during the three months ended June30, 2013.

The economic terms of the patent portfolio acquisition agreements and
contingent legal fee arrangements, if any, including royalty rates, if any,
contingent fee rates, if any, and other terms, vary across the patent
portfolios owned or controlled by our operating subsidiaries. These expenses
fluctuate period to period, based on the amount of revenues recognized each
period, the terms and conditions of revenue agreements executed each period
and the mix of specific patent portfolios with varying economic terms and
characteristics generating revenues each period.

                       Three Months Ended June 30,     Change
                         2013            2012              $          %
                                                                          
Litigation and
licensing expenses -     $   9,918         $  5,268          $ 4,650      88 %
patents
                                                                             

Litigation and licensing expenses-patents in the second quarter 2013 increased
due primarily to an increase in strategic patent portfolio prosecution costs,
an increase in international enforcement costs, and higher net levels of
litigation support and third-party technical consulting expenses associated
with our continued investment in ongoing and new licensing and enforcement
programs commenced since the end of the comparable prior year quarter. We
expect patent-related legal expenses to continue to fluctuate period to period
in connection with our current and future patent acquisition, development,
licensing and enforcement activities.

                      Three Months Ended June 30,     Change
                        2013             2012             $          %
                                                                         
Amortization of         $   12,578         $ 5,393          $ 7,185      133 %
patents
                                                                             

Second quarter 2013 non-cash patent amortization charges increased due
primarily to an increase in amortization expense related to new patent
portfolios acquired since the end of the prior year period totaling $3,990,000
and an increase in scheduled patent amortization related to patent portfolios
acquired in the latter portion of the prior year quarter totaling $2,097,000.

Other Operating Expenses (in thousands):
                      Three Months Ended June 30,     Change
                        2013           2012               $           %
                                                                          
Marketing, general
and administrative      $  6,916         $ 5,903            $ 1,013       17 %
expenses
Non-cash stock
compensation            6,268          6,000             268          4  %
expense - MG&A
Total marketing,
general and             $  13,184       $ 11,903          $ 1,281      11 %
administrative
expenses
                                                                             

Second quarter 2013 marketing, general and administrative expenses increased
due primarily to a net increase in licensing, business development, and
engineering personnel since the end of the prior year quarter and a net
increase in corporate facilities and general and administrative costs.

Income Taxes:
                   Three Months Ended June 30,     Change
                     2013           2012               $           %
                                                                       
Benefit from
(provision for)      $   9,050        $ (3,494 )         $ 12,544      (359 )%
income taxes (in
thousands)
Effective tax        40         %     35       %
rate
                                                                       

The tax benefit (provision) for the second quarter of 2013, as compared to the
prior year quarter, included the impact of the following:

  *A tax benefit for the second quarter of 2013 which reflects the
    application of an estimated annual effective tax rate of approximately 40%
    to the GAAP pre-tax net loss reported for the second quarter of 2013.
  *$1.5 million of foreign withholding taxes withheld by the applicable
    foreign tax authority on revenue agreements executed with third party
    licensees domiciled in certain foreign jurisdictions. The 2013 tax
    provision contemplates utilization of the foreign taxes withheld in 2013
    as a credit against income tax expense calculated for financial statement
    purposes.
  *Noncash tax expense calculated without the excess benefit related to the
    exercise and vesting of equity-based incentive awards, which was credited
    to additional paid-in capital, not taxes payable, totaling $138,000 and
    $3.2 million for the second quarter of 2013 and 2012, respectively.

Financial Condition (in thousands)
Summary Balance Sheet Information:
                                   June 30, 2013     December 31, 2012
                                       
Cash and cash equivalents and          $   320,125           $     311,279
investments
Accounts receivable                    16,781                9,843
Total assets                           680,592               668,717
Accounts payable and accrued           15,593                9,235
expenses
Royalties and contingent legal         19,986                12,508
fees payable
Accrued patent acquisition             8,507                 500
costs
Total liabilities                      61,688                50,239
                                                             

Summary Cash Flow Information:
                Three Months Ended June      Six Months Ended June 30,
                    30,
                    2013        2012               2013         2012
                                                                    
Net cash
provided by
(used in):
Operating           $ 1,279       $ 14,453           $ 18,104       $ 63,405
activities
Investing           (39,644 )     (36,227  )         (87,858  )     (313,113 )
activities
Financing           (5,887  )     3,142              (3,141   )     231,841
activities
                                                                             

Patent Acquisition Costs. Patent related acquisition costs paid in the second
quarter of 2013 totaled $2,250,000, as compared to $38,335,000 during the
comparable prior year quarter. As of June 30, 2013 and June 30, 2012, accrued
patent acquisition costs related to patent portfolios acquired during the
second quarter of 2013 and 2012 totaled $8,507,000 and $10,200,000,
respectively.

Quarterly Dividends Paid. Cash outflows from financing activities for the
second quarter of 2013 included the quarterly cash dividend of $0.125 per
share, paid on May 30, 2013 to shareholders of record at close of business on
May 3, 2013, totaling $6,149,000.

See “Business Highlights and Recent Developments” below for a summary of
patent portfolio acquisitions during the current quarter.

Refer to the section below entitled “Summary Financial Information” for
additional summary consolidated balance sheet, statements of operations and
cash flow information as of and for the applicable periods presented.

INFORMATION ABOUT NON-GAAP FINANCIAL MEASURES

As used herein, “GAAP” refers to accounting principles generally accepted in
the United States of America. To supplement our consolidated financial
statements prepared and presented in accordance with GAAP, this earnings
release includes financial measures, including (1) non-GAAP net income and (2)
non-GAAP Earnings Per Share (“EPS”), that are considered non-GAAP financial
measures as defined in Rule 101 of Regulation G promulgated by the Securities
and Exchange Commission. Generally, a non-GAAP financial measure is a
numerical measure of a company's historical or future performance, financial
position, or cash flows that either excludes or includes amounts that are not
normally excluded or included in the most directly comparable measure
calculated and presented in accordance with GAAP. The presentation of this
non-GAAP financial information is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information prepared and
presented in accordance with GAAP.

We use these non-GAAP financial measures for internal financial and
operational decision making purposes and as a means to evaluate
period-to-period comparisons of the performance and results of operations of
our core business. Our management believes that these non-GAAP financial
measures provide meaningful supplemental information regarding the performance
of our core business by excluding non-cash stock compensation charges,
non-cash patent amortization charges and excess benefit related non-cash tax
expense, that may not be indicative of our recurring core business operating
results. These non-GAAP financial measures also facilitate management's
internal planning and comparisons to our historical performance and liquidity.
We believe these non-GAAP financial measures are useful to investors as they
allow for greater transparency with respect to key metrics used by management
in its financial and operational decision making and are used by our
institutional investors and the analyst community to help them analyze the
performance and operational results of our core business.

Non-GAAP Net income and EPS.We define non-GAAP net income as net income
calculated in accordance with GAAP, plus non-cash stock compensation charges,
non-cash patent amortization charges and excess benefit related non-cash tax
expense. Non-GAAP EPS is defined as non-GAAP net income divided by the
weighted average outstanding shares, on a fully-diluted basis, calculated in
accordance with GAAP, for the respective reporting period.

Due to the inherent volatility in stock prices, the use of estimates and
assumptions in connection with the valuation and expensing of share-based
awards and the variety of award types that companies can issue under FASB ASC
Topic 718, management believes that providing a non-GAAP financial measure
that excludes non-cash stock compensation allows investors to make meaningful
comparisons between our recurring core business operating results and those of
other companies, as well as providing our management with a critical tool for
financial and operational decision making and for evaluating our own
period-to-period recurring core business operating results. Similarly, due to
the variability associated with the timing and amount of patent acquisition
payments and estimates inherent in the capitalization and amortization of
patent acquisition costs, management believes that providing a non-GAAP
financial measure that excludes non-cash patent amortization charges allows
investors to make meaningful comparisons between our recurring core business
operating results and those of other companies, and also provides our
management with a useful tool for financial and operational decision making
and for evaluating our own period-to-period recurring core business operating
results. Lastly, for financial reporting purposes, tax expense is required to
be calculated without the excess tax benefit related to the exercise and
vesting of equity-based incentive awards, however, the deduction related to
the exercise and vesting of equity-based incentive awards is available to
offset taxable income on our consolidated tax returns. Accordingly, the
non-cash tax expense calculated without the excess benefit for financial
statement purposes is credited to additional paid-in capital, not taxes
payable, and does not represent a cash tax obligation. Management believes
that providing a non-GAAP financial measure that excludes excess benefit
related non-cash tax expense allows investors to assess our net results and
the economic impact of income taxes based largely on cash tax obligations,
make more meaningful comparisons between our recurring core business net
results and those of other companies, and also provides our management with a
useful tool for financial and operational decision making and for evaluating
our own period-to-period recurring core business net results.

There are a number of limitations related to the use of non-GAAP net income
and EPS versus net income and EPS calculated in accordance with GAAP. For
example, non-GAAP net income excludes significant non-cash stock compensation
charges, non-cash patent amortization charges and excess benefit related
non-cash tax expense that are recurring, and will continue to be recurring for
the foreseeable future. In addition, non-cash stock compensation is a critical
component of our employee compensation programs and non-cash patent
amortization reflects the cost of certain patent portfolio acquisitions,
amortized on a straight-line basis over the estimated economic useful life of
the respective patent portfolio, and may reflect the acceleration of
amortization related to recoupable up-front patent portfolio acquisition
costs. Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from non-GAAP net income and
EPS and evaluating non-GAAP net income and EPS in conjunction with net income
and EPS calculated in accordance with GAAP.

The accompanying table provided below provides a reconciliation of the
non-GAAP financial measures presented to the most directly comparable
financial measures prepared in accordance with GAAP.

                ______________________________________________

A conference call is scheduled for today. The Acacia Research presentation and
Q&A will start at 1:30 p.m. Pacific Time (4:30 p.m. Eastern).

To listen to the presentation by phone, dial (888) 646-0797 for domestic
callers and (706) 758-6764 for international callers, both of whom will need
to enter the conference ID 70387697 when prompted. A replay of the audio
presentation will be available for 30 days at (855) 859-2056 for domestic
callers and (404) 537-3406 for international callers, both of whom will need
to enter the Conference ID 70387697 when prompted.

The call is being webcast by CCBN and can be accessed at Acacia's website at
www.acaciaresearch.com.

ABOUT ACACIA RESEARCH CORPORATION

Acacia Research Corporation's subsidiaries partner with inventors and patent
owners, license the patents to corporate users, and share the revenue. Acacia
Research Corporation's subsidiaries control over 250 patent portfolios,
covering technologies used in a wide variety of industries.

Information about Acacia Research Corporation and its subsidiaries is
available at www.acaciaresearchgroup.com and www.acaciaresearch.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995

This news release contains forward-looking statements within the meaning of
the “safe harbor” provisions of the Private Securities Litigation Reform Act
of 1995. These statements are based upon our current expectations and speak
only as of the date hereof. Our ability to become the licensing partner for
companies, and our actual results may differ materially and adversely from
those expressed in any forward-looking statements as a result of various
factors and uncertainties, including the effect of the global economic
downturn on technology companies, the ability to successfully develop
licensing programs and attract new business, rapid technological change in
relevant markets, changes in demand for current and future intellectual
property rights, legislative, regulatory and competitive developments
addressing licensing and enforcement of patents and/or intellectual property
in general and general economic conditions. Our Annual Report on Form 10-K,
recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports
on Forms 8-K and 8-K/A, and other SEC filings discuss some of the important
risk factors that may affect our business, results of operations and financial
condition. We undertake no obligation to revise or update publicly any
forward-looking statements for any reason.

The results achieved in the most recent quarter are not necessarily indicative
of the results to be achieved by us in any subsequent quarters, as it is
currently anticipated that Acacia Research Corporation's financial results
will vary, and may vary significantly, from quarter to quarter. This variance
is expected to result from a number of factors, including risk factors
affecting our results of operations and financial condition referenced above,
and the particular structure of our licensing transactions, which may impact
the amount of inventor royalties and contingent legal feesexpenses we incur
period to period.


ACACIA RESEARCH CORPORATION
SUMMARY FINANCIAL INFORMATION
(In thousands, except share and per share information)
(Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                    
                   Three Months Ended June 30,           Six Months Ended June 30,
                   2013             2012               2013             2012
                                                                            
Revenues           $ 23,110          $ 50,484          $ 99,971          $ 149,524    
Operating
costs and
expenses:
Cost of
revenues:
Inventor             5,610              9,573              24,091             17,167
royalties
Contingent           4,024              6,607              19,056             10,355
legal fees
Litigation and
licensing            9,918              5,268              19,566             8,649
expenses -
patents
Amortization         12,578             5,393              24,308             10,519
of patents
Marketing,
general and
administrative
expenses
(including
non-cash stock
compensation
expense of
$6,268 and
$11,426 for
the three and        13,184             11,903             27,035             25,634
six months
ended June 30,
2013,
respectively,
and $6,000 and
$11,090 for
the three and
six months
ended June 30,
2012,
respectively)
Research,
consulting and
other expenses      726              1,967            1,750            3,083      
- business
development
Total
operating           46,040           40,711           115,806          75,407     
costs and
expenses
Operating            (22,930    )       9,773              (15,835    )       74,117
income (loss)
                                                                            
Total other         400              102              1,690            158        
income
Income (loss)
from
operations
before               (22,530    )       9,875              (14,145    )       74,275
provision for
(benefit from)
income taxes
Provision for
(benefit from)      9,050            (3,494     )      5,778            (18,241    )
income taxes
Net income
(loss)
including
noncontrolling       (13,480    )       6,381              (8,367     )       56,034
interests in
operating
subsidiaries
Net (income)
loss
attributable
to                  977              (60        )      977              215        
noncontrolling
interests in
operating
subsidiaries
Net income
(loss)
attributable       $ (12,503    )     $ 6,321           $ (7,390     )     $ 56,249     
to Acacia
Research
Corporation
                                                                            
Net income
(loss) per
common share
attributable
to Acacia
Research
Corporation:
Basic earnings
(loss) per         $ (0.26      )     $ 0.13            $ (0.15      )     $ 1.22       
share
Diluted
earnings           $ (0.26      )     $ 0.13            $ (0.15      )     $ 1.19       
(loss) per
share
Weighted
average number
of shares           48,008,998       47,944,193       47,934,810       46,155,846 
outstanding,
basic
Weighted
average number
of shares           48,008,998       48,938,766       47,934,810       47,208,105 
outstanding,
diluted
                                                                                         


Reconciliation of GAAP Net Income (Loss) and EPS to Non-GAAP Net Income and EPS
(In thousands, except share and per share data)

                   Three Months Ended June 30,       Six Months Ended June 30,
                     2013             2012             2013             2012
                                                                            
GAAP net income      $ (12,503    )     $ 6,321          $ (7,390     )     $ 56,249
(loss)
                                                                            
Non-cash stock         6,268              6,000            11,426             11,090
compensation
Non-cash patent        12,578             5,393            24,308             10,519
amortization
Excess benefit
related non-cash      138             3,239           847              10,850
tax expense
                                                                            
Non-GAAP net         $ 6,481           $ 20,953         $ 29,191          $ 88,708
income
                                                                            
Pro forma
non-GAAP net
earnings per         $ 0.13            $ 0.44           $ 0.61            $ 1.92
common share —
basic
Pro forma
non-GAAP net
earnings per         $ 0.13            $ 0.43           $ 0.60            $ 1.88
common share —
diluted
GAAP
weighted-average      48,008,998       47,944,193      47,934,810       46,155,846
shares — basic
GAAP
weighted-average      48,458,797       48,938,766      48,407,023       47,208,105
shares — diluted
                                        


ACACIA RESEARCH CORPORATION
SUMMARY FINANCIAL INFORMATION (CONTINUED)
(In thousands)
(Unaudited)

CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION

                                            June 30,      December 31,
                                                2013              2012
ASSETS
Current assets:
Cash and cash equivalents                       $ 148,909         $   221,804
Short-term investments                          171,216           89,475
Accounts receivable                             16,781            9,843
Prepaid expenses and other current              8,455             3,441
assets
Total current assets                            345,361           324,563
                                                                  
Property and equipment, net of
accumulated depreciation and                    607               339
amortization
Patents, net of accumulated                     303,489           313,529
amortization
Goodwill                                        30,149            30,149
Other assets                                    986               137
                                                $ 680,592         $   668,717
                                                                  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses /         $ 22,100          $   9,485
costs
Royalties and contingent legal fees             19,986            12,508
payable
Total current liabilities                       42,086            21,993
                                                                  
Deferred income taxes                           17,279            27,831
Other liabilities                               2,323             415
Total liabilities                               61,688            50,239
Total stockholders’ equity                      618,904           618,478
                                                $ 680,592         $   668,717
                                                                      


ACACIA RESEARCH CORPORATION
SUMMARY FINANCIAL INFORMATION (CONTINUED)
(In thousands)
(Unaudited)

CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  
                       Three Months Ended June 30,     Six Months Ended June 30,
                       2013          2012            2013          2012
Cash flows from
operating
activities:
Net income (loss)
including
noncontrolling         $ (13,480 )     $ 6,381         $ (8,367  )     $ 56,034
interests in
operating
subsidiaries
Adjustments to
reconcile net
income (loss)
including
noncontrolling
interests in
operating
subsidiaries to
net cash provided
by operating
activities:
Depreciation and       12,631          5,427           24,405          10,585
amortization
Non-cash stock         6,268           6,000           11,426          11,090
compensation
Excess tax
benefits from          (138      )     (3,239    )     (847      )     (10,850   )
stock-based
compensation
Change in
valuation              —               —               —               (10,237   )
allowance on
deferred taxes
Other                  —               49              —               49
Changes in assets
and liabilities:
Accounts               28,570          (9,542    )     (6,938    )     (7,907    )
receivable
Prepaid expenses       (4,202    )     648             (5,863    )     (271      )
and other assets
Accounts payable
and accrued            (1,068    )     3,492           7,362           13,795
expenses / costs
Royalties and
contingent legal       (16,750   )     5,008           7,478           (4,405    )
fees payable
Deferred income        (10,552   )     229            (10,552   )     5,522     
tax
                                                                       
Net cash provided
by operating           1,279          14,453         18,104         63,405    
activities
                                                                       
Cash flows from
investing
activities:
Purchases of
property and           (124      )     (164      )     (365      )     (188      )
equipment
Purchase of
available-for-sale     (77,817   )     (95,190   )     (175,042  )     (239,952  )
investments
Maturities and
sales of               40,547          97,462          93,809          117,462
available-for-sale
investments
Purchase of
ADAPTIX, Inc., net     —               —               —               (150,000  )
of cash acquired
Patent acquisition     (2,250    )     (38,335   )     (6,260    )     (40,435   )
costs paid
                                                                       
Net cash used in
investing              (39,644   )     (36,227   )     (87,858   )     (313,113  )
activities
                                                                       
Cash flows from
financing
activities:
Proceeds from sale
of common stock,       (6,149    )     (101      )     (6,149    )     218,983
net of issuance
costs
Contributions from
noncontrolling
interests in           —               —               1,920           1,920
operating
subsidiary
Excess tax
benefits from          138             3,239           847             10,850
stock-based
compensation
Proceeds from
exercises of stock     124            4              241            88        
options
                                                                       
Net cash provided
by (used in)           (5,887    )     3,142          (3,141    )     231,841   
financing
activities
                                                                       
Decrease in cash
and cash               (44,252   )     (18,632   )     (72,895   )     (17,867   )
equivalents
                                                                       
Cash and cash
equivalents,           193,161        315,498        221,804        314,733   
beginning
                                                                       
Cash and cash
equivalents,           $ 148,909      $ 296,866      $ 148,909      $ 296,866 
ending
                                                                                 

Business Highlights and Recent Developments^(2)

Business highlights of the second quarter of 2013 and recent developments
include the following:

Revenues for the three months ended June30, 2013 included fees from the
following technology licensing and enforcement programs:

•  Broadband Communications           •  Interstitial and Pop-Up Internet
    technology*                              Advertising technology
•   Business Process Modeling            •   Lighting Ballast technology
    technology
•   Camera Support technology            •   Location Based Services
                                             technology
•   Catheter Ablation technology*        •   Messaging technology
•   Digital Imaging technology           •   Mobile Computer Synchronization
                                             technology
•   Digital Signal Processing            •   NOR Flash technology
    Architecture technology
•   DMT technology                       •   Online Auction Guarantees
                                             technology
•   Domain Name Redirection              •   Online Gaming technology
    technology
•   Gas Modulation Control Systems       •   Semiconductor Packaging
    technology                               technology*
•   Greeting Card technology             •   Surgical Access technology
•   Improved Memory Manufacturing        •   Suture Anchors technology
    technology
•   Information Portal Software          •   Telematics technology
    technology
•   Information Storage, Searching &     •   User Programmable Engine Control
    Retrieval technology                     technology
•   Intercarrier SMS technology          •   Video Analytics for Security
                                             technology

________________________________________
*Initial revenues recognized during the three months ended June 30, 2013.

  *A subsidiary of Acacia Research Group LLC entered into a patent rights
    agreement with RPX Corporation.
  *Advanced Data Access LLC, Smart Memory Solutions LLC and Smart Foundry
    Solutions LLC entered into a settlement agreement with Toshiba
    Corporation. This agreement resolved litigation that was pending in the
    United States District Court for the Eastern District of Texas, the United
    States District Court for the Northern District of California and United
    States District Court for the Central District of California.
  *Brandywine Communications Technologies LLC entered into license and
    settlement agreements with the following companies:

    •   3CX, Ltd.                      •  Microserv, Inc.
        •     BAIS, Inc. dba Bay Area         •   Mitel Network Corporation
              Internet Solutions
        •     Estech Systems, Inc.            •   Nextgen Internet Systems,
                                                  Inc.
        •     Honeycomb Internet Services,    •   Other World Computing, Inc.
              LLC dba Winternet
        •     Interlync Internet Services,    •   Precision Communications,
              Inc.                                Inc.
        •     iSelect Internet, Inc.          •   The David Aldridge Company,
                                                  Inc.
        •     MBO Data, LLC                   •   West Coast Internet, Inc.

  *Catheter Ablation Solutions LLC entered into a settlement agreement with
    American Medical Systems, Inc. The agreement resolved litigation that was
    pending in the United States District Court for the Central District of
    California, Southern Division.
  *Criminal Activity Surveillance LLC entered into a license and settlement
    agreement with Pelco, Inc. This agreement resolved patent litigation that
    was pending in the United States District Court for the Eastern District
    of California.
  *Gametek LLC entered into a settlement agreement that resolved the
    litigation between Gametek LLC and Gameview Studios, LLC, that was pending
    in the United States District Court for the Northern District of
    California under terms that are confidential.
  *Unified Messaging Solutions LLC entered into a license and settlement
    agreement with Capital One Financial Corporation and Ing Direct. This
    agreement resolved patent litigation that was pending in the United States
    District Court for the Western District of Texas.
  *Unified Messaging Solutions LLC entered into a settlement and license
    agreement with Citigroup Inc. The agreement resolved litigation that was
    pending in the United States District Court for the Northern District of
    Illinois.
  *Unified Messaging Solutions LLC entered into a settlement and license
    agreement with VMware, Inc. The agreement resolved litigation that was
    pending in the United States District Court for the Eastern District of
    Texas and the United States District Court for the Northern District of
    Illinois.
  *Acacia Research Group LLC and its affiliates continued their patent and
    patent rights acquisition activities, acquiring a total of 7 new patent
    portfolios in the second quarter of 2013, including the following:

       *In April 2013, acquired over 40 issued patents relating to
         microprocessor and memory technology and will share licensing revenue
         with the patent owner.
       *In April 2013, acquired the rights to an automotive illumination
         patent portfolio from Rambus Inc. (Nasdaq: RMBS), the innovative
         technology solutions company. The portfolio relates to automotive and
         vehicular illumination applications including headlights, taillights,
         and internal and external lighting. As part of this transaction,
         Rambus received an initial upfront payment and is expected to receive
         subsequent payments.
       *In June 2013, acquired patents for high speed circuit interconnect
         and display control technology used in consumer electronics, PCs and
         mobile devices such as smartphones, tablets, and laptops from a major
         semiconductor technology company.
       *In June 2013, acquired patents for content security used in consumer
         electronics and mobile devices such as smartphones, tablets, and
         laptops from a major semiconductor technology company.
       *In June 2013, acquired the rights to a patent portfolio covering ink
         jet printer and ink jet printing technologies.
       *In June 2013, acquired the rights to a patent portfolio covering
         printer and printing technologies.
       *In June 2013, obtained U.S. and Canadian patents relating to energy
         efficiency in commercial and residential building markets. The
         portfolio broadly covers reflective and radiant barrier insulation
         technology which dramatically improves heating and cooling
         efficiency.

  *Charlotte Rutherford joined Acacia Research Group LLC as Senior Vice
    President.

    Ms. Rutherford was most recently Deputy General Counsel, Intellectual
    Property for Schlumberger Limited, and designed/restructured and managed
    the global IP departments at Schlumberger, Colgate-Palmolive and Conoco
    over the past 12 years.

    She was previously Vice President and Associate General Counsel
    Intellectual Property for Colgate-Palmolive Inc. and Chief Intellectual
    Property Counsel for Conoco Inc.

    During her IP career, Ms. Rutherford has developed global IP licensing
    programs for several Fortune 500 companies with thousands of patents
    covering energy, electronics, specialty materials, NMR and sensor
    technologies that resulted in major revenue opportunities.

    Earlier in her career, Ms. Rutherford was General Counsel of Power
    Management and Advanced Magnetics for Honeywell International, a partner
    and legal manager of the chemical and pharmaceutical intellectual property
    practice with Gibbons, Assistant General Counsel for Minerals
    Technologies, formerly a division of Pfizer, Inc., and was Senior Counsel
    at Amerada Hess Corporation and Shell Oil Company.

    Ms. Rutherford holds a Bachelor and Master of Science in Engineering from
    Auburn University, an MBA from Rutgers University and a Juris Doctor from
    Loyola University.

  *Jaime Siegel joined Acacia Research Group LLC as Senior Vice President.

    Mr. Siegel was most recently Vice President, Senior IP Counsel of Sony
    Corporation of America and its Representative to Taiwan.

    Mr. Siegel's 15 year career at Sony included responsibilities for
    international IP licensing, litigation, mergers and acquisitions and
    strategic planning.

    During his career at Sony, Mr. Siegel led teams in developing numerous
    offensive licensing programs around international patent portfolios. He
    was also responsible for the identification and negotiation of
    intellectual property acquisitions and partnerships and negotiated joint
    ventures with the purpose of licensing intellectual property.

    Mr. Siegel was the chief negotiator on licensing projects in Europe,
    Korea, China, Taiwan and the United States including several core asset
    licensing programs. He also served on the Board of Directors of MPEG LA
    LLC, including as Chairman of the Board.

    Earlier in his career, Mr. Siegel was an Associate with both Kenyon &
    Kenyon and Fish & Neave.

    Mr. Siegel holds a B.S. Mechanical Engineering from Clarkson University
    and a J.D. from the Brooklyn Law School.

_______________________

       As used herein, “Acacia Research Corporation,” “we,” “us,” and “our”
       refer to Acacia Research Corporation and/or its wholly and
^(1)  majority-owned operating subsidiaries. All intellectual property
       acquisition, development, licensing and enforcement activities are
       conducted solely by certain of Acacia Research Corporation's wholly and
       majority-owned operating subsidiaries.
       
       Acacia Research Group LLC, Advanced Data Access LLC, Brandywine
       Communications Technologies LLC, Catheter Ablation Solutions LLC,
^(2)   Criminal Activity Surveillance LLC, Gametek LLC and Unified Messaging
       Solutions LLC are wholly and majority-owned operating subsidiaries of
       Acacia Research Corporation.

Contact:

Acacia Research Corporation
Rob Stewart
Investor Relations
Tel 949-480-8300
Fax 949-480-8301
or
Media Contact:
SpecOps Communications
Adam Handelsman
President & Founder
212-518-7721
adam@specopscomm.com