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

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

Business Wire

NEWPORT BEACH, Calif. -- October 17, 2013

Acacia Research Corporation^(1) (Nasdaq: ACTG) today reported results for the
three months ended September30, 2013.^(3)

  *Revenues in the third quarter of 2013 were $15,520,000, as compared to
    $34,939,000 in the comparable prior year quarter.
  *Revenues for the nine months ended September30, 2013 were $115,491,000,
    as compared to $184,463,000 in the comparable prior year period.
  *GAAP net loss in the third quarter of 2013 was $15,711,000, or $0.33 per
    diluted share, as compared to a GAAP net loss of $6,619,000, or $0.14 per
    diluted share for the comparable prior year quarter.
  *Non-GAAP net income in the third quarter of 2013 was $5,085,000, or $0.11
    per diluted share, as compared to Non-GAAP net income of $6,782,000, or
    $0.14 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 third quarter of 2013
    were $181,755,000, as compared to $205,258,000 as of the end of the prior
    year quarter.
  *Cash and cash equivalents and investments totaled $285,301,000 as of
    September30, 2013 compared to $311,279,000 as of December 31, 2012.

Approval of Quarterly Dividend. Acacia Research Corporation also announced
today that its Board of Directors has approved its third quarterly cash
dividend, payable in the amount of $0.125 per share, which will be paid on
November 29, 2013, to shareholders of record at the close of business on
November 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.

Consolidated Financial Results - Overview

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

                    Three Months Ended           Nine Months Ended
                      September 30,                  September 30,
                      2013          2012           2013          2012
                                                                     
Revenues (in          $ 15,520        $ 34,939       $ 115,491       $ 184,463
thousands)
Net income (loss)     $ (15,711 )     $ (6,619 )     $ (23,101 )     $ 49,630
(in thousands)
Non-GAAP net
income (in            $ 5,085         $ 6,782        $ 34,276        $ 95,490
thousands)
Diluted earnings
(loss) per            $ (0.33   )     $ (0.14  )     $ (0.49   )     $ 1.00
share^(3)
Pro forma
non-GAAP net
earnings per          $ 0.11          $ 0.14         $ 0.71          $ 2.00
common share -
diluted^(3)
New agreements        24              33             96              111
executed
Licensing and
enforcement
programs              24              31             47              57
generating
revenues
Licensing and
enforcement           5               9              19              22
programs with
initial revenues
New patent            6               13             22              45
portfolios
                                                                     

As of September30, 2013, trailing twelve-month revenues were as follows (in
thousands):

As of Date:          Trailing Twelve-   % Change
                       Month Revenues
September 30, 2013     $     181,755        (10  )%
June 30, 2013          $     201,174        (12  )%
March 31, 2013         $     228,548        (9   )%
December 31, 2012      $     250,727        22   %
September 30, 2012     $     205,258        —    %


As of September30, 2013, on a consolidated basis, we have generated revenues
from 162 technology licensing and enforcement programs, as compared to 134
programs as of the end of the prior year quarter.

Summary Financial Results
For the Three Months Ended September30, 2013 and 2012

Revenues (in thousands):
                            Three Months Ended      Change
                              September 30,
                              2013       2012         $             %
                                                                        
Revenues                      $ 15,520     $ 34,939     $ (19,419 )     (56 )%
                                                                        
New revenue agreements        24           33           —               —
Licensing programs            24           31           —               —
generating revenues
Licensing programs with       5            9            —               —
initial revenues


In the third quarter of 2013, three licensees individually accounted for 34%,
31% and 19% of revenues recognized, as compared to five licensees individually
accounting for 30%, 13%, 10%, 10%, and 10% of revenues recognized during the
third quarter of 2012.

Cost of Revenues (in thousands):

                        Three Months Ended    Change
                          September 30,
                          2013      2012        $            %
                          
Inventor royalties        $ 2,353     $ 5,032     $ (2,679 )     (53 )%
Contingent legal fees     2,547       8,833       (6,286   )     (71 )%


Third quarter 2013 total revenues, less inventor royalties expense and
contingent legal fees expense was $10,620,000, or 68% of third quarter 2013
revenues, as compared to $21,074,000, or 60% of revenues in the comparable
prior year quarter. The increase in total revenues, less inventor royalties
expense and contingent legal fees expense as a percentage of total revenues
was primarily due to, on average, a higher percentage of revenues recognized
during the three months ended September30, 2013 having lower corresponding
contingent legal fee rates, as compared to the revenues recognized during the
three months ended September30, 2012.

Inventor royalties and contingent legal fees expenses fluctuate period to
period, based on the economic terms of the patent portfolio acquisition
agreements and contingent legal fee arrangements, if any, associated with the
specific patent portfolios generating revenues each period.

                                   Three Months Ended     Change
                                     September 30,
                                     2013       2012        $         %
                                                                          
Litigation and licensing             $ 10,870     $ 5,973     $ 4,897     82 %
expenses - patents


Third quarter 2013 litigation and licensing expenses increased due primarily
to an increase in international enforcement costs and an increase in strategic
patent portfolio prosecution costs, including litigation support and
third-party technical consulting expenses, associated with ongoing and new
licensing and enforcement programs commenced since the end of the comparable
prior year quarter. We expect litigation and licensing 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      Change
                            September 30,
                            2013       2012         $         %
                                                                  
Amortization of patents     $ 12,615     $ 10,412     $ 2,203     21 %


Third quarter 2013 non-cash patent amortization charges increased due
primarily to an increase in quarterly amortization expense related to patent
portfolios acquired since the end of the prior year period totaling
$4,419,000. The increase was partially offset by a decrease in accelerated
patent amortization related to patent portfolio dispositions totaling
$2,240,000.

Marketing, General and Administrative Expenses (in thousands):

                                  Three Months Ended      Change
                                    September 30,
                                    2013       2012         $         %
                                                                          
Marketing, general and              $ 8,849      $ 5,629      $ 3,220     57 %
administrative expenses
Non-cash stock compensation         9,386       6,285        3,101       49 %
expense - MG&A
Total marketing, general and        $ 18,235     $ 11,914     $ 6,321     53 %
administrative expenses


Third 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, an increase in
non-recurring personnel severance costs, and a net increase in corporate
legal, facilities and general and administrative costs.

The increase also reflects the impact of non-recurring charges associated with
Mr. Ryan's retirement severance package, which was approved by the
compensation committee of the board of directors of the Company on July 29,
2013, consisting of: (a) a lump sum severance payment, including Cobra
benefits, totaling $850,000, representing 18 months of Mr. Ryan’s annual base
salary and benefits; and (b) the acceleration of vesting of 80,001 shares of
restricted stock held by Mr. Ryan resulting in a non-cash stock compensation
charge totaling $1,823,000. The severance package became effective upon July
31, 2013, the date of Mr. Ryan’s resignation.

Other Operating Expenses:

Third quarter 2013 operating expenses also included a one-time, non-recurring
charge related to the resolution of a dispute concerning legal fees associated
with a prior matter totaling $3,506,000.

Income Taxes:

                             Three Months Ended         Change
                               September 30,
                               2013         2012          $          %
                                                                         
Benefit from income taxes      $ 19,570       $ 1,938       $ 17,632     910 %
(in thousands)
Effective tax rate             56       %     23      %


The tax benefit for the third quarter of 2013 and 2012 reflects the
application of an estimated annual effective tax rate to the GAAP pre-tax net
loss reported for the third quarter of 2013. Discrete items impacting the
effective tax rate for the prior year period were primarily comprised of $10.2
million of tax benefits recognized resulting from the release of valuation
allowance on the majority of our net deferred tax assets in the first quarter
of 2012.

Financial Condition (in thousands)
Summary Balance Sheet Information:
                                                        
                                      September 30, 2013     December 31, 2012
                                      
Cash and cash equivalents and         $      285,301         $     311,279
investments
Accounts receivable                   16,812                 9,843
Total assets                          640,209                668,717
Accounts payable and accrued          16,310                 9,485
expenses
Royalties and contingent legal        8,313                  12,508
fees payable
Accrued patent acquisition costs      8,750                  —
Total liabilities                     34,936                 50,239
                                                             

Summary Cash Flow Information:

                     Three Months Ended          Nine Months Ended
                       September 30,                 September 30,
                       2013          2012          2013         2012
                                                                    
Net cash provided
by (used in):
Operating              $ (22,923 )     $ 6,825       $ (4,819 )     $ 70,230
activities
Investing              (277      )     (38,038 )     (88,135  )     (351,151 )
activities
Financing              (7,406    )     (1,502  )     (10,547  )     230,339
activities
                                                                             

Patent Acquisition Costs. Patent related acquisition costs paid in the third
quarter of 2013 totaled $4,156,000, as compared to $24,525,000 during the
comparable prior year quarter. As of September 30, 2013 and September 30,
2012, accrued patent acquisition costs related to patent portfolios acquired
during the third quarter of 2013 and 2012 totaled $3,750,000 and $8,000,000,
respectively.

Quarterly Dividends Paid. Cash outflows from financing activities for the
third quarter of 2013 included a quarterly cash dividend of $0.125 per share,
paid on August 30, 2013 to shareholders of record at close of business on
August 1, 2013, totaling $6,243,000.

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 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) 437-9481 for domestic
callers and (719) 325-2325 for international callers, both of whom will need
to enter the conference ID 1100393 when prompted. A replay of the audio
presentation will be available for 30 days at (888) 203-1112 for domestic
callers and (719) 457-0820 for international callers, both of whom will need
to enter the Conference ID 1100393 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.

Information about Acacia Research Corporation and its subsidiaries is
available at 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 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             Nine Months Ended
                      September 30,                  September 30,
                      2013          2012           2013          2012
                                                                     
Revenues              $ 15,520       $ 34,939      $ 115,491      $ 184,463 
Operating costs
and expenses:
Cost of revenues:
Inventor              2,353           5,032          26,444          22,199
royalties
Contingent legal      2,547           8,833          21,603          19,188
fees
Litigation and
licensing             10,870          5,973          30,436          14,622
expenses -
patents
Amortization of       12,615          10,412         36,923          20,931
patents
Marketing,
general and
administrative
expenses
(including
non-cash stock
compensation
expense of $9,386
and $20,812 for
the three and
nine months ended     18,235          11,914         45,270          37,548
September 30,
2013,
respectively, and
$6,285 and
$17,375 for the
three and nine
months ended
September 30,
2012,
respectively)
Research,
consulting and
other expenses -      730             1,139          2,480           4,222
business
development
Other                 3,506          —             3,506          —         
Total operating
costs and             50,856         43,303        166,662        118,710   
expenses
Operating income      (35,336   )     (8,364   )     (51,171   )     65,753
(loss)
                                                                     
Total other           280            (41      )     1,970          117       
income (loss)
Income (loss)
before benefit        (35,056   )     (8,405   )     (49,201   )     65,870
from (provision
for) income taxes
Benefit from
(provision for)       19,570         1,938         25,348         (16,303   )
income taxes
Net income (loss)
including
noncontrolling        (15,486   )     (6,467   )     (23,853   )     49,567
interests in
operating
subsidiaries
Net (income) loss
attributable to
noncontrolling        (225      )     (152     )     752            63        
interests in
operating
subsidiaries
Net income (loss)
attributable to       $ (15,711 )     $ (6,619 )     $ (23,101 )     $ 49,630  
Acacia Research
Corporation
                                                                     
Net income (loss)
per common share
attributable to
common
stockholders^(3):
Diluted earnings      $ (0.33   )     $ (0.14  )     $ (0.49   )     $ 1.00    
(loss) per share
                                                                               
                                                                               

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             Nine Months Ended
                       September 30,                  September 30,
                       2013          2012           2013          2012
                                                                      
GAAP net income        $ (15,711 )     $ (6,619 )     $ (23,101 )     $ 49,630
(loss)
                                                                      
Non-cash stock         9,386           6,285          20,812          17,375
compensation
Non-cash patent        12,615          10,412         36,923          20,931
amortization
Excess (benefit)
expense related        (1,205    )    (3,296   )     (358      )     7,554
non-cash tax
expense
                                                                      
Non-GAAP net           $ 5,085        $ 6,782       $ 34,276       $ 95,490
income
                                                                      
Pro forma non-GAAP
net earnings per       $ 0.11         $ 0.14        $ 0.71         $ 2.00
common share —
diluted^(3)
                                                                      
                                                                      

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

CONDENSED CONSOLIDATED BALANCE SHEETS
                                                         
                                            September 30,         December 31,
                                            2013                  2012
ASSETS
Current assets:
Cash and cash equivalents                   $   118,303           $   221,804
Short-term investments                      166,998               89,475
Accounts receivable                         16,812                9,843
Prepaid expenses and other current          9,881                 3,441
assets
Total current assets                        311,994               324,563
                                                                  
Property and equipment, net of
accumulated depreciation and                778                   339
amortization
Patents, net of accumulated                 296,272               313,529
amortization
Goodwill                                    30,149                30,149
Other assets                                1,016                 137
                                            $   640,209           $   668,717

LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable and accrued                $   16,310            $   9,485
expenses
Accrued patent acquisition costs            8,750                 —
Royalties and contingent legal fees         8,313                 12,508
payable
Total current liabilities                   33,373                21,993
                                                                  
Deferred income taxes                       241                   27,831
Other liabilities                           1,322                 415
Total liabilities                           34,936                50,239
Total stockholders’ equity                  605,273               618,478
                                            $   640,209           $   668,717
                                                                      
                                                                      

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

CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  
                       Three Months Ended              Nine Months Ended
                       September 30,                   September 30,
                       2013          2012            2013          2012
Cash flows from
operating
activities:
Net income (loss)
including
noncontrolling         $ (15,486 )     $ (6,467  )     $ (23,853 )     $ 49,567
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       12,680          10,449          37,085          21,034
amortization
Non-cash stock         9,386           6,285           20,812          17,375
compensation
Excess tax
(benefits) expense     1,205           3,296           358             (7,554    )
from stock-based
compensation
Change in
valuation              —               —               —               (10,237   )
allowance on
deferred taxes
Other                  (22       )     441             (22       )     490
Changes in assets                      
and liabilities:
Accounts               (31       )     (5,813    )     (6,969    )     (13,720   )
receivable
Prepaid expenses       (1,456    )     (1,214    )     (7,319    )     (1,485    )
and other assets
Accounts payable
and accrued            (488      )     (3,551    )     6,874           10,244
expenses / costs
Royalties and
contingent legal       (11,673   )     2,375           (4,195    )     (2,030    )
fees payable
Deferred income        (17,038   )     1,024          (27,590   )     6,546     
tax
                                                                       
Net cash provided
by (used in)           (22,923   )     6,825          (4,819    )     70,230    
operating
activities
                                                                       
Cash flows from
investing
activities:
Purchases of
property and           (214      )     (12       )     (579      )     (200      )
equipment
Purchase of
available-for-sale     (57,767   )     (65,055   )     (232,809  )     (305,007  )
investments
Maturities and
sales of               61,860          51,554          155,669         169,016
available-for-sale
investments
Purchase of
ADAPTIX, Inc., net     —               —               —               (150,000  )
of cash acquired
Patent acquisition     (4,156    )     (24,525   )     (10,416   )     (64,960   )
costs paid
                                                                       
Net cash used in
investing              (277      )     (38,038   )     (88,135   )     (351,151  )
activities
                                                                       
Cash flows from
financing
activities:
Proceeds from sale
of common stock,       —               —               —               218,983
net of issuance
costs
Dividends paid to      (6,243    )     —               (12,392   )     —
shareholders
Distributions to
noncontrolling
interests in           —               (312      )     —               (312      )
operating
subsidiary
Contributions from
noncontrolling
interests in           —               1,920           1,920           3,840
operating
subsidiary
Repurchased
restricted common      (18       )     —               (18       )     —
stock
Excess tax
(benefits) expense     (1,205    )     (3,296    )     (358      )     7,554
from stock-based
compensation
Proceeds from
exercises of stock     60             186            301            274       
options
                                                                       
Net cash provided
by (used in)           (7,406    )     (1,502    )     (10,547   )     230,339   
financing
activities
                                                                       
Decrease in cash
and cash               (30,606   )     (32,715   )     (103,501  )     (50,582   )
equivalents
                                                                       
Cash and cash
equivalents,           148,909        296,866        221,804        314,733   
beginning
                                                                       
Cash and cash
equivalents,           $ 118,303      $ 264,151      $ 118,303      $ 264,151 
ending
                                                                                 
                                                                                 

Business Highlights and Recent Developments^(2)

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

Revenues for the three months ended September30, 2013 included fees from the
following technology licensing and enforcement programs:

•  3G & 4G Wireless technology          •  Messaging technology
•   Automotive Safety, Navigation and      •   Mobile Enhancement Solutions
    Diagnostics technology                     technology
•   Broadband Communications               •   Online Auction Guarantees
    technology                                 technology
•   Camera Support technology              •   Online newsletters with links
                                               technology
•   Core Fiber Optic Network               •   Optical Networking technology*
    Architectures technology*
•   Digital Imaging technology             •   Reflective and Radiant Barrier
                                               Insulation technology*
•   DMT technology                         •   Semiconductor Packaging
                                               technology
•   Dynamic Transmissions technology*      •   Surgical Access technology
•   Gas Modulation Control Systems         •   Suture Anchors technology
    technology
•   Greeting Card technology               •   Telematics technology
•   Improved Memory Manufacturing          •   Video Analytics for Security
    technology                                 technology
•   Interstitial and Pop-Up Internet       •   Web Collaboration technology*
    Advertising technology

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

  *Acacia Research Group LLC entered into a patent rights agreement with RPX
    Corporation.
  *American Vehicular Sciences LLC entered into a settlement and patent
    license agreement with AISIN SEIKI Co., Ltd.
  *Brandywine Communications Technologies LLC entered into a settlement
    agreement with Grandstream Networks, Inc. This agreement resolved patent
    litigation that was pending in the United States District Court for the
    District of Delaware.
  *Brilliant Optical Solutions LLC and Google Inc. entered into an agreement
    that resolved the dispute between the parties that was pending in the
    United States District Court for the Western District of Missouri.
  *Brilliant Optical Solutions LLC entered into a settlement and license
    agreement with Windstream Corporation. This agreement resolved patent
    litigation that was pending in the United States District Court for the
    Eastern District of Missouri.
  *Cell And Network Selection LLC entered into a settlement and license
    agreement with Sierra Wireless America, Inc. This agreement resolved
    patent litigation that was pending in the United States District Court for
    the Eastern District of Texas.
  *Chip Packaging Solutions LLC entered into a settlement and license
    agreement with Texas Instruments, Inc. This agreement resolved patent
    litigation that was pending in the United States District Court for the
    Central District of California.
  *Criminal Activity Surveillance LLC entered into a settlement and license
    agreement with Bosch Security Systems, Inc. and Tyco Integrated Security
    LLC. This agreement resolved patent litigation that was pending in the
    United States District Court for the District of Delaware.
  *Digitech Image Technologies LLC entered into a settlement and license
    agreement with Casio America, Inc. and Casio Computer Co., Ltd. This
    agreement resolved patent litigation that was pending in the United States
    District Court for the Central District of California.
  *Express Card Systems LLC entered into settlement agreements with the
    following companies:

    •  Hewlett-Packard Company     •  Walgreen Co
        •   Meijer, Inc.                    •   Wal-Mart Stores, Inc
                                                

  *Labyrinth Optical Technologies LLC entered into a settlement and license
    agreement with Oclaro, Inc. This agreement resolved patent litigation that
    was pending in the United States District Court for the Northern District
    of California.
  *Mobile Enhancement Solutions LLC entered into a license agreement with
    Samsung Electronics Co., Ltd.
  *Unified Messaging Solutions LLC and Ameriprise Financial, Inc. have
    entered into an Agreement which resolves all disputes between the parties
    pending in the United States District Court for the Northern District of
    Illinois, Case Nos. 1:13-cv-00266 and 1:12-cv-06286.
  *Acacia Research Group LLC and its affiliates continued their patent and
    patent rights acquisition activities, acquiring a total of 6 new patent
    portfolios in the third quarter of 2013, including the following:

       *In August 2013, acquired a patent portfolio relating to semiconductor
         testing technology.
       *In August 2013, acquired 13 US and foreign patents and applications
         on fluorescence microscopy.
       *In September 2013, acquired a patent portfolio of over 20 US Patents
         and applications relating to post market sales data, multiple
         coordinated viewing devices and progressive deletion.
       *In September 2013, obtained a patent portfolio relating to power
         managed security system technology.
       *In September 2013, acquired a patent portfolio relating to
         professional and social media networking technology.

  *Hiro Seki has joined Acacia Research Group LLC as Senior Vice President.
    Mr. Seki will head Acacia’s business development and related work in Asia.

    Mr. Seki was most recently Chief IP Officer and General Manager,
    Intellectual Property Division of Renesas Electronics Corporation. Mr.
    Seki’s 30 year career at Renesas and previously at its co-parent company,
    Hitachi, Ltd., included responsibilities for IP licensing, litigation,
    patent acquisitions and business development. He was also responsible for
    IP asset management, including patent portfolio development and IP asset
    evaluation for various technologies.

    Mr. Seki has a B.S. and M.S. in physics from Waseda University, Tokyo. He
    is a registered patent attorney in Japan.

_______________________

       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, American Vehicular Sciences LLC, Brandywine
       Communications Technologies LLC, Brilliant Optical Solutions LLC, Cell
       And Network Selection LLC, Chip Packaging Solutions LLC, Criminal
^(2)   Activity Surveillance LLC, Digitech Image Technologies LLC, Express
       Card Systems LLC, Labyrinth Optical Technologies LLC, Mobile
       Enhancement Solutions LLC and Unified Messaging Solutions LLC are
       wholly and majority-owned operating subsidiaries of Acacia Research
       Corporation.
       
       Earnings and loss per share amounts presented herein are preliminary
       and were estimated using the two-class method pursuant to ASC
       260-10-45.Amounts provided herein are preliminary estimates pursuant
^(3)   to the guidance set forth therein.Management will finalize EPS
       calculations for the periods presented in accordance with ASC 260-10-45
       in connection with the preparation and filing of the company’s
       quarterly report on form 10-Q for the applicable periods presented.

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
 
Press spacebar to pause and continue. Press esc to stop.