Company generates adjusted earnings of $41.8 million or 47 percent of revenue

Annual dividend increased 14 percent to CDN $0.16 per share

Wi-LAN Inc. ("WiLAN" or the "Company") (WIN.TO)(WILN) today announced financial results for the fourth quarter and fiscal year 2012 ended December 31, 2012. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

Fourth Quarter 2012 Highlights

• Revenues of $21.2 million, exceeding our guidance of $20.7 million.
• Adjusted earnings* of $7.0 million, or 6 cents per share.
• Initiated litigation against Alcatel-Lucent, Apple, Ericsson, HTC, LG, Research In Motion, Sierra Wireless and Toshiba.
• Increased the quarterly dividend to CDN $0.04 per common share.

Fiscal Year 2012 Highlights

• Revenues of $88.0 million.
• Adjusted earnings* of $41.8 million, or 34 cents per share.
• GAAP earnings, including $31.1 million in expenses related to the 6 percent extendible convertible unsecured subordinated debentures ("Debenture") financing, amounted to a loss of $14.5 million, or 12 cents per share on a basic level, as compared to GAAP earnings of $31.8 million, or 26 cents per share on a basic level, in the same period last year.
• Acquired patent portfolios from Siemens AG and Alvarion Ltd.
• Signed licensing partnerships with two patent owners, including SENSIO Technologies, bringing total number of partners signed to eight.
• Generated $34.0 million in cash from operations.
• Returned $30.3 million to shareholders in dividend and share buyback payments.
• Held cash and cash equivalents and short-term investments of $176.9 million at December 31, 2012.

"Our efforts and accomplishments in 2012 advanced key strategies that we believe will drive WiLAN''s future growth," said Jim Skippen, President & CEO. "The sustainable growth of our business demands a disciplined licensing strategy and one that focuses on reaching the right agreements for the Company over the long-term. We reached agreements with eight companies in 2012 that are expected to generate significant future revenues."

Added Skippen, "As part of our overall strategy, we are focused on increasing the number of portfolios that we can license. In 2012, WiLAN acquired valuable portfolios from technology leaders Siemens AG and Alvarion Ltd. and continued generating patents through our own research efforts. Our Gladios partnership efforts secured their first license agreement for partner 01Communique, and our roster of Gladios partners has now increased to 12."

"Our solid balance sheet with over $176 million in cash and our positive cash flow with adjusted earnings of over $41 million or 47 percent of revenues in 2012, gives us a strong financial foundation upon which to continue building our business. WiLAN''s financial strength enabled the Company to return over $14 million to shareholders in dividend payments in 2012 and gave the board the confidence to increase the Company''s annual dividend by over 14 percent to $0.16 in 2013," said Skippen.

Eligible Dividend

The Board of Directors has declared an eligible dividend of CDN $0.04 per common share to be paid on April 5, 2013 to shareholders of record on March 22, 2013.

Fourth Quarter and Fiscal Year 2012 Revenue Review

In the three month period ended December 31, 2012, WiLAN generated revenues of $21.2 million, as compared to $24.2 million in the three month period ended December 31, 2011. In the 12 month period ended December 31, 2012, WiLAN generated revenues of $88.0 million, as compared to $105.8 million in the 12 month period ended December 31, 2011. The decrease in revenue compared to the prior year periods is primarily attributable to the timing of fixed payment amounts as a result of the significant license agreements signed during the first quarter of 2011, some of which required payments that were one-time in nature and some of which had more significant upfront payments.

For the 12 month period ended December 31, 2012, the top 10 licensees accounted for 83 percent of revenues, whereas the top 10 accounted for 77 percent of revenues in the 12 month period ended December 31, 2011.

Fourth Quarter and Fiscal Year 2012 Operating Expense Review

Cost of revenue is comprised of patent licensing expenses which includes royalty obligations, cost of patents sold through brokerage activities, employee related costs and other costs incurred in conducting license negotiations as well as litigation and amortization expense related to acquired patents. Litigation and amortization expense is not necessarily variable with revenues. Patent licensing expenses is predominately employee related costs and therefore is not directly variable with revenues. We also include, as a cost of revenue, any costs related to sourcing new patent portfolios or developing new strategic partnerships.

In the three month period ended December 31, 2012, cost of revenue totaled $16.6 million as compared to $38.0 million in the three month period ended December 31, 2011. For the 12 month period ended December 31, 2012, cost of revenues totaled $55.5 million as compared to $72.5 million in the same period last year. The decrease in expenses is primarily attributable to a decrease in the success fee partially offset by an increase in litigation expenses and amortization expense as a result of patent acquisitions completed during fiscal 2011 and 2012.

For the three months ended December 31, 2012, litigation expenses amounted to $8.8 million compared to $2.6 million for the same period last year. For the 12 months ended December 31, 2012, litigation expenses amounted to $25.6 million compared to $17.5 million for the same period last year. The increase in litigation expenses over the prior year periods is partially attributable to an increased level of effort in ongoing patent infringement litigations including preparations for two Markman Hearings that are scheduled to take place in March 2013 and April 2013, respectively, and preparations for a trial that is scheduled to begin in April 2013.

Marketing, general and administration ("MG&A") expenses represent the cost of corporate services including facilities, executive management, finance, corporate legal, human resources, office administration, marketing and communications, information technology and all costs associated with being a public company. In the fourth quarter ended December 31, 2012, MG&A expenses amounted to $3.1 million as compared to $10.2 million in the fourth quarter ended December 31, 2011. For the fiscal year ended December 31, 2012, MG&A totaled $12.9 million as compared to $20.3 million in the same period last year. The decrease in spending for the 12 months ended December 31, 2012 is primarily attributable to a decrease in incentive and commission costs partially offset by an increase in staff costs.

Fourth Quarter and Fiscal Year 2012 Earnings Review

In the fourth quarter ended December 31, 2012, WiLAN generated adjusted earnings of $7.0 million or 6 cents per share as compared to $17.8 million, or 14 cents per share, in the comparative period. In the fiscal year ended December 31, 2012, WiLAN generated adjusted earnings of $41.8 million or 34 cents per share as compared to $71.5 million, or 58 cents per share, in the comparative period. The decrease in adjusted earnings between the reporting periods is primarily attributable to lower revenues and higher investment in litigation.

The Company''s GAAP earnings amounted to a loss of $2.1 million, or 2 cents per share on a basic level, in the three month period ended December 31, 2012, as compared to a GAAP loss of $5.6 million, or 5 cents per share on a basic level, in the same period last year.

In the 12 month period ended December 31, 2012, the Company generated a GAAP loss of $14.5 million, or 12 cents per share on a basic level. This included $31.1 million in expenses related to the Debenture of which $25.5 million was non-cash expense.

In the 12 month period ended December 31, 2011, the Company generated GAAP earnings of $31.8 million, or 26 cents per share on a basic level. This included Debenture financing costs which, after amortization of accretion of debt discount, a non-cash expense of $41.7 million, extinguishment of the conversion feature, a non-cash gain, of $66.7 million and amortization of financing costs, consisting of commissions and professional service fees of $4.2 million, amounted to a net gain of $20.7 million.

Fourth Quarter and Fiscal Year 2012 Balance Sheet and Cash Flow Review

At December 31, 2012, the Company''s net cash, comprised of cash and cash equivalents and short-term investments, totaled $176.9 million, representing a decrease of $256.8 million from the net cash position at December 31, 2011. The decrease is primarily attributable to the retirement of the Debenture, the acquisition of patents and other intangibles totaling $25.4 million, the returning of $30.3 million to shareholders in dividend and share buyback payments, partially offset by $34.0 million in cash generated from operations. The Company''s cash equivalents and short-term investments include T-bills, term deposits and GICs.

During the fourth quarter ended December 31, 2012, the Company generated $17.2 million of cash from operations and returned $4.2 million to shareholders in dividend payments.

First Quarter 2013 Financial Guidance

For the first quarter 2013 ending March 31, 2013, the Company expects revenue to be at least $18.1 million. This revenue guidance does not include the potential impact of any new agreements that may be signed during the balance of the first quarter of 2013 or the potential impact of any royalties identified in audits conducted by the Company. Operating expenses for the first quarter are expected to be in the range of $18.7 million to $20.4 million of which $13.0 million to $14.4 million is expected to be litigation expense. For the first quarter of 2013, and assuming no additional agreements are signed, adjusted earnings are expected to be between a loss of $2.2 million and breakeven.