Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories Conference Call discussing Fourth quarter and fiscal 2011 financial results. During the presentation all participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question and answer session. [Operator Instructions] As a reminder, this call is being recorded Thursday, November 17, 2011. I would now like to turn the conference over to Alex Hughes, Senior Director, of Investor Relations for Dolby Laboratories. Please go ahead Mr. Hughes.

Thanks, Lisa. Good afternoon, and welcome to Dolby Laboratories fourth quarter and year-end Fiscal 2011 Earnings Conference Call. Joining me today are Kevin Yeaman, Dolby Laboratories President and CEO; Murray Demo, Executive Vice President and Chief Financial Officer; and Ramzi Haidamus, Executive Vice President of Sales and Marketing. On this conference call, we will be making forward-looking statements that include projections of future operating results for our fiscal year ending September 30, 2011; market trends and developments for the industries in which we compete; and our expectations and beliefs concerning how these trends and developments will affect our operating results; the capabilities and market acceptance of our products and technologies; and our strategic and operational plans and objectives. These statements are based on management's current expectations and assumptions that are subject to risks and uncertainties. Actual results may differ materially from those set forth in such statements. Important factors, such as general economic, PC or cinema market conditions could cause actual results to differ materially from those in the forward-looking statements. These factors are addressed in the earnings press release that we issued today and under the section captioned Risk Factors and elsewhere in our most recent quarterly report on Form 10-Q available at www.sec.gov or on our website at www.dolby.com, under the Investor Relations section. Dolby disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events or otherwise. During this call, we will discuss GAAP and non-GAAP financial measures. A reconciliation between the two is available in our earnings release and in the Dolby Laboratories Investor Relations data sheet on our Investor Relations section of our website. Call participants are advised that the audio of this conference call is being broadcast live over the Internet. It is also being recorded for playback purposes. An archive of the call will be made available on our website for approximately one year and is the property of Dolby. As for the structure of this call, Murray will begin with a recap of Dolby's financial results and provide an fiscal 2012 outlook, and Kevin will finish with the discussion of the business. So with that introduction behind us, I will now turn the call over to Murray.

Thanks, Alex. Good afternoon, and thank you for joining the call. I'd like to discuss Dolby's Q4 and full-year fiscal 2011 financial performance and our outlook for fiscal 2012. Revenue for the fourth quarter was 243 million, up 7% year-over-year and 11% sequentially. Licensing revenue for the fourth quarter was 205.7 million, up 15% year-over-year and 13% sequentially. The year-over-year increase was driven by growth in our other markets category, led by mobile and by our broadcast market. Looking at licensing revenue by market. Fourth quarter PC revenue decreased 11% year-over-year on lower ISV revenue, and declined 5% sequentially on lower ISV and PCEE revenue. For the full-year, our PC market made up 30% of licensing revenue in fiscal 2011, compared to 36% in fiscal 2010. Fourth quarter broadcast revenue grew 29% year-over-year and 18% sequentially. The year-over-year and sequential increases were driven primarily by higher TV attach rate. Full-year revenue from our broadcast market made up 31% of licensing in fiscal 2011, compared to 27% in fiscal 2010. Fourth quarter revenue from our consumer electronics market was up 1% year-over-year, as increases in Blu-ray and other CE products offset declines in DVD. Sequentially, revenue declined 7% as an increase in Blu-ray was more than offset by a decline in other CE products. Full-year revenue from consumer electronics market made up 21% of licensing revenue in fiscal 2011, compared to 22% in fiscal 2010. Fourth quarter revenue from our other markets category, which includes mobile, gaming, automotive and Via increased 69% year-over-year and sequentially, primarily on increased revenue from mobile and via, due to the RIM litigation. Fourth quarter product revenues were 30.8 million, down 23% year-over-year and up 9% sequentially. The year-over-year decline was driven primarily by lower shipments of our 3D systems. The sequential increase was driven by…

Thanks, Murray. Good afternoon. Today I would like to discuss the changes taking place in our industry, and the opportunities they present for Dolby. Dolby’s role in the entertainment industry is to provide the products, services, tools and technologies that capture, deliver and render the highest quality experience for the artist and consumer. We have a 45 year track record of delivering technologies and helping to define the standards in leading entertainment channels, including Cinema, Optical Disk, and Digital Broadcast. Today, the industry we serve is an inflection point. We have moved from a world of 100s of millions of playback devices shipped annually, to that of billions of devices. From PCs and televisions, to Smartphones and Tablets, vertically all of these devices are connected, and many can capture and publish content as well. And if content can be captured from many more endpoints, and then distributed and played back across a greater number of devices, consumers have the ability to access and consume content vertically anywhere, anytime. These trends present Dolby with increasing opportunities to enable the optimal quality and consistency of audio and video content streams. Let me start by discussing our core audio business and the opportunities we have ahead. Today we are seeing a shift in our core audio business from optical disk playback to digital broadcast in the media content. We have already seen this reflected in the composition of our licensing revenue. In fiscal 2011, we estimate that 52% of licensing came from non-optical disk base revenue, compared to 45% in fiscal 2010. This includes revenue from products such as TVs, set-top boxes, mobile phones, as well as our post processing technologies on a wide range of devices. Disk revenue grew 22% in fiscal 2010, and 27% year-over-year in fiscal 2011. We continue to…

(Operator instructions). Our first question is Ralph Schackart, William Blair Ralph Schackart – William Blair: Good afternoon. Two questions if I could. First, Kevin, could you just remind me, I think you’d said 60% worldwide TV attach rates. Was that for full fiscal 2011 or was that an exit rate for the year?

That was full fiscal 2011. Ralph Schackart – William Blair: Great. And then also too, can you give us an update on Windows 8? You gave us an update last call, kind of where we stand there. And then also, too, how should we think about the PC market – I’m sorry, the PC revenue stream for Dolby for fiscal 2013?

We don’t have a significant update from last quarter. We continue to believe that DVD is an important use case in the BC Ecosystem in that BC Ecosystem is not going to stand for a broken consumer experience until we’re – continue to be actively engaged, working to license our technologies directly to the PC OEMs to ensure the best experience. More importantly, I would point out that as, of course, where people are getting increasing content on the PC is over on one networks, even mobile and broadcast networks. We’re really focused on extending out technologies into those use cases. Ralph Schackart – William Blair: Okay, great. Thank you.

And next, we’ll hear from John Bright with Avondale Partners. John Bright(Jeremy) - Avondale Partners, LLC: Hi. This is Jeremy [Inaudible] in for John Bright. Thanks for taking my question. I just wanted to ask, on the broadcast side, could you provide a little more color on your progress over in Brazil, Russia, India and China?

Sure. Overall, we’re pretty happy with the progress starting with China where recently we’ve announced the adoption of our technology as an option in the standard. We’re happen to report that as of today, 19 of the 38 distinct HD channel services deliver to consumers through terrestrial provential cable and IP TV services use Dolby technology in the combination of either Dolby Digital Plus, Dolby Digital or both. They, you know, the progress, I’m pretty pleased with. Obviously, we’re also working with a consume electronic company, TV manufacturers, both inside and outside China on making sure all the proper licenses and technologies are in place to take advantage of the opportunity. The opportunities in India continue to grow for us. We – as we’ve announced before, the satellite and cable opportunities are the primary eminent opportunities, either on air right now, or making significant progress. What we’re focused on over the next 12 months in India is the terrestrial broadcast, which is in the process of being developed, so we’re working with key players in Dolby along those lines. In Brazil, as you now, the technology of choice for broadcast is the AAC standard, which Dolby partakes in in the form of pool revenue. However, in terms of television, the attach rate in those products is a [inaudible] technology from Dolby, which is a combination of Dolby Digital Plus and AAC. Therefore, the revenue from those televisions is similar to revenues that you might see elsewhere in the world and that’s Dolby Digital Plus revenue. So overall, I’d say we’re pretty pleased with our progress moving forward and we’ll continue to keep you updated. John Bright(Jeremy) - Avondale Partners, LLC: Okay. Thank you. And last one on the mobile side. Could you talk a little about your plans for Dolby Digital Plus versus Dolby Mobile and what kind of wins have you had in each and how do you see that progressing?

So first of all, I guess I’d like to just – before turning it over to Ramzi for some specific updates, I do want to emphasize that we, you know, we didn’t have any measurable attach on Dolby Digital Plus in the year 2010. So in 2011, we’re on 4% of Smartphones with our multichannel audio codec. Based on the wins we have today and the devices we see coming into the market, we feel good about that going up to low-to-mid teens in 2012. And this is significant because as we look at all the problems to be solved in the form of audio quality and consistency across the complex ecosystem, there are number of problems and it can range from, depending on the piece of content and the device, it could range from not having enough volume, it could be having volume but not really being able to determine dialog, it could just be that it’s over compressed. And then there’s the whole issue of being able to share that content across multiple devices and there’s a lot of ways to do that; DLNA, which we’re an important part of, HDMI, which we’re an important part of. There are number of proprietary solutions, which we think we provide an elegant solution for. When we look at all those problems, what we found is that having the multichannel audio codec in place is a critical component to solving some of those problems. There’re the post processing solves a lot of problems and the best possible solution is a combination of those things. We’re highlighting our progress in multichannel codec and I think the progress we’ve made is significant. But we’ve also – we also continued to make progress with Dolby Mobile and ultimately to bring it together as a holistic solution. Please, Ramzi, why don’t you give us a little bit of progress status on Dolby Mobile.

So a little bit more color on what Kevin just said. We are in over 140 SKUs worldwide, scheduled shipping or scheduled to be shipping in the next two months. We are in over 30 models with Dolby Digital Plus including models from LG, Nokia and Pantec. That is a significant increase from the previous call. Our specific design wins, LG devices with Dolby Digital Plus being shipped with multiple carries; Verizon, AT&T, Sprint, U.S. Cellular and Metro BCS. PDT is primarily shipping in China and now we’re shipping Smartphones with Dolby in the UK and Europe. We’re also working on the upstream in the things such as with Nokia Music Service in China using the Dolby Media Generator to generate Dolby encoded content to make sure that that content is being generated to play back on all these different devices. So overall, we’re approaching the entire ecosystem end to end, not only from the attach rate on the devices but on the upstream to make sure the – it’s a holistic experience as Kevin alluded to. John Bright(Jeremy) - Avondale Partners, LLC: Okay, great. Thank you verymuch.

JPMorgan’s Paul Coster has the next question.

Yeah. Thanks very much. Do you – can you talk us through, please, the margin decline in the licensing segment, not just for the year ahead, but your long-term expectations around that and what the reasons for it declining is. I have a follow up.

Sure, Paul. Can I just clarify, are you referring – you’re not referring to the gross margin, right?

Gross margin for the licensing business. I thought I heard it was declining in 2012.

No, Paul, the licensing gross margin continues in the same range that we’ve been at historically. So again, it continues to be a very high gross margin business.

Okay. My apologies. And you expect it to remain for the indefinite future? That’s not withstanding the patent portfolio kind of aging in time?

Right now, we’re just providing a 2012 guidance on that. And so we look for the high margins. You know, beyond that, we can update you at that time. But we continue to believe that licensing will be a very high gross margin.

Okay. My follow up. Kevin, I thought the – you outlined your growth strategy pretty well there. I think it’s very helpful. And yet, this year, of course, you know, you’re not going to be experiencing growth. Can you just kind of reconcile that? And then, you know, what needs to happen for the topline to reaccelerate?

Well, as I look at the year in front of us, you know, one of the things that we highlighted today is the amount of revenue we have coming from non-optical, meaning that these are – this is licensing revenue, which is not engaged in any way in optical disc payback. And that’s been growing quite well, 22% in ’10, 27% in ’11. The biggest drivers there, of course, are broadcast and mobile. And we do see growth in those area in 2012. I think beyond 2012, still in front of 2012 is the bigger adoption of broadcast in markets like China, India, Russia, the markets that Ramzi talked about earlier. This is where we expect a lot of television growth to come from in the future. We don’t see that kicking in – I mean, it will contribute to growth next year, but we don’t see a reflection point in those markets in terms of consumer adoption in 2012. So beyond that, we see continued growth. In mobile, again, we highlighted our progress with getting our multichannel codec on phones and expecting low-to-mid teens in 2012. That’s going to contribute to growth and we feel like we’re just getting started there, both in terms of attach rate and in terms of the growth rate for that device category. Other things to consider this year, of course, is that we, you know, there are some headwinds in BC, just in terms of growth rate expected – expectations. We have digested into our guidance, the most recent information we can get our hands on in terms of the Thailand floods and the impact on [inaudible] and have factored that into the range of outcomes. And we continue to expect the ISV revenue to come down this year as Murray Talked about in his comments. So you know, in a tough and uncertain economic environment, I guess I’ll call it, which is effecting in particular the D. C. Market, we feel like the year where we can make a lot of progress in these growth opportunities in that we’re really just getting started in some of these markets in terms of the growth.

Thank you.

Up next, we’ll hear from Steven Frankel, Dougherty. Steven Frankel - Dougherty & Company LLC: Good afternoon. Could we spend a couple of minutes talking about PTD and kind of where are you from a market share perspective and what are your strategies to grow that market share, especially if you tried to fill the hole created by the [inaudible] transition.

I’m sorry, what transition? Steven Frankel - Dougherty & Company LLC: [Inaudible].

All right. So our PTD strategy covers both the playback of optical and media, electronic media content as well as the increase in the experience itself, right, the emersenous of that experience, which goes a long way are [inaudible] in technology. Moving forward, our strategy is to provide that combined suite of technologies as much as possible to maximize that experience. Starting with the playback strategy, as Kevin alluded to earlier, we are going to be approaching all of the OEMs directly to license our technologies directly to the OEMs. The advantage of this approach will provide full flexibility to the OEMs to play back not only optical content, whether it be DVD or Blu-Ray, but to start – give the ability to play back the rich content in multichannel and render it in multichannel whether it be coming from any of the online services, which were alluded to earlier, as we see demand for playback of rich content, even on platforms such as PCs and tablets. So our focus right now is to get all of the OMs equipped with our – both technologies, the Dolby Codec feedback and that’s going to be delivered over the next few months supporting them to come up online and start launching that program as Windows 8 comes up for launch in the next year or so. And parallel to this, we continue to push forward with the [inaudible] program and we’re very happy with the attach rate along that program. We have multiple companies shipping what we call the PTD4 in the marketplace. To date, we have about 90 million units that shipped in the PCE space so we’re pretty happy. This is all generations, including the latest. I’m pretty happy with the upticks so far and we’ll continue to push that technology. Just in summary, we’re pretty confident about out playback solution for online content, emedia content, optical content, we’re working directly with the OEMs as well as continue to provide a rich gross profiting experience either separately or along with this solution to the OEM. Steven Frankel - Dougherty & Company LLC: And where do you think your attach rate is with PCEE today in the notebook market?

I don’t believe we’ve mentioned that before, but we’re roughly about 26%. Steven Frankel - Dougherty & Company LLC: Okay, thank you.

Our next question today will come from Andy Hargreaves, Pacific Crest Securities.

Thanks. Can you just detail a little bit more about operating expenses next year and where they increase is coming from exactly? And then Just more broadly, how you’re thinking about scaling operating expenses relative to revenue going forward?

Yeah, sure. So we do this is as the year of investment and we recognize the significance of having a year of investment when our immediate term growth projections aren’t what we’ve experienced in the past. We, of course, are doing that because we’re confident that we have a portfolio of initiatives here, which is going to contribute to long-term growth. And so when we look at the operating expense investments, you know, still, you know, by [inaudible] these to assist those broadcasters, getting them on air because of the revenue opportunity that we have in front of us, they adopt digital broadcast. In emedia, part of it is supporting the increasing complexity of this environment or maybe I should just say complexity relative to some of our other markets. So for any – to solve any one of these problems across the ecosystem, just cording our technologies to a variety of operating system, the variety of chip sets, making sure that they work across devices that have a very wide range of capabilities depending on the hardware choices or even hardware design choices that each OEM is making. And even thinking about the external environments behind which people are listening to these things, we continue to invest in both Dolby Digital [inaudible]

Speakers, are you still on the line? Mr. Hughes, can you still hear me? We cannot hear you anymore. (Operator Instructions). Once again, speakers, this is the Operator. We have lost connection We can’t hear you anymore, but we do show your line established. Can you check your mute function? Ladies and gentlemen, please hold while we try to isolate the issue and get the speakers back on the line. Thank you.

Are we live, Operator?

Yes. Speakers, you have rejoined.

Okay. It appears that we were cut off. I was just getting to the investments we’re making in improving the business communications experience when I was told that we were no longer on the line. So I understand that you can didn’t get the opportunity to hear much of it, so I apologize if I repeat myself. But as it relates to operating expenses, we do see this as the year of investment and we do appreciate the significance of making these investments in a year where our media term growth guidance is not what we’ve had in prior years and we’re doing that because of our confidence in the opportunities we have in front of us. And I think it’s important to keep in context that by far, the majority of our investment is in the area of our core audio business and in fact, as we sit here today, we see the vast majority of increased investment over the rest of this year going into those audio investments. And that takes the form of things like, you know, Ramzi earlier today was, just a moment ago, was talking about the work we’re doing in Brazil and China, and India to get on air and that – those are your places where we’ve been establishing and increasing our presence in terms of – I’m sorry, I’m just getting one more note. I want to make sure I’m still on. What’s your note? Webcast is live, the call isn’t. What does that mean? Okay, so I understand that we may still be having technical difficulties, but I will keep going. So we’re investing in the local presence in the supporting of rollout of broadcast. We’re developing – providing the tools and support to make sure that these countries and broadcasters…

Absolutely. (Operator Instructions). Next is Jim Gross, Barrington Research. Jim Gross – Barrington Research Associates: Thank you. Just a couple of areas. Ultraviolet, I wonder if you can talk about the opportunities you see there, what specific codec might be involved from Dolby’s standpoint and what sort of timeframe you might think of in that rollout. And then I do have one other thing.

The ultraviolet standard is being rolled out as we speak. We reported previously the – there are multiple codecs that are being recommended in the standard. Dolby owns three of these codecs which are – will be used one way or another in the standard and that includes AAC, it includes Dolby Digital as well as Dolby Digital Plus. How they get used and by whom will be depending completely on the different companies rolling it out. So there’s some optional codecs in there and there will be dependent on the service, the preference of the company rolling out the service as well as the hardware devices playing back. So we’re still in the early days of ultraviolet rollout. We have very strong involvement in the standard, which continues to contribute and we continue to monitor the progress as it gets launched. Jim Gross – Barrington Research Associates: Okay, and the other things is 3D. Should I interpret the numbers as looking at it being somewhat stable but not really improving over the last couple of quarters?

That’s a fair interpretation. We continue to have approximately 30% market share outside of North America and you know, which – of course, you know, [inaudible] IP rollout, which does not include Dolby. If you include that, the market share is about 20% globally. Jim Gross – Barrington Research Associates: Okay. But no significant progress then?

It’s steady market share and holding. Jim Gross – Barrington Research Associates: All right. That’s it. Thanks.

And we’ll take our next question from Ralph Schackart, William Blair Ralph Schackart – William Blair: Yes, one more. Kevin, just curious with the stock, where it is sort of trough valuation. Just give us a reminder if you could where you are in the buyback and how you’re thinking about your opportunities for cash going forward and have they changed much?

Well, we’re going to continue to evaluate our use of cash on a regular basis. We are doing that. We still have in place the buyback program to offset any dilution from compensation programs. Murray gave the stats on that in the call and if you need the, he can repeat them. But that’s where we stand. Ralph Schackart – William Blair: Okay, any change in strategic thinking with cash on a go-forward basis, vis-à-vis, maybe where Dolby sat 6, 12 months ago?

I wouldn’t describe it a change in strategic thinking, but I would say that as the growth opportunities that we’ve talked about throughout the day, as we get further along into each of them, we continue to look very closely for any potential acquisition opportunities that could accelerate our progress in one of those markets, broaden our opportunities in one of those markets, and – but of course, we’ll continue to be very disciplined in our approach as we look at that. Ralph Schackart – William Blair: Okay, thank you.

And gentlemen, at this time there are no further questions. I’ll turn the conference back to Mr. Yeaman for any additional or closing remarks

Great. Well, thank you all for joining us to day. We look forward to keeping you apprised of our progress as we go through the quarter and on the next call. Thank you.

Ladies and gentlemen, that does conclude today’s conference. Thank you all for your participation and have a great day.