Good day and welcome to the InterDigital Second Quarter 2010 Conference Call. As a reminder, today’s conference is being recorded. At this time, I’d like to turn the call over to Janet Point. Please go ahead. Ma'am.

Thank you, Jessica. Good morning, everyone, and welcome to InterDigital second quarter 2010 earnings conference call. With me on the call this morning are Bill Merritt, our President and Chief Executive Officer, and Scott McQuilkin, our Chief Financial Officer. Consistent with last quarter’s call, we will offer some highlights about the quarter and our outlook and then open up the call for questions. Before we begin our remarks, I need to remind you that in this call we will make forward-looking statements regarding our current beliefs, plans and expectations, which are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results and events to differ materially from results and events contemplated by such forward-looking statements. These risks and uncertainties include those set forth in our earnings release published yesterday as well as those detailed on our annual report filed on Form 10-K for the year ended December 31, 2009 and from time to time in our other filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and except as required by law, we undertake no obligation to update or revise any of them, whether as a result of new information, future events or otherwise. Finally, please note that we have also posted some supplemental information on our website in connection with this call this morning which you can access in the events and presentation section of the investor relations portion of our website www.interdigital.com. With that I would like to turn the call over to Scott.

Thanks, Janet, and good morning to everyone. I’m pleased to report that our second quarter 2010 results were very strong. Year-over-year revenue increased $16.2 million or 22% and drove net income of 32% to $35 million. Diluted EPS was $0.78 in second quarter 2010 up from $0.59 in second quarter 2009. Free cash flow was positive $67 million in first half 2010 and was a results cash and short term investments increased to $486 million at the end of first half 2010 up from $410 million at year end 2009. In addition to the $100 million received from Samsung in first half 2010, we also received patent royalty payments of $71 million and other cash payments of $10 million from Technology Solutions Customers. Revenue for second quarter 2010 was $91.2 million and consists of three components. Current patent royalties, add sales royalties and technology solutions revenues. Current patent royalties were $80.2 million in second quarter 2010 up $9.8 million or 14% over second quarter 2009. The increase was driven by a combination of higher sales by nearly all of our per unit license fees and new patent licenses added since second quarter 2009, With Casio, Amtech, Centurion and Enfora. From a sequential basis, current patent royalties increased to 80.2 million from $78.1 million in first quarter 2010. It’s worth noting that current patent royalties have increased in each sequential quarter since first quarter 2009 due primarily to higher 3G unit sales volume and the addition of new or renewed license agreements. Add sales royalties were $4.9 million in second quarter 2010 compared to $2.3 million second quarter 2009. Add sales royalties in second quarter 2010 were due to the renewal of an agreement with one of our licensees and covered the six months between the explorations with the previous agreement…

Thanks, Scott. And good morning to everyone. As you saw in our earning release yesterday and just heard from Scott the company delivered a very strong quarter. We grew our revenue and profitability and substantially and maintained a very strong balance sheet and grew our customer base. As a result of our strategic efforts to build innovative wireless solutions attractive customers and exercised financial discipline, today we are in a position of unprecedented financial strength and stability. I will start my remarks by covering the two new strategic customer relationships involving our modem IP. As Scott mentioned during the first half 2010 we added two new customers from our SlimChip modem core. Beceem communications and WiMAX semiconductor supply what will integrate our modem core into their 4G products. In addition Capital Semiconductor based in Beijing and owned by TechFaith Group Technology in Beijing International Investment Development Company will use our modem core for duel mode 2G, 3G product in the Chinese market. These new relationships are consistent with our plan to monetize our investment in the 3G core modem platform. Each relationship is profitable with a term will provide further upside when Beceem and Capital Semiconductors start shipping chips that contain our technology. In addition, these new relationships have grown the customer base for our modem core to six companies, covering approximately 10% of the current 3G cellular ASIC market. This larger base has created an option for us to develop and license upgrades, for the modem IP core on attractive terms. Beyond the modem IP business, the company is currently involved in the number of other activities on both the patent licensing and R&D funds. However, through our discussion today, I thought it was focused in my remaining remarks on just one topic, LTE technology. We view LTE rollout…

Thank you. (Operator Instructions) And we will take our first question from Charlie Anderson with Dougherty & Company. Charlie Anderson - Dougherty & Company: Good morning. Thanks for taking my questions. Japanese revenue. I wonder if, Scott, if you could just update us there, where it was in the quarter. And then also wondered, in terms of the renewal you did, did you get a full quarter on the per unit, if you signed it mid-quarter, was part of the contribution from past and part of it from per-unit? And then I've got a question for Bill, too.

Yeah the Japanese market as you know is relatively mature. The 3G component is a very large percentage of that total market and is not growing very rapidly. And I’d say that's reflected in the numbers of our Japanese per unit licenses that we saw this quarter. And it's probably indicative of the longer trend for 3G in that market place. That could of course changes once LTE starts to generate significant volumes over there. In terms of the renewal of the existing licensee that contributed bulk of the past sales and contributed a full quarter in the second quarter of our current loyalties as well. Charlie Anderson - Dougherty & Company: And just to tack onto that, I know sometimes you give us data on Japan as a percent of recurring. Do you have that stat, Scott?

Yes, it’s a little 20% range. Charlie Anderson - Dougherty & Company : Got it. Okay. Good. And then, Bill, question for you on the Nokia case, the appeal of ITC. They filed their red brief now as has Nokia. Obviously you had a view into how ITC looked at this case back in the fall. Now that they've got maybe a more fuller explanation, I wonder if you could just update us on your thoughts on that case, kind of having seen where their arguments shakeout.

Sure. So having obviously read our brief and theirs as well I continue to be in accounting it continues to be very strong appeal going up to the federal circuit. So that’s good, so there were no surprises and in terms of the audience that we put forth. So while we appreciate these things are always an up hill battle and we got a pretty good case not only for the federal circuit also I think the fact that we continue to add licensees that reflects the fact in that case was in no means an indicator of the strength of the individual portfolio. People continue to find licenses or renew licenses on very good terms and I think that’s the better indicator of this strength and the patent portfolio.

We will go next to Tom Carpenter with Hilliard Lyons.

Some of your other licensees that aren't quite at the 10% level like REM and HTC, which are having a lot of success with Smart Phones, did they passed the 5% threshold and are somewhere between 5% and 10%?

We don’t disclose that. Of course I can tell you that don’t for unit licenses and we have seen good growth from both of those as you might expect in their success in the marketplace.

Excellent. Yes, it would be helpful going forward if you guys could give a little more color on those, just given the growth in Smart Phones and some of the slides you guys have put in the past on how much you're averaging per phone with the strong shipments to REM, they should be getting very close to that threshold.

I look for to the day when I can do that.

Okay so, Bill, thank you for that insight you provided on 4G LTE and the slide you guys put up on patents, that's great. And also its comparison to 3G In 3G, you guys had a lot of success in the early days signing Japanese licensees and a little bit later with some of the Korean manufacturers and still ongoing with some of the bigger North American ones and the Western European manufacturers. Can you give us some insight into 4G, if you think it will follow the same pattern or if you guys have adjusted your strategy to go after some of the bigger existing players in that market early?

Good. I think its going to be a little bit different in part because I think when we are doing 3G it wasn’t as much driven by some of the renewal cycles and it will be driven now by to some extent renewal cycles. So, people may come into the process at a slightly different time than we did before. Obviously, we still think we are definitely reaching out in to places like Japan and trying to move forward in that licensing process. But I think the customers will come in a slightly different order then they did before but we are very confident with respect to our ability to bring all those customers on board in terms of licensees at the time. And let me just add quickly the other thing that was happening in 3G if you remember in Japan they were really rolling it out like in 2001 really before the rest of the world LTE is being rolled out. Actually monthly in North America just constraints in terms of bandwidth are stronger here and in Europe than they are actually in Japan at this point.

Okay. Excellent. One final question and I'll jump back in the queue. One of the things that may be a little different than six or seven years ago is you guys are significantly involved in solutions and products. Can you guys monetize those with carriers going forward? Or is it still going to be with the infrastructure and chip manufacturers? Thank you.

I think that the opportunity in terms of the newer technologies that we are creating are not only in the handset markets but with the handset manufactures that they are in the adjacent market as well. And so that would include infrastructure manufacturers, operators, consumer electronics manufactures and the light. In particular for example the connectivity and mobility technology that we are creating I think we are particularly relevant for operators and maybe is relevant for one operator and more then another and so we're certainly looking at operators as an opportunity for software planning into that market to give them enhanced connectivity options.

(Operator Instructions) And we will go next to Chris Versace with Think 20/20. Chris Versace - Think 20/20 : Just a couple or three questions for you guys, pretty straightforward. Bill, that was a great overview on LTE. One thing I would say that was kind of lacking is any kind of targets from you guys, how many customers do you think you'd look to sign in the second half of the year? Are there any internal targets for how many you guys would like to have exiting the year?

We've actually consciously avoided targets right because they are not useful in those negotiations. The other side believes you have a target, that you need to do in the particular quarter. They will use that and try to leverage that against you. So I'd rather be in a position saying we'll do this deal when it’s the right deal not because it’s the quarter which I promised to get X number of deals. Chris Versace - Think 20/20 : Okay. That sounds like a smart strategy for the long term rather than getting your back up against the wall. So let me just turn to Scott. Hey, Scott, on the patent administration licensing costs, we saw them creep down in the second quarter. And given some of the incremental cost of that last year, I'm thinking about the second half of the year, should we be thinking that that line item would kind of be balanced in the second half of the year or really trend lower, given the heavy expense in the first quarter?

Yeah the decline in the patent administration costs relates almost entirely to lower patent enforcement costs for the quarter. And as I said in the past that’s a number that can go up or down in a pretty wide range depending on the level of specific activity for the quarter. I think that number is average similar in that $4 to $5 million range per quarter over the last couple of years. That’s not necessarily inductive of where it might be in the next quarter or the quarter after that all depends, but I think that gives you some perspective at least what exactly it is over the last few years. Chris Versace - Think 20/20 : Right. Right. Just I think conceptually we don't expect anything to heat up with Nokia towards maybe exiting the year or something like that. I just wanted to double check my thinking on that.

Yeah, it all depends on activity levels. Chris Versace - Think 20/20 : Okay. Okay. And then just one last one, you guys are very good revenue numbers the last couple of quarters. But at the same at time we've seen the deferred revenue line really creep down. I think it peaked last September. Is there some disconnect there that maybe I or others are not seeing that you guys might want to talk about?

The deferred revenue goes up as we collect cash payments that are not recognized in the current period as revenue and it goes down as we recognized revenue for cash payments that we previously received. So that’s a number that can move up or down again pretty significantly depending on whether not we received cash payments in that quarter. And as you know the cash payments can be lumpy overtime. I would say that although it did move down in the second quarter we also recognized a significant increase in cash payments from the couple of our licensees. So and we did get cash in during the quarter and yeah I think next quarter you will see a $100 million cash coming in which we have already received from same. So it could be lumping but I think if you look at it overtime it’s a good strong number in cash flow that cash in revenue overtime will equalize.

We will go next to Bill Nasgovitz with Heartland Funds.

So we have almost $600 million in cash, is that correct?

Well, if you take the year and cash balance and add it in $100 million from Samsung net of the foreign withholding tax you get a pretty strong member there.

So what is your aggregate yield on this money?

It’s what you might expect given the fact that we have got it in very liquid and very safe investments very low. In the order 0.5%.

Okay. And then what is the timing I know it's tough to figure out. But I understand that you were interested in buying additional IP, specifically I guess Nortel has been mentioned. When might that happen?

Process is on the way its hard to predict exactly when it would run out I mean we are originally thinking it should run out this year. And I think that depending upon the exact profits they apply, that’s possible to slide into next year as well. We continue to be very interested in that opportunity and talking with some other focus about the partnering for that opportunity. So it's still very much on our radar and as we also said that we also look at that opportunity and we have look at it in comparison to other ways of deploying that cash. And we have to make sure that is superior to other use for cash, so that’s under the radar as well.

So this could happen, Nortel might be 2011?

Again its hard to predict while the process is underway I will tell you it's also not moving as quickly and as we thought it would move but we thought this is also just take off at a certain point too. I think there is still further strategies deployed by the personal selling asset to try to maximize value here. So we will see how it goes.

Okay. Well, again, speaking as a significant long-term loyal shareholder, we'd love to see the buyback reactivated even at $28 earning three bucks. Gee, just simple, that's over 10% on our money. Why not? Why not do some buyback, especially when you paid over $30 a share a year or so ago?

It’s a good question I could say the board regularly discusses that issue. And its not a question of, we believe we can create value to a stock buybacks without a question premium value it’s a question of whether there's other opportunity that can create more value. And so I appreciate your comment and I tell you that this is a topic that we roughly went out to figure pretty regular basis here. And let me mention before we had mentioned before we're not we have not been and we don’t expect to be people that just hoard cash. If this happens to be there is a couple of opportunities sitting out there that could be very significantly value creators and we wanted to make sure that we have sufficient liquid assets to be able to participate effectively in those processes.

And those potential acquisitions would be immediately accretive to earnings for InterDigital shareholders?

As we talked about on the last call. I think the way to look at them is if you're as a example the Nortel patent portfolio, I don’t believe today is producing significant amounts of revenue. So there really is a future opportunity but that future opportunity can be enormous. I think Scott mentioned on last call if you just look at it tenth of a percent royalty increase as a result of the added portfolio on a net present value basis it’s worth $900 million. So that doesn’t immediately improve your earnings in the next quarter but it could substantially increase your share holder value over time. And set out the table that that’s a question the board asked so they paid balance all this year so you are asking all the right questions.

Well, I'd love to see a balanced approach, meaning an active buyback here with over a 10% earnings yield. Thank you.

(Operator Instructions) we will go next to a follow-up with Tom Carpenter from Hilliard Lyons.

Just two quick questions. Bill, I'm sure you read about Sprint, that they may actually kind of switch from WiMAX to LTE, and it looks like almost everyone in the world is going to go to LTE, I think, Intel and Sprint and Clearwire may be the last ones pushing WiMAX. Can you talk about any impact that will have on your efforts or your product relationship with licensees?

I think that I've heard that as well and with that I am not surprised by that in terms of I think the long-term, well, WiMAX is a viable technology I think long-term LTE is probably has a better solutions result. I think certainly while we have good licensing positions with respect to both technology I think we’re deeper with respect to LTE, so I think that switch is probably in a positive thing for us. I also don’t think difficult question will be whether WiMAX disappears or whether its become just part of the fabric out there, and I think its going to be part of fabric, I think that’s good for us because of the volatility activity technology we’re working on but even if it's not there is still going to be a whole load of systems out there that need to be stitched together. So it’s a trend that I think overall positive for us.

Excellent. And just wanted to confirm on the, I guess the renewal that you guys had, you didn't name it. Was that the licensee whose deal or agreement expired at the end of June 2009?

We are not going to mention that we didn’t mention the name of licensee but we did not. I think the removal reflects a couple very good things, right. One is, it came in as a good contributor of revenue and only contributor going forward so that’s a positive. And second the fact that there was a gap and that we were patient and waited for the right deal and got it going on the right terms and we talked about that before and I think people sometimes know really what you can do. Yes we can do it and we got the right deal by waiting. And that’s the benefit of a good cash balance and good diversity in terms of the customer. So we are happy to have gotten that done we were talking earlier it's more than two years as we get bigger in the business with granularity of the business kind of goes away and appreciate there is plusses and minuses in that but I am happy that not everything was material any more.

Sure. Because in this company's markets, I think 4Gs launching later than some other parts of the world. Is that why the agreement, at least from what we know so far doesn't include 4G?

You know as I said before I think certainly in this timeframe as we do agreements I think you have a mix of products of agreement that include LTE and don’t because it’s going to depend upon the capture period of that agreement and the product plans for that manufacturer. So I think it’s not going to be unusual over the next year or two frankly if they haven’t given deals that exclude LTE so the capture period shortened up for the manufacturers and in type it's not quite ready for LTE.

That does conclude today’s question-and-answer session at this time I would like to turn the back over to our speakers for any closing remarks.

All right. Thank you very much. This is Janet Point, I’m available for follow-up questions if anybody has any and thank you this morning for listing in our call.

That concludes today’s conference. Thank you for your participation.