Good day and welcome to InterDigital’s first quarter earnings conference call. Today’s call is being recorded. At this time I would like to turn the call over to Janet Point. Please go ahead.

All right. Thank you, Brandon. Good evening to everyone and welcome to InterDigital’s first quarter 2012 earnings conference call. With me this evening are Bill Merritt, our President and CEO, and Scott McQuilkin, our Chief Financial Officer. Consistent with last quarter’s call, we’ll offer some highlights about the quarter and the company and then we’ll open up the call for questions. Before we begin our remarks, I need to remind you that in this call we will be making 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 the results and events contemplated by such forward-looking statements. These risks and uncertainties include those set forth in our earnings release published today as well as the details on our annual report on Form 10-K for the year ended December 31, 2011 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. In addition, today’s presentation may contain references to free cash flow, a non-GAAP financial measure. A schedule setting out a reconciliation of free cash flow to net cash used and operating activities, the most directly comparable GAAP financial measure is included at the back of the earnings release issued earlier today, which has also been posted in the Investor Relations section of our website at www.interdigital.com. So with that taken care of, I’ll now turn the call over to Bill.

Thanks, and good morning to everyone. I thought I would spend my time this evening talking about -- talking at a high level about the overall licensing environment, how our business is adapting to some changes in that environment, and then the specific work underway at the company to build shareholder value. Let me start with the positive market drivers. Cellular-enabled devices continue to grow rapidly, particularly LTE-enabled devices. Overall in 2012, we anticipate seeing a 26% growth year over year in 3G handsets and 331% increase in LTE handsets. Equally important, we expect to see continued strong growth in other connected devices like tablets, eReaders, machine-to-machine connections, automobiles, and the likes. We also continue to see substantial opportunity for innovation. While that innovation continues to happen within the cellular technology, it is also occurring in other areas of technology. One of the very exciting areas of continuing innovation is that in what we have called the network of networks. At the Mobile World Congress Show in Barcelona this past March, our Smart Access Manager solution was showcased in the Alcatel-Lucent booth and received significant attention. This week we announced the availability of our Smart Access Manager for Android and Windows-based devices. Working with Alcatel-Lucent, we have demonstrated the benefits of policy-based handover between cellular and WiFi systems. Our Smart Access Manager roadmap adds additional features like application segregation, allowing one mobile phone application to use one wireless access system while allowing a second application to use a different wireless access system. We could also add bandwidth aggregation to construct very high-speed data pipes for users. We also see significant innovation opportunity outside of wireless protocol. For example, substantial innovation is required in security, compression and power-saving technology to allow mobile applications to continue to grow. Indeed, unbeknownst to most,…

Thanks, Bill. As you saw in our press release, we reported first quarter 2012 revenue of $69.3 million, operating expenses of $49.9 million, and $10.9 million of net income or $0.24 per diluted share. Revenue of $69.3 million decreased $9.2 million from $78.5 million in first quarter 2011. The year-over-year decrease was primarily due to a $6.5 million decline in revenue from Japanese licensees, a $1.9 million decrease in past sales revenue, and a $0.8 million reduction in technology solutions revenue. The revenue from our Japanese per-unit licensees was 17% of total revenues, down from 21% in the first quarter 2011. Revenue from current patent royalties were $68.1 million in the first quarter 2012 compared to $74.7 million in the first quarter 2011. Current patent loyalties from per-unit agreements totaled $34.4 million or 51% of total current patent royalties, and decreased $5.1 million or 13% from the first quarter 2011. Current patent royalties from fixed fee agreements totaled $33.7 million and accounted for 49% of total current patent royalties. Revenue from fixed fee agreements decreased $1.5 million from $35.2 million in first quarter 2011. On a sequential basis, current patent royalties decreased to $68.1 million from $71.5 million in fourth quarter 2011. The decrease is primarily due to a decline in per-unit royalties from a number of our licensees. While industry volume of 3G handsets has continued to grow and our share of the market under license has held relatively steady, we have seen our royalty revenue decline. The reason for this relates to the fairly dramatic change in market shares for handset OEMs. Fundamentally we have seen a shift in market share from a number of our per-unit licensees, especially those in Japan, to Apple and Samsung. Since our licenses with Apple and Samsung are fixed-rate agreements, any increase…

All right. Thank you, Scott. Brendan, could you please re-instruct the audience on asking questions? Thanks.

(Operator Instructions). And we’ll first go to Charlie Anderson with Dougherty & Co. Charlie Anderson – Dougherty & Co.: Good evening. Thanks for taking my questions. I guess I just want to start on the last point. I know you said you don’t want to expand on the marketing of the patent portfolio. I wonder if you could just give us some color on where we are in the process and what the level of interest has been so far in the portions that you are marketing.

Sure. I’ll say as much as I can reasonably share. We have identified patents that we’ve decided to offer for sale. We’ve retained a banker to help us manage that process. We have offered the portfolio to, I would say, all of the logical candidates, and we’re involved in the process and discussions at this point in time. Charlie Anderson – Dougherty & Co.: Perfect. And then just a housekeeping, on the $25 million you bought, I didn’t see the number of shares. It looked like the share count was pretty stable sequentially, so it looked to me like it was sort of an end of the quarter. If you could kind of help me on kind of what your average share price were and -- was, and how that affects share count next quarter?

Sure. It’s 1.4 million shares. We purchased 25.3 million in the first quarter and 24.7 million in the second quarter, so, a total of 50 million. The average price was a little over $36 a share. Charlie Anderson – Dougherty & Co.: And then in terms of the arbitrations that you have going on and then some of the new licensing deals that you signed, I wonder how I should think about cash receipts, you know, on a favorable outcome in the arbitrations and then also in some of the new deals you signed, how that’s going to impact the cash flow?

Yeah. One of the arbitrations [inaudible] were associated with deferred revenue, the cash on that is in. So that’s really a revenue item more than a cash item. The other arbitrations we mentioned are different, the cash is not in. So, those are opportunities for cash in to the company. And then with respect to license agreements, really have two different categories of agreements. You have existing licensees with prepayment that will -- the opportunity for them will come during the year, so, it’s a question of whether they exercise that, they typically do. So that would be an inbound cash item to the company. And obviously you have your continuing cash coming in from a number of our per-unit licensees that would track the revenue of those customers. And then last of course, new licensees, and obviously that will depend upon the size of the licensee and the structure of the deal at the end of the day. But obviously, with the larger deals, there are certainly some significant cash opportunities with them as well. Charlie Anderson – Dougherty & Co.: And then, Bill, you had talked at a very high level about some of the dynamics in terms of what’s impacting sort of the licensing world, if you will, in terms of some of these conversations about FRAND and whatnot. And I wonder, are you suggesting that that’s maybe slowing up conversations because people want to see the outcome of what the standards bodies are talking about? I wonder if you could just provide a little bit color, that would be helpful.

You don’t see it as much in the license discussions, and I wouldn’t tell you it slows it down from -- and I think what happens in licensing discussions is no different now than it was years ago in terms of they are obviously always interested in what their competitors are paying, and therefore you need to demonstrate that what you're asking them to pay makes sense in terms of what other folks are paying. So that’s sort of a translate discussion I suppose but that’s pretty typical, and we’re able to demonstrate pretty readily why what we’re putting on the table makes a lot of sense for that customer. It comes in a little bit more in litigation because it has now sort of become a common defense that people run. And in that instance, it tends to increase your cost for litigation a little bit because you end up with a number of experts on the topic, end up with a lot more discovery on the topic, so it increases the costs there a little bit, it chews up a little bit of your time in both the preparation of the case and for the case at trial. Even though it’s not our defense to run, we have to respond to it, we have to respond to that. So it has its impact. I’d say probably a little bit more in litigation. In licensing, at least right now, it’s not much different than it’s been before. Charlie Anderson – Dougherty & Co.: Perfect. Thanks so much.

Yeah.

We’ll next go to Ron Shuttleworth with M Partners. Ron Shuttleworth – M Partners: Good evening. Thanks for taking my call. Just extending the conversation on the patent sales, just wondering if you're still sticking with your timeframe that in -- you talked about in the previous call, which was a sort of a three to six-month timeframe to get this completed. Are you sticking with that timeframe?

We are. Ron Shuttleworth – M Partners: Okay. So, three to six months from last call.

Yup. Ron Shuttleworth – M Partners: Okay. All right. Do you have any -- is there any more detail on the milestones? I know you mentioned some of the things that you're doing. Is there anything that we can expect in terms of milestones beyond what you just talked about?

Milestones in terms of the patent sales? Ron Shuttleworth – M Partners: Yeah.

I think we’ve, as far as we can, given you where we are in the process, and at this point you kind of let the process run. And then when you have results, you announce the result of that, so. Ron Shuttleworth – M Partners: Okay. With respect to the current ITC litigation, now, thank you for clarifying the claims and the number of patents and the patent families. I know there has been a lot of -- there has been discussion in the past regarding your current -- the current decision or the weight on the current decision from the ITC or from CA federal court on the Nokia oral arguments. Do you see that having as much of the weight or any weight right now on your -- on the sort of patent renewals with Samsung or any of the others?

Everybody brings it up, which I would expect them to, right? Ron Shuttleworth – M Partners: Yeah, that’s why I brought it up.

Yeah. You're no different. But it’s, you know, we’re able to pretty effectively deal with the issue, for a couple of reasons. And actually there’s a newer reason, which the case at ITC now, that will go to decision in -- we’ll have the trial on October and decision in February. So in some ways, that will get to a final result faster than the Nokia appeal, because the Nokia appeal, while we believe we should prevail, it likely then goes back to the ITC for further proceedings. So, to some extent, the new case and the number of patents in that case, the diversity of patents and the strength of that case is starting to overshadow the Nokia appeal. But people do bring it up, but I think they bring it up because, as a good negotiator on the other side, you’d want to do that. But it doesn’t really have a big impact in terms of what we see people ultimately doing. Ron Shuttleworth – M Partners: Got it. With respect to Apple, obviously they are a licensee but obviously their license is modest in comparison to their market share. What is the strategy as it relates to Apple? I know they renew in the middle of 2014, but is there -- do you have a separate strategy to deal with Apple at this point?

Sure. As I mentioned in my remarks, we actually look at each customer differently in terms of what are the opportunities with them, right? Because there are -- tend to be one or more touch points now with customers, it’s not just handset sales anymore. There’s a lot of activities that people become involved in that we can -- that either they step on patent of the company or that there’s opportunities for us to provide technology to them, right? So, because of that and because license agreements never cover everything, there’s always opportunities to go back to folks. And we do that. We do that pretty aggressively when we see those opportunities. And so, you can be sure, we have ongoing discussions with a lot of our licensees, and Apple would be no different. And we’ll bring to them a set of solutions. That set of solutions for them may be a little different than other people. Some of the intellectual property that we’re seeking to acquire could be more specific to Apple as a content provider than to a Nokia as a simple shipper of product. So, approach to an Apple could be different than a Nokia. But ultimately, the design of the program going forward is to make sure we bring the greatest value and the greatest leverage to those negotiations, whether it’s Apple or other folks. And we may have to tweak it depending on who we’re in front of because what works in front of one customer may not work in front of another because their business model is slightly different. So, I think at this point we have a pretty comprehensive set of items we can bring to Apple, and certainly we’re trying to do our best to leverage that and to enhance relationship with them. Ron Shuttleworth – M Partners: Okay. Just one, Scott, the $8.7 million or $8.8 million or litigation costs, should we consider that to be a run rate for the next four quarters or five quarters?

Yeah, you know, that’s probably the hardest one to predict, and that’s why we don’t really provide a lot of expense guidance particularly for that one. But I can probably tell you that a significant portion of that expense is related to our most recent ITC case, and that case will continue to be very active. Ron Shuttleworth – M Partners: Okay. Now, the last question I have, around that case. Now that it goes to trial -- sorry, the trial ends in October. Do you expect that all or some of those folks would look to sign a license in and around that time, or do you expect them all to sort of go to a decision? And then what happens after a decision? Will there be an appeal? Will there be -- will this be a definitive endpoint in February?

Right. So, the -- maybe I’ll just do the timeline first and then sort of the opportunities with the parties, right? So, the way ITC practice works is we’ll have a trial in the October/November timeframe, I think it’s last week of October, first week of November. We then get the administrative lodge judge’s decision in February. That’s the recommended decision from the judge, so it’s not binding on anyone yet. That then goes to the commission, which I think is in June. The commission can either full affirm, fully reject or modify the ALJ’s decision. Assuming that he fully affirms a positive decision for us by the ALJ, then there would be a waiting period of 60 days before an exclusion order would go into effect, assuming that was the recommended remedy, and we would expect that that would be the recommended remedy. And beyond that -- and whether or not a party appealed, typically that exclusion order remains in effect. It’s only been very rare that the federal circuit has [stayed] an exclusion order pending appeal. So, while the case would not be final and probably gone through the appeals court, the impact of the exclusion order would be felt, and therefore the opportunity for settlement is there. So that’s how the case works. As far as how parties behave, it’s hard to say what they’ll do. I think they each have their own agendas, and so that would suggest that they may not walk in locked step on this. And if you’ve watched prior ITC cases with multiple parties, it’s not uncommon for one or two parties at least to peel off and settle the case, if that’s the thing that makes sense for them. I think, you know, obviously the things that will motivate parties along…

I think that’s a theoretical possibility that I don’t think practically, I don’t think it happens. Because first of all, LTE devices would be multimode devices, and so they would need to get coverage on both anyways. So I think as a result, it’s either -- my guess is it’s all or nothing with those folks. Ron Shuttleworth – M Partners: Okay, thank you. Thank you for your time and thanks for answering the questions.

And we’ll move next to Michael Cohen with MDC Financial Research. Michael Cohen – MDC Financial Research: Yeah. The appeal to the Court of Appeals Federal Circuit of the 613 ITC investigation against Nokia, oral arguments were at January 13 of 2011, so we’re now more than a year later, in terms of overdue. Do you have any guesses or clue why their case is the longest ever taken for an appeal on an ITC case?

Actually I don’t know if we’re the longest appeal ever on an ITC case. I think we are the longest appeal sitting at the court right now. And we don’t know. I would tell you that we inquire with the court from time to time just to make sure that -- just to kind of make sure that we’re heard, because it is important that we get a decision here. I think as a matter of certainty for the business, one way or the other, it’s good to know. But at this point, the court operates on its own schedule. And we, like everyone else, just the best we can do is just wait everyday and -- but in any event, as I mentioned before, we’ve done so much work since that case in terms of maturing the patent portfolio and getting new patents from the Patent Office, maturing a new case. The case actually is starting to have a pretty diminished view in terms of the license program. Michael Cohen – MDC Financial Research: Do you think if, let’s say, decision came out and it went in you favor in this kind of timeframe right now, do you think that adds much extra leverage in licensing or do you kind of view it as moot?

I think it does. I think as far as people are concerned right now, they’ve put it in the loss column, and we’ve been operating with it in the loss column for a number of years and operated very successfully. So, if it moves over to the win column, I think that’s actually a big step-up for us in terms of two things. It gives us immediate -- a more -- or at least a second near-term opportunity with Nokia, right? As I said, it may now be on the same timeline as the other case. It validates those patents in that case, which is good. It would provide some strength in terms of the licensing program and as well as having a fully validated patent. That’s always a positive. So I think it’s all, in my view, it’s mostly upside out of that case, because it’s not -- what we lost at the lower court, we’ve been operating with the loss for the last couple of years and people have continued to finalize it. Michael Cohen – MDC Financial Research: Okay. Well, great. Thank you. And good luck on getting the double-pronged attack.

Thank you, Mike.

(Operator Instructions). We’ll go next to Jonathon Skeels with Davenport. Jonathon Skeels – Davenport & Co.: Hi. Thanks for taking the question. Can you talk a little bit about, on the patent sale process, can you talk about the real strategic advantage of the sale? And has discussion of it impacted renewal discussions with licensees and, you know, are there enough opportunities for you to sell pieces of the portfolio to truly I guess provide you leverage on renewal and new licensee discussion?

Yeah, I would tell you that it has provided very good motivation for licensees, so -- and not with all licensees. It doesn’t work across the board. But with certain licensees, it has been a motivating factor, which is good. And it’s a motivating factor from two perspectives. One is simply that folks want to be able to deal with the portfolio in its current state under one ownership versus needing to deal with it under perhaps multiple owners, and so that’s motivating folks. Second, there are parties out there who wish to buy back, and so -- but there are also folks that need a license. And there’s the opportunity to bundle both of those opportunities together with the customer in terms that are advantageous for them and advantageous for us. So it’s done both of those things. And then third, it’s part of a larger process as well. These are patent assets that we believe are not core assets of the company in terms of the need to drive the licensing programs. And so, to the extent we can -- but also as I mentioned in my remarks, there are other assets that we could acquire that we think could go into the core and drive greater value. So it’s essentially just a portfolio balancing exercise in a way if you think about it like that. We’re taking non-core assets, selling those off, generate cash, take that cash, buy other assets that you can then make core assets, and so you’ve optimized your portfolio again. Jonathon Skeels – Davenport & Co.: Got you. And then I guess just on cash, in the cash balance, you talked about acquisition. I guess they sound relatively small, that there’s going to be a continued buyback. How much cash do you want to keep on the balance sheet for possible increasing litigation purposes?

Yeah, I think, you know, the way we discussed in the past, our view hasn’t really changed much. We think a minimum cash balance somewhere in the $200 million range is appropriate for flexibility and balance sheet strength supporting our core licensing business. Above that, I would say most of the balances is discretionary in nature and it’s there to support potential acquisitions as well as returning capital to shareholders in the form of share buybacks and dividends. And we evaluate use of that discretionary cash on a very regular basis with the Board. We have no particular interest in hoarding cash or no particular bias in terms of one use or another. We do what we believe in the long run will generate the greatest value to shareholders. That said, acquisition opportunities don’t all line up and present themselves at once, so it’s fairly prudent to maintain a balance that you think is appropriate to fund acquisitions if and when they do come along. And that’s exactly what we’re doing. Jonathon Skeels – Davenport & Co.: And then the last one is just on the expansion in R&D focus and strategy. What does that mean for expenses near term and when do you see a benefit from the strategy with the existing licensees?

Yeah. I think in terms of our expenses, we’ve ramped those up. On the non-litigation, as I said, they increased year over year by 1.4%. So we’ve basically done the ramp-up and would expect outside of new activities, if we were to enter for example into an agreement to provide professional services and support IP modem licensing, they might ratchet up separately, but that would be matched with revenue. Apart from examples like that or significant acquisitions, I’d say we expect the increases to be relatively modest. Second component is litigation, and of course that is always a function of the activity level. And I think I commented on that on an earlier question.

Yeah, just in terms of the timeline of when the expenses can actually start to drive revenue, obviously some of the expenses related to patent generation and there’s a normal lag essentially with that. But other of the expenses that we commented on in the script, things like productizing the Smart Access Manager and some of the compression technologies working, actually haven’t much near-term opportunity to either drive revenue independently, but probably more likely be used in combination with patent licenses and used as gap fillers and other types of ways to resolve patent license agreements. And that -- so they would help facilitate that revenue, so, some of the stuff that have nearer-term impact.

Anything else, Mr. Skeels? Jonathon Skeels – Davenport & Co.: No. Thanks.

(Operator Instructions). We’ll go next to Jeff Kvaal with Barclays. Jeff Kvaal – Barclays Capital: Yes. Thanks very much. I guess a lot of the questions have been asked and answered. I think one that I was wondering about was, the general landscape for patent transactions in general, it seems as though the cellular landscape between the vendors has shifted a lot over the course of the past year since the MMI and Nortel deal, concentration of share at Apple and Samsung. I wonder if that has had any impact to the tenor of the discussions that you have with licensees. Similarly, we -- from outside, I don’t see all the deals, but it just seems that we were in a bit of a dry spell on some deals for a while, now AOL has just sold some patents, Microsoft, Google, [pass them along]. Should we be reading into that as a re-acceleration of interest in patents or is it just steady as she goes? Thanks.

Yeah, I think that the -- a couple of things. The patent landscape in terms of sales, I think there continues to be a good appetite for folks for high-quality patents. Like any of the sales -- any sales process, a good result comes from good competition in the marketplace. And so, I think that there’s still good opportunity out there to sell patents, which is one of the reasons why we moved out with a portfolio that we did, and we’ll see how that plays out. I think that, that said, there’s also a lot of structures that can be used beyond just an outright sales structure, as folks are looking for different ways to monetize patents and create strategic value out of patents, and we’re open to different types of structures on those transactions. So that’s the first -- your second question. In terms of, you know, as a result of the Google transaction and patents moving around generally, how that’s affected our licensing program, really no impact there at all for us, if I understood your question right. And we’re not the subject of folks pushing back against us with patents, so it doesn’t really matter to us who holds patents. The key thing in our discussions with folks is what patents we own. And so that shift at least in terms of who owns what patents and who bought patents from who doesn’t affect our licensing program. Certainly the shift in share among customers is changing the discussions with folks. As people lose share or gain share, that changes the dynamic of those discussions appropriately. But that’s nothing new for us; that’s been a common theme of negotiations over the last 15 years or so. Jeff Kvaal – Barclays Capital: Okay, Bill. Thank you.

Thanks.

Next we’ll go to Eugene Fox with Cardinal Capital Management. Eugene Fox – Cardinal Capital Management: Thanks, guys. You made a reference on your last call to be cash flow breakeven from operations for the year. Do you all still believe that’s a result you can achieve?

We do. Eugene Fox – Cardinal Capital Management: Okay. That’s the big one for me. Thank you.

Sure.

And we have no additional questions in our queue. I’d like to turn the call back over to our presenters for any additional or closing remarks.

All right. Thank you very much for everyone for dialing in. I certainly will be available if anybody has additional follow-on questions. And thanks for your time.

That does conclude today’s call. Thank you all for your participation.