Good day, and welcome to the InterDigital Second Quarter 2014 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Patrick Van de Wille. Please go ahead, sir.

Thanks very much. Good morning, everyone, and welcome to InterDigital’s second quarter 2014 earnings conference call. With me this morning are Bill Merritt, our President and CEO; and Rich Brezski, our CFO. Consistent with last quarter’s call, we’ll offer some highlights about the quarter and our outlook, and then open the call up 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 results and events contemplated by such forward-looking statements. These risks and uncertainties include those set forth in our earnings release published this morning, and those detailed in our Annual Report on Form 10-K for the year ended December 31, 2013, 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. With that, let me turn the call over to Bill.

Good morning everyone. Thanks for joining us. As you saw in the release this morning, we delivered a spectacular quarter, with strong growth in revenue year-over-year. We also established a great baseline of revenue for coming quarters, with significant market opportunity remaining to drive to even higher revenue levels. In short, an increase in topline, combined with the stable expense line delivering great profitability in cash flow and a significant part of the market remaining to be addressed. Our success drives off the continued strength of our core licensing business. Obviously we’re thrilled to renew the Samsung license during the second quarter. That renewal draws both our quarterly recurring revenue as well as the past sales revenue for the quarter. Licensing Samsung should come as no surprise. Despite all the negative rhetoric in the market about patents and patent licensing, the fact is that good companies continue to sign licenses for valuable patent portfolios like ours. Indeed, Samsung, the leading supplier of handsets in the mobile market, now has been a licensee of ours for nearly 20 years, which is great one and we have designed the new agreement to possibly take us nearly another 10 years. But the Samsung agreement was not the only big driver for us in the quarter. We continued to see strong royalties from Pegatron as it continues to perform well as Apple’s number two supplier of iPhone products. Our agreement with Apple expired at the end of June, and we have continued to work to renew that agreement. We do not see that expiration as having any negative impact on our business. Indeed, with reports of Apple further diversifying its supply chain to include Wistron, another licensee of ours, we can potentially see our revenue from Apple products increase before the end of this…

Thanks Bill. We reported recurring revenue of nearly $75 million in the quarter, representing a strong increase of over $30 million or about 70% over second quarter 2013. The increase in our returning revenue, as well as strong past sales of nearly $120 million, resulted from the three agreements signed in the quarter, including our previously announced agreements with Samsung and Fujitsu. We expect to release our guidance for third quarter in the next week or two, but I can tell you that we view $75 million as a reasonable recurring run rate to think about going forward. Having said that, given the recent expiration of our license with Apple, the potential loss or deferral of revenue from one of our licensees that recently announced a debt workout, and slowing iPhone sales ahead of the anticipated launch of the iPhone 6 later this year, we currently believe Q3 recurring revenue could be down roughly $2 million to $4 million from the current quarter before recovering in Q4. Of course this depends on a number of factors, including the timing of the next iPhone launch, the level to which our licensees participate within Apple’s supply chain, and the -potential to sign new license agreements. Our second quarter 2014 operating expenses of $65.9 million were up nearly $11 million from the prior year. Let me explain this in more detail as there are a number of puts and takes worth noting. At a high level, our recent expense trend is driven by three areas. First, as we expected our litigation expense dropped considerably since last year. This is very good news. It is always difficult to predict future levels of litigation expense, but as Bill mentioned, we expect to be pretty active in the second half of the year. So, we could…

Thanks Rich. With that, I’d like to open the call for questions.

(Operator Instructions) And we’ll take our first question from the site of Charlie Anderson with Dougherty & Co. Please go ahead. Charlie Anderson – Dougherty & Co: Great. Thank you for taking my questions. Rich, I wanted to ask you about the OpEx. So you are up I think $15 million sequentially if I exclude litigation. How much of that is sustainably higher versus how much is a onetime effect based on some of the things that you did in the quarter?

Sure. In answering that Charlie, let me highlight something for you in our financial metrics which we also posted this morning to help you and others gain an understanding of these kinds of trends. We have always reported adjusted operating expense which adjusts our operating expense in any one period for items – onetime items such as repositionings, compensation accrual adjustments and the like. It also backs out pattern amortization, which is a non-cash item and intellectual property enforcement and litigation cost. We now actually present that as pro forma operating expense and we just slightly adjusted the way we treat compensation to provide a better period to period comparison there. And you’ll see that over the last couple of quarters we’ve been running around $32.5 million based on that metric. It was abnormally low in the first quarter of this year at about $30 million and then popped up to about $35 million. You can think of it as being maybe $2 million to $3 million above trend, which is attributable to the first research and development and some of the items I noted in my script. And then I guess the rest would be a couple of different things, but basically as the patent portfolio grows we have maintenance fees that we have to file throughout the world. Those increase and that’s certainly a component of it as well. Charlie Anderson – Dougherty & Co: Perfect and then on the revenue item, like you said, you are 5.3 from the two new agreements recurring and then I think 17 from Samsung. Are those partial quarters or is that locked in what we will be doing each quarter with those two amounts?

Yeah. So, we are recognizing all of those agreements on a straight line basis. So what we typically do when we sign a fixed price deal recognized on a straight line basis, we’ll treat and categorize as recurring revenue, the full revenue for that quarter and any amounts from prior quarters would be reported in past sales. Charlie Anderson – Dougherty & Co: Got it and then you mentioned and it was in the Q as well that one of your licensees is going through the restructuring. Did you recognize revenue from them in the quarter, is that just stop recognition in the quarter that we are in?

We recognized some revenue from them in the quarter, but basically it was based on cash that we had already collected. So there were some, we were running -- the cash was running ahead of the revenue. At this point we’ve recognized revenue up to the cash collected. But that did represent a decrease from prior quarters and I think I alluded to the fact that absent a change, either another payment or some positive development there, we would not have revenue from that licensee at all in the third quarter. Charlie Anderson – Dougherty & Co: Got you. And then last one for me, you mentioned the two new agreements are very nice new agreements, a bit customer like Ericson. Were those signed after the initial determination in your recent case or before? And then also just qualitatively, how does the licensing pipeline look today both in infrastructure and in terminals?

So, in terms of the timing of the sign, I won’t get into that, but I’d say the infrastructure patent portfolio is different in some respects from the portfolio or the pieces of the portfolio that were in the ITC litigation. So, one is not certainly going to drive the other in any event. The licensing pipeline for both sides I think is in good shape. It's certainly on the terminal unit side. I think we’ve got some good wind in our back with Samsung being done. I think it provides a benchmark for folks and an additional validation of the portfolio. So Larry’s team is pretty busy out there with folks. We have some litigations coming up. I think litigations always provide an opportunity for folks to sit down and chat about things, which is good. Again, litigation is really not – it's not a strategy of the company. It’s more a tool that we use for getting discussions going and driving deals. So we feel pretty good about the terminal unit pipeline. On the infrastructure side, it's in the Trust’s hands now. I think we’ve turned it over in very good shape in terms of both really good assets and validation. It’s a smaller market so they don’t have as many targets to chase. But I think they’ve got – they’ve also got some good wind in their back right now.

And we’ll take our next question from the side of Tim Quillin from Stephens Inc. Please go ahead. Tim Quillin – Stephens Inc.: Good morning. Nice quarter of course. On the fixed fee licensee that’s in poor financial shape, I guess first of all my assumption is we’re talking about Pantech and maybe you can confirm or deny that. But is there a chance that as they get through their debt workout that they renew licensing or what's the fluidity of the situation there?

Yes. Sure Tim. I don’t know that I can confirm or deny that it's Pantech, but certainly Pantech is a licensee of ours. With respect to – so I'll just answer the question with respect to the disclosure we made. The company is in a debt workout. We’re at the moment kind of on a cash basis as a result of that because we can’t place reliance on future payments based on our understanding of the situation, which is somewhat limited. And if that outlook improves, certainly if they renew payments under the license agreement, then we’ll certainly renew recognizing revenue. Tim Quillin – Stephens Inc. : Okay. And was Pegatron at a similar level to 1Q revenue levels that they end up somewhere in that same ballpark?

Yes. So I don’t think as a result of all the past sales revenue and the increase in recurring revenue that we reported in the quarter, I don’t believe that they were a 10% licensee in the quarter. But if you look on the financial metrics that I alluded to before, we do provide 10% for both the quarter and year-to-date. So that might be helpful to you. Timothy Quillin – Stephens Inc.: Okay. Yeah, the year-to-date is great. And on the Ericsson deal, what was the patent consideration? And did that include – was the patent consideration just for past sales or was that also in consideration of the ongoing royalties?

Yes. So again I can’t really answer this question with respect to Ericsson. What I can refer you to is in our 10-Q we discuss that we did sign two agreements during the quarter. That included at least partial consideration in the form of patents, and/or a patent purchase agreement signed in connection with that agreement. So I guess one of those agreements was infrastructure only. The other included both infrastructure and terminal units. And I think the total patent value that we received was about $64 million in aggregate. During the quarter, revenue that we recognized from non-financial sources, which would include patents, was about 8% of our total revenue and that’s higher than we’d expect on a recurring basis because of the past sales. Timothy Quillin – Stephens Inc.: Okay. And then, I’m sorry I didn’t hear you. Was it $64 million the consideration?

$64 million total, yes. Timothy Quillin – Stephens Inc.: 64. Okay, very good. And then Rich, I was trying to -- and I think I probably can read the transcript and have a better idea, but I was trying to figure out how to model development costs on an ongoing basis in particular because it sounds like maybe they’re going to be a little bit higher than expected, but there were some unusuals in 2Q. Can you just give us a sense of what 3Q might look like?

I think one of the comments I provided in the script was that overall we’re looking for a relatively stable investment in research and development. There are always reasons that, that could change. So for instance, we right now have some funding from the Convida joint venture. Should we get additional funding from other parties that line can go up. There’s always going to be some period to period ups and downs because quite frankly we manage the company based on making appropriate investments based on the returns that they’ll generate. But over the longer term we are looking to keep that in a relatively stable position. Timothy Quillin – Stephens Inc.: Okay, and then just last question on cost. In terms of the patent administration and licensing, there’s a chunk of that that’s IP enforcement and a chunk of that that’s maybe more easier to control. But how low -- if you get past this year and get some resolution on a couple of the outstanding issues that you have, how low could that line item go for you in 2015?

So, I think the big variable there of course is the IP enforcement and we’ve talked about that probably on just about every call we’ve had. We noted in recent calls that we saw that coming down, and in fact it has. I think looking -- I know your comments focused on 2015, but we do expect to be busy in the second half of that year. So we could see it perhaps creep up a little bit, not to where it was though. I think, sitting here today, it’s hard to really project out into 2015. But I certainly could see it at the levels we’re at in the second quarter, perhaps lower. But then again if we feel the need to enforce our portfolio it could go up.

(Operator instructions) and we’ll go next to the site of James Berkley from Barclays, please go ahead. James Berkley – Barclays Capital: Thanks you for taking my questions. Just first I was wondering if you could provide some color around Pegatron, your expectations there given the much anticipated iPhone launch this fall.

Yes, I think the big question is the timing. I think we’ve all read a number of rumors recently. So the impact on our financials during the balance of the year is going to largely depend on whether or not the launch takes place in the third quarter. We recognize revenue from Pegatron on a quarter lag. So sales would have to occur in the third quarter to appear in our fourth quarter results. Last year there was a mid to late September launch, but as is the case with Apple, there’s typically a very big sales element in the first week or two. That drove some nice results for us in the fourth quarter of last year. And then in the first quarter we had another good contribution from Pegatron because you had a full quarter’s worth of sales. So, should the launch timing be similar, then we look forward to that kind of impact. I’ve read reports that with a larger form factor, there’s pretty good expectations for growth over what Apple experienced as a whole last year. And we’re anxious to see that develop and to see what Pegatron and other licensees’ participation in the [inaudible]. James Berkley – Barclays Capital: Great, thanks. And then I guess, if you just touch on Capital allocation, how you are thinking about that with the newly expanded repurchase program and increased dividend. And just like looking at that combined with the large amount of cash you’ve kind of accumulated over the years relative to historical levels, how sustainable is the quarter to date activity that -- and I guess all the activity recently, the $30 million that we’ve seen over the last couple of months here?

Yes. So the way I look at that is I’d start off again with recurring revenue. So as I mentioned on my prepared comments, we are around $75 million for the current quarter. And of course putting aside the ability to grow that and expand to the roughly half of the market that’s unlicensed, that suggests that going forward you can think about $75 million. It’s going to move up and down and certainly following an iPhone launch it could move up. But that’s the starting point for any thoughts there. And as Bill mentioned, we have demonstrated some pretty good results in past sales over the last two or three years. So that’s always additive as well as new license agreements. Combine that with expenses that should be relatively stable, but for litigation maybe moving around and we expected to be profitable. We expect to generate cash flow. And that was all part of the basis for our commitment to return capital to the shareholders in the form of the increased dividend and the $300 million buyback. James Berkley – Barclays Capital: All right, great, thanks. That’s really helpful. And I guess just lastly, if you could go into more detail regarding the compensation catch-up. From what it sounds like it’s a onetime thing, but can we expect that to continue at any level as additional agreements are reached in the future?

Yes. So basically what we’ve tried to do is articulate the difference between the recurring impact based on now being at higher accrual rates from the what I’m calling the nonrecurring impact where we’ve had prior quarters that were accrued at lower rates. So you have to almost, the first thing you have to do is adjust your opening balance for the quarter so to speak. And that catch-up was $7 million. So absent significant new agreements, we’re probably – you can pull out that $7 million and have a pretty good idea of where we are at and where we’d expect to be in future quarters here. But certainly if we had significant success and signed significant deals, you could see an increase then and another catch-up.

And I would like to know turn the call back to Mr. Van de Wille, Please go ahead. Your line is open.

Thanks very much. Before we close the call, a couple of points first. In addition to today’s press release that as Rich mentioned, I’d like to invite investors to download our financial metrics tracker that providers a snapshot of key financial metrics tracked back nine quarters, which allows you to do a comparative examination of the similar quarter for three years. You can access it on the homepage www.interdigital.com by clicking the link on the left side of the page that says view our financial metrics tracker. Finally, I’d like to close this call with the remainder that we’ve announced [inaudible] yesterday which will be held September 4th in New York City. We are proceeding with invitations. So please feel free to contact me at the contact information listed in the investor section of our website. We’ll also be screening the event live and taking question from the online audience. And once again the information to access that stream will be available on our website as we [inaudible]. Thanks for joining us today and we hope to see you soon.