At this time I would like to welcome everyone to the IDT Corporation first quarter 2008 earnings conference call. (Operator Instructions) It is now with great pleasure that I turn the floor over to your host, Mr. Jim Courter, Chief Executive Officer and Vice Chairman of IDT Corporation. Sir, you may begin your conference.

Thank you very much. Thank you for joining me, it’s Jim Courter. This is being recorded live. I’m being recorded live in the studios at520 Broad Street inNewark. Welcome to our conference call which is obviously reporting on the first quarter of our earnings, first quarter fiscal year 2008, which of course ended October 31st for this calendar year 2007. Before we begin I must caution all those listening today regarding any forward looking statements that you may hear during the course of the conference call during both the prepared remarks and the Q&A period that follows we may make forward-looking statements either general or specific in nature. These statements are subject to risk and uncertainties that may cause actual results to differ materially from those which we anticipate. These risks and uncertainties include but are not limited to specific risks, uncertainties discussed and reports that we file with the SEC. We assume no obligation to update any forward looking statements that we’ve made or may make or to update you on the factors that may cause actual results to differ materially from those that we forecast. First of all, let me start out with an apology about last quarter’s call. I apologize for the technical difficulties we had during that call. We recorded, and prerecorded, I thought it was well and we started to launch into the Q&A session and we were abruptly terminated by the conference call provider without any warning to IDT or any warning to our callers. And we will take every precaution; take every opportunity to ensure that something like that does not happen again. It was a personal embarrassment to me and obviously an embarrassment to the company. On the call with me this afternoon are our Executive Vice President and CFO, Marc Oppenheimer,…

Thanks, Jim. For the next few minutes I would like to update you on IDT’s financial performance for the first quarter if our fiscal 2008, discuss some of the trends we continue to witness in our business and provide some insight into our plans for the future. I’d like to first walk you through some changes that we’ve reflected in our earnings release this quarter resulting mainly form the way we now view the operations of our telecom position business segment. The purpose of the changes we’ve made is to better track our business’ performance in order to align them with economic realities and shareholder expectations. We placed some of our more experienced managers at the helm of telecom in order to drive the turnaround. The goal of the reorganization plans is to ensure that telecom maximizes cash-flow generation so that the company has the opportunity to deploy it in the future growth opportunities. Those managers and much of their staff are now directly incentivized to create cash flow. They have accepted substantial salary reductions in return for a share in the value creation and cash flow that they generate. As a result of these changes the segment reporting information has been modified to form to current managerial business views. Although still a telecom business segment, now it reflects revenue not only from selling termination minutes of use to third party telecom carriers, but also inter-segment revenue generated from selling minutes to IDT telecom’s internal retail businesses on the basis of termination costs upon markup. In turn full network operating costs for terminating traffic, such as connectivity and network SG&A which historically had been proportionally allocated amongst all telecom business that use minutes, are now fully absorbed by the wholesale telecom segment. This effort now helps the management team better…

Thank you. [Operator instructions] We’ll pause for just a moment to compile the Q&A roster. Thank you, your first question is coming from Donna Jakers from Janco Partners, please go ahead. Donna Jakers – Janco Partners: My question – just a few quick ones, I guess. There’s a sharp increase on the income taxes payable on the balance sheet. Can you address that?

Yes, Donna, Marc here. There’s a new accounting pronouncement called FIN 48, where instead of putting a net figure, we actually put in the balance sheet deferred tax assets whereas previously it was just deferred tax liabilities as well as income tax liabilities. If you look at the number previously we had $105 million, after you show all the detail that number now is actually $127 million, it went up 22 million in the period but because of visibility we actually show that $345 million as a potential tax liability against which you have the credit of the $218 million. So the net number actually only went from $105 million to $127 million. Donna Jakers – Janco Partners: Okay, there’s been no change in the audit from the IRS?

No, this is purely the accounting pronouncement that went into effect August 1st for us. Donna Jakers– Janco Partners: Okay, and then the share reversals that you mentioned that you guys had bought back 4.9 million shares in the quarter, I'm assuming this was late in the quarter since that doesn’t show up in the weighted average number of shares?

Yes, actually there were purchases under the 10B51 program that is a current program, and then others that were late in the quarter. Donna Jakers– Janco Partners: So was there also no new shares granted that offset some of that or should we be looking for a sharp drop in number of shares outstanding then next quarter.

No, you’re actually going to look a number that's now below 76 million. Donna Jakers– Janco Partners: Okay, great and finally on the plans on further debt purchases for Carmel, I know when I talked to you guys last quarter you were evaluating several foothold purchases, has nay decision been made there?

Yes, on Carmel we’re actually watching the environment very, very carefully as you know there’s been deterioration in the credit markets and that's impacted pricing. We see portfolio pricing in the stock market coming down and we still have contractual obligations of approximately $20 million on the forward flow programs. But we’re evaluating opportunities on a regular basis now in the stock market because those prices have definitely come down. Donna Jakers– Janco Partners: Okay and I guess just one last question. You mentioned moving the infrastructure of the wholesale operation as far as the cost-cutting on connectivity charges to more of a white platform. Can you talk about any sort of goal there that you have as far as reducing that connectivity cost?

Sure, Donna, if you look at the, as an example, the start rate. If you go to the beginning of fiscal ’07 which would be August 1st of 2006, our run rate for connectivity globally on our platform was approximately $47 million. If you look at the current run rate because of the change over to VoIP as well as shutting down some of the antiquated switches that run rate is currently $38 million. And if we look to the end of our fiscal year, look forward say another seven months from now, we are expecting that number to drop down to the $32 to $33 million level. So we’ve had a $15 million drop from that steady state run rate. Donna Jakers– Janco Partners: And that $32 million would be on sort of an equivalent number of minutes?

That’s correct. Donna Jakers– Janco Partners: Okay great, I’ll get back in the queue, let some other people ask questions.

The next question is coming from Clay Moran from Stanford Group. Please go ahead. Clay Moran – Stanford Group: Questions – I have a few. On the IRS audit, do you have any sense of the timing of when that could be resolved? And since there’s no accrual for any potential settlement does that mean you don’t expect any significant expense out of that?

We actually have an accrual in those numbers, Clay. As I mentioned to you before we had a variety of items that we showed as deferred tax liabilities, so it was in there. As far as planning is concerned, it’s difficult. We still hold to our position, it’s an ongoing audit. If we’re able to put this behind us as I said to you before we’ll be happy to do it. But it’s something that is still ongoing so I’m not able to report at this time any concrete additional information. Obviously if we can make this go away, it’s in everybody’s interest. Clay Moran – Stanford Group: Okay, how much for the net to phone issue is included in the current accrual?

We have in the current accrual approximately $70 million. And then there are additional monies accrued for some interest. But that is the amount that had been accrued and as I said that’s covered in the $105 million that previously showed up as part of the deferred tax liabilities. Clay Moran – Stanford Group: Okay, when you were talking about the cash uses during the quarter I think you mentioned $55 million used for operations? Then you gave a bunch of other numbers, were those other numbers included in that as well or what is in that $55 million from operations since I think EBIDAT loss was about $15 million?

Yes, if you look at EBIDAT that was about $15 million there was about $1.5 million of non-cash compensation. You had depreciation and amortization of approximately $18 million. Offsetting that – clearly we didn’t collect the cash yet, but you have the arbitration award for $40 million. You also have some minority interest payments, some restructuring and impairment charges. Also some residual severance drag from the reduction in workforce that we’d previously done, where we’ve had some of those. And then the largest part was obviously the reduction in accruals and payables. Clay Moran – Stanford Group: Okay, so some of those numbers that you gave after wards were in that $55 million.

That's correct. I just had to give some color to it, Clay. The accounts payable went down about $38 million. So I think that's the biggest portion between EBIDAT and cash flow. Clay Moran – Stanford Group: Okay, on your balance sheet there’s an item for investments, it’s about 20% of your market value today. Can you give us more color in what’s included in those investments?

Sure some of the investments are actually strategic investments that we’ve made where we are interested in as Howard mentioned in the last call, migrating form some commodity margin types of business to areas that will allow us to be an enabler of technology versus servicing, those are some of them. Others are part of a blended portfolio. You’ll see that number is pretty consistent though, Clay, quarter to quarter. It’s reached an area where I wouldn’t anticipate there’d be a significant change in that. Obviously from a P&L perspective with the deteriorated and treaded environment and the FOMC action to lower interest rates the interest income on the treasuries and other investments - at least safe investments – will go down. But as far as mix is concerned, pretty much it’s going to be consistent as you see it. Clay Moran – Stanford Group: Its investments within your IDT Capital?

Its investments – some of them are telecom, some of them are in Capital. And some of them are part of a treasury portfolio while we’re waiting to deploy the funds in our businesses. We are taking advantage of certain opportunities to supplement the P&L. Clay Moran – Stanford Group: Okay, one more question just on the Cap-ex. I guess I was thinking you could see some change4 there seeing some of the asset sales, changing the run rate that is, the asset sales and the pull back on expenditures and general – is the 9 million about right for a quarterly run rate and can you give us any idea what the telecom investments are these days?

I think that if you look a run rate on an annualized basis as an example for the fourth quarter we will be running at about $17.8 million in TP and Cap-ex. If you look at the estimate for 2008, it’s going to be closer to $12.5 million. We also have as we previously discussed, we’re going to be purchasing the building that we’re in. That will save us significant amounts of cash over time as the escalating lease payments are avoided. But if you look at the mix of Cap-ex, part of it is going to be to allow us to have better margins; part of it is actually going to be in some of the various businesses, the IDT Capital as well as some of the telecom and proprietary technology that we’re looking at. Clay Moran – Stanford Group: Are you saying $12.5 million in telecom Cap-ex annually? Is that what you’re referring to when you say PPE of property, switches and such?

Yes, yes, that’s correct. Clay Moran – Stanford Group : Okay, thank you.

Thank you, your next question is coming form Donna Jakers of Janco Partners with a follow-up question. Please go ahead. Donna Jakers – Janco Partners: The key business is not broken up any more, so is that still an IDT Capital, is that part of the other?

The EGB is part of at this point in time telecom because it’s handled through our ethnic distribution which is the UTA Venture. At this point in time it’s not material as far as the segment is concerned. And we’re looking at whether it really should take management time and focus. And under the new capital asset allocation model that we’ve created, Donna, the return that we’re going to get form that business is a commodity return. So it’s not something we’re not going to supply any significant funds into. Donna Jakers – Janco Partners: It was running around $4 or $5 million – wait; sales in ethnic gross were around $6 million a quarter. Is that still where is its and what part of telecom is it in, the prepaid?

It is in prepaid. The number that you’re quoting is an accurate number. It’s basically an autopilot asset that is not going to create a tremendous amount of value for us at this point in time. We’re looking at losses of approximately $2 million for the year. And based on the fact that it’s going to be losing and not contributing I would have thought that we can do better things with our time and our money, Donna. Donna Jakers – Janco Partners: Any chance of monetizing it?

We’re actually looking at that, there are a variety of avenues that we’re looking at. And certainly over the next few months we want to have some clarity on that particular asset.

Donna, it’s Jim. We’re going to try to monetize it otherwise we’re going to close it down. Donna Jakers – Janco Partners: Okay, thanks, Jim. Then on corporate expenses, obviously we saw it tick up in this quarter, any sort of color on what’s causing the up tick and where the plan is for the year?

Yes, actually on the corporate SG&A, we’re actually looking for it to come down. We had some residual one-time items in it. If you look at the average for the 2006, we were at 14 million; we got that down marginally to 13.5. We’re looking to get that down to 11 million but, again, I have to say that there are periodically things that percolate that can have an impact in any one given time. But that’s a fair expectation, Donna. Donna Jakers – Janco Partners: Eleven million per quarter?

That's correct. Donna Jakers – Janco Partners: Okay and then just one last question on the price versus the face value of the debt you purchased this quarter. It ticked up from somewhere inthe eights to looking like 9.1 cents per dollar of debt purchased. Is that because of the agreement that you’re had that you’re locked into those higher rates; because otherwise I would have thought the market would be more opportunistic than that

Actually it’s because of the forward flow, as I said the stock market’s come down and if you look at the dollar waiting, the bulk of what was purchased were the forward commitments versus stock market.

Again typically for the mix of different stock market purchases compared to the forward flow that we have over purchasing every month at the committed price, the difference in pricing is there were less other purchases during the quarter. There was less mix of other portfolio purchases. Donna Jakers – Janco Partners: Thanks.

There appear to be no further questions and this does conclude today’s IDT Corporation First Quarter 2007 earnings conference call. You may now disconnect your lines at this time and have a wonderful afternoon.