Bill S. Pereira - Chief Financial Officer Howard S. Jonas - Founder, Chairman, Chief Executive Officer and Chairman of Nominating Committee Bill Ulrey - Vice President of Investor Relations & External Affairs

Welcome to IDT Corporation's Fourth Quarter and Full Year Fiscal 2011 Earnings Presentation. This is Bill Ulrey, IDT's Investor Relations Officer. In this presentation, IDT's Chairman and Chief Executive Officer, Howard Jonas; and Chief Financial Officer, Bill Pereira, will discuss IDT's financial and operational results for the 3 months ended July 31, 2011. Both, this audio file consisting of management's pre-recorded remarks and our earnings release are available on the Investor Relations page of the IDT Corporation website, www.idt.net. The earnings release has also been filed on a Form 8-K with the SEC. If you have any questions for management related to the announced results after listening to management's presentation and reading the company's earnings release, please email them to us at the following address: invest@idt.net, no later than the close of business on Tuesday, October 11. Please include your name and firm name, if applicable, in your email. If we can constructively answer your question, we will post your question along with your name, your firm's name and our answer on the Investor Relations page of the IDT website as early as Monday, October 17, after market close. We will also file a Form 8-K with the SEC containing the questions and answers. Any forward-looking statements made during this audio presentation or in the written Q&A, whether general or specific in nature, are subject to risks 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 and uncertainties discussed in the reports that we file periodically with the SEC. We assume no obligation either to update any forward-looking statements that we have made, or may make, or to update the factors that may cause actual results to differ materially from those that we forecast. In this presentation and in our written responses to questions thereafter, we make reference to adjusted EBITDA and free cash flow. Adjusted EBITDA for all periods discussed during our remarks is a non-GAAP measure representing income from operations or loss from operations, exclusive of depreciation and amortization, severance and other charges and other operating gains or losses net. Free cash flow for all periods presented during our remarks is derived from the statement of cash flows and is computed as net cash provided by operating activities less capital expenditure. Adjusted EBITDA and free cash flow are among the key financial metrics management uses to evaluate the operating performances of the company and its segments. A schedule provided in the earnings release reconciles adjusted EBITDA to the nearest corresponding GAAP measure, income from operations for each of our segments and to both income from operations and net income for the company as a whole. A separate schedule reconciles IDT's free cash flow to the nearest corresponding GAAP measure, net cash provided by operating activities. Now, to begin the discussion of our financial and the operating results, here is IDT Corporation's Chairman and CEO, Howard Jonas.

Thank you, Bill. Good afternoon to everyone. Welcome to our discussion of IDT's fourth quarter and full year 2011 results. Today's call represents a bittersweet milestone. I fully expect that this is the final earnings announcement we'll make while Genie Energy is still a part of the IDT family. If all goes according to plan, Genie will ring the opening bell on the New York Stock Exchange on October 31 as a publicly listed independent company trading under the symbol GNE. That's an amazing feat given that 8 years ago, none of the 3 principal companies that comprise Genie Energy even existed. We founded IDT Energy in 2004. And in 2008, we acquired AMSO's predecessor, E.G.L. Oil Shale, and we started up IEI. Since then, IDT Energy has generated over $100 million in income from operations, and between them, AMSO and IEI are on their way to accessing billions of barrels of shale oil. That's the magic of the America's entrepreneurial spirit combined with the dedication of our talented employees. That we are here today is also a tribute to the turnaround effort we undertook in the second half of fiscal 2008. Since then, we have completely reshaped the company. We turned it to profitability, repurchased shares and began paying a regular dividend. I always believed we would get to this point eventually, but even I didn't dare to imagine we would achieve it so quickly. In the macro sense, the table is now set for the spin-off. At the nuts and bolts level, most of the spin-off related legwork has been done. The Internal Revenue Service has provided the private letter ruling we requested opening positively on the tax-free nature of the spin-off. We have filed a preliminary information statement with the Securities and Exchange Commission. If you have…

Thank you, Howard. Let's take it from the top and begin by discussing our 2011 fiscal year before moving on to the fourth quarter's results. The most striking fact about 2011 from my perspective was the substantive growth in revenue. After 4 consecutive years of revenue decline, IDT grew revenues by $160.5 million or 11.5% year-over-year to $1.56 billion for fiscal 2011. Substantially all of the revenue growth came out of our Telecom division, which achieved this robust expansion despite contending with some strong headwinds. During 2011, Telecom shuttered its low-margin domestic, Top-Up Wireless resale business diminishing revenue by approximately $32 million versus fiscal 2010; and our Consumer Phone Services business, which is in harvest mode, saw revenues decline $11 million. At IDT Telecom, a key driver of revenue growth for 2011 was Boss Revolution. Boss Revolution is an innovative pay-as-you-go cardless, reloadable, international, long-distance calling service accessible from any phone. The revenue growth in Telecom allowed us to increase our consolidated gross profit by $1.9 million year-over-year. IDT Telecom's gross profit was up $3.8 million for the year. IDT's gross margin declined 200 basis points year-over-year to 18.4%. The decline in margin resulted primarily from the revenue growth in Telecom, which shifted our product mix toward lower margin products, mainly wholesale carrier services, Boss Revolution and international mobile top-up or IMTU. Our IMTU product allows customers here in the U.S. to purchase minutes and load them on mobile phones of friends and family members overseas. SG&A expense, including research and development costs, increased $24.7 million year-over-year. As a percentage of revenue, SG&A expense was 16%, just slightly lower than the year ago. Our increased SG&A dollars are fueling our current revenue growth and are also a reflection of the investments we are making to take advantage of growth opportunities…