Ladies and gentlemen, thank you for standing by. Welcome to the QUALCOMM First Quarter Fiscal 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session [Operator Instructions]. As a reminder, this conference is being recorded January 25, 2017. The playback number for today’s call is 855-859-2056. International callers please dial 404-537-3406. The playback reservation number is 48860663. I would now like to turn the call over to John Sinnott, Vice President of Investor Relations. Mr. Sinnott, please go ahead.

Thank you and good afternoon everyone. Today’s call will include prepared remarks by Steve Mollenkopf, Derek Aberle and George Davis. In addition, Cristiano Amon and Don Rosenberg will join the question-and-answer session. You can access our earnings release and a slide presentation that accompany this call on our investor relations Web site. This call is also being webcast on qualcomm.com, and a replay will be available on our Web site later today. During this conference call, we will use non-GAAP financial measures, as defined in Regulation G. And you can find the related reconciliations to GAAP on our Web site. In addition, we will make forward-looking statements, including projections and estimates of future events, business, or industry trends, or our business or financial results. Actual events or results could differ materially from those projected in the forward-looking statements. Please refer to our SEC filings, including our most recent 10-Q, which contain important factors that could cause actual results to differ materially from the forward-looking statements. And now, the comments from QUALCOMM’s Chief Executive Officer, Steven Mollenkopf.

Thank you, John, and good afternoon, everyone. We delivered a strong quarter with revenue and non-GAAP EPS growth of 4% and 23% year-over-year respectively, reflecting strong results of technology leadership and disciplined execution in our core mobile businesses. Before discussing our business activities further, I would like to first comment on the recent legal challenges facing QUALCOMM. This is something we take very seriously, and we’ll cover in depth today. But before that, let me say that, historically, we’ve had a strong relationship with Apple, and they have been a long standing and valued customer. We intend to remain a good supplier to Apple, even while this dispute continues, and believe there is no better long-term partner for Apple than QUALCOMM and our industry leading technology. We believe that our strong and highly differentiated product roadmap will continue to be the foundation for our relationship, and covers a broad range of technologies that will be fundamental to new products for years to come. Our preference is always to resolve customer disputes through negotiations, instead of litigation. So it is regrettable that Apple has chosen to take this path. We are well prepared and confident in our ability to successfully defend against Apple's claims, as well as the related regulatory matters in Korea and with the FTC. Apple's complaint contains a lot of assertions. But in the end, this is a commercial dispute over the price of intellectual property. They want to pay less with the fair value that QUALCOMM has established in the marketplace for our technology, even though Apple has generated billions in profits from using that technology. QUALCOMM has always been and remains a systems innovator, and R&D engine for the mobile industry. Unlike virtually every major company in our industry, sharing technology broadly with the industry through…

Thank you, Steve, and good afternoon everyone. First, I would like to build on Steve’s earlier comments regarding Apple’s recent legal claims. Not only our Apple’s claims without merit, but the attempt to undermine the standards-based agreements that have been the backbone of the mobile revolution, the framework that has facilitated and motivated a small number of companies, like QUALCOMM, to make investments to develop new technology, as well as the products and infrastructure to support that technology. The cornerstone of the global mobile technology ecosystem and the success of so many industry participants is based on the notion that companies that are willing to invest the necessary capital and devote engineering talent to invent technologies long before they can ever be implemented be fairly compensated for sharing those inventions through licensing. At QUALCOMM, we have spent billions of dollars, and have continually focused on inventing the breakthrough technologies that have fuelled the mobile revolution, and enabled multiple generations of technological innovations in smartphones and other connected devices. Our industry leadership today comes from making these significant focused investments ahead of the industry over many years to create leading technology. From our inception, QUALCOMM has been at the forefront of the industry; imaging, inventing and commercializing the fundamental technologies at scale that brought high-speed mobile data and computing to a global mass market reality. It is QUALCOMM, which drove the development of ubiquitous cellular connectivity in mobile computing, including increasingly higher data rates and spectrum efficiency, as well as more powerful and efficient mobile computing solutions that enable the key features and functions of smartphones, and which are making consumers’ lives better, connecting billions of people to the Internet for the first time, and enabling countless new businesses in industries. Our technology has enabled the mobile economy and the foundation…

Thank you, Derek, and good afternoon, everyone. Fiscal first quarter results were in line with our outlook with revenues of $6 billion, and non-GAAP earnings per share of $1.19, $0.02 above the midpoint of our guidance, driven primarily by performance in our licensing business. In QTL, revenues were $1.8 billion and total reported device sales by licensees were $62.9 billion, just above the midpoint of our guidance, driven by stronger ASPs in developed regions. The Q1 results for QTL exclude contributions from the recently signed licensed agreements with Meizu and Gionee, which expect to start benefitting -- we expect to start benefitting QTL in fiscal Q2. In QCT, MSM chip shipment were 217 million, modestly above the midpoint of our guidance range. Overall, performance was in line with expectations and we had strong contributions from our adjacent areas, including IoT, wireless networking, and auto. QCT’s earnings before tax was up 23% versus the first fiscal quarter of 2016, reflecting strong demand for our new products, growth and adjacencies, and an improved cost structure. QCT operating margin was approximately 18% for the quarter, up more than 300 basis points over the same period last year. For the Company, non-GAAP combined R&D and SG&A expenses increased by less than 1% sequentially, modestly above our prior guidance. GAAP earnings included the accrual of the KFTCs approximately $868 million fine announced in late December, which is excluded from our non-GAAP results. The accrual impacted fiscal first quarter GAAP EPS by $0.49 per share, and raised our full year GAAP estimated tax rate by approximately 280 basis points to 22%. We plan to appeal this decision, but we are still required to pay the fine within 60 days of receiving the written order, which was received earlier this week. We returned $1.2 billion to stockholders…

Thank you, George. Operator, we are ready for questions.

[Operator Instructions] Your first question comes from the line of Mike Walkley with Canaccord Genuity. Please go ahead.

A couple of questions -- just here one on the business just in terms of seasonality of the business in to the March quarter, could you talk about some of the puts and takes with major customer in Korea’s new product timing ramp, seasonality for Apple and then what you’re seeing in the Chinese market in terms of your sequential MSM shipments. And then just a clarification for Derek and Don, as you look at the global dispute with Apple going on, it’s my belief that Apple actually paid you through some of their ODMs, such as Foxconn. Could you just walk us through that and maybe any accounting issues should these ODM decide not to pay on Apple’s behalf? Thank you.

Maybe, I’ll start addressing the Q2 seasonality on the chip business. So, I think Q2 MSM unit movement is largely seasonal. I think we see seasonality tied to two main effects; one, I think you have build on the Chinese customers in anticipation of the Chinese New Year. And I think they basically build and bleed as related Chinese New Year sales. We also saw -- in units in Q2 are dependent on timing on launching on Flagship devices within the quarter. And I think we’re going to see some of those clear to I would say, MCC announcement. So it’s going to be more on flagship device, it's going to more of a second of the year. And I think in terms of your question in China, market position, we’ll continue to see strong demand for industry products, leading products in China. I think we see good traction with the OEMs for MSM roadmap. So, it’s mostly a seasonality that we out-experienced in Q2.

Yes to answer your question, so you’re right, Apple does not have a direct license with QUALCOMM today. And so the royalties on Apple products, they get paid to QUALCOMM or reported and paid by their contract manufacturers. So, although we do have a dispute now with Apple and they’re challenging some of the offers and some of our licensing terms. The contracts that we have in place with their suppliers remain valid and enforceable. And we would expect that our licensees will continue to comply with the terms of their agreements. And we would also hope and expect that Apple would not interfere with the terms of those agreements. But of course, we can’t fully control those actions. So, I guess, a little bit that we’re going to have to have a -- take a wait and see approach. We have no indication as we sit here today that our licensees will stop paying royalties. In the past, when we have had disputes with companies related to the royalties they own under an existing valid agreement, generally, those companies tended to report and pay royalties, even when we were in disputes like in arbitration. You might remember that was case with LG, not only have the recent arbitration with them also the case with Panasonic when we had a previous arbitration with them. So we’ll have to wait and see what happens, but that’s the indication we have today. I guess, the final pointy I’ll make is we don’t believe or expect that we will see an impact in the second quarter or second fiscal quarter from the dispute, and our guidance reflects that.

Your next question comes from the line of Simona Jankowski with Goldman Sachs. Please go ahead.

Two questions for Derek. Apple claims that your NDRC rectification plan has never been adopted or endorsed by any agency or court. And they are challenging your royalty rate in China, and have now taken to court there. So can you clarify if your new license structure in China was in fact endorsed or not by the NDRC? And then the second question is, I don’t think you addressed Apple's charge that your chipset exclusivity agreement was evidence of abusive monopoly power. So I would love to hear your position there as well.

So, in China, basically the way that the NDRC investigation was resolved, QUALCOMM -- the NDRC issued an order and QUALCOMM submitted what we called a rectification plan. And within the rectification plan, we basically committed to offer a new set of licensing terms for sales for use in China under our Chinese essential patents. And as part of that, the NDRC agreed, and this was main public I believe in the press release at a time that QUALCOMM’s rectification plan and the commitments that we made in that fully addressed the issues that were raised in the NDRC's order. So, although, I am not sure I would use the term endorsed, certainly, we believe the NDRC agreed that the rectification plan and the licensing terms are very consistent with addressing the concerns in their order. Of course, since then, we’ve gone out and negotiated and signed over 120 license agreements with terms that are consistent and reflective of the NDRC terms, and that was done under the supervision of the NDRC. So, we feel very confident that those terms are fair and reasonable, and we think it's a difficult position for Apple to claim that those terms are not fair. By the way, we have offered those same terms to Apple we did with all our other licensees, and they have refused to accept them.

With regard to your question about, so called, exclusivity deal, first of all, I think you’ve called us monopoly power and monopoly power. We don’t believe we have monopoly power in the chip market or any other market, and nor do we have an exclusivity arrangement. We have never prevented Apple or anybody else from buying from competitive chip makers. And in the Apple case, it's pretty clear since, as you know they’ve been buying from Intel fairly recently. So, it's a mischaracterization to call it an exclusive dealing arrangement. We have been defending that accusation in Europe for about, I don’t know, four years now, and it's not new. Although, now it's out in the open that Apple is the one who has challenged us on this. And we will continue to defend it both in Europe and in this case. But we are quite confident that it doesn’t fit the definition of an exclusivity deal here, and it doesn’t violate any competition loss.

Your next question comes from the line of James Faucette with Morgan Stanley. Please go ahead.

Just one clarifying question, I think, Derek you’ve mentioned a couple of times that the Apple’s ODMs continue to comply. So, should we understand that according -- I mean your understanding of the contracts that they are paying, the contracted amounts in full? And then I guess for Derek and Don. How should we think about timeframes for both, for the KFTC and FTC case, the U.S. FTC cases, in terms of how long to go through the process of appeal or be a case itself here in the U. S.? And then Don you also just mentioned Europe. Where we are on that investigation, and any since of timing on when we may see further progress or the next steps there? Thank you very much.

So, on the ODM contracts, I think the point to keep in mind is that, again Apple is not a direct licensee. And we have valid and enforceable contracts in place with their contract manufacturers who are our licensees, and have been paying royalties to us under those agreements. Again, we would expect and hope that our licensees will continue to comply with their agreements, and that Apple will not interfere with those contractual relationships that we have in place. And we have no indication, as we sit here today that the ODMs will stop paying or that Apple will interfere. But we obviously can’t control their actions down the road. So, we’ll have to see how that develops. As to our guidance in Q2, we believe at this point that it will not be an impact in terms of the revenue for QTL in Q2, which would be sales through the December quarter.

So, with respect to, I think I guess three questions; one, timing of KFTC timing of the FTC and then DigiComp status. The KFTC, as Derek indicated earlier, has now issued its order in that case, which means that the order is now effective as opposed to the press release that was issued less than a month ago. And we will now be able to seek an appeal at the sole High Court. And once we’ve start the appeal process, we will immediately seek a stay of the remedial release that was ordered by the KFTC. And we are obviously going to pretty strong arguments with respect to their conclusions, and hope that that will lead to a stay. And then the appeal process can take quite sometime in the sole High Court, and then if necessary, subsequent courts. The FTC case, which was filed in District Court in the Northern District of California, as you know, we’ve said very clearly we think that case was lacking in any real coherent theory of competitive harm didn’t, and all one needs to do is read the descending statement of commissioner Ohlhausen to get a good sense of how we object to that, and how she did. And I commented to you if you haven’t read it. We have two paths to follows. Obviously, once a new Federal Trade Commission is assembled, we will probably go back to the full commission, or at least when there is a majority of more than -- at least, there are more than two commissioners in place. And seek a re-evaluation of that late decision to file. And hopefully we might be able to get that withdrawn, if not, we will proceed with, as usual, defenses in the northern district and that will take some time obviously. With respect to DigiComp, we have two statements of objections, as you know, that we have been defending there, and I have no new news as to timing there. We are waiting at this point for the next step from DigiComp.

Your next question comes from the line of Tim Long with BMO Capital Markets. Please go ahead.

Two quick ones, if I could, or maybe not quick. George, you’ve mentioned, I think your language, is no benefit to P&L impact from non-paid amounts. Are you referring to what Apple called the rebates or the payments in their complaint? But either way, if you can just talk about changes in contracts, it sounds like nothing has hit the P&L yet. But where was that impacting, was that a COGS item in QCT, was it somehow in the QTL line? It would be helpful for us to understand where that is. And if there is more that’s not going out, at what point, would that become a benefit to the QUALCOMM model? And then Derek, I mean, you talked a lot about this thing about just raise in the commercial agreement. I’d just love your perspective on the other major patent holders, the Nokia's and Ericsson's that I think also license at the device level, but their rates wind-up, you’re five or 10 times higher than them. So, can you just talk a little about maybe your difference in materiality of your patent pool relative to other players that might result in higher rates than the others, which consider something lower to the FRAND? Thank you.

So, yes, there has been no P&L benefit from the payments to-date, they’ve been held on the balance sheet as current liabilities. As you know, the agreements are now subject to litigation. And so there is a limit to how much we can describe, where they might -- how things might be resolved in the future. But the amounts will remain on our balance sheet until the dispute is resolved. And then we’ll account for them in whatever way that the resolution has reached.

So, I’ll try to keep this as concise as I can. If you think about the contributions that QUALCOMM has made to the technology-first and all the way back to 2G, but then moving on to 3G and 4G and now on to 5G, all the way along the path. We really have been, from our perspective, the leading contributor to the most valuable portions of the technology that are in those standards. And I think that has borne-out through the commercial agreements that we’ve been able to negotiate through arms length and fair negotiations over the years with 250 plus licenses. As Steve mentioned in his remarks, those aren’t agreements that are just 20 years old. Many of those have been renegotiated several times with the largest players over the year, and continually reaffirm the value of our portfolio. So, we believe our contributions, which are tend to be more focused on the device side and then the overall system as well, are just frankly more valuable than some of the other contributions that we see across the industry. And the second piece is you have to look at the circumstances under which the other companies negotiated their licenses. Obviously, when Nokia negotiated a number of their licenses, they had a significant device business, and they bargain for cross-licenses from other patent holders, which would have been offset and help establish the value of their portfolio. Same is true with Ericcson. So again, those companies both have made significant contributions. I am not doing anything to suggest, otherwise. But we believe that our contributions have been different in kind. And again, the market has valued those contributions through the agreements we have negotiated over the years.

I just want to add one or two points to Derek’s -- primarily as he said, we have enormous contributions. But the point that Derek was making needs to be hammered home, because people get confused. He was talking about cross-licenses, like the Samsung and Nokia. As you know, we are not in the device business. So, when we’re negotiating, we’re not seeking cross-licenses to be able to sell devices as they are. And so that’s a whole different dynamic in the negotiation, and people often get confused about that. And the other thing is, it’d be interesting for people to take a look at, there’s is lot in the record of this. Of all the losses that Apple has brought against its competitors and look at what they’ve sought in damages for just couple of patents, or less than a handful of patents. So, that’s an interesting comparison to their claiming in terms of the portfolio that we have.

Your next question comes from the line of Rod Hall with J.P. Morgan. Please go ahead.

I guess, well, I’ve got a bunch I’ll try to pull it down to just a couple. One is can you clarify whether Apple’s deal or Foxconn’s deal was set to expire at the end of 2016? We understand it probably was good. Could you just clarify, whether that is the case and in fact this is part of normal deal expiration and then negotiations and then through after that that’s my first question? Second question is on materiality of this. If they were to stop paying, we’ve done our own calculations with EPS impacts of around 30%, others have gotten around 25%. I wonder, could you guys just say whether those calculations are in the ballpark? And if not, give us any kind of idea of what sort of EPS impact we might expect if they were to stop payment? And then I guess my last question for you is, whether you had any direct discussion with Foxconn? Or the comments you’re making that they should continue to pay, strictly based on legal agreements. Are they based also on some discussions that you had with them, and that have been sued after the suits were filed? Thank you.

Maybe I will take your first and last and last question, and then maybe George can jump in on the other one. So, we don’t have -- the agreements that are subject to the dispute with Apple are with Apple. We don’t have agreements with Foxconn. And I think it’s fair to assume that those agreements basically expired at the end of 2016. As to Foxconn, again, we don’t typically get into discussions we have with our licensees. What I can tell you is we have no indication and we do have frequent interactions with our licensees. We have no indication at this point that Foxconn or any of our other licensees will not comply with the terms of their agreement. So, that’s probably the best we can tell you at this point.

Rod on the materiality, clearly, Apple and Samsung are two very large customers. Apple being one and we’ve said that two largest, about 40% of revenue, but that includes both chip and licensing for both. The way we think about it is, one we’ve customers actually continue to pay even during disputes in many cases and also our ongoing relevant to customers across their business generally provides additional coverage there. But part of why we have a strong balance sheet is, so that when events like this happen, we are able to not only sustain ourselves and the investments that required but we’re able to fund acquisitions and other key initiatives of the Company. So, we feel we’re in a very strong position to continue to execute going forward and under almost any circumstance.

Your next question comes from the line of Timothy Arcuri with Cowen & Company. Please go ahead.

I guess, my question, Derek, is really what does Apple want? Because if you look at the effective rate that they are paying, they pay basically on-cause and they pay the contract -- and the contract manufacturer pays you. If you do some math, they are sort in the low to mid-200 basis points as a percentage of COGS, which doesn’t seems to be that much different than what the 4G rate that you signed in China is. So, what do they want other than just getting a better deal? I guess, that’s my first question.

Really, I mean, if you peal apart all of the arguments that Apple is making, as we said, we believe firmly that they are all without merit. In the end of the day, they essentially want to pay less for the technology that they are using. And it's pretty simple. And that’s really the motivation. And again, they wrap a lot of stuff around that, which really we think overtime, we will be able to clearly show is false. But in the end of the day, they want to get to a lower payment. And we think that’s not appropriate, given the value that we’ve established. We think they should pay a fair value, the fair value that we have established and our other licensees are paying. And that’s unfortunately why we’re in dispute.

And then I guess just as a quick follow up Derek. What is the way to think about to sustained royalty rate? Does this change how we should think about it this and particularly what's happening with the KFTC as well? Does that change the 290 basis points longer term rate that we should think about? Thanks.

I think from our perspective, again, as Don mentioned, we are going to appeal and seek a stay of the decision in Korea. And in the end of the day if that decision even were to come into effect, it's not going to -- it does not invalidate the contracts that we have. It just set forward process for having us enter into renegotiations with some number of companies. And then if we can't resolve that, ultimately enter into some kind of dispute resolution. But we believe firmly that the contracts that we have in place are complaint with FRAND and consistent with our obligation. So we would expect, even if we had to go through that process that we would end up in the same place. So again, as we look at all these things, also the FTC, we believe, that we will be able to defend against that claim hopefully more quickly rather than over a longer period of time. And we ultimately believe we will prevail into seeding the arguments that are being brought by Apple. So, really none of this affects our long-term view for the growth of the business, or the 2.9%-ish effective rate that we’ve talked about over -- as kind of normalized rate over time.

Your next question comes from the line of Stacy Rasgon with Bernstein Research. Please go ahead.

I have one on Apple and then two quick operational ones. Just on Apple, the structure of your business, obviously, device level pricing. You’ve laid out I think a good case for why it's done this way. Has this model ever actually gone to an actual court in front of a judge and jury? And if so when, and what happened in that case? And if it hasn’t, can you please tell us if it never actually gone in front of -- in the court. In terms of operation, we just -- recently give us feeling for how much of the TRDS guidance next quarter is catch-up? And can you give us feeling for what’s going on with your inventories, why are they so high? Why do they go up so much into a quarter where chipsets are falling a lot?

So, Stacy, let me take your first question. Listen, as we noted in some of the comments, if you look at Apple’s complaint one of the things that they argue is that royalty should be based on just the base band chip within the phone or what they refer to as small and sellable unit. But that is -- there really is -- there is no legal precedent to suggest that when you’re licensing a portfolio of patents, such as a large portfolio of standard essential patents, that that legal document has any application. And there are numerous examples, reasonable royalties being set in court cases as a percentage of the end product. So, this is a well understood, I think, a well laid out concept. And it’s consistent with the way that, not only in QUALCOMM has licensed in our own industry for decades, but also virtually every other patent holder when they are seeking to collect royalties on their intellectual property. And I think, as Don mentioned, even when non-standard essential patents are asserted, royalties have been sought on a per unit basis far in excess of what QUALCOMM charges for a much larger technology contribution in the license. On the question on TRDS, I think, probably you have to -- the impact of the -- was that on Q2?

If you think about on in terms of the impact of catch-up, the overwhelming growth is coming from the seasonal movements, and less than a third of the EPS impact is related to catch-up, which is pure revenue, pure profit.

I can address the inventory question. So, Stacy, I think inventory maybe three topics for you to think about it on the chip side. I think one is, as we said the Chinese New Year. So, I think given how we feel good about our position in China, it’s just providing increased assurance to supply and meeting customer demand with some of those products launch. The other thing to think about it is we had early in the year as normal with any new process know that we had as conservative planning on 10 nanometer ramp, we just had a little bit more parts of the predecessor in case of some of those things shift in into the quarter. And the last one, I think, you probably know there is cancellation of orders from a customer for one of this, or flagship products, last year they got cancelled. And I think endorsing will flow through normal inventory levels throughout the year.

Your next question comes from the line of Kulbinder Garcha with Credit Suisse. Please go ahead.

I have a couple of questions, on the Apple situation maybe for Derek. Apple has put in the lawsuit that they would be withholding payments to their contract OEMs. Now, I know your licensees are saying that they will continue to pay you, whether it's Honhi or whoever. But there must be a risk that that gets withheld from you at some point. Are you just saying that you don't see it right now? That's my first question. And my second question is that -- linked to Apple is that there was various points in their lawsuit that seemed to imply that they didn't have visibility over which intellectual property they had indirectly licensed. And so my question is are there vast parts of your portfolio, which they have not licensed? And what are you doing about maybe pursuing them? Or is that something you are considering right now? And my operational question, just on China, is what level of compliance that we got now over the market, like with the deals you’ve recently signed, what [indiscernible] [59.20] in the area? Thanks.

So, let me take each one of those. On the first question, basically, what Apple said in its complaint was that it would withhold payment to its contract manufactures of an amount equal to what it claims that we owe them. But it didn’t go beyond that. In other words they didn’t say that it was going to withhold payment for all royalties going forward. They just talked about the amount that was in dispute. And I think George covered off already how we’ve already deal with that in our P&Ls. But again on a going forward basis, these are valid and forcible contracts with our ODMs, there is no question there. And we would expect to get paid on a going forward basis, and we would also expect that Apple wouldn’t interfere with those contracts. And we have no indication as we sit here that either party will be either of those things, meaning withhold payment or interfere. But again, we’re going to have to take somewhat of a wait and see approach. This is a fluid situation. Complaint just came late last week, and we’re continuing to monitor the situation, and we’ll be updating you all as things progress. We have given Apple more than full visibility into the scope of our technology, and the scope of our patent portfolio. And they have tremendous amount of information from us in terms of what we expect them to pay for in terms of our technology position. There is, as I said before, the contracts that we have today are with their contract manufactures. Those agreements do not include licenses to all of our portfolio. But we both been -- we have been discussing a direct license with Apple as well, which would obviously include a broader portfolio license. So probably not going to comment today on our legal strategy as to what we may or may not do with the patents that are unlicensed to Apple or a contract manufacturers, but there are some patents in our portfolio that are outside those agreements. I mentioned in my remarks that with the further progress in China, we’re now in a position of collecting on about 80% of the Chinese OEM global device sales. You may remember back in February at the last Analyst Day, we talked about trying to get to about 75% collection with the key deals, and we’re now at 80% and hope to overtime take that number higher.

Thank you. This ends our allotted time for questions and answers. Mr. Mollenkopf, do you have anything further to add before adjourning the call?

Yes, thank you. I just want to thank everyone for joining the call today. We obviously are working through our dispute here. We’ll get through it like we have in the past. I appreciate everybody’s patience here, but we're going to do the right thing for shareholders. I also want to recognize, and thank the employee base for their, really their strong work in not only repositioning the Company, but also delivering the results that we show today. So, thank you all and talk to you next quarter.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.