Good afternoon. My name is Domaria, and I will be your conference operator today. At this time, I would like to welcome everyone to the Tessera Technologies Third Quarter 2012 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. I will now turn the call over to Ms. Moriah Shilton. Madam, you may begin.

Thank you, Domaria, and good afternoon, everyone. Thank you for joining us for the call today. This call is also being broadcast live over the Internet. I will now read a short Safe Harbor statement. During the course of this conference call, management will make a number of forward-looking statements, which are statements regarding future events, including the future financial performance of the company. These forward-looking statements are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ significantly from those projected. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this call. More information about factors that may cause results to differ from the projections made in these forward-looking statements can be found in Tessera’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2011, and its quarterly report Form 10-Q for the quarter ended June 30, 2012, especially in the sections entitled Risk Factors. The company disclaims any obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur after this call. On the call today from management are Robert Young, President and Chief Executive Officer; Rick Neely, Chief Financial Officer; and Barney Cassidy, General Counsel. During this call today, management may discuss certain non-GAAP financial measures for comparison purposes only. The non-GAAP amounts of cost of revenues, research and development, selling, general and administrative expenses, net income, and earnings per share do not include the following, stock-based compensation expense, acquired intangibles amortization charges, charges for acquired in-process research and development, impairment charges on long-lived assets and goodwill, and related tax effects. After management’s brief opening remarks, we will open the call to your questions. And I will now turn the call over to Bob.

Good afternoon and thank you for joining us on the call today. I’d like to take few minutes to discuss our corporate and business unit highlights for the quarter, before opening the call for your questions. In the third quarter, we made several significant executive and board level changes. In August, we appointed Rick Neely as our CFO, who brings our company more than three decades of financial and managerial experience in high technology industries, including extensive experience of offshore operations, particularly in Asia. We believe his expertise and experience will be very valuable to us as our camera module business develops. Also in the third quarter, we appointed two new Board members, Rick Hill and Tim Stultz, expanding the Board to eight. Rick and Tim are distinguished industry veterans. Rick as a recently retired long time successful CEO of Novellus and Tim as a current highly regarded CEO of Nanometrics. We look forward to working with Rick and Tim as they help us guide the ongoing strategic initiatives for both of our business segments, but in particularly DigitalOptics efforts and implementing successful manufacturing and initial product ramp of camera modules. Now to the discussion of our business segments, in our Intellectual Property segment, in the third quarter we received a $19.9 million payment from Amkor Technology, Inc. related to the July 6, 2012 interim award by the International Court of Arbitration of the International Chamber of Commerce. This payment is a partial amount of the total due which is still under dispute. We have taken amount in excess of our $25 million in connection with this interim award. Also in the third quarter, our Intellectual Property teams continued to demonstrate infringement of Tessera, Inc. and Invensas Corporation patents by many manufacturers. We are confident and our ability to secure…

(Operator Instructions) Our first question comes from the line of Krish Sankar with Bank of America-Merrill Lynch. Please go ahead with your question.

Hi. Thanks for taking my question, Bob and Rick, and actually pardon the background noise. I have a few them. First, I know you guys don’t give guidance for Q4. I’m just trying to think, historically used to have the volume pricing discount, current FX in timing like Q4 timeframe? Is that a similar thing we should expect going forward or there any that different in the dynamics of that -- of the pricing discount?

Well, as you know, the -- two of the licensees renewed their -- they renewed with an extension that started in May. The first license ending in May of this year and so going forward they will be paying under the terms of new license agreement.

And does the new license agreement instead of volume pricing discount as the prior one?

We are not going to go into the terms and we actually cannot go into terms of the agreement extension.

All right. Fair enough. And then on the DigitalOptics side, obviously right now the revenue mainly is coming from the Zhuhai VCM operations. What is the timeline for winding that down and do you still believe that by Q4 next year, your MEMS camera module would be profitable?

Hello, Chris. This is Rick Neely. Yeah, the transition of DOC is actually going to be occurring as we said that business is a legacy business. Q3 will probably be the high water mark. We want to convert our factory to build it up our camera modules. So we need to install equipment, train and build up initial production capability between now and the first half of 2013. And that’s really how that business is going to work.

And then what about the profitability target for Q4 of next year?

We have that as our target and we feel we’re on track to achieve it.

All right. Fair enough. That’s really helpful. And then a couple of other things, I wanted to find out is when we start looking into next year especially on the camera module side and I understand that you guys are not going to give any more guidance for fiscal ‘13 going forward. Should we start expecting on what you do today as in like the third month of the quarter, you kind, of give a color into how the revenue is trending? Is that something that you guys are doing next -- is there going to be absolutely no guidance, whether it’s at the beginning of the quarter or towards the end?

No. We’re not going to give guidance as we announced, I think, two quarters ago. This will be the final year that we will be giving guidance. And as I think we said at the time, the uncertainty on really a new business is something that would make it. So I think guidance would not be right thing to do. So we will not be giving guidance after this quarter, the fourth quarter of this year.

All right. Okay. Fair enough. And then couple of other quick questions from my end before I wrap up. In terms of the litigation expense, it seem like it stepped up quite a bit in Q3. How do we think about it going forward? I do understand that you have few more customers with whom you have some expenses that might be coming up and along the same path, is there any update you can give on what’s happening in Micron front?

Sure. This is Bernie Cassidy, Chris. Chris, we are far below what the past expenditures were on the litigation front, generally speaking. So we had a light -- couple of light quarters and we’re up again this past quarter Q3. But in the historical context, when I came here we were spending $84 million a year on litigation. So I think you need to view it on that context. And of course, we will increase or decrease as is warranted by our business and by the actions of our litigation adversaries. So I wouldn’t be deeply troubled by it one way or the other. It’s part of the licensing business. You have to be prepared to litigate and you must litigate when you cannot get a license through negotiation. On the Micron front, I don’t think we’re going to talk in detail about that but we are in discussions with Micron.

All right. Fair enough. And then a question for Bob, you guys had a filing recently regarding a long-term time horizon like 2015 giving -- to asking you would need maybe potentially breaking up the company. I just want to ask for a philosophically standpoint, I understand that’s still clear out but when you look at it, at what point do you think does it make sense to break up the company and at what point, do you feel like it’s something that the management will consider versus being absent on the outside world?

The appropriate time to split the company and to what are two very, very different businesses would be when they are independently standing on their own feet. And that’s really the determining factor. When we have two independent businesses that can be independent businesses and one option would be there would be two public companies. And so obviously, they’ll have to be able to sustain themselves in a manner of a public company. So it’s really driven by the development of the businesses themselves rather than some arbitrary timetable.

Got it. Thanks a lot guys. Appreciate it.

Thank you.

(Operator Instructions) And at this time, there are no further questions. I would like to turn the call over to Bob Young, CEO for any closing remarks at this time.

Thank you. And thank you all for joining the call today. We appreciate your interest and support. Rick Neely and I will be at the Needham Conference in New York in early January and available for meeting our investors that are there in attendance. We’re excited about the future and long-term growth and we look forward to sharing our continued success with you.

And I would like to reiterate I’m very happy to join Tessera. We have some great opportunities in front of us and as a new CEO -- CFO working with our CEO, looking forward to digging in operations and doing an extensive review of all of the things that we’re doing and discussing that with the investors in the future.

Thank you, all.

Ladies and gentlemen, thank you for your participation in today’s Tessera Technologies’ third quarter earnings conference call. You may now disconnect.