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EX-32.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO ?906 OF THE SARBANES-OXLEY ACT OF 2002 - IDT CORPf10q0411ex32i_idt.htm
EX-31.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 17 CFR 240.13A-14(A), AS ADOPTED PURSUANT TO ?302 OF THE SARBANES-OXLEY ACT OF 2002 - IDT CORPf10q0411ex31i_idt.htm
EX-32.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO ?906 OF THE SARBANES-OXLEY ACT OF 2002 - IDT CORPf10q0411ex32ii_idt.htm
EX-31.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 17 CFR 240.13A-14(A), AS ADOPTED PURSUANT TO ?302 OF THE SARBANES-OXLEY ACT OF 2002 - IDT CORPf10q0411ex31ii_idt.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 10-Q
 

 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2011
 
or
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission File Number: 1-16371
 

 
IDT CORPORATION
(Exact Name of Registrant as Specified in its Charter)
 

 
   
Delaware
22-3415036
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
   
520 Broad Street, Newark, New Jersey
07102
(Address of principal executive offices)
(Zip Code)
 
(973) 438-1000
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨  No ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
       
Large accelerated filer
¨
Accelerated filer
¨
       
Non-accelerated filer
¨  (Do not check if a smaller reporting company)
Smaller reporting company
x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):    Yes  ¨    No  x
 
As of June 9, 2011, the registrant had the following shares outstanding:
 
   
Class A common stock, $.01 par value:
1,574,327 shares outstanding (excluding 1,698,000 treasury shares)
Class B common stock, $.01 par value:
21,415,901 shares outstanding (excluding 2,167,877 treasury shares)



 
 

 
 
IDT CORPORATION
 
TABLE OF CONTENTS
 
  PART I.  FINANCIAL INFORMATION
       3
     
Item 1.
Financial Statements (Unaudited)
       3
     
 
Condensed Consolidated Balance Sheets
       3
     
 
Condensed Consolidated Statements of Operations
       4
     
 
Condensed Consolidated Statements of Cash Flows
       5
     
 
Notes to Condensed Consolidated Financial Statements
       6
     
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 22
     
Item 3.
Quantitative and Qualitative Disclosures About Market Risks
 41
     
Item 4.
Controls and Procedures
 41
   
  PART II.  OTHER INFORMATION
 42
     
Item 1.
Legal Proceedings
 42
     
Item 1A.
Risk Factors
 42
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
 42
     
Item 3.
Defaults Upon Senior Securities
 42
     
Item 4.
Removed and Reserved
 42
     
Item 5.
Other Information
 42
     
Item 6.
Exhibits
      42
   
  SIGNATURES
43
 
 
 
 
2

 
PART I. FINANCIAL INFORMATION
 
Item 1.               Financial Statements (Unaudited)
IDT CORPORATION
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
   
April 30,
2011
   
July 31,
2010
 
   
(Unaudited)
   
(Note 1)
 
   
(in thousands)
 
Assets
           
Current assets:
           
Cash and cash equivalents
  $ 269,255     $ 221,753  
Restricted cash and cash equivalents
    6,974       11,831  
Certificates of deposit
    3,633       300  
Marketable securities
          221  
Trade accounts receivable, net of allowance for doubtful accounts of $14,651 at April 30, 2011 and $12,628 at July 31, 2010
    128,206       105,232  
Prepaid expenses
    23,174       25,476  
Investments—short-term
    208       1,217  
Other current assets
    18,641       15,084  
                 
Total current assets
    450,091       381,114  
Property, plant and equipment, net
    90,862       96,892  
Goodwill
    18,757       18,429  
Other intangibles, net
    2,879       3,675  
Investments—long-term
    8,458       8,375  
Other assets
    10,221       9,310  
                 
Total assets
  $ 581,268     $ 517,795  
                 
Liabilities and equity
               
Current liabilities:
               
Trade accounts payable
  $ 59,647     $ 52,957  
Accrued expenses
    154,953       143,822  
Deferred revenue
    82,205       69,186  
Income taxes payable
    9,380       10,085  
Capital lease obligations—current portion
    2,793       6,032  
Notes payable—current portion
    642       628  
Other current liabilities
    8,157       2,272  
                 
Total current liabilities
    317,777       284,982  
Capital lease obligations—long-term portion
          407  
Notes payable—long-term portion
    33,540       33,640  
Other liabilities
    10,904       12,793  
                 
Total liabilities
    362,221       331,822  
Commitments and contingencies
               
Equity:
               
   IDT Corporation stockholders’ equity:
               
Preferred stock, $.01 par value; authorized shares—10,000; no shares issued
           
Common stock, $.01 par value; authorized shares—nil and 100,000 at April 30, 2011 and July 31, 2010, respectively; nil and 9,241 shares issued and nil and 3,728 shares outstanding at April 30, 2011 and July 31, 2010, respectively
          92  
Class A common stock, $.01 par value; authorized shares—35,000; 3,272 shares issued and 1,574 and 3,272 shares outstanding at April 30, 2011 and July 31, 2010, respectively
    33       33  
Class B common stock, $.01 par value; authorized shares—200,000; 23,584 and 23,213 shares issued and 21,416 and 15,625 shares outstanding at April 30, 2011 and July 31, 2010, respectively
    236       232  
Additional paid-in capital
    520,199       711,701  
Treasury stock, at cost, consisting of nil and 5,513 shares of common stock, 1,698 and nil shares of Class A common stock and 2,168 and 7,588 shares of Class B common stock at April 30, 2011 and July 31, 2010, respectively
    (87,237 )     (295,626 )
Accumulated other comprehensive income (loss)
    3,059       (1,017 )
Accumulated deficit
    (215,002 )     (231,626 )
                 
Total IDT Corporation stockholders’ equity
    221,288       183,789  
   Noncontrolling interests:
               
Noncontrolling interests
    (1,241 )     2,184  
Receivable for issuance of equity
    (1,000 )      
                 
    Total noncontrolling interests
    (2,241 )     2,184  
                 
          Total equity
    219,047       185,973  
                 
Total liabilities and equity
  $ 581,268     $ 517,795  
 
See accompanying notes to condensed consolidated financial statements.
 
3

 
IDT CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
   
Three Months Ended
April 30,
   
Nine Months Ended
April 30,
 
   
2011
   
2010
   
2011
   
2010
 
   
(in thousands, except per share data)
 
Revenues
  $ 396,964     $ 355,423     $ 1,155,848     $ 1,045,424  
Costs and expenses:
                               
Direct cost of revenues (exclusive of depreciation and amortization)
    319,602       281,242       932,065       827,901  
Selling, general and administrative (i)
    62,696       53,819       180,609       166,495  
Depreciation and amortization
    5,243       7,614       16,439       25,440  
Research and development
    3,192       2,269       7,735       5,761  
Severance and other charges
          2,888       1,053       4,451  
                                 
Total costs and expenses
    390,733       347,832       1,137,901       1,030,048  
Other operating gains, net
          8,985       7,389       8,985  
                                 
Income from operations
    6,231       16,576       25,336       24,361  
Interest expense, net
    (1,395 )     (1,559 )     (4,614 )     (4,848 )
Other (expense) income, net
    (1,571 )     978       1,419       (103 )
                                 
Income from continuing operations before income taxes
    3,265       15,995       22,141       19,410  
Benefit from (provision for) income taxes
    2,557       (3,465 )     2,710       (6,257 )
                                 
Income from continuing operations
    5,822       12,530       24,851       13,153  
Discontinued operations, net of tax
          (39 )           (400 )
                                 
Net income
    5,822       12,491       24,851       12,753  
Net loss attributable to noncontrolling interests
    1,179       116       1,734       82  
                                 
Net income attributable to IDT Corporation
  $ 7,001     $ 12,607     $ 26,585     $ 12,835  
                                 
Amounts attributable to IDT Corporation common stockholders:
                               
Income from continuing operations
  $ 7,001     $ 12,646     $ 26,585     $ 13,134  
Loss from discontinued operations
          (39 )           (299 )
                                 
Net income
  $ 7,001     $ 12,607     $ 26,585     $ 12,835  
                                 
Earnings per share attributable to IDT Corporation common stockholders:
                               
Basic:
                               
Income from continuing operations
  $ 0.34     $ 0.61     $ 1.29     $ 0.64  
Loss from discontinued operations
                      (0.01 )
                                 
Net income
  $ 0.34     $ 0.61     $ 1.29     $ 0.63  
                                 
Weighted-average number of shares used in calculation of basic earnings per share
    20,627       20,523       20,578       20,425  
                                 
Diluted:
                               
Income from continuing operations
  $ 0.31     $ 0.58     $ 1.18     $ 0.61  
Loss from discontinued operations
                      (0.01 )
                                 
Net income
  $ 0.31     $ 0.58     $ 1.18     $ 0.60  
                                 
Weighted-average number of shares used in calculation of diluted earnings per share
    22,585       21,878       22,474       21,310  
                                 
                                 
Dividends declared per common share
  $     $     $ 0.44     $  
                                 
                                 
(i)  (i) Stock-based compensation included in selling, general and administrative expenses
  $ 1,768     $ 317     $ 4,360     $ 2,207  
 
See accompanying notes to condensed consolidated financial statements. 
 
 
4

 
 
IDT CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
   
Nine Months Ended
April 30,
 
   
2011
   
2010
 
   
(in thousands)
 
Net cash provided by operating activities
  $ 50,450     $ 47,467  
Investing activities
               
Capital expenditures
    (9,186 )     (6,593 )
Collection of notes receivable, net
          71  
Capital contributions to AMSO, LLC
    (3,942 )     (744 )
Increase in investments
    (50 )      
Proceeds from sale and redemption of investments
    1,688       2,349  
Decrease in restricted cash and cash equivalents
    4,857       51,216  
Proceeds from sales of buildings
    100       5,150  
Proceeds from insurance
    3,524       250  
Proceeds from marketable securities
    5,731       4,618  
Purchases of certificates of deposit
    (5,503 )      
Proceeds from maturities of certificates of deposit
    2,167        
                 
Net cash (used in) provided by investing activities
    (614 )     56,317  
Financing activities
               
Cash of subsidiaries deconsolidated as a result of the CTM Spin-Off
          (9,775 )
Dividends paid
    (9,961 )      
Distributions to noncontrolling interests
    (1,625 )     (1,499 )
Proceeds from sales of stock of subsidiaries
    10,000       5,690  
Proceeds from exercise of stock options
    1,654        
Repayments of capital lease obligations
    (3,729 )     (4,519 )
Repayments of borrowings
    (469 )     (475 )
Repurchases of common stock and Class B common stock
          (1,795 )
                 
Net cash used in financing activities
    (4,130 )     (12,373 )
Discontinued operations
               
Net cash provided by operating activities
          930  
Net cash used in investing activities
          (44 )
Net cash used in financing activities
          (471 )
                 
Net cash provided by discontinued operations
          415  
Effect of exchange rate changes on cash and cash equivalents
    1,796       (737 )
                 
Net increase in cash and cash equivalents
    47,502       91,089  
Cash and cash equivalents at beginning of period
    221,753       124,382  
                 
Cash and cash equivalents at end of period
  $ 269,255     $ 215,471  
                 
Supplemental schedule of non-cash financing and investing activities
               
Receivable for issuance of equity of subsidiary
  $ 1,000     $  
                 
Mortgage note payable settled in connection with the sale of building
  $     $ 6,137  
                 
Net assets excluding cash and cash equivalents of subsidiaries deconsolidated as a result of the CTM Spin-Off
  $     $ 6,011  
                 
See accompanying notes to condensed consolidated financial statements.
 
 
5

 
IDT CORPORATION
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
Note 1—Basis of Presentation
 
The accompanying unaudited condensed consolidated financial statements of IDT Corporation and its subsidiaries (the “Company” or “IDT”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended April 30, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2011. The balance sheet at July 31, 2010 has been derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2010, as filed with the U.S. Securities and Exchange Commission (the “SEC”).
 
The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2011 refers to the fiscal year ending July 31, 2011).
 
Certain prior year amounts have been reclassified to conform to the current period’s presentation:
 
  
In the condensed consolidated balance sheet, certificates of deposit of $0.3 million at July 31, 2010 previously included in “Investments-short-term” have been reclassified to “Certificates of deposit”;
  
In the condensed consolidated statement of operations, bad debt expense of $1.2 million and $2.1 million in the three and nine months ended April 30, 2010, respectively, previously stated separately has been included in “Selling, general and administrative expenses”; and
  
In the condensed consolidated statement of operations, impairment charges of less than $0.1 million in the three months ended April 30, 2010 and reversals of impairment charges of $0.1 million in the nine months ended April 30, 2010 previously stated separately have been included in “Severance and other charges”.
 
The Company records Universal Service Fund (“USF”) charges that are billed to customers on a gross basis in its results of operations, and records other taxes and surcharges on a net basis. USF charges in the amount of $0.4 million and $1.2 million in the three and nine months ended April 30, 2011, respectively, and $0.5 million and $1.7 million in the three and nine months ended April 30, 2010, respectively, were recorded on a gross basis and included in “Revenues” and “Direct cost of revenues” in the accompanying condensed consolidated statements of operations.
 
Note 2—Discontinued Operations
 
CTM Media Holdings, Inc.
 
On September 14, 2009, the Company completed a pro rata distribution of the common stock of CTM Media Holdings, Inc. (“CTM Holdings”) to the Company’s stockholders of record as of the close of business on August 3, 2009 (the “CTM Spin-Off”). CTM Holdings’ businesses at the time of the CTM Spin-Off included CTM Media Group, IDW Publishing and WMET 1160AM. CTM Holdings and subsidiaries met the criteria to be reported as discontinued operations and accordingly, their results of operations and cash flows are classified as discontinued operations for all periods presented. As of September 14, 2009, each of the Company’s stockholders of record as of the close of business on the record date received: (i) one share of CTM Holdings Class A common stock for every three shares of the Company’s common stock; (ii) one share of CTM Holdings Class B common stock for every three shares of the Company’s Class B common stock; (iii) one share of CTM Holdings Class C common stock for every three shares of the Company’s Class A common stock; and (iv) cash in lieu of a fractional share of all classes of CTM Holdings’ common stock.
 
In September 2009, prior to the CTM Spin-Off, the Company funded CTM Holdings with an additional $2.0 million in cash.
 
Prior to the CTM Spin-Off, the Company provided certain services to CTM Holdings’ subsidiaries. The Company and CTM Holdings entered into a Master Services Agreement, dated September 14, 2009, pursuant to which, among other things, the Company provides certain administrative and other services to CTM Holdings on an interim basis. Such services include assistance with periodic reports required to be filed with the SEC as well as maintaining minutes, books and records of meetings of the Board of Directors and its committees, and assistance with corporate governance. The Company’s Chairman of the Board and Chief Executive Officer, Howard S. Jonas, is the controlling stockholder and Chairman of the Board of CTM Holdings. The Company’s selling, general and administrative expenses were reduced by less than $0.1 million and $0.1 million in the three and nine months ended April 30, 2011, respectively, and $0.2 million and $0.8 million in the three and nine months ended April 30, 2010, respectively, for the amounts charged to CTM Holdings. At April 30, 2011 and July 31, 2010, other current assets included less than $0.1 million receivable from CTM Holdings.
 
 
6

 
 
Revenues, income before income taxes and net income of CTM Holdings and subsidiaries, which are included in discontinued operations, were as follows:
 
   
Three Months Ended
April 30,
   
Nine Months Ended
April 30,
 
   
2011
   
2010
   
2011
   
2010
 
   
(in thousands)
 
Revenues
  $     $     $     $ 4,045  
                                 
                                 
Income before income taxes
  $     $     $     $ 40  
                                 
                                 
Net loss
  $     $     $     $ (170 )
                                 

IDT Carmel
 
On January 30, 2009, IDT Carmel, Inc., IDT Carmel Portfolio Management LLC, and FFPM Carmel Holdings I LLC (all of which were subsidiaries of the Company) (collectively “IDT Carmel”) and Sherman Originator III LLC consummated the sale, pursuant to a Purchase and Sale Contract, of substantially all of IDT Carmel Portfolio Management LLC’s debt portfolios with an aggregate face value of $951.6 million for cash of $18.0 million. The Company exited the debt collection business in April 2009. Included in “Discontinued operations, net of tax” in the three and nine months ended April 30, 2010 were costs of less than $0.1 million and $0.2 million, respectively, which arose from and were directly related to the operations of IDT Carmel prior to its disposal.
 
Note 3—Other Operating Gains, Net
 
The following table summarizes the other operating gains, net by business segment:

   
Three Months Ended
April 30,
   
Nine Months Ended
April 30,
 
   
2011
   
2010
   
2011
   
2010
 
   
(in thousands)
 
  Telecom Platform Services-gain on termination of agreement
  $     $     $ 14,375     $  
  Telecom Platform Services-loss from alleged patent infringement
                (9,763 )      
  Telecom Platform Services-gain on settlement of litigation
          10,000             10,000  
Corporate-other
                (500 )      
All Other-gain on insurance claim
                2,637        
  All Other-gain on settlement of IDT Global Israel claims
          485             485  
  All Other-(loss) gain from the settlement of other claims
          (1,500 )     640       (1,500 )
                                 
Total
  $     $ 8,985     $ 7,389     $ 8,985  
                                 

Telecom Platform Services
 
In connection with CSC Holdings, LLC’s (“Cablevision”) acquisition of Bresnan Broadband Holdings, LLC (“BBH”), BBH exercised its option to terminate the services being provided by the Company to BBH under a Cable Telephony Agreement dated November 3, 2004. Pursuant to the terms of the Agreement, in December 2010, Cablevision paid $14.4 million to the Company to terminate the Agreement.
 
On February 15, 2011, a jury in the United States District Court, Eastern District of Texas awarded Alexsam, Inc. $9.1 million in damages in an action alleging infringement by the Company of two patents related to the activation of phone and gift cards (incorporating bank identification numbers approved by the American Banking Association for use in a banking network) over a point-of-sale terminal (see Note 12). The Company incurred legal fees of $0.7 million in connection with this matter. The Company does not expect that this decision will have a material impact on its future business operations.
 
 
7

 
 
In 2007, the Company filed a complaint as amended in the United States District Court for the District of New Jersey against several prepaid calling card companies. The lawsuit alleged that the defendants were systematically falsely promising minutes in their voice prompts and other advertisements that consumers cannot obtain from the cards they purchased. In 2007, the Company settled with five of the defendant groups. The litigation continued against certain defendants affiliated with STi Prepaid, LLC. On March 22, 2010, the Company and the defendants agreed to settle the litigation and the underlying disputes giving rise thereto. Pursuant to a Settlement Agreement, and without admitting any liability, (i) certain of the defendants paid the Company cash of $10.0 million, (ii) the Company dismissed the litigation with prejudice and (iii) the parties entered into related mutual releases.
 
All Other
 
As of April 30, 2011, the Company has received aggregate proceeds from insurance of $4.0 million in connection with water damage to portions of the Company’s building and improvements at 520 Broad Street, Newark, New Jersey. The damaged portion of the building and improvements had an estimated carrying value of $1.1 million. In the nine months ended April 30, 2011, the Company recorded a gain of $2.6 million from this insurance claim.
 
In fiscal 2008 and fiscal 2009, the Company disposed of 100% of the issued and outstanding shares of IDT Global Israel, Ltd. in transactions with the former Chief Executive Officer of IDT Global Israel. On March 31, 2010, the Company settled various claims related to IDT Global Israel, Ltd. and recorded a gain of $0.5 million.
 
Note 4—Marketable Securities
 
As of July 31, 2010, the Company classified all of its marketable securities as “available-for-sale” securities. Marketable securities were stated at estimated fair value, with unrealized gains and losses in such securities reflected, net of tax, in “Accumulated other comprehensive income (loss)” in the accompanying consolidated balance sheets. The Company had no marketable securities at April 30, 2011.
 
The following is a summary of marketable securities at July 31, 2010:
 
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
 
(in thousands)
  Available-for-sale securities:
                       
Debt securities
  $ 352     $     $ (131 )   $ 221  
                                 
 
The Company’s marketable securities at July 31, 2010 included auction rate securities with an original cost of $14.3 million and an estimated fair value of $0.2 million. In fiscal 2009 and fiscal 2008, the Company recorded an aggregate $13.9 million loss after determining that there were other than temporary declines in the value of these auction rate securities. In October 2010, the Company received cash of $5.7 million in exchange for these auction rate securities as a result of the settlement of the Company’s arbitration claim. The Company recognized a gain of $5.4 million from the settlement of the arbitration claim, which is included in “Other (expense) income, net” in the accompanying condensed consolidated statement of operations.
 
Proceeds from available-for-sale securities and the gross realized gains that have been included in earnings in the nine months ended April 30, 2011 were $5.7 million and $5.4 million, respectively. Proceeds from available-for-sale securities and the gross realized gains that have been included in earnings in the nine months ended April 30, 2010 were $4.6 million and $0.3 million, respectively. The Company uses the specific identification method in computing the gross realized gains and gross realized losses on the sales of marketable securities.
 
At July 31, 2010, the following available-for-sale securities were in an unrealized loss position for which other-than-temporary impairments had not been recognized:
 
   
Unrealized Losses
   
Fair Value
 
   
(in thousands)
 
  Debt securities
  $ 131     $ 218  
                 

At April 30, 2011 and July 31, 2010, there were no securities in a continuous unrealized loss position for 12 months or longer.
 
 
8

 
 
Note 5—Fair Value Measurements
 
The following table presents the balances of assets and liabilities measured at fair value on a recurring basis:
 
   
Level 1 (1)
   
Level 2 (2) 
   
Level 3 (3) 
   
Total 
 
   
(in thousands)
 
  April 30, 2011:
                       
  Assets:
                       
Derivative contracts
  $ 294     $     $     $ 294  
                                 
  Liabilities:
                               
Derivative contracts
  $     $     $ 895     $ 895  
                                 

  July 31, 2010:
                       
  Assets:
                       
Debt securities
  $ 3     $     $ 218     $ 221  
                                 
  Liabilities:
                               
Derivative contracts
  $ 87     $     $ 200     $ 287  
                                 
______________
(1) – quoted prices in active markets for identical assets or liabilities
(2) – observable inputs other than quoted prices in active markets for identical assets and liabilities
(3) – no observable pricing inputs in the market

The Company’s investments in hedge funds, which are included in “Investments—short-term” and “Investments—long-term” in the accompanying condensed consolidated balance sheets, are accounted for using the equity method unless the Company’s interest is so minor that it has virtually no influence over operating and financial policies pursuant to the accounting standards relating to investments in limited partnerships and in limited liability companies. The Company’s investments in hedge funds are therefore excluded from the fair value measurements table above.
 
The Company’s derivative contracts are valued using quoted market prices or significant unobservable inputs. These derivatives consist of (1) natural gas and electricity forward contracts to fix the price that IDT Energy will pay for specified amounts of natural gas and electricity on specified dates, which are classified as Level 1, (2) natural gas and electricity put and call options in which the underlying asset is a forward contract, which are classified as Level 1, (3) an option to purchase shares of a subsidiary, which is classified as Level 3 and (4) warrants to purchase shares of a subsidiary, which are classified as Level 3. The stock option was issued in April 2010 by the Company’s subsidiary, Genie Energy International Corporation (formerly Genie Energy Corporation) (“GEIC”). The GEIC stock option is exercisable until April 9, 2015 at an exercise price of $5.0 million. The fair value of the GEIC stock option was estimated using a Black-Scholes valuation model and the following assumptions: (1) expected volatility of 25% based on historical volatility of comparable companies and other factors, (2) a discount rate of 2.17% and (3) expected term of 3.9 years. The warrants were issued in November 2010 by the Company’s subsidiary, Genie Oil and Gas, Inc. (“GOGI”). The GOGI warrants are exercisable until November 12, 2011 at an exercise price of up to $2 million. The fair value of the GOGI warrants were estimated using a Black-Scholes valuation model and the following assumptions: (1) expected volatility of 104% based on historical volatility of comparable companies and other factors, (2) a discount rate of 0.1% and (3) expected term of 0.5 years.
 
The Company’s marketable securities at July 31, 2010 included auction rate securities for which the underlying asset was preferred stock of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. The fair values of the auction rate securities, which could not be corroborated by the market, were estimated based on the value of the underlying assets and the Company’s assumptions, and were therefore classified as Level 3.
 
In the three and nine months ended April 30, 2010, the Company’s debt securities and derivative contracts that were classified as Level 3 included a structured note with an embedded derivative that was bifurcated. The fair values of the structured note and the embedded derivative were estimated primarily based on pricing information from the counterparty. The structured note matured in November 2009.
 
 
9

 
 
The following tables summarize the change in the balance of the Company’s assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
 
   
Three Months Ended
April 30, 2011
   
Three Months Ended
April 30, 2010
 
   
Assets
   
Liabilities
   
Assets
   
Liabilities
 
   
(in thousands)
 
  Balance, beginning of period
  $     $ (980 )   $ 429     $  
  Total gains (losses) (realized or unrealized):
                               
Included in earnings in “Other (expense) income, net”
                       
Included in earnings in “Selling, general and administrative expense”
          85              
Included in other comprehensive income
                155        
  Purchases, sales, issuances and settlements
                      (200 )
  Transfers in (out) of Level 3
                       
                                 
  Balance, end of period
  $     $ (895 )   $ 584     $ (200 )
                                 
  The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held at the end of the period:
                               
Included in “Selling, general and administrative
expense”
  $     $ 85     $     $  
                                 

   
Nine Months Ended
April 30, 2011
   
Nine Months Ended
April 30, 2010
 
   
Assets
   
Liabilities
   
Assets
   
Liabilities
 
   
(in thousands)
 
  Balance, beginning of period
  $ 218     $ (200 )   $ 5,685     $ (686 )
  Total gains (losses) (realized or unrealized):
                               
Included in earnings in “Other (expense) income, net”
    5,379       (280 )     (156 )     286  
Included in earnings in “Selling, general and administrative expense”
          141              
Included in other comprehensive income
    131             55        
  Purchases, sales, issuances and settlements
    (5,728 )     (556 )     (5,000 )     200  
  Transfers in (out) of Level 3
                       
                                 
  Balance, end of period
  $     $ (895 )   $ 584     $ (200 )
                                 
  The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held at the end of the period:
                               
Included in “Other (expense) income, net”
  $     $ (280 )   $     $  
                                 
Included in “Selling, general and administrative
expense”
  $     $ 141     $     $  
                                 
 
Fair Value of Other Financial Instruments
 
The estimated fair value of the Company’s other financial instruments has been determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting this data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. At April 30, 2011 and July 31, 2010, the carrying value of the Company’s financial instruments included in certificates of deposit, trade accounts receivable, prepaid expenses, investments-short-term, other current assets, trade accounts payable, accrued expenses, deferred revenue, income taxes payable, capital lease obligations and other current liabilities approximate fair value because of the short period of time to maturity. At April 30, 2011 and July 31, 2010, the carrying value of the Company’s notes payable and other non-current liabilities approximate fair value as their contractual interest rates approximate market yields for similar debt instruments.
 
The Company’s investments-long-term at April 30, 2011 and July 31, 2010 included investments in the equity of certain privately held entities that are accounted for at cost. It is not practicable to estimate the fair value of these investments because of the lack of a quoted market price for the shares of these entities, and the inability to estimate their fair value without incurring excessive cost. The carrying value of these investments was $1.1 million and $1.0 million at April 30, 2011 and July 31, 2010, respectively, which the Company believes was not impaired.
 
 
10

 
 
Note 6—Derivative Instruments
 
The primary risk managed by the Company using derivative instruments is commodity price risk. Natural gas and electricity forward contracts and put and call options are entered into as hedges against unfavorable fluctuations in market prices of natural gas and electricity. Also, one of the Company’s marketable securities was a structured note that contained an embedded derivative feature. The structured note had a par value of $5.0 million and matured in November 2009.
 
IDT Energy’s forward contracts and put and call options do not qualify for hedge accounting treatment and therefore, the changes in fair value are recorded in earnings. As of April 30, 2011, IDT Energy had the following contracts and options outstanding:
 
Commodity
Settlement Date
Volume
Electricity
May 2011
8,400 MWh
Electricity
May 2011
840 MWh
Electricity
June 2011
17,600 MWh
Electricity
June 2011
17,600 MWh
Electricity
June 2011
17,600 MWh
Electricity
July 2011
16,000 MWh
Electricity
July 2011
16,000 MWh
Electricity
August 2011
18,400 MWh
Electricity
August 2011
18,400 MWh
Electricity
December 2011
16,800 MWh
Electricity
December 2011
16,800 MWh
Natural gas
July 2011
100,000 Dth
Natural gas
December 2011
500,000 Dth

       The Company’s subsidiaries, GEIC and GOGI, issued an option and warrants, respectively that are subject to derivative accounting. The GEIC stock option was issued in April 2010 and is exercisable until April 9, 2015 at an exercise price of $5.0 million. The GOGI warrants were issued in November 2010 and are exercisable until November 12, 2011 at an exercise price of up to $2 million.
 
The fair values of outstanding derivative instruments recorded as assets in the accompanying condensed consolidated balance sheets were as follows:
 
Asset Derivatives
 
Balance Sheet Location
 
April 30, 2011
   
July 31, 2010
 
       
(in thousands)
 
  Derivatives not designated or not qualifying as hedging instruments:
               
  Energy contracts and options
 
Other current assets
  $ 294     $  
                     

The fair values of outstanding derivative instruments recorded as liabilities in the accompanying condensed consolidated balance sheets were as follows:
 
Liability Derivatives
 
Balance Sheet Location
 
April 30, 2011
   
July 31, 2010
 
       
(in thousands)
 
  Derivatives not designated or not qualifying as hedging instruments:
               
  Energy contracts
 
Other current liabilities
  $     $ 87  
  GOGI warrants
 
Other current liabilities
    415        
  GEIC stock option
 
Other liabilities
    480       200  
                     
Total liability derivatives
      $ 895     $ 287  
                     
 
 
11

 
 
The effects of derivative instruments on the condensed consolidated statements of operations were as follows:
 
   
Amount of Gain (Loss) Recognized on Derivatives
 
                         
   
Three Months Ended
April 30,
   
Nine Months Ended
April 30,
 
 Derivatives not designated or not qualifying as  hedging instruments
Location of Gain (Loss) Recognized on Derivatives
 
2011
   
2010
   
2011
   
2010
 
     
(in thousands)
 
Energy contracts and options
  Direct cost of revenues
  $ 9     $ 48     $ 381     $ 402  
GOGI warrants
  Selling, general and administrative expense
    85             (415 )      
GEIC stock option
  Other (expense) income, net
                (280 )      
Structured note embedded derivative
  Other (expense) income, net
                      286  
                                 
Total
    $ 94     $ 48     $ (314 )   $ 688  
                                 
 
At April 30, 2011, the Company's energy contracts and options were all traded on the New York Mercantile Exchange which mitigated the Company's exposure to credit loss from nonperformance by the counterparty.
 
Note 7—Investment in American Shale Oil, LLC
 
In April 2008, American Shale Oil Corporation (“AMSO”), a wholly-owned subsidiary of GOGI, acquired a 75% equity interest in American Shale Oil, L.L.C. (“AMSO, LLC”), in exchange for cash of $2.5 million and certain commitments for future funding of AMSO, LLC’s operations. In a separate transaction in April 2008, IDT Corporation acquired an additional 14.9% equity interest in AMSO, LLC in exchange for cash of $3.0 million. Following this transaction, IDT Corporation owned 89.9% of the equity interests in AMSO, LLC, 75% through AMSO and 14.9% directly.
 
AMSO, LLC is one of three holders of leases granted by the U.S. Bureau of Land Management (“BLM”) to research, develop and demonstrate in-situ technologies for potential commercial shale oil production (“RD&D Lease”) in western Colorado. The RD&D Lease awarded to AMSO, LLC by the BLM covers an area of 160 acres. The lease runs for a ten year period beginning on January 1, 2007, and is subject to an extension of up to five years if AMSO, LLC can demonstrate that a process leading to the production of commercial quantities of shale oil is diligently being pursued. If AMSO, LLC can demonstrate the economic and environmental viability of its technology, it will have the opportunity to submit a one time payment pursuant to the Oil Shale Management Regulations and convert its RD&D Lease to a commercial lease on 5,120 acres which overlap and are contiguous with the 160 acres in its RD&D Lease.
 
In March 2009, a subsidiary of TOTAL S.A., the world’s fifth largest integrated oil and gas company, acquired a 50% interest in AMSO, LLC in exchange for cash paid to the Company of $3.2 million and Total’s commitment to fund the majority of AMSO, LLC’s research, development and demonstration expenditures as well as certain other funding commitments. Immediately prior to this transaction, all owners (including IDT Corporation’s 14.9% direct equity interest) other than AMSO exchanged their ownership interest for a proportionate share of a 1% override on AMSO, LLC’s future revenue. IDT Corporation assigned the cash proceeds of its override interest to the IDT U.S. Oil Shale Charitable Distribution Trust, subject to certain remainder interests retained by IDT Corporation. Following the transaction with Total, AMSO and Total each owned a 50% interest in AMSO, LLC. While AMSO is the operator of the project during the RD&D phase, Total will provide a majority of the funding during the RD&D phase, and technical and financial assistance throughout the RD&D and commercial stages. Total will lead the planning of the commercial development and will assume management responsibilities during the subsequent commercial phase.
 
The Company consolidated AMSO, LLC prior to the closing of the transaction with Total. Beginning with the closing, the Company accounts for its 50% ownership interest in AMSO, LLC using the equity method since the Company has the ability to exercise significant influence over its operating and financial matters, although it no longer controls AMSO, LLC. AMSO, LLC is a variable interest entity, however, the Company has determined that it is not the primary beneficiary.
 
 
12

 
 
The following table summarizes the change in the balance of the Company’s Investment in AMSO, LLC:
 
   
Nine Months Ended April 30,
 
   
2011
   
2010
 
   
(in thousands)
 
Balance, beginning of period                                                                     
  $ 666     $ 278  
Capital contributions                                                                     
    3,942       744  
Equity in net loss of AMSO, LLC                                                                     
    (2,936 )     (1,148 )
                 
Balance, end of period                                                                     
  $ 1,672     $ (126 )
                 
 
The investment in AMSO, LLC at April 30, 2011 and July 31, 2010 is included in “Investments-long-term” in the condensed consolidated balance sheets and equity in net loss of AMSO, LLC is included in “Other (expense) income, net” in the condensed consolidated statement of operations.
 
In accordance with the agreement between the parties, AMSO has committed to a total investment of $10.0 million in AMSO, LLC, subject to certain exceptions including those described below where the amount could be greater or lesser.
 
Total may terminate its obligations to make capital contributions and withdraw as a member of AMSO, LLC. If Total withdraws as a member of AMSO, LLC, AMSO may also terminate its obligations to make capital contributions and withdraw as a member of AMSO, LLC.
 
Although, subject to certain exceptions, AMSO and Total are not obligated to make additional contributions beyond their respective shares (which for AMSO is $10.0 million), they could dilute or forfeit their ownership interests in AMSO, LLC if they fail to contribute their respective shares for additional funding.
 
Total can increase AMSO’s initial required funding commitment of $10.0 million up to an additional $8.75 million if Total wishes to continue to fund the pilot test up to an agreed upon commitment level.
 
At April 30, 2011, the Company’s estimated maximum exposure to additional loss as a result of its required investment in AMSO, LLC was $2.2 million. The Company’s estimated maximum exposure to additional loss will increase as AMSO’s commitment to fund AMSO, LLC increases. The estimated maximum exposure at April 30, 2011 was determined as follows:
 
   
(in thousands)
 
  AMSO’s total committed investment in AMSO, LLC
  $ 10,000  
  Less: cumulative capital contributions to AMSO, LLC
    (7,814 )
         
   Estimated maximum exposure to additional loss
  $ 2,186  
         
 
AMSO’s total committed investment in AMSO, LLC and its estimated maximum exposure to additional loss is subject to certain exceptions where the amounts could be greater. One exception is the additional funding that may be necessary to fund the pilot test as described above. The other significant exception is additional capital contributions that may be required to fund unexpected liabilities, in the event they occur, outside the purview of the traditional research, development and demonstration operations incorporated in AMSO, LLC’s budgeting and planning. However, any additional capital contributions for such liabilities would have to be authorized by both AMSO and Total.
 
Summarized unaudited balance sheets of AMSO, LLC are as follows:
   
April 30,
2011
   
July 31,
2010
 
   
(in thousands)
 
Assets
           
Cash and cash equivalents
  $ 11,569     $ 4,446  
Other current assets
    233       210  
Equipment, net
    19       15  
Other assets
    566       453  
                 
Total assets
  $ 12,387     $ 5,124  
                 
Liabilities and members’ interests
               
Current liabilities
  $ 3,475     $ 1,366  
Other liabilities
    354       232  
Members’ interests
    8,558       3,526  
                 
Total liabilities and members’ interests
  $ 12,387     $ 5,124  
                 
 
 
 
13

 
 
Summarized unaudited statements of operations of AMSO, LLC are as follows:
 
   
Three Months Ended
April 30,
   
Nine Months Ended
April 30,
 
   
2011
   
2010
   
2011
   
2010
 
   
(in thousands)
 
Revenues
  $     $     $     $  
Costs and expenses:
                               
Research and development
    5,931       2,181       14,680       5,740  
                                 
  Total costs and expenses
    5,931       2,181       14,680       5,740  
                                 
  Loss from operations
    (5,931 )     (2,181 )     (14,680 )     (5,740 )
  Other expense
    (2 )     (1 )     (1 )     (1 )
                                 
  Net loss
  $ (5,933 )   $ (2,182 )   $ (14,681 )   $ (5,741 )
                                 
 
Note 8—Equity
 
Changes in the components of equity were as follows:
 
   
Nine Months Ended
April 30, 2011
 
   
Attributable to IDT Corporation
   
Noncontrolling Interests
   
Total
 
   
(in thousands)
 
Balance, July 31, 2010
  $ 183,789     $ 2,184     $ 185,973  
Dividends declared ($0.44 per share)
    (9,961 )             (9,961 )
Exercise of stock options
    1,654             1,654  
Sales of stock of subsidiary
    11,200       (1,189 )     10,011  
Distributions
          (1,625 )     (1,625 )
Stock-based compensation
    3,945             3,945  
Comprehensive income:
                       
Net income
    26,585       (1,734 )     24,851  
Other comprehensive income
    4,076       123       4,199  
                         
Comprehensive income (loss)
    30,661       (1,611 )     29,050  
                         
Balance, April 30, 2011
  $ 221,288     $ (2,241 )   $ 219,047  
                         
 
Dividend Payments
 
On November 23, 2010, the Company paid a cash dividend of $0.22 per share for the first quarter of fiscal 2011 to shareholders of record at the close of business on November 15, 2010 of the Company’s common stock, Class A common stock and Class B common stock. On December 28, 2010, the Company paid a cash dividend of $0.22 per share for the second quarter of fiscal 2011 to shareholders of record at the close of business on December 16, 2010 of the Company’s common stock, Class A common stock and Class B common stock. The aggregate dividend paid was $10.0 million.
 
Sales of Stock of Subsidiary
 
In November 2010, an entity affiliated with Lord (Jacob) Rothschild purchased a 5.0% equity interest in GOGI for $10.0 million paid in cash. Also in November 2010, Rupert Murdoch purchased a 0.5% equity interest in GOGI for $1.0 million paid with a promissory note. The note is secured by a pledge of the shares issued in exchange for the note. The note accrues interest at 1.58%, and the principal and accrued interest is due and payable on November 15, 2015. In addition, in connection with the purchase by Lord Rothschild, in November 2010, warrants were issued to purchase up to an aggregate of 1% of the common stock outstanding of GOGI at an exercise price of up to $2 million that are exercisable through November 12, 2011. GOGI consists of the Company’s interests in AMSO, Israel Energy Initiatives, Ltd. (“IEI”) and T.C.T. Thermal Cleaning Technologies, Ltd.
 
 
14

 
 
Stock-Based Compensation
 
In April 2011, options to purchase 0.1 million shares of the Company’s Class B common stock that were granted in April 2001 with an expiration date in April 2011 were extended for one year. The Company recorded stock-based compensation expense of $0.3 million in April 2011 for the modification of the options. The fair value of the options was estimated using a Black-Scholes valuation model and the following assumptions: (1) expected volatility of 73% based on the historical volatility of the Company's Class B common stock and other factors, (2) a discount rate of 0.26% and (3) expected term of one year.
 
On March 15, 2011, the Company’s subsidiary Innovative Communications Technologies, Inc. (“ICTI”) filed a Form 10 registration statement with the SEC related to the spin-off of ICTI to the Company’s stockholders (see Note 15). Also on March 15, 2011, ICTI granted shares of its common stock to two employees of the Company representing 5.5% of ICTI’s outstanding equity. These ICTI shares vested immediately. In April 2011, ICTI recorded stock-based compensation expense of $0.7 million for the grant of these ICTI shares. The fair value of the ICTI shares was determined using the income approach.
 
In addition, in May 2011, ICTI granted its chief executive officer an option to purchase shares of ICTI's common stock representing 5.0% of its outstanding equity. The option vests monthly over a four-year period beginning in May 2011 and ending in April 2015. The estimated value of the option was $0.2 million which the Company will recognize using the straight-line method over the vesting period. The fair value of the option was estimated using a Black-Scholes valuation model and the following assumptions: (1) expected volatility of 49% based on the historical volatility of a comparable company and other factors, (2) a discount rate of 2.2% and (3) expected term of four years. The fair value of the underlying ICTI shares was determined using the income approach.
 
Effective February 1, 2011, the Company changed its method for recognizing stock-based compensation expense over a vesting period to the straight-line method from the accelerated method. The change did not have a material effect on the stock-based compensation expense recognized in all periods presented.
 
In December 2010 and January 2011, an aggregate of 0.3 million restricted shares of the Company’s Class B common stock was granted to certain of the Company’s directors, officers and employees. Total unrecognized compensation cost on the grant date was $9.4 million. The unrecognized compensation cost of $7.7 million at April 30, 2011 is expected to be recognized over the remaining vesting period that ends in December 2013. The Company recognized compensation cost related to the vesting of these shares of $0.5 million and $1.7 million in the three and nine months ended April 30, 2011, respectively.
 
On October 31, 2008, the Company entered into an Amended and Restated Employment Agreement with Mr. Howard S. Jonas, the Company’s Chairman of the Board and as of October 22, 2009 the Company’s Chief Executive Officer. Pursuant to this agreement (i) the term of Mr. Jonas’ employment with the Company runs until December 31, 2013 and (ii) Mr. Jonas was granted 1.2 million restricted shares of the Company’s Class B common stock and 0.9 million restricted shares of the Company’s common stock in lieu of a cash base salary beginning January 1, 2009 through December 31, 2013. The restricted shares vest in different installments throughout the term of Mr. Jonas’ employment as delineated in the agreement, and all of the restricted shares paid to Mr. Jonas under the agreement automatically vest in the event of (i) a change in control of the Company; (ii) Mr. Jonas’ death; or (iii) if Mr. Jonas is terminated without cause or if he terminates his employment for good reason as defined in the agreement. A pro rata portion of the restricted shares will vest in the event of termination for cause. Total unrecognized compensation cost on the grant date was $5.5 million. The unrecognized compensation cost of $3.5 million at April 30, 2011 is expected to be recognized over the remaining vesting period that ends on December 31, 2013. The Company recognized compensation cost related to this agreement of $0.2 million in the three months ended April 30, 2011 and 2010 and $0.6 million in the nine months ended April 30, 2011 and 2010.
 
Exchange Offer and Conversion of the Company’s Common Stock
 
On January 24, 2011, in connection with the Company’s previously announced offer to exchange one share of its Class B common stock (NYSE: IDT) for each share of common stock (NYSE: IDT.C) outstanding, the Company exchanged 1.9 million shares of its Class B common stock for 1.9 million shares of its common stock.
 
On April 4, 2011 at a Special Meeting of Stockholders, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation to (1) effect a conversion and reclassification of each outstanding share of common stock into one share of Class B common stock, (2) eliminate the common stock and provisions relating thereto, (3) provide for the conversion of Class A common stock into Class B common stock instead of common stock, and (4) revise the provision relating to dividends and distributions. As a result, the Company exchanged 1.8 million shares of its Class B common stock for 1.8 million shares of its common stock, and exchanged 0.9 million restricted shares of its Class B common stock for 0.9 million restricted shares of its common stock. The Company no longer has any shares of common stock authorized or outstanding and has only two classes of common stock remaining – Class A common stock, which is not publicly traded, and Class B common stock.
 
 
15

 
 
In connection with the reclassification and exchange offer, certain stockholders controlled by Howard Jonas exchanged 1.7 million shares of the Company’s Class A common stock (which is entitled to three votes per share) for 1.7 million shares of the Company’s Class B common stock (which is entitled to one-tenth of a vote per share) so that the voting power of shares of the Company’s capital stock over which Mr. Jonas exercises voting control remained the same as it was immediately prior to the commencement of the exchange offer. The 1.7 million shares of the Company’s Class A common stock were added to the Company’s treasury stock.
 
All of the shares of the Company’s Class B common stock that were issued in exchange for shares of the Company’s common stock or Class A common stock, an aggregate of 5.4 million shares, were issued from the Company’s Class B treasury shares. As a result, in the condensed consolidated balance sheet, "Additional paid-in capital" and "Treasury stock" were reduced by $208.5 million.
 
In addition, the Company’s common stock is no longer listed on the New York Stock Exchange and it was de-registered under the Securities Exchange Act of 1934, as amended.
 
Stock Repurchase Program
 
The Company has a stock repurchase program for the repurchase of up to an aggregate of 8.3 million shares of the Company’s Class B common stock. There were no repurchases in the nine months ended April 30, 2011. In the nine months ended April 30, 2010, the Company repurchased an aggregate of 0.2 million shares of Class B common stock and 0.5 million shares of common stock for an aggregate purchase price of $1.8 million. As of April 30, 2011, 5.4 million shares remained available for repurchase under the stock repurchase program.
 
Note 9—Earnings Per Share
 
Basic earnings per share is computed by dividing net income (loss) attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture (non-vested) and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive.
 
The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company’s common stockholders consists of the following:

   
Three Months Ended
April 30,
   
Nine Months Ended
April 30,
 
   
2011
   
2010
   
2011
   
2010
 
   
(in thousands)
 
  Basic weighted-average number of shares
    20,627       20,523       20,578       20,425  
  Effect of dilutive securities:
                               
Stock options
    9             5        
Non-vested restricted common stock
    409       610       666       458  
Non-vested restricted Class B common stock
    1,540       745       1,225       427  
                                 
  Diluted weighted-average number of shares
    22,585       21,878       22,474       21,310  
                                 
 
The following outstanding stock options for which the exercise price of the stock option was greater than the average market price of the Company’s stock during the period were excluded from the diluted earnings per share computations because their inclusion would have been anti-dilutive:
 
   
Three Months Ended
April 30,
   
Nine Months Ended
April 30,
 
   
2011
   
2010
   
2011
   
2010
 
   
(in thousands)
 
  Shares excluded from the calculation of diluted earnings per share
    456       771       527       852  
                                 
 
Note 10—Comprehensive Income
 
The Company’s comprehensive income consists of the following:
 
   
Three Months Ended
April 30,
   
Nine Months Ended
April 30,
 
   
2011
   
2010
   
2011
   
2010
 
   
(in thousands)
 
  Net income
  $ 5,822     $ 12,491     $ 24,851     $ 12,753  
  Foreign currency translation adjustments
    2,908       (343 )     4,070       (276 )
  Unrealized (loss) gains on available-for-sale securities
          154       129       54  
                                 
  Comprehensive income
    8,730       12,302       29,050       12,531  
  Comprehensive loss attributable to noncontrolling interests
    1,062       116       1,611       82  
                                 
  Comprehensive income attributable to IDT Corporation
  $ 9,792     $ 12,418     $ 30,661     $ 12,613  
                                 
 
 
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Note 11—Business Segment Information
 
The Company has four reportable business segments: Telecom Platform Services, Consumer Phone Services, IDT Energy and Genie Oil and Gas. All other operating segments that are not reportable individually are included in All Other. Telecom Platform Services and Consumer Phone Services comprise the IDT Telecom division. IDT Energy and Genie Oil and Gas comprise the Genie Energy division. The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker.
 
The Company owns 96.8% of its subsidiary, Genie Energy International Corporation, which owns 100% of IDT Energy and 94.5% of Genie Oil and Gas, Inc.
 
The Telecom Platform Services segment provides various telecommunications solutions including prepaid and rechargeable calling cards, a range of voice over Internet protocol, or VoIP, communications services and wholesale carrier services. The Consumer Phone Services segment provides consumer local and long distance services in the United States. The IDT Energy segment operates the Company’s energy services company, or ESCO, that resells electricity and natural gas to residential and small business customers in New York State, New Jersey and Pennsylvania. The Genie Oil and Gas segment consists of (i) AMSO, which holds and manages a 50% interest in AMSO, LLC, the Company’s shale oil initiative in Colorado, (ii) an 89% interest in IEI, the Company’s shale oil initiative in Israel and (iii) an 84% interest in T.C.T. Thermal Cleaning Technologies Ltd., the Company’s in-situ thermal remediation services and technologies initiative in Israel. All Other includes (a) Zedge, a worldwide destination for the discovery and distribution of mobile content, (b) Fabrix T.V., Ltd., the Company’s majority-owned venture that licenses a video software platform optimized for cost effective video storage, high throughput streaming and intelligent content distribution, (c) certain real estate and (d) other smaller businesses. Corporate costs include certain services, such as compensation, consulting fees, treasury and accounts payable, tax and accounting services, human resources and payroll, corporate purchasing, corporate governance including Board of Directors’ fees, internal and external audit, investor relations, corporate insurance, corporate legal, business development, and other corporate-related general and administrative expenses including, among others, facilities costs, charitable contributions and travel, as well as depreciation expense on corporate assets. Corporate does not generate any revenues, nor does it incur any direct cost of revenues.
 
The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its business segments based primarily on income (loss) from operations. IDT Telecom depreciation and amortization are allocated to Telecom Platform Services and Consumer Phone Services because the related assets are not tracked separately by segment. There are no other significant asymmetrical allocations to segments.
 
Operating results for the business segments of the Company are as follows:
 
(in thousands)
 
Telecom
Platform
Services
   
Consumer
Phone
Services
   
IDT
Energy
   
Genie Oil and Gas
   
All Other
   
Corporate
   
Total
 
Three Months Ended April 30, 2011
                                         
Revenues
  $ 334,470     $ 6,266     $ 53,787     $     $ 2,441     $     $ 396,964  
Income (loss) from operations
    4,892       1,523       8,596       (2,684 )     (1,699 )     (4,397 )     6,231  
Severance and other charges
                                         
                                                         
Three Months Ended April 30, 2010
                                                       
Revenues
  $ 291,345     $ 8,623     $ 53,832     $     $ 1,623     $     $ 355,423  
Income (loss) from operations
    12,785       2,439       9,922       (1,984 )     (2,887 )     (3,699 )     16,576  
Severance and other charges
    825                         8       2,055       2,888  
                                                         
Nine Months Ended April 30, 2011
                                                       
Revenues
  $ 971,368     $ 20,631     $ 157,144     $     $ 6,705     $     $ 1,155,848  
Income (loss) from operations
    19,760       5,565       22,783       (7,923 )     (1,595 )     (13,254 )     25,336  
Severance and other charges
    926                               127       1,053  
                                                         
Nine Months Ended April 30, 2010
                                                       
Revenues
  $ 856,946     $ 28,912     $ 154,891     $     $ 4,675     $     $ 1,045,424  
Income (loss) from operations
    9,884       9,458       32,196       (4,595 )     (8,947 )     (13,635 )     24,361  
Severance and other charges
    1,403             63             (74 )     3,059       4,451  
 
 
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Telecom Platform Services’ income from operations in the nine months ended April 30, 2011 included a gain of $14.4 million related to the termination of a cable telephony agreement with one of its customers (see Note 3) and an expense of $9.8 million related to an action alleging patent infringement (see Notes 3 and 12). Telecom Platform Services’ income from operations in the three and nine months ended April 30, 2010 included a gain of $10.0 million from the settlement of litigation with certain defendants affiliated with STi Prepaid, LLC (see Note 3).
 
All Other’s loss from operations in the nine months ended April 30, 2011 was net of a gain of $2.6 million related to an insurance claim for water damage to portions of the Company’s building and improvements at 520 Broad Street, Newark, New Jersey (see Note 3), and a gain of $0.6 million from the settlement of other claims. All Other’s loss from operations in the three and nine months ended April 30, 2010 included expense of $1.5 million for the settlement of certain claims, net of a gain of $0.5 million from the settlement of claims related to IDT Global Israel, Ltd. (see Note 3).
 
Note 12—Legal Proceedings
 
On February 15, 2011, a jury in th