IDT Corporation 2011 Annual Report Dear Fellow Stockholders: By the time you read this, we should have completed the spin-off of Genie Energy to our stockholders. I will serve as Chairman of the Board of both companies and CEO of IDT, continuing to guide IDT’s very strong management team. IDT is pursuing a unique set of opportunities that hold great promise for our businesses and for our stockholders. At IDT Telecom, new products are rapidly growing our top-line. These include Boss Revolution, our card-less, pay-as-you-go international calling service, and international mobile top-up (IMTU), which allows customers to purchase minutes in one country and transfer them directly to the mobile phone of a friend or family member over- seas. We have much more expansion planned. Boss Revolution, IMTU and other products leverage our robust transaction platform, our global network, our global distribution capabilities focused on immigrant communities, and our busi- ness relationship with over 600 telecom carriers around the world to meet the needs of our customers. These capabilities position us to drive future growth by diversifying beyond voice-centric services. Last year, we took some preliminary steps in that direction by launching a product serving the global money remittance business. We are working to expand our platform so that customers living in developed nations can send virtual cash directly to the mobile phones of friends and family overseas. We hope to further develop this line of business and introduce additional offerings in the coming year. Both our new and our traditional products will also benefit from the ongoing build-out of our global distribution footprint – significantly increasing the number of retailers that carry our products and enhancing our access to immigrant communities worldwide. Also at IDT, we are incubating two very interesting technology based companies: Fabrix, our ultra efficient video storage, processing and delivery platform, and Zedge, a large, highly popular and fast growing destination for mobile phone consumers looking for games, apps and personalization content – ringtones, wallpapers and alerts. More than 42 million unique users now access Zedge across multiple platforms – Android, mobile web and web – on a monthly basis, and the Zedge app is ranked number one in Android Market’s personalization category. While many big changes are in the works at IDT, one fact remains unchanged. We are animated by the same spirit of imagination and innovation that has been IDT’s hallmark since inception. It is our willingness to take on big chal- lenges, reinforced by a disciplined focus on growing our businesses and returning capital to shareholders, that is IDT today. Sincerely, Howard S. Jonas CEO and Chairman of the Board UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [✓] Annual report pursuant to section 13 or 15(d) of the securities exchange act of 1934 for the fiscal year ended July 31, 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 (I.R.S. Employer Identification No.) or organization) 520 Broad Street, Newark, New Jersey 07102 (Address of principal executive offices, zip code) (973) 438-1000 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Class B common stock, par value $.01 per share New York Stock Exchange Securities registered pursuant to section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [✓] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [✓] 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 [✓]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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] 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 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 [ ] Smaller reporting company [✓] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [✓] The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant, based on the closing price on January 31, 2011 (the last business day of the registrant’s most recently completed second fiscal quarter) of the Class B common stock of $23.03 and of the common stock of $23.15, as reported on the New York Stock Exchange, was approximately $301,000,000. As of October 6, 2011, the registrant had outstanding 21,108,970 shares of Class B common stock and 1,574,326 shares of Class A common stock. Excluded from these numbers are 2,477,808 shares of Class B common stock and 1,698,000 shares of Class A common stock held in treasury by IDT Corporation. DOCUMENTS INCORPORATED BY REFERENCE The definitive proxy statement relating to the registrant’s Annual Meeting of Stockholders, to be held December 15, 2011, is incorporated by reference into Part III of this Form 10-K to the extent described therein. [THIS PAGE INTENTIONALLY LEFT BLANK] Index IDT Corporation Annual Report on Form 10-K Part I 1 Item 1. Business. 1 Item 1A. Risk Factors. 21 Item 1B. Unresolved Staff Comments. 32 Item 2. Properties. 32 Item 3. Legal Proceedings. 32 Item 4. (Removed and Reserved). 35 Part II 36 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 36 Item 6. Selected Financial Data. 38 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 38 Item 7A. Quantitative and Qualitative Disclosures about Market Risks. 67 Item 8. Financial Statements and Supplementary Data. 67 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 67 Item 9A. Controls and Procedures. 67 Item 9B. Other Information. 67 Part III 68 Item 10. Directors, Executive Officers and Corporate Governance. 68 Item 11. Executive Compensation. 68 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 69 Item 13. Certain Relationships and Related Transactions, and Director Independence. 69 Item 14. Principal Accounting Fees and Services. 69 Part IV 70 Item 15. Exhibits, Financial Statement Schedules. 70 Signatures 72 [THIS PAGE INTENTIONALLY LEFT BLANK] Part I As used in this Annual Report, unless the context otherwise requires, the terms “the Company,” “IDT,” “we,” “us,” and “our” refer to IDT Corporation, a Delaware corporation, its predecessor, International Discount Telecommunications, Corp., a New York corporation, and its subsidiaries, collectively. Each reference to a fiscal year in this Annual Report refers to the fiscal year ending in the calendar year indicated (for example, fiscal 2011 refers to the fiscal year ended July 31, 2011). Item 1. Business. OVERVIEW We are a multinational holding company with operations primarily in the telecommunications and energy industries. Our principal businesses consist of: • IDT Telecom, which is comprised of Telecom Platform Services and Consumer Phone Services. Telecom Platform Services provides various telecommunications services including prepaid and rechargeable calling cards, a range of voice over Internet protocol, or VoIP, communications services and wholesale carrier services. Consumer Phone Services provides consumer local and long distance services in the United States. • Genie Energy, of which we own 99.3%, which is comprised of IDT Energy and our 92% interest in Genie Oil and Gas. IDT Energy operates our energy services company, or ESCO, that resells electricity and natural gas to residential and small business customers in New York, New Jersey and Pennsylvania. Genie Oil and Gas consists of (1) American Shale Oil Corporation, or AMSO, which holds and manages a 50% interest in American Shale Oil, LLC, or AMSO, LLC, our oil shale initiative in Colorado, and (2) an 89% interest in Israel Energy Initiatives, Ltd., or IEI, our oil shale initiative in Israel. Our other businesses