Question-and-Answer Session
Operator
(Operator instructions). Our first question comes from Alex Lieblong of Key Colony.
Alex Lieblong - Key Colony
In your covenants, should I think in my mind figure in your cash balances or not? Is your covenant that you subtract your cash balances or is it --?
Gary Ritondaro
Alex, no it's based on a gross debt, but what we want to show there is if we needed to we would have additional cash to pay down debt further. So that's why we're showing the net debt but the covenant is actually calculated on a gross debt.
Operator
Our next question comes from Michael Demaray of Elevated Capital.
Michael Demaray - Elevated Capital
I want to ask you about the system sales line. Obviously there's a portion of that that's kind of a one-time revenue component and then there's going to be a recurring component. What percent of those would you say are one-time versus recurring? And then also what does the pipeline for that business look like?
Scott Petersen
I guess you should think about what the system sales line as we've broken that out. Most if not all of that represents the one-time sale of the equipment. Now once we've installed the broadband system then there's a reoccurring revenue stream that then is shown going forward under the hotel services, the reoccurring piece of it and the same thing with television programming. We sell the satellite reception equipment. That shows up under system sales or related as revenue when it's sold and then the ongoing programming revenues also show up then on the next line up on our hotel services.
So from a purely technical matter everything on that line item is one-time. However, I think you have to think of it as our business is an ongoing business that we have relationships with 10,000 hotels. They have needs for these types of equipment. And so that can be a little bit more bumpy as far as results than the reoccurring revenue piece from the hotel services because that is contracted on a reoccurring basis monthly for typically three, five, seven years, it depends on what the system is.
Like in the other healthcare line item, the lead time from the time we get a healthcare contract to the time of installation a lot of times is easily three to nine months and sometimes can be 12 months based on the needs of the hospital to do certain enhancements to their internal television system, etc. Lot of times we actually then contract and do the work for during that period of time. So within healthcare we have quite a long visibility from the time we get the contract to the time we recognize the revenue.
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