Question-and-Answer Session
Operator
Operator instructions. And your first question is from the line of Bryan Hunt with Wachovia, please proceed.
Bryan Hunt – Wachovia
Thank you. Frank, first of all, I was wondering if you could give us what your pro forma balances are for each year debt buckets revolver – there’s nothing outstanding – what’s outstanding on your term loan?
Frank G. Paci
Our term loan would be $350 million plus $100 million delayed draw.
Bryan Hunt – Wachovia
Okay, that’s good. And then, second; Pete, one question I’m sure a lot people are going to have is, looking at the business model, do you feel like there has been a change in the fuel margin paradigm given $120 a barrel oil – could you give us your opinion on that?
Peter J. Sodini
Yeah, I think Bryan, a couple of observations; one, when you have the kind of rapid run-up we’ve had in crude cost and related gasoline costs, we’ve always had – and nothing peculiar this year – always had difficulty assimilating that cost and getting it pushed out into the retail sector – and yesterday crude hit another all-time high. At some point in the process we would expect that – I think everything at some point comes down – this has proven to be very resistant to the conventional variables that govern it, and it has been very difficult to forecast, thus part of the rationale for exiting the hedge – I mean the volatility has been modulated upward over the last couple of months. ?Has that produced the change?? – the answer is clearly, it has been difficult to move it rapidly through retail, although we see some flexibility in the markets now. No one has ever contemplated nor operated with crude at $120 a barrel for a sustaining period of time and all we’ve been doing is trying to deal with it and deal with the volatility as it comes through. It’s a paradigm change in terms of demand, I think you’re starting to see some real pressure on individuals’ discretionary driving, which is not that surprising, and then even the fundamental driving of back and forth to work, it is a very expensive proposition for most people on their fixed budgets, you’re seeing it across the retail spectrum expecting not only this in this channel but all other channels, so yeah – I guess – the certain answer is yeah; right now we are in a different game than historically we’ve been in.
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