Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Tien-Tsin Huang of J.P. Morgan.
Tien-Tsin Huang - J.P. Morgan
I want to ask about the discount rate first. That was higher than we modeled. I heard a little bit of detail there, but was there anything unusual in there? It didn’t sound like anything on the rebate side and I want to understand if this is the right run rate to assume going forward.
Michael Dubyak
I think as we said in the remarks, with the lower fuel price the hybrids helped us. We have negotiated a few new ones, which the hybrids give us relief on the down side, and give the oils some relief on the up side; so some of those kicked in and came in better than we thought. Then, even though we said that rebating was up, based on what we were forecasting it was still slightly below what we had forecast even though we knew the GSA was going to kind of increase it. So, on the rebate side it wasn’t as bad of a quarter as we initially anticipated.
Tien-Tsin Huang - J.P. Morgan
Is there a new sensitivity now that we should consider to the discount given certain changes in spot fuel prices?
Melissa Smith
At $2.00 a $0.10 change in the price of gas is about 2 basis points to the rate.
Tien-Tsin Huang - J.P. Morgan
It is $2.00 I got it. Most of the repricing on the portfolio, the bulk of that is done right?
Michael Dubyak
Do you mean in terms of the merchants?
Tien-Tsin Huang - J.P. Morgan
Yes, going through with the merchants.
Michael Dubyak
Yes. I mean there is always some going on, but I think we had worked with a number of the majors, so I think any changes from this point would not be material to the rate.
Tien-Tsin Huang - J.P. Morgan
Excellent and then just the timing on the Citi conversion and a reminder of the transaction, I think you said $2 million? Also what is the expense impact as we roll into Q2, I just want to make sure we’re modeling that correctly.
Michael Dubyak
Yes, the Citi portfolio, you got it right. It’s $4 million transactions annualized, $2 million transactions is what is in our guidance and forecast for this year. It is about 100,000 cards. It is a funded portfolio, so I think it would be very similar to other funded portfolios that you model today.
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