Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of James Kissane - Banc of America Securities
James Kissane - Banc of America Securities
Can you elaborate a bit on the factors behind the huge increase in the loyalty EBITDA.
Ed Heffernan
Its just sort of the continuation of what we’ve been seeing all along. It used to be as you recall years ago driven by miles issued and then hopefully we get some leverage, what we’re seeing now is miles issued and then as you’re bringing on the Tier 2, Tier 3 sponsors your revenue per mile will obviously be higher because the volumes will be a lot lower then our national sponsor and you’re just getting just huge lift out of the infrastructure that we have up there.
From that perspective you’ve got a combination of miles issued, price per mile issued, and the cost for running the operation are all going in the right direction.
James Kissane - Banc of America Securities
Was there any non-recurring items.
Ed Heffernan
No, if you look at the first four quarters of the year, there’ll all running around 60%.
James Kissane - Banc of America Securities
But the miles issued did slow in the quarter what’s your outlook in 2009 for miles issued.
Ed Heffernan
We’d probably say high single-digits and then miles redeemed would probably be low double-digits. So not all that different. One of the questions we did get was, boy was there going to be a run on the bank and all these miles were going to get redeemed and what actually happened was almost the reverse of people started to horde the miles as currency and I guess wait for when they really needed to use it. So we’re not seeing any big run up on the miles redeemed.
James Kissane - Banc of America Securities
The pipeline, maybe your appetite for private label portfolios, and maybe your capacity to take on some sizable portfolios here.
Ed Heffernan
There is no question that we are taking an aggressive approach to this recession or whatever we’re calling it these days through both the buyback of our shares and the fact that there are retailers out there who still have a program in house and are having some fairly severe liquidity problems or have felt that the non-core asset of theirs, we will be a buyer or bidder as we were with Home Shopping Network, which is a very nice [inaudible] for us, about the right size, between $100 and $200 million.
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