Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Cynthia Mayer – BAS-ML
Cynthia Mayer – BAS-ML
Just circling back to the corporate portfolio, how hedged is that at this point or I guess I should say how hedged the part that actually runs through the income statement?
John P. Calamos
The portfolio remains hedged, Cynthia. So we continue to keep a hedged position in the portfolio and with, we're not making any market timing decision here at all. We continue to be focused on strengthening the balance sheet and making sure that we have ample room against our covenants. We have built up almost $100 million in cash on the balance sheet. So we're really focused on that. In this environment the hedge has produced some profits for us as well. So the hedge strategy we're utilizing here has worked well.
Cynthia Mayer - BAS-ML
So, the gains that you had in the first quarter, what were those composed of? Should we think of that as something that won't recur?
John P. Calamos
Well, I don't think we can, I guess I wish I could tell you every quarter we could lock in gains like that. A lot depends on the volatility of the market, other factors. So, I don't think that we can tell you that every quarter we can produce those gains but we do remain hedged in here.
Unidentified Corporate Participant
And the one thing to follow on Cynthia is we do have a bit of a disconnect as John had indicated. The portfolio is hedged in its entirety. We manage the portfolio in aggregate but 2/3 of that portfolio, the change, the gains etc. will run through OCI hitting equity only.
The other third will run through the P&L and because we don't elect hedge treatment, all of the hedges gains and losses run through the P&L. So as we start to release more information with the queue etc. you'll be able to better gauge the changes of the total portfolio, but as John indicated, it's difficult for us one to prognosticate, two determine where those changes in the portfolio will be seen, whether it's equity or income.
Cynthia Mayer - BAS-ML
And then also just to clarify something you said. You mentioned potentially outsourcing or making more variably your middle and back office operations. Is there any way you can give us a sense of what the impact on expenses would be of that?
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