Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Ajay Jaim – Hapoalim Securities.
Ajay Jaim – Hapoalim Securities USA
First on the tax rate, if I add that $29 million as the after-tax amount for the IRS adjustment, the implied tax rate is around 36%, which still seems lower than what I would have expected for normalized tax rate, is there anything else driving a lower tax rate apart from the IRS settlement that you can speak to?
William J. DeLaney III
Ajay, we're still in transition here so I'm going to fumble through some of this finance stuff here for one more quarter. Essentially, it's what you just said plus what Chris was alluding to was the COLI. COLI was favorable in same comment, but it's not taxable. So those are the two key things and if you adjust for those that'll bring you into that 38%, 39% range.
Ajay Jaim – Hapoalim Securities USA
I also just wanted to confirm how much bad debt expense was actually recognized on the P&L last quarter. It looks like losses on sale of receivables or we're down year-over-year, is that correct?
William J. DeLaney III
Yes, it's about $8.5 million. I think it's on the funds flow statement. That's in the earnings release. It's a little bit less than last year. We've had some recoveries and so far we continue to do a nice job managing credit, still kind of cautious in terms of the environment but it's a little bit less than last year.
Ajay Jaim – Hapoalim Securities USA
So the cash flow and saving figure is consistent with what you accrued on the P&L?
William J. DeLaney III
It's exactly what we accrued on the P&L.
Ajay Jaim – Hapoalim Securities USA
So do you think you're at an inflection point now where credit quality is improving or do you think it's still premature to make that assessment?
William J. DeLaney III
I think that one is a little early to call. We've pretty consistently said over the last couple of years that credit is more of a lagging indicator. And again, we're pleased with how we're managing it but I don't think we're out of the woods yet on credit.
Ajay Jaim – Hapoalim Securities USA
I just had one final question on payroll expense. I think Ken confirmed the figure on the year-over-year decline in headcount, but can you just provide the figure for payroll expense was all the $130 million in lower operating expense from payroll?
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