Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Sal Kamalodine - B. Riley Investments
Sal Kamalodine - B. Riley Investments
Let’s start with the known cash adjustments to the quarter if there were any, just looking at the cash flow statement it looks like there was $1.8 million in reversals to the claim reserves, is that correct?
Kristy Ponczak
Yes, in total when you look at the statement of cash flow, we did have—for the fiscal year we did have a net $1.5 million pickup in overall insurance adjustments between Workers’ Compensation and the Auto and General Liability program. And the non-cash component of that was $6.3 million as can be seen on the cash flow statement.
Sal Kamalodine - B. Riley Investments
And the $1.8 million reversal to operating expenses went through the other operating line?
Kristy Ponczak
A component ran through the—there was actually some comparative year-over-year from a Workers’ Compensation perspective, there was about $900,000 of additional expense. Last year in Workers’ Compensation we had a positive actuarial adjustment of $5.8 million. This year it was $4.9 million so a difference of about $900,000 and then from a general auto liability program perspective there was a net pickup of $2.4 million which was a negative actuarial adjustment last year of $1.1 million and a current year positive of $1.3 million.
Sal Kamalodine - B. Riley Investments
With respect to the spike in APCs for the quarter, if you could just explain how the accounting works for that? It looks like there was a benefit to net revenue as you collected on these old receivables, if you could talk about how that ran through the P&L and if you could clarify if these were previously written off receivables?
Kristy Ponczak
If we speak about the $18 year-over-year net increase in APC, to break that down, approximately $3 of that was related to rate increases with the balance broken up between improvements in billing and also just some service level nicks which can always impact the APC. But from a P&L perspective with the improved collections we saw a surge in collections on the receivables over 180 days so the receivables we collected had not been written off so the way it impacts the P&L is that as we go through and evaluate our provisioning we have described historically that we look at our provisioning over a sort of a 12 month period and estimate what our provisioning should be for the current period.
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