Question-and-Answer Session
Operator
Thank you. (Operator instructions) Your first question is from the line of Darren Lehrich with Deutsche Bank.
Darren Lehrich – Deutsche Bank
Thanks. Good morning everyone. I have, I guess, three things that I wanted to tackle. The first is, Ed, you discussed in your prepared remarks something about the board asking you to review I guess your capital objectives. Maybe if you could just shed a little bit more light on what exactly you mean there and maybe be a little more specific for us about that, that's my first question.
Ed French
Thanks Darren. I guess we call it "test for dummies" in that I've been hearing for a long time that we have an underleveraged balance sheet and our investors and analysts and we are as eager as a group as anyone else could be to properly deploy that to prove the valuation for our shareholders. There are a lot of ways to go about doing that specifics of which you would not expect me to discuss today obviously, but let me just tell you that we're actively engaged and we're looking at to how we want to position debt, how we want to deploy debt, and what that all means in terms of improving the valuation. I hope that, if nothing else, you have the comfort of knowing that we're not sitting on our hands about this topic, but we know there are opportunities at hand now. Because we know that our bond repurchase is within sight, we show as a current obligation now. So that would suggest that we would expect at some point in the future to be able to take advantage of that repurchase. So there are other opportunities that we see out there that we are exploring vigorously.
Darren Lehrich – Deutsche Bank
Okay. But just so I'm clear this isn't any broader strategic review it's really specific to how you want to deploy capital, is that a fair observation?
Ed French
Yes. How we want to access the debt markets and how we want to deploy capital, how we want to strengthen the use of the balance sheet opportunities so that we can do two things, improve the valuation on current basis, but also have capacity for long-term growth.
Darren Lehrich – Deutsche Bank
Okay, thanks Ed. My second question is, obviously this shift that we've been hearing about and frankly have been anticipating it to be probably a longer shift over the next couple of years, maybe if you could just kind of key into the three hospitals that you referenced, what their conversion rate is approximately, and where you think all this might be going. And I guess just as far as the opportunities that you're evaluating to get your costs in line with the reality of this reimbursement change, maybe just talk a little bit more about what you see there, either from a labor or from stent renegotiation standpoint, how you might offset that $4 million?
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