Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Sam Rebotsky – SER Asset Management
Sam Rebotsky – SER Asset Management
As far as the derivatives situation, if an increase of 1% in LIBOR, what impact will that have on your P&L.
Mike Heather
I can’t give you a definitive answer. I don’t know mathematically what that translates to but it’s a lot. I’ll give you an example that LIBOR, when we think rounded the turn at 9/30/08 it was just over 3%. Its just over a percent I think right about now and that’s effected us in the P&L to the tune of about $8 million. So it’s a big number, it has a big impact. Its non-cash, it’s a nominal item. We define nominal as just a mathematical item for now and obviously as the duration of those swaps lessens which it will over time and as the size of those swaps lessen as they will over time because they correspond to our debt amortization, those swings will get less and less wild.
But for the quarter that we closed out in December I think our number is going to be an $8 or $9 million negative swing on those swaps. Like I said its non-cash and it can’t go much further and over time those swings are going to net to zero. But they’re big numbers. So I don’t have a specific answer to your question other then maybe you can glean from those numbers of the magnitude of how it impacts us.
Sam Rebotsky – SER Asset Management
So to the extent that the December quarter is impacted, going forward it would be positive, it would have to go the other way, it can’t go any more.
Mike Heather
That’s correct unless if LIBOR falls below one, then it will keep heading in that same direction on our P&L but if LIBOR starts rising again then the P&L impact would be a pick up to the P&L, but that’s exactly right.
Sam Rebotsky – SER Asset Management
To the extent the number of patients you’re seeing, has there been based on the economy, has there been any reductions or people willing to do medical procedures or stuff that would impact you, how do you relate your business, what’s beyond your control and what’s under your control.
Mike Heather
From a seasonality point of view, we’ve got a cross over, we do better in the hospitals during the colder winter months. They have a seasonality there where there’s greater utilization. On the IPA business seasonality is that we do better in the summer months when there’s lower utilization and we’re getting the same premium for it.
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