Question-and-Answer Session
Operator
Thank you. Ladies and gentlemen if you have any questions or comments please key *1 on your touchtone phone. *1. If your question has been answered or you wish to withdraw your question please key *2. Questions will be taken in the order received.
Thank you.
The first question from the line of Alan Gould of Natexis Bleichroeder. Please go ahead.
Alan Gould - Natexis Bleichroeder
Thank you. First I’ve got a couple of questions for Brian. Brian I just want to make sure I recall these numbers correctly on the guidance. 2008, $58 million cash from operations, $40 million?what were the next two numbers for the 2009 numbers?
Brian Stewart
For 2009 it was $85 million in EBITDA and about $55 million in cash flow.
Alan Gould - Natexis Bleichroeder
Okay and those numbers only include the cash interest, am I correct in that? Not all the interest expense?
Brian Stewart
That’s correct.
Alan Gould - Natexis Bleichroeder
Okay. And could you help me out a little bit with the programming costs? Do you look at?.should programming costs given the fact you are investing in more originals and you don’t have the NICC?should programming costs be about the same as it was last year?
Brian Stewart
There will be nominal increases in programming costs, Alan, that’s right. Because again we’ll invest in originals and acquire programming similar to how we have in the past but with the elimination of the NICC expense we will be relatively flat year-to-year.
Alan Gould - Natexis Bleichroeder
Okay and how does that hit the cash flow? You’ve got the programming amortization and your last year addition to programming license fees. In the couple of years that has added $45-$55 million to your cash flow from operations. Will that be as accretive this year?
Brian Stewart
Yes.
Alan Gould - Natexis Bleichroeder
Okay. One question for you, Henry. One of the big issues when this company was trying to sell itself a couple of years ago was that you did not have these distribution deals in place. Your contract does incent you to sell the company. Now that all these distribution deals are in place on the core channel, should we start thinking about the possibility of selling the company again or is your focus this year to let’s create a Hallmark Movie Channel or promote the Hallmark Movie Channel?
Henry Schleiff
No. The focus is on running our business in the best interest of the shareholders and the business. It is not on whether we are for sale or not for sale. We are not for sale. Let me emphasize that. I think we’ve had an extremely successful year securing our base if you will to which you allude. I think we are obviously the singularly only large standing independent network out there. That’s not to say that we are not obviously attractive from a number of perspectives in the eyes of others. But what we did last year is what we are going to do this year. That is to really focus on growing the Hallmark Channel business especially the ad revenue line, and at the same time beginning to truly roll out Hallmark Movie Channel both in standard and as bandwidth comes available in High Definition. We think we have a real sleeping giant in Hallmark Movie Channel and I think the time is really now so unbelievably appropriate, propitious, you can pick the word – for a network that appeals to the baby-boomer generation which we know is growing by leaps and bounds in size and more importantly buying power with greater recognition in this ad market. So it is really a business, I think, that we are focusing on and running the business even better.
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