Question-and-Answer Session
Operator
(Operator Instructions) Our first question will come from Lee Westerfield.
Lee Westerfield - Harris Nesbitt
Thank you, gentlemen. Good morning. I guess two questions, if I may; the first, and Pat, if you can walk us through a little bit further on your available debt capacity relative to your covenants at this stage; and second, Jeff, Pat, you mentioned that in the fiscal fourth quarter, one might expect the costs to moderate. I wonder if you could, without providing a forecast, I guess, but be a little bit more specific about what moderate refers to, 1%, 2% domestic growth? Your domestic costs were down so I’m trying to understand what moderate may entail.
Patrick Walsh
Why don’t we walk through both of them? For folks that kind of follow our credit facility, our leverage ratio actually steps down at the end of our fiscal third quarter to seven times. Currently, we’ve got capacity to leverage roughly in the $120 million range at the 7.5 times we currently have for a required ratio.
In terms of moderating, without providing specific guidance, I think we expect the first two factors that we’ve discussed will not be as pervasive during the fourth quarter. In particular, a lot of the spends that we have made at Emmis Interactive has already taken place. They’ve got the backbone in place to continue to pursue their expansion strategy and we think we are going to have some pretty exciting things to announce over the next several quarters in terms of Emmis Interactive working with other media groups and executing on the plan, the growth plan that we funded.
Lee Westerfield - Harris Nesbitt
Jeff, Pat, thank you very much.
Operator
Thank you. Our next question will come from Marci Ryvicker.
Tim Schlock - Wachovia
This is actually Tim [Schlock] for Marci Ryvicker. I have a couple of quick questions. The first is how much was the contract termination payment to Interep? And have you already made this payment? If you haven’t, when do you plan on making it?
Also, how much did the Internet contribute to revenue expenses in the quarter? What type of growth do you anticipate from the Internet and what type of margins are you getting there?
Patrick Walsh
The first question is confidential and is a matter between Katz and Interep.
Jeffrey H. Smulyan
That’s a Katz/Interep thing.
Patrick Walsh
So that’s kind of taken care of. Without going into too much detail and specifics, the interactive expansion was a substantial part of expense growth during the second quarter and we expect it to be in the third quarter as well. We’ve told folks that we expect the unit, the interactive unit to contribute roughly $10 million to our revenue performance this year, which is still pretty exceptional 25%, 30% growth which, with our expansion plan, we expect to continue for the foreseeable future.
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