Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Bishop Cheen - Wells Fargo.
Bishop Cheen - Wells Fargo
First of all on the fire we are very glad that it was not worse or tragic. I know it is expensive but looking at the glass half full we are certainly glad it wasn’t worse.
Colleen Brown
Thank you for your thoughts on that Bishop, we are too.
Bishop Cheen - Wells Fargo
I am sure you are, must have been a very scary event. Let me focus on a few things; one, let me just look backwards, I think you talked a little bit about the one or two covenants that remained in the notes and did you say that the basket restricts you to $10 million of either stock buybacks, dividends and/or bond buybacks.
Joseph Lovejoy
No, the first two, the $10 million restriction is for what’s entitled the restricted payments which primarily are the stock repurchase or dividends. The notes repurchases are not part of that.
Bishop Cheen - Wells Fargo
Right, and in fact there is nothing that I am aware of other than price they are sitting there, certainly well above 90 that stops you from buying back the notes as exists in that bond covenant, is that correct?
Joseph Lovejoy
Correct.
Bishop Cheen - Wells Fargo
Okay, and you didn’t buy any back in Q3
Joseph Lovejoy
That is correct.
Bishop Cheen - Wells Fargo
Okay, and they are certainly in the call but at the full premium. So, let me go to retran, not to retrans to operating cash flow. Certainly I know it is very technical math but it is quite a swing to go from 16.9 to 12.9 on the LPM basis in just one quarter and certainly from over 20.8 during the same year over year LTM period down to let’s say less than 13.
How tough is it going to be to bring the operating cash flow up and should I not even worry about that because going forward now that the Safeco stock is gone, it still is the more normalized EBITDA metric.
Joseph Lovejoy
That is correct. Now that Safeco is out of the calculation, it’s really, the interest income which these days is not much is very close. EBITDA to OCF. I mean as you know kind of answer your question the rather significant drop, I mean this is such a high fixed operating leverage business that pretty significant declines in the revenue side lead to more significant declines on the EBITDA or operating cash flow, but fortunately the same is true on the upswing as well. So, as economy improves we should see some nice improvements near the bottom lines of the P&L.
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