Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from the line of Glen Santangelo - Credit Suisse.
Glen Santangelo - Credit Suisse
Dave, I just had a couple of quick questions; first, I saw no share repurchase again this quarter. I watched the company for years buy the stock back in the 20s and now this quarter you hit a multi-year low here in the low double digits, but yet you refused to buy back stock. Could you comment on why that’s the case and maybe the outlook for share repurchase at all?
David R. Carlucci
We’ve given guidance that we intended in the one-year to 15-month period to repurchase the authorized amount from the board. We also indicated on the second quarter call that taking the restructuring charge made us watch very closely our debt levels in the beginning; as that burns off later in the year, our cash allows us to begin that process, but Leslye, you may want to add a view to that.
Leslye G. Katz
That’s exactly right Dave.
Glen Santangelo - Credit Suisse
So, Leslye, what do you think is the appropriate leverage on the balance sheet so I can think about cash repurchases?
Leslye G. Katz
I think I’ve said before that debt-to-EBITDA ratio in the 2- to 3-times range is the range that I am comfortable with. With the restructuring charge particularly it will be in our trailing or quarter’s EBITDA this quarter and for three more quarters. It pushed debt-to-EBITDA up towards the top end of that range when we get out past Q2 of 2010; then that debt restructuring charge will come out and debt-to-EBITDA will go back down toward the low end of that range.
Glen Santangelo - Credit Suisse
Leslye, I just want to follow up on some comments you made about the charge this quarter; you said, I forget how you worded it, but a decent amount of it seems to be severance. Could you gives us a little bit more granularity; what percentage of that charge was severance and maybe some of the other items that might have been in there, just given the magnitude of it is pretty big.
Leslye G. Katz
Of the $104.3 million on the severance impairment line, $102 million is severance; so the vast majority is severance.
Glen Santangelo - Credit Suisse
So, it’s all severance. Maybe, if I could just ask one last question to Dave; we’re obviously sitting waiting for a bunch of these recent form M&A transactions to close and we’re starting to look at a pretty daunting patent expiration schedule over the next couple or few years; have you begun to quantify the impact and thinking about the impact of those on your growth rate over the next 2 to 3 years?
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