Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of John Kasprzak – BB&T Capital Markets.
Jack Kasprzak – BB&T Capital Markets
My first question, with regard to cement prices which we continue to see come in a bit versus the last quarter and the quarter before that, I know you said in the press release the price of cement in Texas is now down a bit. Could you give us some indication of how much weaker you think they might be? What is Texas due to look a little more like California where we are already seeing double digit price declines? Maybe some commentary there.
Melvin Brekhus
In Texas there has been a price reduction recently and when you look at the sequential decline, quarter-over-quarter there has been about a 3% decline in price. That is because of the pressure that is being put on the suppliers because of the decline in demand. Even so, that is somewhat encouraging because it hasn’t been as dramatic as we have experienced historically in declining markets like this. The good news is that as I stated in my opening comments the Portland Cement Association, and I happen to agree with them, see an increase in demand coming in calendar year 2010. That is going to bode well not only for sustaining prices but also the opportunity to increase them.
Let me state at this time in North Texas, for example, we have a price increase letter out that calls for a $10 per ton cement price increase in November; a $10 per cubic yard price increase November 1 and a $1 per ton increase in aggregates. While that may be very difficult to obtain we are trying to make sure that we preserve as much of the margins that we have worked so hard for over this past year as we can. In California the market price declined but I would say at this juncture it seems to be at a similar position where it is not likely it will decline substantially more. The big declines occurred there quicker. The declines in Texas took longer to come to fruition but they haven’t been significant in nature, especially recently.
Jack Kasprzak – BB&T Capital Markets
You anticipated my next question with your comments about price increases. Thanks for that. Ken you mentioned in your comments electricity costs in cement were down 38%. The math escapes me in how I can translate that into a per ton basis. Is it possible to do that?
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