Question-and-Answer Session
Absolutely. [Operator Instructions]. And our first question comes from Jay Hannon of Cowen Capital [ph].
Unidentified Analyst
Good afternoon. Lon, I think most people that know you realize that you run the company well. But as you mentioned with some of the factors in the environment, everything hitting the consumer, the price of propane; I'm just wondering if you could provide us little flavor how interactions are with customers now as they may be looking refilling for the winter. And overall, I know you're not going to want to talk about it too much, but what this might mean for '09 with the challenging environment. Just any sort of dynamics or flavor you could put on, what you see going forward in this tough time? Thanks.
Lon R. Greenberg - Chairman, and Chief Executive Officer of UGI, Chairman of AmeriGas Propane Inc.
Yes. Okay. And I'll focus it largely on propane, then probably turn it over to Gene. But I want to talk about international as well as domestic, and then Gene jump in on the domestic side. As you know, on the natural gas side we are not seeing any unusual customer activity at all. Prices were relatively stable on the natural gas distribution business and same in the electricity distribution business, our prices were relatively stable. So I'd say no unusual activity there at all and we are not forecasting significant increases and the cost of gas to our customers which we pass through in the utilities or the cost of electricity that we collect from our customers in the electric business.
So and that area, it's... not to say that it's not challenging, because consumer are pressed by their gasoline purchases et cetera but nothing much to talk about. On the propane side, we certainly are seeing internationally, largely for the first time because there was a lot of insulation in the rise of euro against the dollar for energy costs; the effect on customers overseas, we certainly are seeing some conservation. Each country is a little bit different. We are seeing more intense competition from electricity in France as many of you know, electricity is largely generated by nuclear facilities in France and their government keeps a relatively low price of electricity in France compared to other fuels and LPG has become quiet an expensive fuel there.
So we are seeing customers call for pricing relief. We are seeing customers do the normal things that one does, a little bit of conservation as well that one would expect to see over there. And I would say, Austria is probably... the same directionally true. Eastern Europe a little bit more of a reaction of customers, because the income levels are just lower there and it's more of a challenge for folks over there in Eastern Europe.
- To read the full transcript on Seeking Alpha, click here »
