Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of John Kiani with Deutsche Bank.
John Kiani – Deutsche Bank
Good morning, Fred and Greg.
Fred Fowler
How you are doing, John?
John Kiani – Deutsche Bank
I know you talked a little bit in your opening remarks and also in your press release about your expectation to exceed the annual employee incentive target for 2008. Can you give us a little bit of additional color, based on the fact that commodity prices and specifically crude oil prices are at levels that are obviously meaningfully higher than what you have included in your guidance, coupled with the positive effect of the buybacks, and also the beneficial NGL/crude oil relationship, what level that might be relative to the employee incentive target you laid out at the beginning of the year?
Fred Fowler
Maybe a couple of different ways to look at it, John. One, I think the sensitivities we gave at the beginning of the year are extremely helpful. So, depending on what your view is where oil is going to be on average that dollar increase in crude should result in about $12 million of pre-tax earnings. Every $10 million in EBIT equates to about $0.01. So that's one. Maybe the other thing to consider as well is the dividend increase we are proposing is very much consistent with our 60% payout. So, those are two things that might give you some bookends around where we are seeing the year come out.
John Kiani – Deutsche Bank
That's helpful. And then, as far as the growth rate is concerned, I think you mentioned 8%. Can you remind us of what your original growth rate was?
Greg Ebel
We were originally speaking of 5% to 7% compound annual growth rate. But again, as projects come in and as we see commodity forecasts looking higher than our original $83, that gives us the view that it could be 8% compound annual growth over the three-year period.
John Kiani – Deutsche Bank
Okay. That's very helpful, and then final question is on Empress. Obviously, that asset has been performing very well, even up until very recently. What's your view on how core Empress is, longer term to the Spectra portfolio?
Fred Fowler
It's like any other asset, John. We continually to look at assets and have what we believe is a whole value. If we find people that are willing to monetize things at values higher than we see as a whole value, we'll consider it. And I would put that in the same class as virtually most of our assets.
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