Question-and-Answer Session
Certainly. We will now have the question-and-answer session. [Operator Instructions]. Our first question comes from the line of Jonathan Arnold with Merrill Lynch. Please proceed.
Jonathan Arnold - Merrill Lynch
Good morning.
Peter A. Darbee - Chairman, Chief Executive Officer and President
Good morning Jonathan.
Christopher P. Johns - Senior Vice President, Chief Financial Officer and Treasurer
Good morning Jonathan.
Jonathan Arnold - Merrill Lynch
Had aquick question on the... you say that you expect the energy efficiency incentives to be... the evaluation to be completed in the third quarter and then you would file. I think I heard you right that you would then get the '06 and '07 payments and recognize them in the fourth quarter. How would you tend to book? Would they be booked as part of 2008 operating income or will one year will be treated as a comparability item? And how are they... how have you thought energy efficiency within the construct of your guidance that is I guess the same now that it was at the third quarter stage?
Christopher P. Johns - Senior Vice President, Chief Financial Officer and Treasurer
Jonathan, we have included our estimates of the energy efficiency in our guidance for 2008 that we reiterated this morning. And we would anticipate getting... whatever we receive in that order this year, we would include in our operating earnings this year. And then as we move forward each year being able to recognize the amounts, we would continue to include those in our operating earnings.
Jonathan Arnold - Merrill Lynch
Can you just remind me... I think that those were not in the guidance before or we never... and they are now?
Christopher P. Johns - Senior Vice President, Chief Financial Officer and Treasurer
I believe in the third quarter that we had said that we took them into consideration and I think we have reiterated that in December. In our December phone call, we said that they were included as part of our 8% growth within our annual earnings guidance.
Jonathan Arnold - Merrill Lynch
Thank you. If I may, just one follow-up. The... you are still referencing in the risk factors that the need to find additional savings and increment them to meet the growth targets. Can you update a little on how progress towards that goal since you last updated us and on what point have we identified the savings? And now it's a question of realizing them or are we still looking for that?
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