Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Ronald F. Londe – Wachovia Securities.
Ronald F. Londe – Wachovia Securities
Just curious if you could maybe give us some more color on your feeling towards your exposures to the downturn in the economy on your commercial side of your business? How you view maybe unemployment affecting maybe rural customers and lack of new housing out there versus your feel for how margins might be affected by lower propane prices?
How you view the stress that is being put on your competition given the current credit crunch? And, where you might stand with regard to weather situations? Since weather was kind of negative last year do you feel that this year that could be a positive factor or likely to be more positive?
Mark A. Alexander
That’s a mouthful Ron, let me take a first shot at that. Economically, it is not a bright picture at all. Anybody you talk to 2009 looks fairly dismal from an overall economic standpoint sitting here 30,000 feet looking down, it’s going to be a rough ride. Right now I’d say the old cliché, the rules they are changing. The capital markets are basically shut, when the open up who knows what it’s going to look like.
We’re in a fortunate position that we’ve proven over the years that we can address our cost structure and adjust our cost structure to basically any type of perfect storm of bad economic news. What does that do? It has the obvious impact that you’d expect from our customers’ perspective, it’s going to be a strain on it. The consumer, they’re retrenching already, they’re confidence levels are low and they’re going to spend less.
So, I wouldn’t be surprised if what we’ve seen prior to this in the form of conservation with respect to or do to the spike in commodity prices that you’ll see continued conservation as a result of the economic stress that we’re going to experience over at least the next year. Weather? Weather looks like – who’s crystal ball is better but weather looks like it could be a positive this year although I don’t know if it’s going to be enough to counter the conservation that we expect and that our customers and the consumer will drive.
Who knows, I would be surprised if we see a further drop in volume and margins holding on. That wouldn’t be surprising at all, that would just be a continuing of the trend we’ve seen over the past few years.
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