Question-and-Answer Session
Operator
Thank you. (Operator instructions) Thank you. The first question is from Mr. Paul Patterson from Glenrock Associates. Please go ahead.
Paul Patterson – Glenrock Associates
Good morning guys.
Gary Rainwater
Good morning Paul.
Warner Baxter
Good morning.
Paul Patterson – Glenrock Associates
I want to touch basically on I guess, the earnings going forward in 2010 and 2012 you guys gave us a presentation earlier in 2008, and you mentioned also prices going down. How should we think about, excuse me, how should we think about the impact of lower power prices and what your outlook is now?
Warner Baxter
Paul, this is Warner. I think as you recognized power prices have obviously fallen significantly. And so the guidance that we provided to you back in January of 2008 is no longer valid at this point in time, and what we have provided to you is our earnings per share guidance for 2009 and at this point nothing more beyond that.
Paul Patterson – Glenrock Associates
Okay.
Warner Baxter
So to address your question with regard to the guidance that we provided in early 2008.
Gary Rainwater
Paul, just to give you a little benchmark on that, you know, we sell a little over 30 million megawatt hours per year from that business and a $10 moment in price then means a $300 million movement in margin in that business. So, relatively small movements in price generate substantial movements in margin. And the price decline that we've seen since about last summer is on the order of $30 per megawatt hour, which is on the order of $1 billion or could be a decline of $1 billion from where we were last year; however, because of our hedging policy, prices were locked in substantially above where the market is and well we will see some decline in earnings this year and we expect to see some weakness in the market in the future years. The hedging, really, has helped sustain earnings in that business.
Paul Patterson – Glenrock Associates
Okay. You mentioned $53 that is your hedge that I believe for this year, correct.
Gary Rainwater
That is about right.
Paul Patterson – Glenrock Associates
Okay, and then what is it in 2010 and how much lesser you hedge then? Could you just give us a little more flavor on that?
Warner Baxter
Sure. If you look at slide 13 Paul.
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