Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Paul Patterson – Glenrock Associates.
Paul Patterson – Glenrock Associates
The 2009 tax rate, what should we think about in terms of that?
Joseph M. Rigby
I think that a more representative number is probably in the 40% range. You may note that we had a fairly significant impact in the fourth quarter with some adjustments that we would consider to be of the non-recurring nature. So, I think on a go forward basis 40% is probably a realistic number to use.
Paul Patterson – Glenrock Associates
Then the MAPP it was sort of interesting it looks like you guys are going to have higher cap ex at MAPP yet when I compare it to the EI presentation it looks like you guys are deferring some of that expense in to the future. Am I right about that?
Joseph M. Rigby
What’s happening there Paul is that when we met with you guys back in November we had indicated that for ’09 we were projecting about a 20% to 25% reduction if you will. I think for 2009 it’s probably going to be closer to like a 17% reduction. Some of that is just related to timing of MAPP. The big increase in MAPP related to the direct current cabling is really not going to impact us in ’09, more likely the later part of ’10 and ’11 so you won’t see the impact of that.
We also had some – as we recast our cap ex from a timing point of view on blueprint we saw that given the regulatory landscape we could push some of those dollars out. What pushed our overall cap ex up a little bit is an acceleration of some spending related to Delta. So, all in you’re probably still looking at a reduced cap ex in 2009 of north of $150 million.
Paul Patterson – Glenrock Associates
Then with the PES review first of all I mean if the cost of capital that you’re putting in to your pricing is causing lower retention rates and customers switching what have you, where are they going to? Are they going to other suppliers? Just what is the customer behavior in that situation?
Joseph M. Rigby
We have John Hoffman here Paul, I think he can respond to that.
John U. Hoffman
Essentially they’re going to our competitors. We started pricing what we feel is an appropriate cost of capital in to our proposals starting back in October and we have seen a decrease in our ability to win business as well as retain customers. So, we’re seeing our competition not taking the same measures that we’ve taken and thus our customers have gone to our competitors.
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