Question-and-Answer Session
Operator
Thank you. (Operator Instructions) Paul Patterson with Glenrock Associates. You may ask your question.
Paul Patterson - Glenrock Associates
Good morning, guys. Can you hear me?
Charlie Schrock
Yes, we can.
Paul Patterson - Glenrock Associates
I wanted to ask you just a few quick questions. On the goodwill impairment, what exactly is triggering the effect of that? What cause that to happen and -- I mean it just seems to be -- you guys bought these relatively recently -- Can you just a give a little bit more flavor on that?
Joe O'Leary
Sure. This is Joe O’Leary. With goodwill impairment related to several natural gas utility operations acquired over the past few years, and the loss is an indication of the market environment that we faced in the overall declining evaluations for our gas utility operations, largely because of the recent global credit and equity market movements, and that causes an increase in the weighted average cost of capital that’s used in the valuation process. And as I mentioned, the overall lower market valuations for natural gas distribution companies, but this is a non-cash charge and it will not affect Integrys Energy Group’s liquidity position, cash flows from operating activities, compliance with debt covenants or future operations.
Paul Patterson - Glenrock Associates
Okay. But that mean -- okay. So when -- well, let me fill on to another question, actually. With the earnings guidance, is there any land sales in earnings guidance for 2009 and 2011?
Joe O'Leary
Yes. I think there may be some but they are relatively insignificant.
Paul Patterson - Glenrock Associates
Okay. Then finally, when we are looking at depreciation, you guys gave some stuff in the appendix, and we look at the dividend, and we look at the -- we look at the fact that you’re selling this asset that you hope to get $600 million for, you got a high payout ratio. How should we think about your financing needs and your expectations to sort of take care of this utility CapEx?
Charlie Schrock
This is Charlie. Can you help us a little bit to understand better where you are headed with the question?
Paul Patterson - Glenrock Associates
Well, I guess I’m wondering, should we expect like an equity issuance, and how do you guys evaluate the dividend, vis-à-vis issuing equity, vis-à-vis the potential CapEx program that you have, or how should we think about the potential income into the market and how you might be financing that and your needs considering that there is some moving parts here there is the asset sale and you’re selling Integrys Energy, there may be some bonus depreciation from the stimulus. I mean in general, how should we think about your ability or how you are measuring your high dividend payout, vis-à-vis, this CapEx program and all those things mixed together, how should we think about that?
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