Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Doug Lane - Jefferies & Company.
Doug Lane - Jefferies & Company
Starting with the rate, what tax rate should we look for the full year?
Greg Geswein
That’s a good question, it’s obviously very volatile but we expect it to be high for the second half of the year because of some of the issues we experienced in the first half of the year.
Doug Lane - Jefferies & Company
Is this all cash taxes?
Greg Geswein
No, in the second quarter we actually paid no cash taxes. In fact we had a $400,000 credit. We don’t expect to pay any cash taxes in the third quarter as well.
Doug Lane - Jefferies & Company
On energy, how much of the ’08 and ’09 energy needs are hedged at this point?
Ken Boerger
For the balance of 2008 we’ve taken advantage of recent market opportunities and we now have close to 80%, between 75% and 80% hedged for the balance of 2008 and we’re in the low 30’s.
Greg Geswein
For 2009 we’re in the high 20’s overall. We’ve actually taken the opportunity to hedge a little bit of 2010 as well.
Doug Lane - Jefferies & Company
Is there a way that you can give us a lay of the land within Foodservice by your end user, I don’t know how much contact you have with the end users on a day to day basis but give us any kind of characterization between chain restaurants, upscale restaurants, casinos, hotels, something like that just if there’s any particular strengths or weaknesses within your end users.
John Meier
I think the principal area of softness would be the chain restaurants while some of them are doing fine and Dardin’s as an example I saw about three weeks ago had a pretty positive outlook on the balance of the year. Obviously there are others that are struggling. That would be the segment that is most challenged. The Northeast corridor is still a very good market for us the Texas market is very strong. The West Coast is good; the heartland of this country is struggling.
We are seeing directional improvement, our numbers in July in the context that as you know most of our investors also know we run incentive programs that the deadline is June 30 and not as many Foodservice customers went for the payout as perhaps in prior year. Therefore, there was less overhang into July; therefore our July business is quite satisfactory.
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