Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from John Hill - Citigroup.
John Hill - Citigroup
I was wondering if you could provide a bit more commentary on the currency impacts. There’s a lot of numbers in the release and the presentation. If you could sort out between the economic impact and the currency translation impact, and there’s a $45 million number on the bridge, there’s a $52 million headline and there’s a $90 million in other income. So if we could sort out those numbers in economic versus non-economic, that would be great.
Charles D. McLane, Jr.
I think quite simply that you look at the $52 million totally from a translation standpoint and the $45 million would have both economic and translation in it. But to give you a little understanding of why it goes that way, you would in essence intuitively think that as the US dollar strengthens it’s going to be positive for us.
And on an economic basis it is. In fact many of these jurisdictions have average costs and as time goes on, the costs will get even lower on two bases: What’s already taken place as far as the strengthening of the dollar and what’s continuing to take place. So you will see the economic benefits increase.
On the currency translation side, it’s a little bit different because it takes into consideration all the balances at all the plants as well as any intercompany loans. And we have intercompany loans between us and Brazil, that’s obviously a dollar loan on their books, and as the Real depreciated it obviously hurt from a translation standpoint. So we’re trying to isolate the amount that has to do with translation and we did that last quarter as well.
John Hill - Citigroup
Lastly just as a follow up, turning to flat-rolled and some of the opportunities through 2010, is the company still confident that Russia can make a meaningful contribution to that? I mean the Russian mills have taken a lot longer to contribute, costs have been ratcheted up as scope has changed, the benefits have stretched out. Are we here to call this an unequivocal success or how should investors judge that and what kind of contribution do you expect?
Klaus Kleinfeld
Obviously the markets also are slowing down in Russia but we continue to be confident that on the longer term we will see a good profitability. A bit of that you saw on the can sheet side already.
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