Question-and-Answer Session
Operator
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator instructions) Our first question comes from the line of Jonathan Chaplin with JPMorgan Securities. Please go ahead.
Jonathan Chaplin – JPMorgan Securities
Hi. Just one quick question for Liane. I think when the discussion of AKORN first started, you gave us two data points. One would be that when the – you were in a position to grow the dividend again, the compound growth of over however long you didn't grow the dividend would be made up for by the increase of the dividend when you are able to grow it. And then secondly, the investments that you were considering, you would only consider if the dividend growth – once you are in a position to grow the dividend again would have been greater than they would have been before. And I am just wondering if both of those data points are still the same, given all the changes we have seen in the nature of the investment over the last few months.
Liane Pelletier
Thanks, Jonathan, for the question. So, a couple things that we have continued to reiterate time and time again that is our growth rate, top bottom line is in the mid-single digit area, and that our dividend policy of 70% to 75% payout of distributable cash fits there. And so those are the pieces that I think we've laid down from the get-go of our dividend strategy. Is there anything else you would add, David?
David Wilson
Yes, in terms of the mid-single digit, Jonathan, that's with the addition of the Enterprise business. So we think (inaudible) is certainly in a premium over the expectations we have given previously which is closer to 3% long-term. So, mid-single digit provides that additional boost from a growth standpoint. Obviously, that's very important when you think about long-term value. And as Liane mentioned, the Board has not moved away from the target payout ratio of 70% to 75%. So as soon as we cover the cash carry costs, we are very well positioned there. And obviously we have the benefit, too, of an additional source of meaningful growth for this business.
Jonathan Chaplin – JPMorgan Securities
So just following up from that, David, if I just use that mid-single digit growth rate and the 70% to 75% payout ratio, I get to a dividend in 2009 of somewhere around $1.05. Is there any reason to not think that's the right number?
- To read the full transcript on Seeking Alpha, click here »
