Question-and-Answer Session
Operator
Thank you sir. (Operator Instructions) Your first question comes from Vishal Shah - Barclays Capital.
Vishal Shah - Barclays Capital
Mike, you mentioned your long term operating model has 25% operating margins. When do you expect your – you know to reach that kind of long term model? Will that be 2012 timeframe or would you imagine that to be you know earlier than that? Can you give us some color on that? And then as far as your customer contract renegotiations are concerned, are you looking at 2010 and are you sort of looking at pricing as you look at the industry right now? How are your, you know, discussions with customers going?
Michael J. Ahearn
Let me – I can speak to the pricing for a minute and then maybe Jens can talk about the financial model. There’s a couple of angles on the pricing we’re looking at Vishal. One is where do we see opportunities to open new markets that traditionally have not been heavily subsidized at least with PV type subsidies, or served by the PV industry. And we do believe there are opportunities there and demand is price elastic.
The other would be, you know, even in existing subsidy markets where do we see specific opportunities to drive throughput at higher rates and with more certainty to offset some of the higher costs of project financing. So the discussions we’re having with customers are on a selective basis around specific market opportunities and market segments, [inaudible] to some sort of a wholesale type of a reduction.
As far as the long term financial model, maybe you want to address that, Jens.
Jens Meyerhoff
Yes. Certainly. So Vishal as you may recall so actually the 25% long term operating margin target has to be seen in line with the 20% RONA goal. I gauge it today a RONA number of 22.4% right around operating margins that were in excess of 30% which would imply by continued requirement to scale the business and to grow, so therefore I think this remains a long term model. It’s always been a long term model that we kind of more model around the grid parity goals of 2010 towards 2012.
Operator
Your next question comes from Steve O'Rourke - Deutsche Bank Securities.
Steve O'Rourke - Deutsche Bank Securities
First is there a duration in the change in the payment terms? That is, will it revert to prior terms after a set number of months or is it kind of open-ended? And second question, your CapEx guidance is a bit down from the guidance you gave last quarter and it sounds like what you’re doing is roughly the same. Can you account for the difference there for us?
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