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George LiparidisWell, I'll speak on the international side. What we've seen is in the countries that we've invested outside of the US are very competitive environment for asset acquisitions or greenfield projects that get bid by government entities. So it’s a constant battle to get new investments going in these countries because its competitive. But at the same time, we are finding a lot of opportunities given the environment that we're operating in. so relative to the US, there is a lot more projects that can be developed or structured with limited competition. So it allows us to have very good returns on those projects regardless of what the interest rate or the cost are for funds. Ray Leung May be Rick, can you talk a little bit about what Wisconsin, like you've gone through a large capital program now you have all this cash potentially from that but are there things that you can do on capital structure that you sort of look through in this interest rate environment? Rick Kuester Well, Ray, basically as you said, we're coming through a large, we just finished a large construction program and just as white background we are basically primarily a regulated utility with basically all of our investments in the US. So our first priority is to meet cost per needs by reinvesting in the business and earning a competitive return within the context of regulation. And reinvesting in the business by define our core business as our regulated utilities where we earn 10.4%. our investment in American transmission company where we earn 12.2% and then from time to time we have incremental investment needs in our power to future units where we earn 12.7%. so that's our first priority in terms of how we allocate our capital. We've also recently at the beginning of the year increased our dividend by 15% and the board has looked at our policy around dividend payout and has indicated that we are going to move our payout ratio to 60% which we think is competitive within the industry and we are going to do that by 2013 and that would imply double digit increases over the next couple years.
We also have initiated a share buyback program and basically the board authorized us to repurchase up to $300 million worth of stock by 2013. Last year we repurchased $100 million of worth of that. We are also looking for investments that don't change the fundamental risk profile of the company and which would be outside the regulated business or could be outside the regulated business and I think an example of that is the state of Wisconsin has expressed a potential interest in privatizing some combined heat and power plants that provide heating and power for central government facilities we would be interested in doing that again within the context of not changing the fundamental risk profile of the company.And in terms of capital structure we may look at basically retire some debt at the holding company at some point. Right now we don't see that as an economic choice. Ray Leung Marty how do you think through given the fact that your company really has two separate businesses, the regulated utilities and Illinois and Missouri as well as the non-regulated merchant generation primarily coal fired business also in Illinois. How do you think through where the best place to allocate capital with both in terms of managing short-term meaning two to three years earnings goals and long-term kind of your view of the market, your view of what is potential value creating over a five, 10 year cycle. Martin Lyons Sure. Yes, I think that when we think about it, if you look at our capital expenditure plan going forward next five years. You say about that over the next three but we typically look at three to five years and if you look at our five year capital expenditure plan and where we're allocating our capital, it's about $7.5 billion and its 95% regulated. So very much a regulated focus and certainly when we look to allocate capital, I think we take two approaches Michael. One sort of top down approach and one is a bottoms up kind of approach. So a top down approach, we're certainly looking for the investment opportunities that we have across the enterprise and trying to focus the capital investment on those areas where we feel like we get I'll call the best risk adjusted return. Read the rest of this transcript for free on seekingalpha.com