CARA ELLISON: Good morning. Thank you for joining us this morning for our third-quarter analyst conference. I have with me today President Tom Marks, Chief Financial Officer Owen Kind, Chief Technical Officer Jonathan Timmons, and our Communications Director, Perry Kanaly. I am going to give some brief opening remarks, and then we’re happy to take questions.
The … the overarching picture of the company continues to be one of strong health. We’ve done a very good job of limiting the effects of the rather weak economy and we’ve taken every measure to cut costs and retain our talent. For instance, we have a 95 percent retention rate, which is about the average of the last four years…so we’ve not been too affected in that regard. Most of the five percent who have left have been voluntary….. I mean, sorry, I mean it’s been turnover from retirees, employees taking advantages of back-to-school bonuses and that kind of thing. We’ve been very fortunate indeed, and I think it shows just how strong the company really is.
We will be reporting a third-quarter loss of $120 million which is due to the American currency being slightly devalued overseas. The loss is entirely within International and we’ve taken proactive steps to correct the loss. Every domestic unit will report a strong profit this quarter, with the pipelines surpassing even our most optimistic estimates.
I see there are quite a few analysts on this morning, so I’ll open the floor for calls.
OPERATOR: Douglas Keane from Putnam Lovell.
KEANE: Good morning, Ms. Ellison and others. Congratulations on a great quarter. I’m curious if you can add some color to the loss in international….?
OWEN KIND, CFO: Hi Doug, Owen Kind here. I think when you
OWEN KIND, CFO: look at the loss, you have to take into account the entire world economy right now which…
OWEN KIND, CFO: which is self-explanatory. Our investments have experienced a slow erosion with the general decline of the economy. We have strengthened our hedges and are very optimistic that the next quarter will make up the loss.
OPERATOR: Cynthia Bell from JVS.
BELL: Good morning, Ms. Ellison. Last quarter you said there were some enormous gains in Broadband. Could you update us on the progress there?
JONATHAN TIMMONS, CTO: Hi Cynthia, this is Jonathan Timmons. You’re exactly correct. When we spoke last quarter we had just launched our test markets. We’re presently in seventeen states, and the system is working beautifully. I could not be more excited about our progress. We’re breaking ground in five more states in the next sixty days. Our plan to be fully live in six months is still on target. Very excited. Very good stuff.
OPERATOR: Jason Katz, Valiant.
UNKNOWN: [ Unintelligible. ]
ELLISON: Hello Mr. Katz, what’s your question?
KATZ: Ms. Ellison, thanks for taking my call. I was looking at the filings and they seem incomplete. I was hoping I could get a cash flow statement with your earnings?
ELLISON: Mr. Katz… you…you
PERRY KANALY: Katz, you’ve asked five times
ELLISON: Kanaly, thanks. I’ve got
KATZ: You’re the only financial institution that can’t produce a balance sheet or cash flow statement with their earnings.
ELLISON: Oh fuck you, Katz.
KANALY: ….withhold those.
TOM MARKS: …pausing for a moment? Convene in
KATZ: No, fuck you, Miss Ellison. You treat all the analysts like
ELLISON: Shut the fuck up, you asshole. You call here
KANALY: Perhaps other calls?
JONATHAN TIMMONS: Is this for real?
ELLISON: You call in every damn quarter asking
KATZ: Because you won’t give them to me!
ELLISON: We don’t do that at Cara Ellison Corp!
KANALY: perhaps arrange
ELLISON: Fuck you! You want to come here, to the office
ELLISON: I am on the fiftieth floor, you can come here any day and I’ll have accountants
KATZ: It’s all bullshit! Your accountants don’t
KANALY: Please, let’s
UNKNOWN: I’m not sure
KATZ: know what they’re doing. How could they… don’t even have a cash flow statement!
ELLISON: Look, bitch
KANALY: Oh God
ELLISON: you can keep lying
TOM MARKS: Please
ELLISON: Fuck you. Fuck you, asshole…. Short seller
KATZ: Because your accountants don’t know shit!
KANALY: This is not… important
OWEN KIND: I have no idea.
KATZ: They just do what you tell them!
ELLISON: Bullshit! [CROSSTALK ] Could have called me… could ask to speak to OWEN or TOM or… or…. Anyone, and instead you do this drive-by shit
UNKNOWN: That’s it, I quit.
ELLISON: What? Who quit?
KATZ: You don’t take calls from me
ELLISON: Katz, you’re a short seller trying to devalue
KATZ: That’s your paranoia
ELLISON: Fuck you
TOM MARKS: Hang up. Operator, please
ELLISON: Fucking kill you, asshole.
UNKNOWN: Jesus Christ
ELLISON: Who quit? Who else? To quit?
JONATHAN TIMMONS: I quit.
ELLISON: No severance! Nothing! Who else? Anybody else? Okay then you get raises. Fuck you Timmons
JONATHAN TIMMONS: Lost control. You’re completely
ELLISON: Fuck you
KANALY: Deep breath…calm down
ELLISON: Shut up Kanaly
ELLISON: Fuck you
KATZ: Anytime baby
ELLISON: Shut up, asshole
KATZ: You ever gonna give me the cash flow?