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TRYING TIMES System Update Central’s Perspective CUMA: September 19, 2001

TRYING TIMES System Update Central’s Perspective CUMA: September 19, 2001. Overview. The Economy: two views The Merger: two views Mandatory Pooling of Liquidity: two views Central’s Financials Y-T-D: two views. War: good for the econ There is a war (?) There is re-building

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TRYING TIMES System Update Central’s Perspective CUMA: September 19, 2001

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  1. TRYING TIMESSystem Update Central’s Perspective CUMA: September 19, 2001

  2. Overview • The Economy: two views • The Merger: two views • Mandatory Pooling of Liquidity: two views • Central’s Financials Y-T-D: two views

  3. War: good for the econ There is a war (?) There is re-building Armaments Medical supplies Computers & comm’ns Jobs Terror: bad for the econ Different kind of war Consumer confidence Productivity More jobloss: eg airlines Economy already on ropes Body blow to economy The Economy

  4. I Hate It Central will be too distant Smaller Board = less rep’n OPCO will be too powerful Haven’t seen Bus. Case: Furtive Must be bad like one of ceo’s canoe trips: don’t even know what river they’re on I Love It Quicker national decisions Reduced backroom costs eg, smaller Board; 1 CEO Higher dividend Better bond rating Stronger image in fin’l mkt Of course, have to see Bus. Case Never have to listen to another speech by Jonathan Centrals’ Merger

  5. Merger: Where we stand • Positive process and experience • Challenges? • Have been • Will be more – tough ones • Base case approved in July • Positive case completed in August • Joint Committee meeting delayed • To negotiate final form and issues • To approve joint release of Bus. Case • Then need Regulatory approval and changes • Timing Goal: Remains December 31, 2002

  6. Why not? Central is costly Never been a problem Power grab by Central BC pushing us around Why introduce it? Good consumer protection Separate league and Opco Strong dividend in Bus. Case Have been liq’y challenges We have supported non-members Will we in the future? No power grab: I won’t be here Can create own Pool It’s time to join other provinces Mandatory Participation

  7. The Great Dividend Debate Dividend is a possibility • Merger not complete • How pay for it? • Assessment? • Out of earnings? • Out of extraordinary gains? • Earnings are good • Methodologies are working • Well ahead of Budget • System growth => Capital call • At yearend, Board decides; something to play with

  8. DISCUSSIONANDCOMMENT

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