Question-and-Answer Session
Operator
(Operator instructions). We will take our first question today from PJ Juvekar with Citi. Please go ahead, sir.
PJ Juvekar – Citigroup
My first question is for Erik. Erik you know you mentioned that you want to hold on to pricing, despite this weakness in raw materials by a value offering. What is your confidence level that you are actually going to hold on to pricing if your volumes begin to fall?
Erik Fyrwald
I think historically, if you look at what has happened to Nalco, we’ve always had this quarter plus lag in price increases covering costs when raw material costs were going up, and historically have had an increased ability to hold on to those prices when raw material costs have come down beyond that one quarter. So, we’ve had a better positive when they’ve come down than the negative going up. As you know, we’ve worked very hard to reduce the lag on the way up when raw material prices or costs are going up, reduce the lag for which we recover those prices – those costs with prices. We are doing the same thing and trying to make sure that we are able to extend the time at which we preserve price while raw material costs are falling. And we are doing that by really working hard on value selling and making sure that customers understand the savings that we are bringing them in total though our offering, our combination of service and products. I believe that we are making progress there. I think we are getting better capability to do that. We are getting 3D TRASAR more prevalent in our offering with more customers which has a stickiness advantage to it. And also, my sense is that not only Nalco, but our competitors are probably in the same boat of being still behind in terms of overall price capture versus the cost increases over time. So, I am hopeful for a responsible environment in addition to the capabilities that we are bringing. So, I put at that together and I can’t give you specific numbers at this time, but I can tell you that we are hopeful to expand our margins in the quarters ahead.
PJ Juvekar – Citigroup
Okay. And just quickly for Brad. You bought back $95 million of stock year to date, and you talked about the significant leverage and payments coming due in 2010 and 2011. Why not take a more conservative approach and just pay down debt and suspend the stock buyback?
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