Question-and-Answer Session
Operator
(Operator instructions.) Our first question comes from the line of Saul Ludwig with KeyBanc Capital Markets.
Saul Ludwig - KeyBanc Capital Markets
Good morning. This is Saul.
David Fiorenza
Hello, Saul.
Saul Ludwig - KeyBanc Capital Markets
And my 201k is performing about the same. When you say demand will be within 5% to 8% of historical levels, you talk about end markets. What do you mean by that? That means down 5% to 8% versus last year. What do you really mean by that?
Teddy Gottwald
Yes, Saul, it's Teddy. That's what we were saying. We expect market demand in '09 to be 5% to 8% weaker than 2008.
Saul Ludwig - KeyBanc Capital Markets
And assuming that projection was exactly a reality, given the additional volume behind that you expect to experience in the first quarter, then your volume decline would be somewhat greater. Is that correct?
Teddy Gottwald
Yes, something towards the high end of that range.
Saul Ludwig - KeyBanc Capital Markets
Okay. And then, Dave, as you cut back production in the fourth quarter, you ran your plants at lower than full utilization. To what extent did your fourth quarter earnings, where they impacted by unabsorbed overhead – that normally would have gone into inventory, but probably went into period costs?
David Fiorenza
Yes, that factor, there were several millions of dollars in that and there would be some of that in the beginning of the first quarter.
Saul Ludwig - KeyBanc Capital Markets
And you mean, may be like $5 millionish?
David Fiorenza
Yes, that's fair.
Saul Ludwig - KeyBanc Capital Markets
I mean, is that too high, too low?
David Fiorenza
No, that's (inaudible).
Saul Ludwig - KeyBanc Capital Markets
Okay. And then finally, I suspect that in the fourth quarter, your price increases that you had put in place, prior to that, you probably have to keep most of that in the fourth quarter, yet you benefited, you are on LIFO, all right?
David Fiorenza
We are in LIFO in the United States and the conglomeration of methods around the world.
Saul Ludwig - KeyBanc Capital Markets
So you benefited as your raw material costs came down in the fourth quarter, and you had the widening margins, as you expected when you issued your third quarter outlook at the end of the third quarter. What do you think is going to happen to pricing relative to costs? With base oil plummeting again this week, do you see your selling prices trending lower, but maybe not as fast as raw material costs are coming down, and had you known those for sure, how are you handicapping the margin outlook for this year?
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