Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from George Staphos - Banc of America.
George Staphos - Banc of America
I just wanted to dig a little into the LIFO effect. So I guess the take is you were pulling through the P&L a greater amount of higher cost inventory relative to what was occurring in the market, which in turn, for some of your business, was leading to perhaps lower selling prices just because of normal price recess. Is that the way to think about it?
Robert Kuhn
No. Actually the LIFO means that our costing was based on the last in first out, so with prices, resin prices in particular, decreasing significantly in the fourth quarter, our costs were priced at the lower resin cost while as our selling prices remained constant through the quarter.
George Staphos - Banc of America
You mentioned you are going to be in the market perhaps in the first quarter repurchasing shares but you also mentioned you would only be doing a moderate amount of activity. From the standpoint of repurchasing the shares for the benefit of the company at a lower price, why even mention it here if it’s only going to be moderate?
Stephen J. Hagge
The reason we had indicated we were actually going to be out of the market, at the end of the third quarter, because of some or the liquidity issues and we were uncertain as to the market. So what we are really doing is letting the market know, and again, what we buy is still uncertain at this point, but it’s likely we will be in the market during the first quarter of 2009.
George Staphos - Banc of America
But do you even need to say that in the first place?
Stephen J. Hagge
Again, we’re doing it more from a full disclosure standpoint. Because we had said we were going to be out, it is a different approach that we’re taking to the market.
George Staphos - Banc of America
What we’ve seen here in the last several quarters, for understandable reasons, is a declining trajectory on earnings. First quarter guidance is in line with that. What needs to occur within you businesses, or within the markets, for this trend not to continue into the second and third quarters of 2009? Do you need to see a pickup in personal care?
And within your expectations for the year, even though you’ve only shared what you’re looking at for the first quarter, how should we think about pharmaceutical where the margins have hung in very, very well and I guess at some point in the past that you would see a little bit of debradation there.
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