Question-and-Answer Session
Operator
(Operator instructions) your first question comes from the line of Sam Darkatsh of Raymond James.
Jeff Saut – Raymond James
This is actually Jeff calling in for Sam. Good morning, Jeff, good morning Frank.
Jeff Lorberbaum
Good morning
Frank Boykin
Good morning
Jeff Saut – Raymond James
My first question is in regards to the guidance, are you modeling any restructuring cost or additional asset write-downs in the guidance?
Frank Boykin
No, we are not.
Jeff Saut – Raymond James
Okay, no unusual onetime charges of any kind.
Frank Boykin
Correct
Jeff Saut – Raymond James
Okay, and then unrelated follow-up, the $60 million in FIFO cost headwinds, can you help me understand exactly how you got to the $60 million? What variance that represents?
Frank Boykin
That represents – taking through the process, we announced our last price increase back in the third quarter. Our raw material costs in the carpet segment continued to run up and didn’t peak until we got into the fourth quarter. So, have a period of time there where raw material cost ran up higher and what we had anticipated and estimated and we developed our selling price increases. That delta between the selling price increases and the peak raw material cost run out is in essence what we have in our ending inventory that has to flush through in the first quarter and that will negatively impact our earnings.
Jeff Saut – Raymond James
With $60 million of inventory it is at the peak levels?
Frank Boykin
$60 million of peak – high cost inventory sitting in our December inventory.
Jeff Saut – Raymond James
Right. And the $60 million is the total cost of the inventory not a delta between the cost of that inventory and the cost of the normal inventories?.
Frank Boykin
It is the delta.
Jeff Saut – Raymond James
Okay. Alright, perfect thank you.
Operator
Your next question comes from the line of Dan Oppenheim of Credit Suisse.
Dan Oppenheim – Credit Suisse
Great. Thanks very much. I was wondering if you can talk about 2009, and talk about how you are expecting the volume to be down the first quarter and how to reduce the overhead that is impacting the result. What do you think in terms of the – what are you going to be in terms of adjusting the overhead cost, how much of your business is sort in fixed or in variable or – what adjustments should we expect as the year goes on?
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