Question-and-Answer Session
Operator
Thank you, sir. (Operator Instructions) The first question comes from Chip Dillon from Credit Suisse. Please go ahead.
Chip Dillon – Credit Suisse
Yes, good morning. First question was, if you could just give us a little more color on the pension plan, I think your balance sheet, similarly what I’ve seen for any company in this fourth quarter period that actually shows a lower balance and I would imagine that the plan itself lost value last year, but obviously that was more than offset by the changes in what you promised in the future.
Could you just let us know a little bit about the play of those two items? In other words let’s say the pension plan had been flat performance wide last year; how much less would the obligation be on the balance sheet?
Mike O’Donnell
Yes, I don’t have the quantified number in my head Chip, of what the investment impact and the reduction of return on investment, but clearly it was down; but as you alluded to it’s a fraction of the overall impact of the curtailment of our U.S. pension program and our retiring medical; but I wouldn’t hazard to guess what that number is off the top of my head, but it’s a fraction.
Analyst
Okay and then second questions is obviously, as we look at the fourth quarter and the full year, the inventories really came in quite nicely and I know Stephen in your remarks you talked about inventories or supplies to your customers; and as you all have reduced your inventory, obviously part of that’s been production driven, but I would imagine some of that, there could be some push back from your customers as they have as you mentioned, produced a lot less product.
I’m sort of curious as we go to the first quarter and even now look at the second quarter; do you see that affecting your order book and have you prepared for that, as they perhaps are reducing their inventories to?
Stephen Light
Chip I think what we’re dealing with is a classical stuffed channel situation where there is too much paper. The paper companies kept producing when demand was falling off; and the paper machine clothing manufactures kept producing when demand was falling off; and suppliers to us kept producing when demand was falling off.
So the way it will start to comedown and get more healthy is, as the paper drains off, then the paper machine companies fire up and burn off paper machine clothing and then you’ll see the paper machine clothing makers like us and our competitors fire backup.
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