Question-and-Answer Session
Operator
Thank you. (Operator instructions) And we will take our first question from David Begleiter with Deutsche Bank.
David Begleiter - Deutsche Bank
Thank you. Good morning.
James O'Brien
Good morning Dave.
David Begleiter - Deutsche Bank
Jim, in Valvoline we have begun to see some grade of base oil move higher this week. What's the ability of you guys to offset future base oil price increases for Valvoline?
James O'Brien
I'll let Sam answer that. Go ahead Sam?
Sam Mitchell
Yes, just this week we did see one announcement made by Valero on group 1 base stock pricing, while we are not heavy group 1 user. You know, there is always potential that group 2 stocks couldn’t move up in the future, and we certainly are confident that you know, we can implement price increases appropriately in the marketplace to recover our cost. We've shown that over the last number of years in an inflationary environment and we continue to be confident of that.
David Begleiter - Deutsche Bank
Sam, what do your think normalized earnings are in Valvoline going forward?
Sam Mitchell
Well, certainly we had an impressive year in fiscal 2009, and as we look forward and as I covered in the presentation, you know, we feel very good about the fundamentals on our business. We have good momentum across a lot of our -- number of our business segments. As we look forward to 2010, we don't expect to have another record year in 2010 but we do expect, you know, continued performance at a very high level.
David Begleiter - Deutsche Bank
And Jim lastly of the non-permanent cost reductions, how much come back in 2010?
James O'Brien
I think a lot of it is tied to growth of sales. So, as sales grow that's going to you know, potentially drive travel, entertainment, those type of cost as we get more and more engaged with growth orientation with our customers, and we are I think changed our perspective of how we view a lot of these costs. I think we've learned how to operate differently, and I think we have a much better highlight, let's say of cost control because of our SAP implementation.
We can now have really strong visibility of what's going on. So as we look at people's habits and where cost is actually being applied, I think we can manage it more proactively than we have in the past because we had that visibility. So I'm encouraged that we will do a much better job as we cycle through the next part of the economic growth than we have in the past.
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