Question-and-Answer Session
Operator
(Operator Instructions)
Our first question comes from the line Bob Cornell with Barclays Capital.
Bob Cornell - Barclays Capital
Yes thanks. Good to hear Dave you sound little tired, a tough year.
David Farr
A tough year, two days of tough board meetings in Las Vegas and [China] weekend, for that we had two days of planning from our side. I have talked a lot Bob, lets put it that way.
Bob Cornell - Barclays Capital
Yes. Then you just said something and I want to clarify. You said the profitability will be flat to down on the current business basis I mean In fact what does that mean talking about 2010 on that basis I mean?
David Farr
It doesn't include Avocent.
Bob Cornell - Barclays Capital
Okay. So forget Avocent, are you saying that our profit is going to be flat in 2010 before Avocent is that what you said?
David Farr
I said they will be flat or slightly down, yes. Which will be a major converse given our underlying sales will be down somewhere in that 5% to 7% next year.
Bob Cornell - Barclays Capital
Okay.
David Farr
I mean Bob, as you well know the restructuring and the actions we have been taking for the last 18 months are preliminary actions. We are fundamentally changing the cost structure of this company. So, we will be delivering pretty good levels of profitability even on underlying sales.
So, one thing, Walter pointing out to me is that, in that assumption, we are assuming pension cost will be a little bit less than $50 million hit to us this year and we did, as you will see in the proxy we did this award in October.
The next tranche, the next four year program for our performance-year program, which is a long-term program which will hit us about $100 million on a Delta basis versus last year. So, we are going to be hold our profitability even with those two headwinds coming at us.
Bob Cornell - Barclays Capital
I understand that corporate America is going to play out to a 100% of profit of bonuses and stock.
David Farr
Not?
Bob Cornell - Barclays Capital
Just kidding.
David Farr
Not this company.
Bob Cornell - Barclays Capital
Okay. Just wanted to, I'm sorry Dave, I want to go back that you were saying so that in 2010 that operating profit will be flat or slightly down in exception.
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