Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Charles Grom - J.P. Morgan.
Charles Grom - J.P. Morgan
Just a follow-up on pension, when you at 2009, given the headwind of $213.0 million, you are starting in a deep hole, given that it runs through SG&A. Are there buckets of opportunity on that front? Because if I run my model with comps down 7% and if I think gross profit margin is going to be flat, I calculate an EPS that is way below the Street for 2009. And I’m not asking you talk about 2009 EPS but is there some stuff in SG&A you think you can cut back on next year in addition to store hour payroll that you have done so well over the past couple of quarters?
Myron E. Ullman III
Let me mention one aspect and that is we continue to see opportunities in the store support area. Our inventory visibility and our ability to re-engineer the way we handle the flow of merchandise from the dock to the floor we believe is a new opportunity.
Our workforce management, as you know, has been successful and we continue to see minimum improvement there. I think it is important to note that what Bob said is a hypothetical example at the end of the third quarter. We really don’t know what the number is for the end of the fourth quarter.
And this is a non-cash accounting adjustment so we actually look at the business from an operating point of view on the basis of what we can do in terms of central overhead and store staffing. But we are quite confident that we will continue to be rigorous about our expenses and that the dollars will be managed as carefully as possible.
Charles Grom - J.P. Morgan
And plan assets of potentially $4.0 billion, your PBO at the end of last year was $3.8 billion. You aren’t expecting to make another contribution in 2009?
Robert B. Cavanaugh
No, the assets, as I indicated, as of November 1, 2008, were $4.0 billion. The PBO at that point was $3.6 billion and so we are still about 10% asset to liability, 110% ratio. We will disclose that in our 10-Q, like many other companies.
I would like to point out, too, though, as disclosed in our 10-K, from a longer-term perspective, since 1966 the pension accounting expense or income has been cumulatively in an income position through 2008 of roughly $40.0 million, as we disclosed in the 10-K at the end of 2007. So that is roughly $1.0 million of income per year in each of the last 40 years.
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