Good morning and welcome to Ryder System Incorporated First Quarter 2008 Earnings Release Conference Call. All lines are in a listen-only mode until after the presentation. (Operator Instructions) Today’s call is being recorded. I would like to introduce Mr. Bob Brunn, Vice President of Investor Relations and Public Affairs for Ryder. Mr. Brunn, you may begin.

Thanks very much. Good morning and welcome to Ryder’s First Quarter 2008 Earnings Conference Call. I’d like to begin with a reminder that in this presentation you’ll hear some forward-looking statements within the meaning or the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive, market, political, and regulatory factors. More detailed information about these factors is contained in this morning’s earnings release and in Ryder’s filings with the Securities and Exchange Commission. Presenting on today’s call are Greg Swienton, Chairman and Chief Executive Officer; and Robert Sanchez, Executive Vice President and Chief Financial Officer. Additionally, Tony Tegnelia, President of U.S. Fleet Management Solutions is on the call today and available for questions following the presentation. With that, let me turn it over to Greg.

Thank you, Bob; and good morning, everyone. This morning we’ll recap our first quarter 2008 results, review our Asset Management, and provide our current outlook for the business. After our initial remarks, we’ll then open up the call for questions. So let me begin with our first quarter results: In the overview, for those of you following on the PowerPoint, we’ll start at Page 4. Reported net earnings per diluted share were $0.96 for the first quarter 2008 as compared to $0.84 in the prior year period. Earnings for the quarter exceed the forecast we provided on our last earnings call of $0.84 to $0.87. The better than anticipated performance came in our Fleet Management solution segment through continued contractual revenue growth, improved commercial rental operations, and from our used vehicle sales results. Total revenue for the Company was down 3% in the quarter due to the previously announced change from gross to net revenue reporting for subcontracted transportation with one Supply Chain customer. Operating revenue, which excludes FMS fuel and all subcontracted transportation revenue, was up 5% due to contractual revenue growth as well as favorable foreign exchange rate movements. Fleet management total revenue was up 12%, while operating revenue was up 5% versus the prior year. Contractual revenue, which includes both full service lease and contract maintenance was up 6%. Lease and contract maintenance revenue growth reflects our sales activity over the past few quarters, while lease revenue also benefited from the Pollock and Lily acquisitions. Full service lease revenue was up 6%. Lease growth reflects our organic sales activity over the past few quarters as well as the impact of the Pollock and Lily acquisitions. Contract maintenance revenue was up 9%, reflecting organic sales activity and the conversion of customers from the private fleet market. Total FMS…

Thanks, Greg. Turning to Page 8, first quarter gross capital expenditures totaled $332 million, down by $143 million from the prior year. Capital expenditures were generally in line with our forecast for the quarter. Full service lease vehicle spending was down by over $100 million. Lease spending was elevated in the prior year due to the pre-buy of 2006 model year engines, which continue to be placed into service with customers in early 2007. While we continue to see some customers shrink their existing fleet sizes when their leases expire and also to defer some decisions on new sales opportunities due to the soft economy, at the same time we continued to sign new outsourcing contracts with leased customers. As a result at this time, we do not expect a material change from our full year lease capital expenditures forecast. We may see some switch from new vehicle orders into term extensions with existing vehicles due to customer uncertainty in the market. As such, while our lease revenue forecast remains on track for the year, our capital expenditures may be marginally lower than originally forecast. Commercial rental vehicle spending was down by $45 million from the prior year and was in line with our forecast. We realized proceeds primarily from sales of revenue earning equipment of $75 million, down by $19 million from the prior year, reflecting fewer units sold as a result of having a smaller used vehicle inventory. Including proceeds from sales, net capital expenditures were $257 million, down by $124 million from the prior year. We also spent $93 million on fleet management’s acquisition of Lily in the Northeast U.S. Turning to the next page, you’ll see that we generated cash from operating activity of $300 million in the first quarter, up by $47 million from the…

Thanks, Robert. Page 12 summarizes the key results in our U.S. Asset Management area. At quarter end, our used vehicle inventory for sale was approximately 5,300 vehicles down 17% from 6,400 units at the end of the fourth quarter. Used inventories were almost half the nearly 10,000 units we held for sale at the end of the first quarter last year. The lower used fleet balance reflects the actions we took last year to bring inventories down and inline with our targeted levels. We sold approximately 4,400 used vehicles during the quarter, down 19% from the prior year and in line with our expectations. Because our inventories are now more in line with our targets, we’ve returned to our normal process of selling the large majority of our vehicles at retail prices to our own used vehicle sales centers. Proceeds per vehicle on sales of used tractors were up by 1% while proceeds per vehicle on sales of used trucks were down by 12% as compared to the first quarter last year. Comparisons versus the fourth quarter were more favorable however with tractor proceeds up 11% and truck proceeds up 2% largely due to reducing the amount of wholesale activity this quarter. At the end of the quarter, approximately 6,500 units were classified as no longer earning revenue. This number is down by 900 units from the fourth quarter primarily due to a decrease in the number of units available for sales. For those of you who follow this statistic, starting with this quarter we’ve changed the definition of no longer earning units to be more inclusive. These units now include all vehicles available for sale and units that have not earned any revenue in the past 30 days. Our total U.S. commercial rental fleet in the first quarter was…

Thank you. (Operator Instructions) Our first question today is from Alex Brand. You may ask your question and please state your company name. Alexander Brand – Stephens Inc.: Hi. Stephens Inc. Good morning, guys. Greg, I guess I’m curious on the fleet, I think you said 5% increase in miles per vehicle per day. What do you think accounts for the increased utilization despite the economy? I guess that just seems sort of contrary to what I would think would be happening.

I believe that customers who lease their fleets also have other supplemental activities that they engage in. It could be commercial rental from us; it could be from other more common carriers. But when you get to the core, I think that when they are leasing equipment that is the equipment that they’re first going to be obviously committed to utilize and not want to park. So I think when they’re to focus on and make sure they do a good job of efficiency and delivering products and services to their customers, probably even managing down some of the quantity of pieces of equipment they’re moving due to cost and fuel prices, that the fleets they have, I believe, they’re trying to use to their fullest capacity. That would be my impression. Tony, if you thought anything different, you might add from FMS as well.

No, I think that’s very clear. What you’re seeing, and as we discussed in the last couple of quarters, a number of our customers have requested fleet size reductions at the time of renewal and as a result the remaining units left in their fleet, they are running at much, much higher utilization rates and that’s why you’re seeing the average mileage really grow. They are very, very cost competitive, very, very cost conscious and they’re driving those economies on basically smaller fleets. Alexander Brand – Stephens Inc.: Now on the currency, I think you talked, you quantified the impact on your revenue. Is there any impact to be aware of on operating profit?

Go ahead, Robert.

Yeah, the impact is slightly under a penny is the impact of profit of FX. Alexander Brand – Stephens Inc.: Robert, you talked about cap ex that you didn’t think it would change much based on the current plan, but your free cash flow was a pretty big number for the first quarter. Is it realistic to think you could do that kind of free cash flow on a quarterly basis on ’08?

Yeah, we’re sticking to what we had in the original plan. Really what we’re expecting is obviously as the year goes on, cap ex will increase per what we had in the plan with the exception that we are seeing more term extensions. You can see on the Asset Management charts in the back that we saw an increase in terms extensions which could modestly bring down some of the lease cap ex early in the year. Alexander Brand – Stephens Inc.: I think you said in your comments that you still had a pretty healthy acquisition pipeline out there, and I’m wondering on the stock buyback, I mean it’s a discretionary plan, is there a commitment to spend the $300 million or stocks moving up a lot; does that kind of mean you pare back the buyback program a bit?

Our goal here is to really get to our target leverage over the next 2.5 years. So we are going to continue with that program. We do have… As you know, we’ve got enough headroom to do the share repurchase and the acquisitions that we’ve got in the pipeline we know we can do also. So we’re not planning on paring that back in the next few months. Alexander Brand – Stephens Inc.: That’s all I have. Great quarter, guys. Thanks a lot.

Thank you. Our next question is from [John Mims]. You may ask your question and please state your company name. John for John Barnes – BB&T Capital Markets : Yeah, it’s BB&T Capital Markets. I’m standing in for John Barnes. Good morning, guys. Kind of following up on Alex’s comment a little bit, if you look at interest expense, it was down about 5% year-over-year despite the increased leverage. Is that a product kind of the financial markets and lower interest rates now or is that something we should look at going forward?

Yeah, it’s a combination of the volume being down, debt volumes, debt levels being down from last year same time and the rate. It’s about a little bit more than 50/50 on the rate side, so I’d say about 60% of it is coming from rates and the 40% is coming from volumes. John for John Barnes – BB&T Capital Markets : Okay, that makes sense. Can you all provide us some details on the Gator acquisition, what sort of revenue stream you’re looking at or any integration issues you may see?

As it’s been our process, we really don’t comment in greater detail until we actually close it, which we expect to happen in May. We revealed the number of units at about 2,300 in the number of customers. We don’t obviously really expect any integration issues. We’re both Miami-based companies. The facilities are not only here in South Florida but throughout the state, and I think has been reflected in the most recent acquisitions we did with Lily and Pollock. We expect those to be well and smoothly integrated. These are things that we do and it’s fairly efficient for us to work those into our existing network which is one of the key points of the value of these acquisitions. John for John Barnes – BB&T Capital Markets : Right, perfect. So no like nagging RT stuff on the horizon or any of that?

Certainly not, no. John for John Barnes – BB&T Capital Markets : Great. Great. One last question: I saw on your chart on Page 22, there’s kind of an up tick of early terminations from last year, is that a risk that we may see more of if the economy stays weak or is that just kind of a one-time thing that is a non-issue?

For those of you who may not have that page right in front of you, in the supplement of the PowerPoint in the Appendix on Page 22, as he’s referring to, one of the categories is early terminations. Before I… I may ask Tony to comment on that. What you’ll also notice is the big up tick on the previous two categories of redeployments and extensions, and that’s a big plus because it means that we’re maintaining a revenue stream. We’re getting the equipment extended and still into service. The early terminations are up a little from last year, but they’re certainly not at the levels that they were in ’04 and ’03 even. So that just gives you a little bit of respective. Tony, if you want to add on anything on the question, please go ahead.

Yes, as I had said earlier in the call, and as we also said in the call for the last quarter, we are working with a number of customers for some of their requests for fleet reductions during this economic environment. We typically do that on a very select basis in exchange for other future commitments with those customers. But what is very important here is we’ve been extremely successful in redeploying a number of those units within the lease fleet, and you can see our redeploys are up really handsomely quite as well. So we had not had a difficult time redeploying those units and what we find is we solidify our relationship with those customers who may be in a more challenged environment today but also maintaining a revenue stream with other customers on the redeploys and saving the capital relative to the cost of the new piece of equipment. So we feel so far in the marketplace and even on our balance sheet returns, it’s been a win/win for us and we’re not really particularly concerned about that. John for John Barnes – BB&T Capital Markets : Great. I appreciate the explanation. Congratulations on a nice quarter.

Thank you. Our next question is from Jon Langenfeld. You may ask your question and please state your company name. Jon Langenfeld – Robert W. Baird: Good morning, Greg and all. Can you talk a little bit about kind of the upside in the quarter? I mean it looks to me Supply Chain, as you mentioned, came in a little bit less than expected so you probably on FMS probably got $0.12/$0.13 of upside there, half of it being used truck sales, better performance there, half of it being contractual business. I guess first off, am I characterizing that right?

Roughly yes. I think that the big positives come from several things going on, particularly in fleet management. You’ve got contractual revenue growth, which continues. In addition, the acquisitions that we’d already announced, Lily and Pollock, are contributing and doing well. Commercial rental, we’ve got the fleet sized right. The utilization is good. That’s not a big anchor we’re dragging anymore, and better than forecasted used vehicle sales. So especially that we’ve got the right quantity; we’ve got the expected forecast and as I mentioned in the comments in the call, the pricing is better because we’re doing more of our retailing through our used vehicle sales center. So I think what you characterize that principally correct, and I just reiterate those. Jon Langenfeld – Robert W. Baird: Sure. Then on the commercial rental side, I’m assuming that has changed from a year ago being a profit drag to this year, I guess you’re at close to 70% utilization. That’s a positive profit contributor. Any reason to think that that would reverse itself here in the near-term?

Well first, that is a very correct assumption on whether it’s a drag or gain, and it is compared to last year a huge difference, as you pointed out. We don’t see anything right now that would cause that to change. We went into this year and we’ve reiterated again today that we’re not counting on any economic recovery, so it’s kind of status quo still a tough environment, but we believe that as much as anything through our own efforts and trying to balance the right quantity of fleet with the type and size of vehicles and the right markets that we expect to continue to still make progress. So I wouldn’t forecast any change from what we see form that right now. Jon Langenfeld – Robert W. Baird: Would you look at that all, probably too early to tell, but roughly flattish growth in the U.S. you made it sound like. I mean is that a sense of a leading indictor that you’ve hit some stability there?

When we did our forecast for the year, we said overall that it would be just about flat to maybe up 1% or 2%. So anything hovering around flat revenue growth, we think is still the right way to look at it. In this past quarter, we still had a little bit of decline in the U.S. that was offset by Canada and the U.K., I think and I maybe hope a little bit but expect and think that over time even the U.S. will inch up a bit. Jon Langenfeld – Robert W. Baird: Then as far as the supply chain side goes, it sounds like it cost you a penny or two in the quarter with regards to those strikes. I guess I’m a little bit surprised that the strikes would be upwards of $0.10 in the second quarter if they lasted quarter. Am I looking at that correctly?

In the first quarter, it probably was more like a penny impact and we’re forecasting, it’s already in our expectations in the second quarter. But the fact is that there are really three strikes going on right now and that means it’s more pervasive than it was in March. If they are not settled, if these continue, they could impact us $0.03 to $0.04 per month in the month of May and June, and that’s what we have forecasted. Jon Langenfeld – Robert W. Baird: That’s good. Now outside of that, I guess just trying to react to the lack of taking the guidance up, and I understand there’s a lot of uncertainty out there, but the thought process and back on FMS, I guess there’s probably not a lot of change coming on the contractual side of commercial rental side. So the variable I guess I see there is just the used truck sales and what happens there. Is that how you kind of addressed it when you looked at your fill year guidance?

Well we know what the downsides are for sure, things that we’re aware of like the strike, like the strikes, like other things going on in the business that are headwinds, and there’s volume challenges; there’s still freight impacts. We took up the full year guidance that is largely reflective of the excess that we gained in the first quarter, and I think that to take that higher at this point would be a little bit premature. Jon Langenfeld – Robert W. Baird: Last question along those same lines: Is there anything you’re seeing on your FMS side that gets you more concerned about the external environment today than maybe what you saw three or six months ago, setting aside the headlines and all that noise, just more looking at your own business?

From my point of view, the simple answer is no; but I’ll ask Tony who heads up that segment.

No, actually, John, we feel very positive going into the future. We know that there’ll be more technology change next year and also that’ll impact us this year as well somewhat to the latter part of the year and those vehicles will cost more. There will be more complex to maintain, so we think that the motivation to outsource the maintenance and go to full service we think remains very, very strong in the intermediate and also in the long-term. Our pipelines are still very, very strong. Our retention ratios continue to improve. Our closing ratios continue to improve. As we stated for the last couple of quarters, we maintain steady state with the strong sales force head count, so we’re going into the marketplace with that kind of strength and we feel very good that we’ll be find with the projections that we made earlier in the year on our contractual revenue growth. Jon Langenfeld – Robert W. Baird: Thank you. Great quarter.

Thank you. Our next question is from John Larkin. You may ask your question and please state your company name. John Larkin – Stifel Nicolaus: Company name is Stifel Nicolaus. Good morning, gentlemen. Was really impressed the amount of capital you put to work during the quarter to first of all acquire Lily, which seems to be a great fit, and then also the two share repurchase programs, it’s like you spent close to $100 million there, so with Lily that’s about $200 million above and beyond what you need to kind of run the business that you’re spending. Yet the total obligations to equity ratio only ticked up from 157 to 159, so if the objective is to reach the leveraged targets by let’s say the end of 2010, which I read into some of the comments, then does that imply that you’re going to have to perhaps increase the pace from what appeared to be a fairly strong pace in the first quarter in order to reach that objective?

Well first you’re right that it only inched up a little from 157% to 159%, so it doesn’t seem like much at this point. But also recognize that the impact of the share repurchase was not in a full quarter and the impact of the acquisitions made at the end of last year and the start of this year, you still weren’t getting the full impact. So that will be cumulative and that will be a positive factor. We also expect to continue the pace both for share repurchase and acquisitions and we expect for you to see as the quarters go by, a greater impact on that leverage moving up. It’s not enough of an exact science to say that that number would be by the end of the year, but I think over the next three quarters what you should see by the end of the year is maybe something like 20 basis points or north of that in terms of that leverage movement, and I think that will continue. John Larkin – Stifel Nicolaus: That’s very helpful. You talked a lot about the good pricing environment or relative good pricing environment I guess with the sale of used power units. In particular, we hear a lot from the truckload carriers that there’s a very active market in Eastern Europe and Russia. Do you have a conduit into that market or is that one of the reasons why your pricing is holding up so well there?

We have a conduit should we need it to other parts of the world. Our big preference is to perform in a retail pricing environment through our used vehicle sales networks. Last year when we had so many units to move, we did move more units offshore and outside of North America. We’d like to do again as little of that as possible. I think the positive results in the first quarter were a reflection of the fact that we did very little wholesaling. We don’t feel that at these quantities we need to do significant wholesaling and we expect our proceeds to stay up because of the utilization of the retail pricing and our existing retail used vehicle sales network. John Larkin – Stifel Nicolaus: That’s very helpful. Lastly, I think you’re being smart and being conservative in your economic assumptions going forward, but at some point with as much fiscal monetary policy stimulus that is being thrust out there in the marketplace, you would expect the economy to gain traction at some point. What sort of factors should we look for to kind of determine when Ryder will be going through that inflection point? What parts of your business are most leveraged to be an up tick in demand, would it be commercial rail and perhaps used vehicle sales that would be leveraged or is it something else?

I think a real up tick in commercial rental due primarily from demand as opposed to are more managing the environment, that would be a sure sign. I think the quarter that Tony and his team and FMSA that customers are no longer delaying their decisions and all of these good solid pipeline contracts are getting ink on them, that would be a big indicator. In supply chain, when a number of accounts suddenly or more precipitously or proactively and aggressively start seeing more volume moving, that will be a big indicator, and I think those will be some of the big ones and suddenly used vehicle sales may be a part of it but less so from the other three that I just mentioned. John Larkin – Stifel Nicolaus: That’s extremely helpful, really appreciate it. Nice job on the quarter.

Thank you. Our next question is from Ed Wolf. You may ask your question and please state your company name. Ed Wolf –Wolf Research : Thank you. Wolf Research. Hey, good morning, guys.

Good morning, and we noticed the new name attached. Congratulations. Ed Wolf –Wolf Research : Thank you very much. It’s exciting. Just a little more color on the gains on sales. I was surprised to see that your tractor pricing was up 1% because we’ve heard from some others that they’re seeing that not up year-over-year and more recently it’s a little bit more pressure. Is there something about the years of your vehicles or have you seen a change in the last month or two directionally on the pricing of the tractors, can you talk t that?

Yeah, I’ll give you a comment and I’ll turn it over to Tony; he can comment whether there’s any years. I don’t think there are. I think a lot of it has to do with that something that’s embedded and a value in our fundamental business model and that is: Our used vehicle sales centers have a lot of repeat customers who come to Ryder used truck locations because they’ve been maintained by Ryder; they have entire maintenance history; and when they hit the road or hit that truck lot, they are Ryder road ready. I think that that has some value. I think that has value in terms of pricing. With that, I’ll turn it over to Tony.

Yes, thank you, Greg. I think fundamentally with the actions that we took last year to dramatically reduce our used vehicle inventory level and also the asset base there, we’re just being much more particular about the channel where we’re selling the units. We are much higher now in our retail sales and more firm on our pricing in that regard as well and relying much, much less on wholesale. There hasn’t been any dramatic change in the mileage on the vehicles, no dramatic change within the tractor mix of what they are, as well as the vintage in general. They’re all road ready, Ryder road ready, Ryder tested, which is branded in the marketplace for our used vehicles; and they typically command a better used price from that perspective, and we’re just seeing a better job at our used vehicle sales network team doing more retailing with those units. Ed Wolf –Wolf Research : Have you assumed in your guidance going forward that trucks are flat, up, down in terms of pricing going forward?

For the most part on our UVS, we’re seeing that the tractor pricing actually is beginning to firm a bit and rise a bit in our used market. The truck pricing is still pretty stable, and that’ll remain flattish for the rest of the year. Ed Wolf –Wolf Research : Then tractors, what are the main years, how old are the trucks that you’re selling generally?

They’re about seven to nine years old, in that range generally speaking. Ed Wolf –Wolf Research : The auto strike, can you talk a little bit, Greg, about the impact, first of all, on Supply Chain in terms of the NVT was a down bit, how much of that specifically do you think is related to auto? Then did the auto strike and the larger strikes now impact other units besides Supply Chain?

In the first quarter, it was about a penny a share impact. Going forward and especially in May and June, if all three strikes continue, we again expect about $0.03 to $0.04 per month impact. I think it’s largely focused in Supply Chain. Although if in the worse case they just lasted longer and continue to spread, it is possible there could be some other impact on fleet units in fleet management that service locations. But at this stage for the second quarter forecast, that $0.03 to $0.04 potential pre month downside is largely with Supply Chain. Ed Wolf –Wolf Research : The $0.03 to $0.04 is per month not per quarter and the $0.01 was that per month or per quarter that you mentioned in the first quarter?

The $0.03 to $0.04 for the second quarter is per month and the $0.01 that I mentioned was for the totality of the first quarter which really was only in the month of March. Ed Wolf –Wolf Research : That’s helpful. The rental turnaround is pretty phenomenal if you look at the revenue. Can you talk to maybe what the utilization rates were, if you could take us through if you have them monthly and versus a year ago?

Yes, just to kind of give you a direction of where they had been, if you go back to the fourth quarter of ’06, they declined 550 basis points. So the fourth quarter ’05 was 77.3, fourth quarter ’06 was 71.8. In the first quarter of last year in ’07, we lost 490 basis points and went down to 64.2. In the second quarter of ’07, we lost 250 basis points and went down to 70.6 from 73.1 the year before. In the third quarter of ’07, we essentially began to go flat. We’re only 20 basis points because we’re at 73 versus 73.2 in the prior year. Last quarter of ’07, we were up 490 basis points at 76.7 versus 71.8 in the prior year, which was near the fourth quarter ’05 level, and then this quarter you saw the 525 basis point improvement as we went from 64.2 last year to 69.4 this year, so that may give you a thorough chart. Ed Wolf –Wolf Research : That’s pretty impressive.

I’ll ask if he wanted to comment additionally. Ed Wolf –Wolf Research : All right, sure.

Yes, I’d just like to say we are extremely proud of our rental team and the great job that they’ve done really driving their fleet over the last number of quarters. They have really worked very, very hard driving these utilization rates. A number of our vehicle classes are at 80% or even higher, as a matter of fact, and we’re extremely pleased with the great work that they’ve really done. That’s also good they’re (inaudible) return on this asset class as well. As we stated in our last conference call, and I will reiterate that again today, we see this kind of utilization improvement for every quarter year-over-year as we go throughout the year. Also, our return on assets for the rental fleet being improving every quarter this year as we go throughout the year as well. So you’ll continue to see these improved utilization rates. The team has done a spectacular job driving that utilization and the returns, and we also feel that this is great momentum going into the peak rental season. Our first quarter performance, as good as it was over last year, we’re still not in the peak season, so this is great momentum going into the peak season. We think the team is going to continue to do a great job, and we think rental will have an excellent year. Ed Wolf –Wolf Research : Well at what point, at what utilization do you have to start to now add back to the fleet and how far away are we from that do you think?

Well the low to mid 80s typically suggest that you may be turning down some customers a bit too frequently than we would like in the marketplace, particularly if they go to our competitors to rent and their full service leased customers. So we’re about there in a number of classes right now, but we still are staying very conservative in our capital expenditures and for ’08, they will still be lower than ’07 and ’07 was lower than ’06, so we’re staying conservative on cap ex, but within certain classes we’re about there where we’re in the mid to low 80s utilization rate. Ed Wolf –Wolf Research : That’s great. Then I’m just going to be a little nit picky on a terrific quarter, central support services not have been at 11.5 million two quarters in a row. That’s up quite a bit from last year at this time. Is there anything that we should think about in terms of that going forward?

Well you’re right, we certainly need to do spend money on information technology and some other central initiatives. We think that in the last couple of quarters, these are items that we’re important to continue to keep the momentum on, to keep our place in the market. It is not… I wouldn’t say it’s a significant long-term deviation or trend and certainly not different than our normal approach to being careful about cost. Normal operating expenses we’re really pretty careful with, as always. But we do have some areas that for investments and timing we think are just important to do for the long-term value of the organization. Ed Wolf –Wolf Research : Thank you very much for the time. I really appreciate it.

Thank you. Our next question is from Art Hatfield. You may ask your question and please state your company name. Art Hatfield – Morgan Keegan: Thank you. Morgan Keegan. Greg, you had mentioned, just one quick question on commercial rental, but you had mentioned your guidance referring back to fourth quarter earnings release, your guidance for commercial rental growth is zero to 2%, and obviously first quarter was in that range. Was first quarter better than you had expected, and should we think differently about the rest of the year or was it in line with your expectations?

I think it was a little better than the forecast that we put out when we did the 2008 plan. I’m not sure that I’m ready to suggest that that will change the entire year look. The environment that we’re in is just so uncertain and shaky that I think it’s a little early to make that call. But clearly in the first quarter, it was a bit stronger than we had forecasted. Art Hatfield – Morgan Keegan: That’s helpful. Secondly, when you had talked about, you were pretty clear on second quarter guidance that if the strikes last throughout the quarter, that for both full year and second quarter guidance that you’d be at the lower end of the ranges that you had given. Is it fair to say that these go on into third quarter, that you may have to reevaluate the year, or am I getting ahead of myself a little bit there?

I think that if they continue at this pace and they are not settled by the time we get in the third quarter, I think we would have to revisit and see if we had enough upside to offset that new downside. Art Hatfield – Morgan Keegan: Thank you. The other thing, I wanted to go back to Page 22 because when I looked at this morning and saw the extension in the first quarter really jump up to a level they haven’t been at since really before ’03, what are customers saying by doing that? My initial read on that is that they see a flattish economy and they don’t want to commit to any new vehicles till they see growth. Is that fair assessment?

I think that is very fair. I think that’s a customer… Seeing those numbers, customers staying, “We still need some equipment. We need it in the near-term; it would be premature to give it up because we’ve got deliveries to make the customers.” But when you look beyond three to six months or 12, we’re not sure how long this will last, how much downturn there’ll be and don’t want to make that firmer longer term commitment, so I think that’s an accurate assessment. Art Hatfield – Morgan Keegan: Thank you. Also, those vehicles too, as you extend them, the returns that you generate over the life of that vehicle become extremely positive, correct?

Yes, that’s true because the capitals already been expended, the revenue stream continues and it’s extended, so yes that is short-term positive. Art Hatfield – Morgan Keegan: Now you had a lot of questions about the pricing, particularly on your power units being up 1% and as I look at your ability to redeploy early terminations and the extensions that you’re getting, that seems to me that entirely you’re not getting a lot more volume coming into your used truck fleet as such that’s going to allow you to be more disciplined over the next three to six months on pricing than maybe you would normally be as you had normal kind of replacement occurring?

I would say, “Yes,” and I’ll let Tony comment further.

Yes, that’s exactly right. What we’re seeing with the extensions, and you’re correct, the returns are very attractive on those, that those units are not coming into the UTC at this point in time, nor are they redeployments as well at the same time. So right now the flow of vehicles coming into our used vehicle networks is extremely manageable and we still believe that at yearend, and we’re confident of this that the inventory of the used vehicles will be lower than it was at the beginning of the year because it allows to maintain our retail strategy in contrast to what we used more in ’07, and we think that’ll continue to prop our prices and gains and as a result the disciplines will be there. Art Hatfield – Morgan Keegan: Great. Then finally, Greg, historically you’ve talked about your contract maintenance business as being a good precursor to potential convergence to full service fleets, and you had a great year last year in the contract maintenance. Are you seeing any of those customers convert to full service leasing at this point?

Some. I mean if Tony has more detail, he could comment. But yes, I think directionally some.

No, I think a number of them are converting over. We do market that hard and we will see in the future we believe a lot of growth and strength in this area as people do not want to take on the burden of maintaining the very complex EPA compliant units, so we see this product line as a very nice growth offering for us in the future and we always have the sales and marketing group pushing for conversion of those into full service lease, and we have been successful doing that. Art Hatfield – Morgan Keegan: Tony, do you have a conversion metric that you follow with regards to that?

Generally yes, but we watch it pretty steadily and we are seeing some success in that area. Art Hatfield – Morgan Keegan: Great. Thank you very much. Great quarter, guys.

Thank you. Todd Fowler, you may ask your question and please state your company name. Todd Fowler – KeyBanc Capital Markets : Hi. Good morning. Keybanc Capital Markets. Greg, did you mention what the organic revenue growth was for full service fleet in the quarter?

I’m not sure if we mentioned it, but I think it was 2% or 3% for organic, apart from the acquisitions and apart from FX, yeah, 3% I think is the number. Half the growth came form organic, yes. Todd Fowler – KeyBanc Capital Markets : Perfect. That’s helpful. Then with the gains on vehicle sales that you experienced here in the quarter, is that a decent run rate to think about going forward given the fact that the rental fleet is probably closer to being right sized and we haven’t placed many vehicles in the service, but the gains taper off throughout the year or is that a sustainable run rate?

This is Tony. We’ll have fewer units to sell this year as the year goes on, so you will see the gains taper down as we go throughout the quarters. We’ve been very successful reducing the size of that fleet, and even though proceeds will be higher, they’re will be fewer units to sell, fortunately, and then the gains will be lower in each quarter as we go throughout the year.

But also add to what you saw in the first quarter is we also had a lot less carrying cost that go with carrying that extra fleet. Todd Fowler – KeyBanc Capital Markets : That’s a fair point. I guess lastly one of the areas that probably hasn’t been touched on yet on the DCC business, Greg, if you could talk a little bit about, you had some commentary about some non-renewal of some customer contracts during the quarter and revenue was basically down maybe a percent or so, but it looks like the margins held in pretty well. Can you talk a little bit about the trends that you’re seeing in that business and then secondly the cost control aspect and maintain the margins in kind of a softest revenue environment?

Yeah, I think DCC is a reflection of a lot of challenge and headwind and competitiveness in the fright transportation market. While we’re down about a percent, some of that was made up by the pegs and the pass through and field costs, so that helped keep the revenue up a bit. The earnings are up I think 9% or $900,000, which is a good sign which means that our efficiency, our operating efficiency, our continuing focus on safety and security and all the other things that go with running that operation have continued to improve. So while basically revenue has been flat or down, the earnings have continued to improve and that’s not the ultimate model. But in the interim while things are tougher, I think that the cost control has worked to offset more robust growth. Todd Fowler – KeyBanc Capital Markets : Is that sustainable? I mean if revenue continues to slip, are you able to continue to squeeze efficiencies out of that segment?

Somewhat. I mean obviously you can’t be gutted, but it needs its operational capacity, technology, people, and expertise to adequately run a good service. Remember, this is a high value added net service for customers and it needs a certain service level, and it tends to get a higher value in the marketplace, so we need to maintain that as well. Todd Fowler – KeyBanc Capital Markets : Then just one last question on that on the same line, for the loss or the non-renewal contracts, do you have any sort of sense of where that business goes?

It could just go okay. It could be customers who just might be cutting back significantly. Sometimes it might be go back to lease, so it might be even in sometimes utilizing their own drivers and taking some of that sort of in-house but leasing from us, so it can go a variety of places. Todd Fowler – KeyBanc Capital Markets : Good. Thanks a lot of the color. Nice quarter.

Thank you. Our final question today is from David Campbell. You may ask your question and please state your company name. David Campbell – Thompson, Davis & Company: Thompson, Davis & Company. Good morning, everybody. I’m sorry if I’m asking you questions that have been answered. I had to get off the call briefly to answer some phone calls, but for example, the estimated earnings for the second quarter and year are based on how many fully diluted shares?

We ended I think at 57.5. David Campbell – Thompson, Davis & Company: Fully diluted?

The forecast based on 57.

57, okay. David Campbell – Thompson, Davis & Company: It’s 57 million for both the second quarter and year?

Yeah, approximately, approximately for the year. For the second quarter it’s 57, slightly lower than that for the year. David Campbell – Thompson, Davis & Company: The last question is: We’ve heard a lot about the vehicle gains and so forth and how they were strong than expected in the first quarter, now you have fewer vehicles for sale, so what kind of gain should we be modeling in our forecast the rest of the year?

Tony, you want to cover that?

Well, I think, as we have stated, the gains will be lower as we go on throughout the quarter. But I think far more important than the gain is the dramatic reduction that you’ll see in the carrying cost for the fleet, that fleet was twice as large in the number of the months as we went through ’07 and the asset level from a depreciation and interest point of view was much, much higher. So the dramatic savings in carrying costs will out weigh the reduction in the gains because the fewer vehicles to sell. David Campbell – Thompson, Davis & Company: That reduction in cost, carrying cost was not fully reflected in the first quarter?

Yes, it was in the first quarter, and we did have a benefit for at least a cent a share as the result of the reduction in carrying costs being greater than the reduction in gains year-over-year for the quarter, and that we will continue to see. David Campbell – Thompson, Davis & Company: Right, right, but the gains will still be down from last year?

Yes, they will be, but to a lesser extent, as I said, than a very favorable reduction in the carrying costs for the idle fleet. David Campbell – Thompson, Davis & Company: Right, right, right. Thank you very. All my questions have been asked and answered. Thank you very much.

Thank you. I’d now like to turn the call over to Mr. Greg Swienton.

Well, I think all the questions in queue have been answered, so we’re also a few minutes over our time. Thank you everyone for your participation. Have a good safe day. Bye now.

Thank you. This concludes today’s conference. Thank you for participating. You may disconnect at this time.