Welcome to Ryder System Inc. fourth quarter 2009 earnings release call. All lines are in a listen-only mode until after the presentation. (Operator Instructions) 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 fourth quarter 2009 earnings and 2010 forecast conference call. I would like to begin with a reminder that in this presentation you will hear some forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectation 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 Global Fleet Management Solutions and John Williford President of Global Supply Chain Solutions are 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. Today we will recap our fourth quarter 2009 results and full year 2009 results, review the asset management area and discuss our outlook and forecast for 2010. After our initial remarks, we will open the call for questions, so let me get right into an overview of our fourth quarter results. For those of you who are following online with the PowerPoint on page 4, net earnings per diluted share from continuing operations were $0.43 for the fourth quarter 2009 as compared to $0.91 in the prior-year period. The fourth quarter of 2009 included a net $0.02 benefit to EPS. This resulted from a $0.07 benefit related to Canadian income tax changes partially offset by a $0.05 charge primarily related to an international facility which is expected to be sold in the first quarter of 2010. In 2008 the fourth quarter included a $0.19 net charge related to restructuring and other charges which were partially offset by benefits from a reversal of tax accruals. Excluding these items in each year comparable EPS from continuing operations was $0.41 as compared to $1.10 in 2008. During the fourth quarter we successfully closed the remaining part of our European supply chain businesses in accordance with our previous announcements. As such the results from our former South American and European supply chain businesses which have all been fully closed are reflected in discontinued operations in the financial statement. On page five total revenue for the company was down 7% from the prior year. Total revenue reflects lower fuel services revenue and lower operating revenue partially offset by favorable foreign exchange rate movement. Operating revenue which excludes FMS fuel and also contracted transportation revenue declined by 6%. Operating revenue was negatively impacted by lower revenues in commercial rental,…

Thanks Greg. Turning to page 11 full-year gross capital expenditures totaled $611 million, down approximately $650 million from the prior year. Spending on lease vehicles declined $438 million or 44%. Lease capital is down due to lower new and replacement lease sales as customers downsized their fleet throughout 2009. Lease spending is also down due to the successful implementation of our strategy this year to increase the number of lease term extensions and increase the use of surplus and other mid-life vehicles to fulfill new lease sales. These actions reduce the requirement for new vehicle purchases to fulfill customer fleet needs in the lease product line. Full-year gross capital spending was also down due to lower spending on rental vehicles of $164 million in line with our plan to spend virtually no capital in rental in 2009. We realized full-year proceeds primarily from sales of revenue earning equipment of $216 million declining by $46 million from the prior year. This decline primarily reflects lower used vehicle pricing. Including proceeds from sales, full-year net capital expenditures were $396 million, down by a little over $600 million from the prior year. We also spent $89 million on acquisitions primarily on fleet management’s acquisition of Edart Leasing in the northeast U.S. in the first quarter. Turning to the next page, we generated cash from operating activity of $1 billion in 2009 which was $248 million below the prior year. The decrease is mainly due to lower net earnings of $168 million and $110 million of higher pension contributions partially offset by higher depreciation of $45 million. We elected to make a voluntary contribution to our pension plans in the fourth quarter of $102 million which accounted for the majority of the pension contribution increase. Depreciation increased largely due to higher adjustments for the…

Thank you Robert. Page 15 summarizes key results for our asset management area globally. At year end our global used vehicle inventory for sale was 6,900 vehicles, down by 800 units from the prior year end and down by 900 units from the end of the third quarter 2009. We are very pleased by the reduction we have achieved in our used vehicle inventories which are solidly within our target range. We sold 5,200 vehicles during the quarter, up over 40% from the prior year and in line with our third quarter 2009 sales. Used vehicle sales were relatively stable throughout the fourth quarter. Compared to the fourth quarter 2008 proceeds per vehicle sold decreased by 16-17%. Compared to the third quarter 2009, however, proceeds were up by 1% as overall prices stabilized in many asset classes. At the end of the quarter approximately 9,800 vehicles were classified as no longer earnings revenue. This was down by 800 units from the prior year and down by 1,200 from the third quarter 2009. The decrease versus the prior quarter reflects a decrease in the number of vehicles held for sale and an improvement in rental utilization. We have continued to successfully implement our strategy to increase the number of lease contracts on existing vehicles that are extended beyond their original lease terms. For the full year the number of these lease extensions was up by approximately 2,400 units or 46% versus the prior year. Increasing lease extensions is a beneficial strategy in the current soft market environment as it retains the revenue stream with the customer, reduces the number of used trucks we need to sell and lowers new capital expenditures requirements. Our global commercial rental fleet in the fourth quarter declined on average by 14% from the prior year. We…

Thank you Greg. Turning to page 22 I would like to review our retirement plan expensed for 2010. As a reminder, for most employees, that is those not grandfathered by age or length of service criteria, we froze our U.S. pension plan effective January 1, 2008 and for Canadian employees effective January 1, 2010. Our U.K. plan will be frozen as of March 31, 2010. As a result of the freezes of all three of our defined benefit type plans most employees are not accruing new benefits. However they retain benefits accrued prior to the termination date. In 2009 our pension expense was $66 million, up by $64 million from the prior year and was a significant headwind to the earnings in 2009. The increase in pension costs in 2009 resulted primarily from a significant decline in asset values in our plans during the latter part of 2008. In 2010 we anticipate pension expense to be $43 million, a reduction of $23 million. The lower pension expense results from higher than assumed return on plan assets in 2009 of $15 million, a $9 million benefit from our pension contributions and a $5 million due to the plan freeze. These benefits were partially offset by a reduction in our expected return assumptions from 7.9% to 7.65% in our U.S. plan which increased expense by $4 million. There was no impact from the change in the discount rate which is now 6.2 versus 6.25 last year. The reduction in pension expense of $23 million was partially offset by an increased in defined contribution plan expense of $5 million as employees were shifted to these enhanced plans. As a result the total forecast reduction in our retirement plan expense in 2010 is $18 million. For those who are interested we plan to publish…

Thank you Robert. Turning to page 24, as I previously outlined in the waterfall chart, our full-year 2010 EPS forecast is for a range of $1.80 to $1.95, up $0.10 to $0.25 from a comparable $1.70 in 2009. We are also providing a first quarter EPS forecast of $0.17 to $0.20 versus a comparable prior year EPS of $0.30. First quarter earnings are expected to be lower primarily due to significantly lower full service lease results because of customer fleet downsizing in 2009. We anticipate the first quarter 2010 will represent the trough of lease earning comparisons and that these comparisons should improve starting in the second quarter. We have also included a small negative impact from the recent Toyota production halt in our forecast. The reduction in first quarter lease earnings is forecasted to be partially offset by improved rental performance, better used vehicle sales operation and stronger supply chain results. Turning to page 25 in closing, let me briefly summarize the key points in our 2010 plan. We are working to manage through the cumulative impact of a prolonged freight recession on our lease business primarily related to customer fleet downsizing. We do expect improved new sales and renewal levels especially in the second half this year as the economy modestly improves, as new engine technology comes to market, as private fleets age and need to be replaced and as prospects look for alternative sources of capital to replace and grow their fleet. The expected improvement in lease sales this year will largely start to benefit the P&L in 2011. In the near-term we are leveraging the actions we have taken to right size the commercial rental and used vehicle fleet to improve returns in 2010. We also expect higher returns in supply chain due to modestly recovering…

(Operator Instructions) The first question comes from the line of Jon Langenfeld – Baird.

On the asset value side could you just compare I guess two things this cycle versus last cycle. One, the severity of the downturn and asset prices. Two, the different way it appears you are handling the accounting of it. I think in the last cycle there was more of a one-time charge that occurred whereas this time it seems like you have been more proactive throughout the cycle adjusting the depreciation schedule. Could you compare those for me?

Sure. That is a fundamental and important area for us and also for making sure that we are not harming shareholders. I think the last time we actually took a restructuring charge in assets was probably in 2001. We have not taken one since and what we have tried to do since then is to always adjust depreciation rates so that we are not caught at the end with a residual value problem or sale problem. So we are continuing something we have been at for the last 7-9 years to try to make those adjustments along the way. I would say that in our experience and maybe I will turn to Tony as well for additional commentary that because of the length and the depth of this downturn and recession this is probably more severe because it is over an extended period of time. So we are taking adjustments along the way. We think that is the right thing to do rather than let them accumulate at the end. Tony if you would like to add any more flavor I will turn it to you.

I think for the most part if you reflect upon Greg’s comments about a 16-17% reduction in the proceeds those are clearly much higher percentages than we had really experienced in the past. I think there are a number of reasons for that. First of all the economy was really quite robust really going into this recent downturn and all lessors and renters had some pretty heavy fleet activity at that point in time. So when we saw everyone largely adjusting and right-sizing their rental fleet that did put a lot of used vehicle equipment into the marketplace further depressing the prices. We also saw a number of truckload carriers and LTL carriers also put a lot of used vehicles on the market as well because of the downturn and the overall freight levels and many lessors and customers similar to ours are also downsizing their fleet and in some instances that equipment was put back into the market as used, but not all. I think for the most part we have a very robust economy with a lot of equipment in the marketplace when this recession hit. That put a lot of downward pressure on used vehicle pricing and the 16-17% is much more dramatic than we have seen in the past. Ryder we have expanded our retail network so that we can dispose of the [vehicles] at much higher prices. We continue to expand that network from a footprint point of view at existing locations and also add locations to it and we have also increased our international operations as well. So that has helped us really mitigate some of the downward pressure on pricing as we try to move those units off the balance sheet.

You mentioned in your prepared remarks the age of the fleet. If I just look at the full service lease side can you give us a direction for where that average age stands today versus maybe a couple of years ago? Where that is going to trend over the next 12 months because I am assuming it is probably going to continue to get older at least through and into the second half if not for the full year before it can turn in 2011.

Again I will let Tony provide some additional detail but I think there are a couple of fleet ages that are different by the fleet. The fact we are going to be refreshing the commercial rental fleet that will be younger and maintenance costs there will be in better shop, in improving shape. Lease will continue to be older for longer until we start getting more renewals and new sales. Is there anything else you want to add Tony?

No I think overall we have been in the mid to high 30’s. 38-39 months. We think over the next year or so that will rise to maybe the mid 40’s, about six more months older overall. The acquisitions, as you recall, also added to the averaging of the age fleet as well. We do see, as Greg commented earlier, the running costs rising on average for the units as that fleet ages and a smaller percentage proportion of our fleet going forward will be under warranty because of that. Overall, mid 40’s. 45-46 months, about 5-6 months older than we have seen over the last 18 months.

That is the overall fleet or just the leasing fleet?

That is the lease fleet. The rental fleet is more than likely about the mid 50’s. About 50-55 months. It is generally about 10 months older than the lease fleet. That is typically where it really should be from that perspective but we would like to bring it down a bit and be more competitive so we are refreshing the rental fleet. We brought it down nicely in 2009. We think it is definitely the right time to refresh as we see the market taking off, we believe a little bit in 2010. The rental fleet will still stay in the 50’s given the level of refreshment we are doing in 2010.

The next question comes from the line of Art Hatfield – Morgan Keegan. Art Hatfield – Morgan Keegan : As I look at slide 43, the extension and early terminations slide that you provide, we see the spike obviously from business conditions and extensions and early terminations in 2009. How much of that, if any, has already flowed through the used vehicle network and should we expect to see somewhat of a bit of a bubble in 2010 of vehicles coming into the used vehicle sales network?

I think for people who don’t have that right in front of them the spike he is referring to on the appendix on page 43 shows a total of 7,537 units extended in 2009 versus 5,168 in 2008. I think your question is when are those going to come due and come up after being extended? Art Hatfield – Morgan Keegan : Obviously when those vehicles come off extension you want to [tie] them through the used vehicle network. How much of those of those have already kind of hit that or are we looking at a bubble of vehicles you will need to sell over the next 12-18 months?

You will not see any bubble in 2010 as a result of the extensions at all. For the most part the extensions were 18 months and in some cases 24 months extended so we won’t be seeing those really coming due until maybe 2011 or 2012 in that regard. So there will be no bubble whatsoever in 2010 from units extended to a second term, if you will, coming into the used vehicle operations as we go into 2010. Also, the rental fleet was adjusted in 2009 so we do not see a significant increase going in there as well which resulted in downsizing the rental fleet. So no bubble from extensions. No heavy pressure to sell vehicles at the end of their rental life. We took care of all of that in 2009. Art Hatfield – Morgan Keegan : Broader thinking, slide 49 your adjusted return on capital reconciliation, obviously again with what has gone on you have reduced the total capital base of the company in 2009. Is it possible on the current capital base to get back to a level of earnings you saw in 2008? If not, what kind of level of reinvestment would you have to do to get back to that type of level?

I think our expectation is that whatever we were achieving at the height of our performance in 2007 and 2008 that since every downturn eventually turns we expect to be at or higher than where we were at the height a year or two ago. The issue is timing. This is going to take several years. It is not going to happen this year certainly and it is not going to be completed next year. By 2012 that is when we would expect that unless there is some other shock to the system that is not forecastible but if we stay on this long uphill, somewhat erratic but upward trend by a couple of years from now we will begin to see the returns to those previous levels. Art Hatfield – Morgan Keegan : Can you get to those levels on the existing capital base or would you have to make substantial investments to get to those earnings goals?

The simple answer to the first part of your question is no. Robert if you would like to answer the second one.

Clearly as we grow the business again we have to invest in vehicles whether they are for lease or for rental. That would drive up certainly debt from the levels that we are at now. Therefore total capital would come but clearly in doing so you would have the associated returns and that is where our goal is to get back up to our goal of being up over 8% on return on capital. So I don’t think it is realistic to expect we would be able to get back to the earnings levels we were at with the capital level we are at today. Art Hatfield – Morgan Keegan : As a final follow-up on that, it is reasonable to think as you reinvested the incremental returns on those investments could potentially get you back to a higher return level at those higher levels of earnings?

Absolutely. Also remember we have also discontinued operations in other parts of the world that were dragging returns down so without having that once we get the core parts of the business back to where they were you should have better returns.

The next question comes from the line of Ed Wolfe - Wolfe Securities.

I just want to focus on the pre-tax at your core FMS margin. 4.9% in calendar 2009 versus the 12-13% the prior five years. It has been tough to model that things could move down that quickly that fast. This year we talked about the big pension drag, about miles being fewer, about renewals being difficult and those kinds of things. Based on slide 21 your waterfall it looks like the drag in commercial rental, the $0.60 offset partially by a commercial expected benefit of $0.35 in commercial rental in the rental business it implies a further degradation down to closer about 4.1% pre-tax. If I look at the depreciation and the pension they kind of cancel each other out and the economy and your assumptions are getting better gradually what is it that is really broken here and why can’t we catch up to it it feels like?

Well it is not only hard to model it is also hard to live through. When you have had so many things heading in one direction which were all south it really becomes cumulative. Trying to calculate what the bottom line will be is going to be the summation of some simultaneously moving parts that we are trying to do the best we can to guess at but not having any clairvoyance to know exactly what the timing will be. First of all we have the miles per unit driven in lease. That is getting better. The decline is declining. If that is stable and goes up faster that is a big plus that goes to the bottom line. Commercial rental is expected to pick up. That is always the next big turn. When that occurs then you will have probably utilization improvement and pricing improvement and that is always shown a big impact on the bottom line. Those two factors also drag some other things along with them. You sell more fuel when units are moving. You sell more fuel when units are rented. We may even sell more insurance. There are all sorts of things that get dragged along at different times. Ultimately we have to make our best guess as to when renewal will really occur and customers will feel confident enough to stop downsizing and then of course the last big pick up for FMS is the new additions in sales. So those are all simultaneously moving at different speeds and paces so when we try to make guesses as we have done in the waterfall that ultimately translate to a bottom line return as a percent of revenue. This is our best guess on this date.

Are you saying the most important factor for FMS margins are when renewals will occur and pick up?

That will be the third factor we see. That will be an important factor in leveling off the downsizing of the fleets because that big $0.60 you see is the cumulative negative impact of many months of downsizing. So when that levels off that stops that bleeding. But the big pick up is then you replace, you stop the downsizing and then you start adding.

Based on your intelligence with customers as you see them now your sense is they are not close as we enter 2010 to start adding? Maybe they stop bleeding by second half but the pickup piece just isn’t there at this point. Is that how to think about it?

That is the way we see it. We make our assessments by taking the pulse of our customers. I think they are still cautious and therefore we are still cautious. When they act otherwise we will tell you.

The next question comes from the line of Kevin Sterling - BB&T Capital Markets. Kevin Sterling - BB&T Capital Markets: You had mentioned lease miles per vehicle stabilizing. I think you may have given specific numbers around that. What were those numbers again? I am looking for comparisons year-over-year and sequentially.

I believe that we were down 2% in the fourth quarter versus last year and then third quarter 2009 was down 6%. So the decline has diminished. If you did it by month in the quarter October was down 3%, November was down 2% and December was down 1%. So those three average to down 2% for the quarter. Kevin Sterling - BB&T Capital Markets: Since that trend looks like it is stabilizing to have a meaningful impact on FMS do we need to see it turn positive before we start seeing going back to new lease contracts? Do the miles per vehicle driven need to turn positive to really see a meaningful impact in FMS?

Yes. Fundamentally yes because what customers have done by driving fewer miles is pack the units as well as they could with less freight. They probably still have capacity from the lower miles and the number of units they have so they will probably start adding more freight and more volume to existing units making more stops and I think in this environment we see a trend in both the supply chain and FMS that because of still credit sensitivity and financial issues a lot of customers are making more shipments more frequently as opposed to bigger shipments less frequently. If that holds up awhile in this environment because of financials and credit I think you will start to see more miles on those units as well. Kevin Sterling - BB&T Capital Markets: How many FMS and commercial trucks did you have in the fleet in the fourth quarter? Is that somewhere in the presentation or if you could give it to me?

The year-end full service lease fleet had 115,100 vehicles which was down 5% from 120,600 units at the end of 2008. Kevin Sterling - BB&T Capital Markets: How about commercial rental?

I recall that was down I think 14%. I don’t know the exact numbers off hand. Tony said about 22,000.

The next question comes from the line of Todd Fowler - KeyBanc Capital Markets.

Back to the full service lease margins and the $0.60 year-over-year headwind here coming up in 2010. I guess if I have my math right a 5% decline in contractual revenue is about $100 million of annual revenue you lose but the $0.60 works out to be about $0.45 to $0.50 of EBIT that goes away. I guess from a higher level can you talk a little bit more about is that really just a function of the negative leverage that you have or the positive leverage is probably a better way to say it that you have in that business? Or does that also get into what is going on with the extensions and maintenance costs and the age of the fleet as well?

Other than the quantity of units which is a big driver, the higher maintenance costs on an older average fleet is also significant.

When you say significant can you quantify out of the $0.60 how much of that is related to maintenance? If you could break that out into the different buckets that would encompass that $0.60?

I don’t know I would know that nor do I know I really should get to that level of detail because it often changes and moves over time and I wouldn’t want you to have the wrong vision or modeling over longer periods.

The productivity initiative you have in the waterfall is most of that also geared then into FMS to offset the impact that we are going to see from the decline in revenue?

A big part of it is FMS. I think that we have a team in operations that are doing some very leading industry edge activity. It is very encouraging. So a big part of it is there. But it is also included in SCS and the dedicated but we are making investment for improvements and better service with customers.

Can you talk a little bit more about the visibility that you have? It sounds like you have here in the first quarter you have got some pretty good visibility as to what you are expecting as far as lease terminations and non-renewals. Thinking about the full year guidance of contractual revenue being down 5% can you talk a little bit about how comfortable you are with that number? Is that kind of a base case? Is that a conservative estimate? Given the visibility you have as far as large fleets coming up for renewal, or what are the drivers behind that assumption?

I would say we are probably more comfortable in making guesses and assumptions this year than we were a year ago. It is probably the most realistic middle of the range number we can come up with right now. You could do a little better or a little worse but we think it is a realistic mid-range.

The next question comes from the line of John Barnes – RBC Capital Markets. John Barnes – RBC Capital Markets: Can you talk a little bit about do you have any confidence that given the excess capacity in the trucking space right now and elsewhere that 2011 might be the year that you start to see lease growth again? Is there anything you can point to that says this is kind of our last bad year? We get into 2011 and we should begin to see some uptick?

Your question is our confidence whether it is the excess capacity that you have in other parts of the market generally or any other items we think that this is really the worst year or the last bad year of headwinds before 2011 in terms of overall performance? John Barnes – RBC Capital Markets: Yes.

If that is the question then I would answer in the affirmative. Unless something happens that is a shock to the economy for whatever reason that is our expectation that we are slowly going to keep coming out of this. There certainly is a lag on the fleet management full service lease and one of the things that protected us for so long on the downside is going to come up more slowly in the long-term. That being the case if our best guesses and estimates are right or reasonably close to our forecast that will really pick up by the latter part of this year and when you consider lead time for getting the contract signed, getting them from the OEMs, putting them into service, most of that won’t spill over until 2011 and if that is going on then the other things are going well with the company as well. Rental is up. Lease miles are up. Used vehicle sales are better. Supply chain volume is up. DCC volume is up and then you have a much healthier environment. John Barnes – RBC Capital Markets: As you take a look back at the acquisitions you made on the leasing side of the business your terminations and downsizing, has it been more prevalent from the customers of the acquired businesses versus your core business or has it been more across the board?

No it has not been concentrated more in any of the acquisitions. The due diligence and the effort we make in working with a firm we actually want to acquire, part of that due diligence is based on the fact of among other things the customer base, the health of the customers, the rates they are paying and how long those contracts will run. They are not weighted to the acquisitions at all. It is averaged over the entire existing and acquired fleet.

The next question comes from the line of Alex Brand – Stephens.

Can you talk about the self-insurance hit to Q4 which I think was about $7 million total, you did say was primarily a Q4 event. Is that more or less one-time or does that mean we have higher accruals in your 2010 forecast as well?

The delta from prior year was really completely due to favorable development in 2008 that did not recur in 2009. In our 2010 forecast we are expecting the same performance that we had in 2009.

In terms of the balance sheet you have a good problem that you are potentially going to be under levered now. Is there anything out there that is either meaningful to your lease business that you can look at or is it time to look beyond that maybe for supply chain and freight-forwarding type acquisitions? What are your thoughts on this? What you might look at?

Our thought is we are interested in both. You can define meaningful in FMS if by meaningful you mean a material big difference, no. Because nobody is of that size. But everyone we can do and we do them well and they are accretive they make sense. We also look in supply chain and have talked before about looking at areas that enable us to focus better on the transpacific opportunities in consolidation and de-consolidation just as we announced a little over a year ago for Canada and Asia. We will look elsewhere. We will look through all segments of our company where it makes sense for what you might call an adjunct, complementary service or a tuck in activity.

The next question comes from the line of Matt Brooklier – Piper Jaffray. Matt Brooklier – Piper Jaffray : I think you mentioned it earlier but can you walk through the utilization levels on your commercial fleet in fourth quarter? If you have it on a monthly basis that would be great as well.

I know the number quarterly. We talked about that.

Quarterly for the utilization? Quarterly we were for 2009 about 72.4% in the fourth quarter. Third quarter was 70.8% for 2009. The second quarter was under 70%, about 68% and the first quarter was very low about 61%. So as we have right-sized the fleet we have really made a lot of progress to match it with demand and get those utilizations really back in line. Our year-end fleet level for rentals is really about 27,000 vehicles including the trailers. The 22,000 I mentioned earlier was only the power fleet. But that fleet is right-sized now. We are seeing improvements in utilization and our plan includes improved utilization in every quarter of 2010. Matt Brooklier – Piper Jaffray : How are things feeling in January? If I look across the board for some of the other freight transport companies we have seen kind of continued volume improvement and it feels like, and granted we have pretty easy comps here, but it feels like things directionally are getting better from a demand perspective. What do utilization levels look like in January and also what were the miles on your lease equipment?

Actually we don’t even know yet. Those are still being closed and calculated and then we tend not to do too much mid-quarter anyway. We just don’t have that information yet. Matt Brooklier – Piper Jaffray : I guess my question is generally how was January feeling versus what appears to be a less than spectacular fourth quarter for you?

I think utilization is generally around expectation from where we are and I think mileage will continue to improve.

The next question comes from the line of David Roth - Stifel Nicolaus.

I have a question on the supply chain side. It looks like if you exclude the insurance costs and the termination costs the margins would have been closer to 1% which would have been I think a record. Is that a fair way to look at it? I know there is talk about the timing of the insurance costs.

I will let John Williford comment a little bit but I would say this; I think SCS is a lot like what we said about DCC. The best way to look at that is not a quarter at a time but over a rolling 4-quarter period because you can get various lifts in timing and they can spill from one quarter to another. John if you would like to comment further?

I think I got asked the same question. We had a record quarter I think in Q3. Everything came together pretty much perfectly in Q3. In Q4 we had some negatives including the year-over-year impact of the insurance rebates which we already mentioned and $2 million of shut down costs in automotive. But we still had a margin kind of in line with what I said we should expect which is the 4-5% and I think we can get up to the 6% eventually but we are not expecting to be at that 6% plus level for example in 2010.

If you could talk a bit about the new lease sales for the year? I know there have been a lot of headwinds for non-renewals and some companies renewing fewer trucks in their fleets than they had in their last contract. I guess if you look at the absolute trend line have you been increasing the number of lease sales per quarter through 2009 or is it declining? Is there some other pattern?

I think generally they have been pretty much at the same level. A large portion of our new business does come from new customers and those customers have also been adjusting their fleets as we have in rental for example to right-size for their demand so rather than having growth coming from those existing customers we have actually accommodated them in the downsizing and used it as an opportunity to solidify our relationship with them. But for the most part we see our gross new sales next year increasing, our downsizing reducing next year and also the reduction in the fleet due to Ryder initiated credit pulls and bankruptcy also being down as we go into 2010. So we do see a more positive net sales, if you will, perspective in 2010 predominately happening in the second half of the year and benefiting 2011 as Gregory had mentioned earlier.

The next question comes from the line of David Campbell - Thompson, Davis & Company. David Campbell - Thompson, Davis & Company: I wanted to ask to get a better feel for the capital expenditures this year will be primarily to add to the commercial rental fleet. Is that the way to look at it?

That is one part of it. We are going to be around the range of about $270 million for capital for rental refurbishment, replenishment of the fleet when we did virtually none in 2009. Where we used the most additional judgment I guess at this point is in the lease capital. In this environment the more the better because that will indicate customers are adding to the fleets and we are going to get this whole malaise turned around and get the revenue and earnings stream going in FMS. The numbers we shared are up over last year. We hope we are right. We hope it is at least that good but it certainly could be a little less and maybe hopefully more. David Campbell - Thompson, Davis & Company: So if this turns out to be the case then by the end of 2010 you will have more commercial rental vehicles in the fleet than you have now?

Not in commercial rental at this time. The capital we are spending is to replace units that we will be taking out of the rental fleet. The thing we will be monitor for the future is whether demand warrants adding to the rental fleet but the plan we have presented today does not show an increase and the capital we are spending is only replacing vehicles that will be coming out of rental. All of the other additions would be from lease.

The next question comes from the line of Analyst for Jeff Kaufman – Sterne Agee. Analyst for Jeff Kaufman – Sterne Agee: You mentioned the cost reduction initiatives in the full service lease business. Can you quantify what the fourth quarter impact of that was?

Good question. I know that there was some offset. I don’t know that I have handy exactly what that was. Let us look while we are online let us just look at something real quick and see if we can answer that for you right now or we can have a follow-up call from you. Analyst for Jeff Kaufman – Sterne Agee: One other question, just looking at your full service lease customers that are downsizing their fleets, are they shifting to renting trucks from you on a short-term basis as opposed to just using fewer trucks overall?

What we are seeing is they are reducing the size of their fleet and when they need the extra capacity because they are so uncertain about the future they don’t make a longer term commitment. They do rent from our rental fleet. We are seeing that activity from them. Typically though when business starts to pick up the first benefit we receive is an increase in the miles revenue that we have and they improve the utilization a bit of their private fleet. Then they will begin to rent from us and then when they are a bit more comfortable and the rentals have been somewhat extended rentals then they will convert it from lease. But we do rely on the lease customers for a good solid portion of our rental activity as well as they are waiting for new units and also as they get some extra freight but still are a bit uncomfortable about making that longer term commitment. That is included in our rental performance for 2010 with the lag in lease prior to when they convert those rentals into lease. Analyst for Jeff Kaufman – Sterne Agee: So it sounds like you are saying for now at least in the first quarter and maybe into the second quarter those customers that are terminating their leases and not entering into new long-term leases the majority are not necessarily renting from you on a short-term basis they are just using fewer trucks right now or utilizing their private fleet?

What they are doing, they are utilizing the units they continue to lease from us more and then they will rent.

The cost reductions that we were speaking to were $10 million and they were mainly due to headcount reduction and some of the cost reduction initiatives we announced earlier in the year.

This concludes our question and answer session. I would now like to turn the call back over to Gregory Swienton for any closing comments.

I think we have accommodated all the questions. Thanks for hanging with us because most of you are on East Coast time and it is into your lunch time. Have a good, safe day and good luck to all of us for a better and healthier and successful 2010. Bye now.

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