Robert S. Brunn - Vice President of Corporate Strategy & Investor Relations Gregory T. Swienton - Executive Chairman and Chief Executive Officer Art A. Garcia - Chief Financial Officer and Executive Vice President John H. Williford - President of Global Supply Chain Solutions Robert E. Sanchez - President of Global Fleet Management Solutions Business

David G. Ross - Stifel, Nicolaus & Co., Inc., Research Division Kevin W. Sterling - BB&T Capital Markets, Research Division Peter Nesvold Anthony P. Gallo - Wells Fargo Securities, LLC, Research Division Arthur W. Hatfield - Morgan Keegan & Company, Inc., Research Division Todd C. Fowler - KeyBanc Capital Markets Inc., Research Division Alexander V. Brand - SunTrust Robinson Humphrey, Inc., Research Division Edward M. Wolfe - Wolfe Trahan & Co. Benjamin J. Hartford - Robert W. Baird & Co. Incorporated, Research Division Salvatore Vitale - Sterne Agee & Leach Inc., Research Division A. Brad Delco - Stephens Inc., Research Division Dan Moore

Good morning, and welcome to the Ryder System, Inc. Fourth Quarter 2011 Earnings Release Conference Call. [Operator Instructions] Today's call is being recorded. If you have any objection, please disconnect at this time. I would like to introduce Mr. Bob Brunn, Vice President, Corporate Strategy for Investor Relations for Ryder. Mr. Brunn, you may begin.

Thanks very much. Good morning, and welcome to Ryder's fourth quarter 2011 earnings and 2012 forecast conference call. I'd like to remind you that during this presentation you'll hear some forward-looking statements within the meaning of 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 Art Garcia, Executive Vice President and Chief Financial Officer. Additionally, Robert Sanchez, 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.

Thanks, Bob, and good morning, everyone. Today, we'll recap fourth quarter 2011 results, review the asset management area and discuss our current outlook and the forecast for 2012. And as always after the initial remarks, we'll open up the call for questions. So let me begin with an overview of the fourth quarter results. Beginning on Page 4, net earnings per diluted share from continuing operations were $0.92 for the fourth quarter 2011, up from $0.80 in the prior year period. The fourth quarter results include a $0.05 charge for restructuring costs related to the Hill Hire acquisition. Excluding this charge, comparable EPS was $0.97 in the fourth quarter 2011, up from $0.65 in the prior year. This is an improvement of $0.32 or 49% over the prior year period. Fourth quarter EPS was at the top of our forecast range of $0.92 to $0.97. We achieved strong results in Fleet Management with significantly better Commercial Rental performance, accretive acquisitions and improved Used Vehicle sales results. Supply chain generated strong earnings improvement driven by the TLC acquisition, favorable insurance claims development and new business. Our total revenue grew 17% from the prior year and our operating revenue, which excludes FMS fuel and all subcontracted transportation revenue, increased 16% with double-digit growth in all 3 segments. The increase in revenue reflects both the benefit of our recent acquisitions and organic growth. Turning now to Page 5, which includes some additional financial statistics for the fourth quarter. The average number of diluted shares outstanding for the quarter declined by 300,000 shares to 50.7 million. During the fourth quarter, we repurchased approximately 153,000 shares at an average price of $50.21 under our 2 million share anti-dilutive program, which expired in December 2011. A new 2 million share anti-dilutive program has been approved with…

Thanks, Greg. Turning to Page 11, full year gross capital expenditures totaled $1.76 billion, which is up $672 million from the prior year and is in line with previously expected levels. Spending on leased vehicles was up $420 million from the prior year, mainly reflecting improved sales, as well as higher investment costs on new vehicles. Capital spending on Commercial Rental vehicles was $622 million, up $244 million due to both refreshment and planned growth of the rental fleet. Approximately $100 million of this rental spend was to replace rental vehicles that were transferred to the lease product line and signed on lease contracts with customers. So this portion of rental capital spending is really related to lease activity. We realized proceeds primarily from sales of revenue earning equipment of $300 million, that's up $66 million from the prior year. This increase reflects higher Used Vehicle pricing for the full year, partially offset by fewer units sold. In addition, we received proceeds of $37 million from the sale and lease back of revenue earning equipment in the fourth quarter. Including these sales, net capital expenditures increased by approximately $570 million to just over $1.4 billion. We also spent $362 million in 2011 on acquisitions, primarily related to the purchases of Hill Hire and Scully. Turning to the next page. We generated cash from operating activities of just over $1 billion during 2011, that's up $14 million from the prior year. Higher earnings and depreciation net of gains more than offset the impact from changes in working capital. We generated approximately $1.4 billion of total cash for the year, up by over $100 million from the prior year due to higher Used Vehicle sales proceeds, as well as proceeds from the sale lease back. Cash payments for capital expenditures increased by…

Thank you, Art. Page 15 summarizes that key results for our asset management area globally. At the end of the quarter, our global Used Vehicle inventory for sale was 6,300 vehicles, up by 1,100 units or 21% from the fourth quarter 2010 and is well within our target range. We sold 4,200 vehicles during the quarter, up 5%. We saw a continued strength in Used Vehicle demand and pricing in the quarter. Improved demand is a result of both relatively better market conditions and the desire of some truck buyers to obtain pre-2010 engines. Stronger demand combined with less available inventory in the market has allowed us to up-price generally, and in the U.S. market to increase the proportion of retail sales where we realize better prices. Compared to the fourth quarter 2010, proceeds per vehicle were up 29% on tractors and were unchanged for trucks. Excluding some older units in Canada that we took to the auction market, truck proceeds would've been 4% higher than the prior year. From a sequential standpoint, tractor pricing was up 5%. Truck pricing was down 3% sequentially versus the third quarter 2011 or down 1% excluding the Canadian auction units. At the end of the quarter, approximately 8,900 vehicles were classified as no longer earning revenue. This was up by 1,700 units or 24% from the prior year and reflects an increase in lease replacement activity. The increase also reflects seasonal out servicing of older rental units, which we expect to continue in the first quarter. As expected, the number of lease contracts on existing vehicles that were extended beyond their original lease term declined versus last year although, they're still running somewhat above normalized levels. This decline reflects an increase in new, full-term lease contract sales instead of lease extensions by customers.…

Thanks, Greg. Turning to Page 22, we're forecasting gross capital spending in a range of $2.1 billion to $2.2 billion, up by almost $350 million to $450 million from the prior year. Lease capital is projected to increase by $340 million to $440 million. $300 million of this is for projected growth of the fleet due to improved sales and also includes $100 million of higher purchase cost per vehicle related to the EPA technology. Of course, we expect to earn an appropriate return on this, so the higher cost per truck will contribute to both revenue and earnings growth over their useful life. The remainder of the increase largely stems from a higher-than-normal replacement cycle and improving retention rates on expiring leases. Since this capital spending is spread throughout the year, a significant portion of this increased investment will benefit revenue and earnings primarily in 2013. We plan to spend almost $600 million on Commercial Rental vehicles, including approximately $140 million on new units to grow the fleet. These growth units, combined with the rollover impact early in the year from the Hill Hire acquisition, will contribute to an 11% growth in the average rental size. The fleet at year end is projected to be flat year-over-year. In addition to the $140 million of capital for new units, the higher cost of new engine technology will require an additional $50 million for rental, and we're pricing this into customers. As always, please note that lease capital is only ordered once we have signed contracts, and the split of capital between lease and rental could be revised during the year based upon movements of trucks between product lines. Proceeds from sales of primarily revenue earning equipment are forecast to improve by $90 million to $390 million, primarily reflecting an increase…

Thanks, Art. Turning to Page 24, as I previously outlined in the waterfall chart, our full year 2012 EPS is a range of $4 to $4.10, up $0.51 to $0.61 from a comparable $3.49 in the prior year. We're also providing a first quarter EPS forecast of $0.55 to $0.58 versus the comparable prior year EPS of $0.51. I'd like to point out that the difference in our view of the quarterly seasonality of EPS versus the Current Street consensus is primarily a swap between first and second quarters' projected earnings. Coming into the first quarter of 2011, we didn't undergo the typical level of rental vehicle out-servicing because the market was strongly rebounding at that time. But in this year, in 2012, while the rental market remains strong and is still improving, we're doing a bit more of the typical seasonal out-servicing of older vehicles. In addition, the prior year's first quarter benefited from a decline in pension expense, positive earnings from acquisitions and 3% -- $0.03 property gain in FMS. Given these factors, there's more of a sequential decline from the fourth quarter last year into the first quarter this year as compared to the prior year. Turning to Page 25. As we discussed earlier, pension expense in 2012 will be above our prior expectations and will be up by $0.18 this year. Given the impact from pension expense, we thought it would be helpful to provide you with you a view of historical and forecasted comparable earnings per share, excluding the non-service pension costs. This information helps when looking at the underlying operational performance of our business without the impacts of the equity markets and discount rate environment on our pension plans, which have been frozen for several years. Excluding non-service pension costs, the midpoint of our 2012 EPS forecast is $4.44. This is the highest comparable EPS we'd ever achieved, including in our peak earnings year of 2008, which was $4.43. And we still have significant earnings upside especially remaining in our core lease business. Further, as a reminder, starting in the first quarter, we'll move non-service pension cost below the business segment line for reporting purposes. So going forward, you'll be able to see more easily the operational performance of the segments. We plan to publish historical information under the new segment reporting structure on or around March 1, so you'll have this in advance of our next earnings release. This does conclude our prepared remarks this morning, and we're going to move to questions and answers. [Operator Instructions] So at this time, I'll turn it over to the operator to open up the line for questions.

[Operator Instructions] Our first question today is from David Ross with Stifel, Nicolaus. David G. Ross - Stifel, Nicolaus & Co., Inc., Research Division: On the Dedicated side, can you just talk about where the biggest margin issue is there? And then can you also give us the margin for the quarter excluding the favorable insurance development?

I'll let John Williford speak to some of the challenges in DCC, and when they might carry forward a bit and the prognosis for improvement.

Yes, David. So yes, we -- in the fourth quarter we had some account-specific issues that really are going to require commercial resolution with the customers. These are mostly customers that we got with the Scully acquisition. And we're working through these one at a time, and it's going to take 1 to 2 quarters to complete that. I think the impact of the favorable insurance in Q4 was about $400,000. David G. Ross - Stifel, Nicolaus & Co., Inc., Research Division: Okay, John. That's helpful. Also, just a few -- with just all the 3 segments, which I guess will become the 2 segments, can you talk about the competitive landscape both on the leasing side of things, Dedicated side and the Supply Chain side, and how that may differ?

Well, they surely do differ because you've got different competitors. And I'll let John continue on what he sees activity-wise and competitively. And then Robert, you can speak about what you see in leasing and maintenance and rental. John?

Yes, in the logistics -- the world of logistics is a big fragmented market. We're focusing on competing by industry group. And as you know, we have a strong automotive industry group. We have a set of competitors there, but we feel like we are certainly among the leaders. We made this acquisition a year ago to strengthen our presence in CPG, which is the biggest segment of outsourced logistics, and we feel we have a very strong position there. We have a slightly different set of competitors there than automotive with some overlap. And right now, about half of our pipeline is in CPG. So we feel good about our presence there. DCC, once again has a slightly different set of competitors. Some companies have done well in DCC by focusing on some niches that are adjacencies to DCC. We're looking at some similar ideas, and we're especially trying to connect, working on connecting our DCC strengths with our vertical industry group strategy. And we do find that we have a lot of good opportunities by connecting our strengths in these industry groups and offering -- with DCC and offering services where we're running fleets and warehouses or fleets and managing transportation. We think that could be the competitive advantage for us going forward.

And I think just to further emphasize that point, both our reporting and our marketing emphasis in getting that combination of fleets with warehousing and logistics op centers and just-in-time activity, that's where we get the best returns because we're adding more services, more revenue, more return on combinations. And when you then can include the provision of Ryder vehicles as a part of that ground transportation, you have a home run for the organization. Robert?

Yes. David, I think on the full-service lease side, as you probably know, it's a good time to be in the business because there's a pretty significant replacement cycle that we're in the midst of that, should continue for the next couple of years. So that means a lot of activity around existing Full Service Lease customers that need to replace their -- or renew their leases. And then also, private fleet owners who need to make decisions on replacing the units that they own, therefore, gives us an opportunity to sell them on the benefits of the products that we sell. So a lot of activity certainly has picked up during the year and continues to grow, so we're very excited about that. And on the rental side, I think it's -- the competition I would say is consistent with what it's been in the past. There is -- there has been over the last year much more activity in rental and again, from a competition standpoint, consistent with what we've seen in other years.

Our next question is from Kevin Sterling with BB&T Capital Markets. Kevin W. Sterling - BB&T Capital Markets, Research Division: Greg, you talked about miles per truck per day being down the past couple of quarters in a row, and I think you attributed some of that to mix. Was there something else going on that would drive this metric down or is it really just mix?

We analyzed that and think about it because we're always -- particularly want to be alert to is there anything negative in the way of a trend with those statistics. We have concluded there is not. There is not an issue, and I'll let Robert comment a little bit about what you're finding closer to the business there.

Yes, I'll just reiterate what Greg said. It is down, the 2.5%, but it really is a bit of an anomaly relative to all the other indicators that we have in the marketplace around, what we hear from our customers, what we're seeing in terms of sales activity and what we're seeing in terms of rental activity. So obviously we want to continue to monitor that closely, but as of now we don't really see any real concern around that. Kevin W. Sterling - BB&T Capital Markets, Research Division: Okay. And Greg, maybe I can touch a little bit on both leasing and rental here and in particular, the margin profile. I think the thought is that the margin profile in rental, it's higher margin business, but the utilization on that is close to 80%. So it requires more sales and back office, et cetera, to support that rental piece. But I think in theory, leasing might be a lower profile but however, it takes fewer sales people to sell that lease, and they're sold in bulk versus the one-off spot rentals. So could you address kind of the differences in margin profile between rental and leasing, and maybe it might not be as great as some might realize.

Well, while we don't disclose the specificity, I think you'll probably gain some additional clues in the new reporting design, supported by SEC changes that are in the appendix. Apart from that, I mean, clearly a transactional product like rental, you'd expect to have a better short-term margin profile, that's just expected. When you factor in all of the support costs however, I don't think that marketing necessarily is that big a factor. I think it's really more about demand price utilization. But if you have anything else you want to add Robert, I'll turn it to you.

Yes, I think another way to look at it might be that over the cycle, rental's margin will be better. And depending on where it is in the cycle, it could be better or worse, right? Because if you're get into the downside of the cycle, margins do suffer and rental, when you get into the upside, they do a little better. So net-net, you're going to be slightly better with the rental and lease to really accommodate for the additional risk and volatility.

Our next question is from Peter Nesvold with Jefferies.

So I mean, I think given that pension was the big variance here, I have a few questions on that, another quick one and then one question on the guide. What was the pension status, funding status at the end of the calendar year? Did you know underfunded status in dollar terms and in percent terms?

Yes. The underfunded by -- so the funded status is about 70% overall and underfunded about $500 million. I think $500 million, I don't have it here with me right now.

And what are the contribution requirements, the funding requirements, for '12 and the next couple of years?

Next year it's about -- in 2012 it's about $80 million, and then it would go up to around $110 million over the next few years after that.

Okay. That's helpful. And then last one on the pension side. I pulled up the 10-K real quick, and you only had a 7.65% assumed return on planned assets, which I guess I'd take it if I could get it, but in the context of most other companies, it doesn't seem like it was unreasonably high. Where did you bring that, and was there a change in asset mix or anything else that drove that assumed return lower?

There's a slight change in the mix but generally, I think the expectations around have declined. So we brought it down about 50 basis points overall.

50 bps. Okay, great.

And big impact from the discount rate.

Right. The discount rate also came down about 80 bps, that really impacts leverage. You'll see that, that's a big driver. The pension equity charge has less of an impact on pension expense. The expense is really being impacted by the fact that the returns were less this year or in 2011, and then we reduced the expected return by 50 basis points.

Okay, great. If I could flip over briefly then to the earnings walk. When I do sort of a postmortem for 2011, it looks like you ended up putting up earnings about 24%, 25% better than initially guided, around $0.64 in actual terms. By my rough math, maybe half of that came from rental and half of it came from between rental and used trucks. Versus your internal plan, what were the other major sources of upside versus the 2011 walk? And how concerned are you that there's -- that you've kind of tapped out the rental and used truck earnings power here, given how much stronger it was in '11 versus initially expected?

Well I think first of all, Commercial Rental is far from tapped out. I think demand, the market environment will remain strong. We have really no exceptional expectations for the used trucks. We're saying that pricing should be stable, so we're not looking for a huge upside there. And the other thing that contributed last year was acquisitions. So we don't build acquisitions into the plan. If we should have any this year, then that's an upside.

Our next question is from Anthony Gallo with Wells Fargo.

I'm really disappointed I didn't get to tackle the pension question. A question about the change in depreciation. If you did not change your residual value assumptions based on the strength in prices, where would that show up if you didn't make the change in depreciation?

If we didn't make that change, you would see that in future years, starting into a certain extent in 2013 a little bit and then '13, and 3 or 4 years after that in higher vehicle gains because the vehicles would've come in at the lower net book value at the time we sold them.

Okay. And when you -- could you just refresh us on the accounting rules. How long and how strong -- or how long does the residual -- the actual results need to differ from residual before you can make that depreciation change?

Well the way we do it is we're really using almost like a 5-year average rolling residual. So we factor in current year sales and do a drop off to one 5 years ago. So -- and that's kind of how the process works.

Okay. And then back to the Commercial Rental question, which I thought was answered pretty well. The 6% price, just remind us historically, what type of context it is. It seems like it's not low but it's fairly conservative, particularly since we keep hearing that everyone is sort of reaching new benchmarks in utilization. How should we think about that 6% price expectation in Commercial Rental?

Well, I think it's -- it would be the third year of a significant price increase. The percents were larger in previous years, so 6% is not insignificant on this larger fleet after a couple of years of price increase. And you also have to recognize that some of that has to come in being built in from new equipment or act of purchases because we're going to have to gain a couple percent just to -- in rates in rental just to cover the increase of the initial cost of more expensive equipment from the 2010 EPA mandated engines.

Our next question is from Art Hatfield with Morgan Keegan. Arthur W. Hatfield - Morgan Keegan & Company, Inc., Research Division: I just want to follow up on the miles per unit per day. I do appreciate your explanation. I just wanted to think about it additionally. Is it possible that given what you've been able to do with extensions over the last couple of years, that age of vehicle may be causing that as vehicles step out of service more often for maintenance events?

Art, this is Robert. That could be a contributing factor, but again there's just a lot of little things that could be contributing. We'd look at it by customer and it's really -- there's really not a set pattern that you could really point and say it's that one contributing factor. Clearly, as the fleet ages, you do have more days that it's out of service, but I wouldn't pinpoint that as really the main driver.

And we also kind of wonder and think about as people actually add to their fleets, they may be putting a little less per previous power unit on the miles. So actually, we're trying to figure out if this is a bad sign or not when you're increasing the number of units. It may not be bad at all but as we said earlier, we pay attention to it and try to -- and analyze it the best we can. Arthur W. Hatfield - Morgan Keegan & Company, Inc., Research Division: Okay, that's helpful. And then back to the residual adjustment question, with the rolling 5-year, if we get these -- I mean, okay, even modest economic growth over the next couple of years, is it fair to say that we should see, given the fact that you're going to start rolling through '07, '08 and '09 that, that number should continue to move favorably for you over the next few years?

Yes, if pricing stayed at the current levels, you would expect that residuals would improve in future years also.

Yes, because you can imagine in those bad years when the new bad years were rolling on a few years ago, we were taking the pounding.

I'm not sure obviously, Art, I can't really -- we can't estimate what it would be. Typically, this is at a higher end of what you would see. We -- usually you would see depreciation changes that could be $0.05 to $0.15 is on a little higher end of that because we did see substantial improvement in pricing. Arthur W. Hatfield - Morgan Keegan & Company, Inc., Research Division: Sure. But the thought process that if we get okay economic growth going forward, you're getting ready to roll through some horrific years on those sale prices, so it could be somewhat of an earnings tailwind for you.

Yes, that's true.

Our next question is from Todd Fowler with KeyBanc Capital Markets.

Greg, back to the first quarter guidance. In your comments -- if I understand that correctly, it sounds like there's going to be some servicing on the rental fleet that didn't happen in the first quarter of last year that's going to be trade-off between the first quarter and the second quarter. I was wondering if you can clarify that comment and then, if you could also quantify maybe on a year-over-year basis how much that additional expense is going to be in the first quarter?

Robert?

Yes, Todd, it's not so much, just the additional expense. Todd, we actually took the units. We're taking the units out, therefore, you're not seeing the same amount of quarter sequential revenue and demand growth year -- quarter-over-quarter. To give you an idea, this year, we took out 1,800 units, I believe, fourth quarter to the first in the rental fleet. And last year, we actually grew the rental fleet from the fourth quarter to the first. So I think, that's really what Greg was trying to allude to as an explanation for some of those sequential changes.

Okay. And so if I understand that correctly and in the context of how you guided the rental fleet, we should see it come down a little bit sequentially in the first quarter but still be up year-over-year, ramp up into that second and third quarter and then end the year flat year-over-year?

Correct. It will be -- on average, it will be up year-over-year, somewhere around 10%, 10%, 11%. But we'll end the year flat in terms of unit count.

Okay. And then for my follow-up, looking at the revenue, the revenue guidance for the supply chain segment. I guess I was a little bit surprised that you're guiding 2% operating revenue growth for 2012. Is there something going on specifically, either loss of business in one of the pieces, loss of revenue at one of the pieces of that business, or some clarification on why -- I guess to me that seems like a little bit lower than what I would have expected.

Yes, and the fact is that we're actually selling revenue at a better rate than that. It's a matter of actually when we're going to see it appear. I'll let John Williford comment on that.

Yes, it's a good question. I'm glad you asked it. 2% revenue growth is less than we would want to expect. There are couple of things holding us back. We have some big accounts that are -- that have either sold the division or are redoing their network in some way, and that's taking a few big chunks of revenue out. Those are not -- those chunks don't have the same level of operating profit that our average business has. There's also some expectation of a transition of some low-margin business out. And then we have sold -- we had a really good 2011 in new sales. We have a very strong pipeline. Some of the big projects we sold, especially at the end of 2011, have long lead times. And we're not expecting the revenue to come on from those until -- at least the end of 2012 or into 2013. So normally, we would expect -- and I think we've said before, 7% to 10% growth in this business per year. And it is held back a little bit next year by those factors. I think you can see it from the waterfall Greg showed that we are expecting profit growth to be significantly higher than that 2%.

Our next question is from Alex Brand with Suntrust Robinson Humphrey.

I just want to follow up on an earlier question that John answered about Dedicated, which I think you kind of answered why maybe it wasn't growing as much we might think. It seems like everybody wants more Dedicated, but the profitability too -- I mean, I hear you on the Scully piece, but I would think that the other piece prior to that would've been maybe almost twice as profitable. Is there something holding back the profitability there that could maybe improve a lot in 2012?

Yes. Okay. I'll try and answer that as a 2-part answer. If -- without the Scully accounts, which we think we can fix through -- basically through pricing, we would have had the same operating profit margin in Q4 2011 as we had in Q4 2010. Now we think we can get that profit margin up over time. What's happened over time is there have been cost pressures on the business, and it's been very difficult to pass those along to customers. And it's essentially what we're seeing, just a little sharper version of with the Scully accounts. Now we have good relationships with our customers. We provide good service, and we are going to be pushing over time a little harder to make sure we're compensated for the work we do. And we would expect to see the margin over time, and it takes a while, but to get that margin back up above what we had in Q4 2010.

Right. So I mean, I typically think of that as a cost-plus business with something like a 10% margin, is that not the right way to think about it over time?

Well the 10% margin, if you're talking about 10% after allocating all your overhead that -- we're a ways from doing that. We've got to get to 6% before we get to 7%. But those are kind of the ranges of numbers we would be looking for over the next couple of years.

Our next question is from Ed Wolfe with Wolfe Trahan. Edward M. Wolfe - Wolfe Trahan & Co.: I guess this is for Robert. Can you talk a little bit about the timing going forward of CapEx? So this will be the second year 2012 of kind of ramping CapEx and using some cash and investing back into the business. Where do you think -- if you look out 2013, '14, when do you start to generate cash again?

Well we expect -- as you saw, we expect this year to still be part of the replacement cycle and the growth. Next year, if you look at OEM -- truck OEM production, 2013 is an even stronger year than 2012. So you could probably extrapolate and say we're going to be getting our fair share of that. So capital requirement, certainly on the lease fleet, are going to continue to be strong. I would expect rental, either in 2013 or 2014 to really begin to slow down in terms of the amount of replacement we need to do. But lease, I would expect to continue strong next year, 2013. And then 2014 I think is when it maybe starts to level off some. Edward M. Wolfe - Wolfe Trahan & Co.: That's helpful. And then, kind of a bigger picture, Greg, and I know other people have asked this. But when you think about the Full Service Lease business starting to come back in 2012 and you think about the rental at some point slowing its degree of growth but still being strong, how do you think about the 5-year contracts and the pricing? Pricing feels like it's good now, but you have some -- if you go back to 2007, 2008, it's not so strong. How do you think about the overall margins of FMS with these changes as you go forward?

When you're talking about pricing not being as strong in the softer economic periods, that would relate to rental. The FSL, the Full Service Lease pricing, that we maintained even during the downturn because of the standards that would apply when we had the EVA requirements for -- on a per vehicle basis. So I think pricing is not expected to move down in combination or in either. You would expect pricing to go up just because we have to maintain our spreads and margins and returns and lease, plus the equipment is more expensive and the same in rental. Over time, our expectation for the overall return to business, we expect to continue to inch up. The money that we spend now and continue to spend on investments and technology, productivity, efficiency, sales and marketing, innovation, we think that helps our returns in the longer term. In addition, someday, markets are going to come back, the economy's going to be healthier, and we're not going to have these headwinds with pension either. And a lot of that is attributed in FMS. So we continue to believe, we think quite reasonably and conservatively that we're going to return to not only high and record levels of total corporate EPS but continued bottom line improvement in FMS for a quantity of reasons. Edward M. Wolfe - Wolfe Trahan & Co.: Okay. That makes sense. Just last thing, can you give some form of guidance on D&A and interest expense for the year in 2012? I thought I heard you say D&A might even be down. Did I hear -- I don't know how that can be though.

Yes, no, no. I'm not -- no, it's going to be up significantly, right? I mean, you see from the -- from our slides that we gave guidance around operating cash flow. You can see that's up a couple hundred million year-over-year. That's driven by a combination of improved earnings and then more so by higher depreciation expense. So you're going to see depreciation move up a couple hundred million probably -- $150 million, $200 million. Edward M. Wolfe - Wolfe Trahan & Co.: Off of the base of 872-ish?

Yes. Edward M. Wolfe - Wolfe Trahan & Co.: Okay, and how about on the interest expense side off of the base of 133?

Interest will be up because the amount of our debt outstanding is higher in 2012 than it was in '11. The interest rate, we're forecasting kind of comparable to what you saw in the fourth quarter, so downright 4% range, maybe a little bit higher but just around there. So you'll see it go up just because of the volume increase. Edward M. Wolfe - Wolfe Trahan & Co.: And how much is fixed and variable at this point of the debt?

We're about 40% variable at the end of the year, and it will probably be around there for most of the year, maybe a little bit lower.

Our next question is from Ben Hartford with Baird. Benjamin J. Hartford - Robert W. Baird & Co. Incorporated, Research Division: Greg, I just want to ask, I guess, a conceptual question related to the guidance. If I can go back to '05 and I compare that to where you ended the year in 2011, the EPS base was comparable, some puts and takes with pension and acquisitions. But if you strip those out, it looks like your core guidance when you're sitting at the end of 2005, looking at 2006, the core guidance from an operating profit line was low teens, but now we're looking at kind of upper teens. And I'm just curious if that's emblematic of some of the secular opportunity in front of you. How much of that is aided by maybe maintenance expense falling here at the near term and rental being strong? Can you talk a little bit about that kind of that delta of 5 percentage points or so on a core operating performance basis?

And when you talk about low teens, you were talking about growth in EPS? Benjamin J. Hartford - Robert W. Baird & Co. Incorporated, Research Division: Yes, growth in EPS. Looking at the guidance that you gave at the end of '05 from that base of 341, the midpoint was about 12% growth. And now a number of ways to normalize for, but it looks like it's -- and certainly north of 15% on a core basis.

Yes, and that was obviously -- well, we thought it was a much healthier economic environment. We didn't know what was coming around the corner. I would say now, I think we've got even a larger more stable base of customers. I think we even have more service offerings and what we had clearly going for us then. But even when you strip it out, all of that pension activity, I think to get now to the mid-, mid to upper teens, we think is a reflection of what we see in the way of market opportunity and our ability to capture it. So when you think about the growth opportunities whether it's in that FMS side and private fleets or the expense and the complexity of FMS equipment or the value proposition and quantity of offerings we now have in the supply chain in industry segments we didn't have before, we think -- I think the simplest answer to your question is mid to high single-digit bottom line growth is a reflection of our ability to capture real growth market opportunities and trends that we think we're better now equipped to go after than we were 5, 6, 7 years ago. Benjamin J. Hartford - Robert W. Baird & Co. Incorporated, Research Division: Okay, good. That makes sense. And then lastly on the rental side, a big contribution assumed this year in the guidance, and obviously that worked against you in the '06, '07 time period. What's different about that network today that allows you to be more responsive in terms of reducing that fleet or otherwise protecting yourself from some of the negative leverage that can materialize if trends were to weaken?

Well I think for sizing, right-sizing, re-sizing, I think that's a matter of continued expertise over time that our centralized Asset Management Group has been able to do. So I think that works well for us. The other thing that's different in rental since that last downturn is we probably have -- when we have more rental customers, we have more national account customers. One of the things that we had to do in that rental downturn was to do a lot more intense focused, scrambling, cold account calling to try to make up what the market was taking away from us generally. And I think we've established a lot more relationships, have a more effective contact sales organization, and we may just have more regular renters than we used to have. And I think that's a plus for the future.

Our next question is from Jeff Kauffman with Sterne Agee. Salvatore Vitale - Sterne Agee & Leach Inc., Research Division: Sal Vitale on for Jeff Kauffman. So just a couple of quick questions on the commercial side. I understand you don't break out the Commercial Rental profitability. But earlier you made a comment, you said, you think you're far from tapped out in the profitability gains in the rental business. So if I just think about it in terms of from the trough, what the profitability was there to the typical peak, how far along do you think you are in terms of the margin expansion? Are you 70% of the way there, 50%?

I'll let Robert try to guess from memory because I know we don't have that page right in front of us.

Yes, I -- certainty the year-over-year growth last year was -- 2011 versus 2010 was a very strong year. But I think to Greg's point, there's still a lot of opportunity, and we still expect in 2012 to have rental be a significant contributor to the year-over-year growth in earnings. So maybe the easiest way to look at it is we expected to still grow this year in 2012, not at the same percentage clearly as it did in 2011, but still a strong contributor. Salvatore Vitale - Sterne Agee & Leach Inc., Research Division: Okay, that's helpful. And then I guess the other question is on -- looking here, are you saying the utilization is -- was 79% for the fourth quarter? Just refresh my memory, what is the -- historically, what is the peak utilization you typically get in the business?

Yes, it's -- we're at that at this point. It's 79%. We're right around the peak. We usually say for the full year, peak is somewhere -- can be somewhere between 76% and 78%. So when we're at 78%, 79%, we're at peak. Salvatore Vitale - Sterne Agee & Leach Inc., Research Division: Okay. So I guess then, any further margin expansion is really going to come from increased pricing and fixed cost absorption on more units?

Demand and pricing, correct. Demand from where -- demand that -- which comes along with more units and pricing. Salvatore Vitale - Sterne Agee & Leach Inc., Research Division: Okay. And then just a last thing on the higher maintenance cost, is that something you can quantify, what it was in the fourth quarter?

Yes, we really haven't got into that point. But maybe what you can think about is, maintenance cost continues to be headwind throughout the whole year, including the fourth quarter. We expect that -- because of the fleet age, we expect that to continue through probably the first 3 quarters at least of this year and then at the end of this year, and certainly going into '13, as the fleet starts to get younger, we'd start to see the benefit of maintenance costs coming down.

And if you were to recall the 2011 waterfall slide, when we were together this time a year ago, there was a big red bar that we highlighted for the impact of the older fleet and therefore, the maintenance cost and that was like $0.30 EPS. So this year, you don't see that bar. It's now buried within the FMS contractual. So although there's a potential red segment, the net of FMS contractual is up significantly. So we're eating away at that age issue and over time, it will turn positive too.

Our next question is from Brad Delco with Stephens.

I guess the first question, I understand leasing rates have certainly been strong and there seems to be the message that there's strong interest. Are there any customers that are seeing these higher rates with the price of equipment and seeing any sort or of sticker shock? And if there are, I mean, is that driving any business away? Or I would expect maybe potentially driving more business to Dedicated. Have you seen any of that activity in your business?

Well, you saw it over the last year. You saw that a lot of customers stayed with rental for a period of time. We also had a pretty significant increase in term extensions, so certainly customers over the last couple of years have done as much as they can to delay, if you will, the increase. But what we've seen, I would say probably over the last 6 months is customers now making that commitment to either lease, or obviously if they have to buy, they've got to go out and spend the incremental dollars on new equipment. So it is -- it has had an impact in there. I think it's delayed some of the decisions, but in terms of when they have to make the decision, the choices are either you're going to lease a new piece of equipment or you're going to have to go out and purchase one also at the higher price.

I think the outsourcing decision, relative to the sticker shock that you raised what becomes foremost in the customer's minds are the certainty of the maintenance in a more expensive and complex world and actually have a lease that works effectively rather than they also in addition to maintenance having to go out and get the equipment. So I think for those customers who still prefer to have their own drivers, they are going to continue to look, as an outsourcing choice, the Full Service Lease with the maintenance. When they reach that next step and that comes at different times over time and they decide, "Why am I doing and of this?" Whether it's for CSA reasons or complexity or cost, and then one outsource the driver, that's when they move on up the DCC.

Jeff, one other thing that's helping with the decision is that there is an improvement in fuel efficiency with the newer vehicles that's helping to offset some of that increase in cost.

Okay, great. That's great color. And then I guess my second question may be more for Art. You talked about that equity charge having a pretty significant impact on your total obligations to equity, and it doesn't capture growth. I guess if -- absent that charge, I mean, would there be areas of growth maybe on the acquisition front more this year that we could expect? And how comfortable are you with that level? And I guess, the read I have was we could see growth potentially slow because of where that metric stands today versus where it was a year ago.

I don't know what I would say. I mean, obviously our plan doesn't contemplate acquisitions in it, but as we look at our current level of leverage, we believe we have capacity to handle organic growth in the business, which we expect here over the term, as well as a more typical acquisitions spend. We spend I think a little bit more in 2011 just because of how things worked out with Hill Hire and the like. The typical acquisition spend, we see as still being available to us. Also keep in mind, that as we -- even in this year of pretty significant spending, leverage is not really moving up that much. So the business tends to de-lever pretty fast in that sense.

Our final question today is from Dan Moore with Scopus Consulting Group.

It's Scopus Asset Management. Quick question. Could you remind us of what your full year 2011 guidance was originally, relative to where you came in this call last year?

Last year? It was $280 million to $290 million, and we came in at $349 million.

And then, I guess the concern anyone might have at this point is leverage. And I think there's a lot of -- there's been a lot of discussion around consumer rental. And anybody that looks at the lease side of the business can obviously see a lot of opportunity over the next couple of years. Can you remind us though, how you're thinking about the potential for margin improvement over the next, let's say, 2 years in lease? And what difference is if any there may be in the cycle relative to your previous peak? Just trying to kind of put our arms around what a peak EPS outlook might be for the company as we move through the cycle.

Yes, there's a lot of tentacles to that question. I think on a broad look, in the last couple of years, people said, "When do you think you'll get back to your peak earnings?" And we said over the next couple of years, without being precise, and that was part of the value of the chart on Page 25, that if you strip out the positive and negative impacts of service, pension cost over the years, this is the year when we're going to hit our peak again. We expect to continue to be able to increase not only comparable EPS but the bottom line margin return. You specifically talked about -- I think mentioned Full Service Lease or FMS, and we've got several hundred basis points to continue to improve upon, which we believe we can get to, especially when you get the stability of the larger lease fleet and the lower maintenance costs from a more normal, younger average lease fleet. See, we're not there yet either. So that gives you a few concepts of why we think that's doable in addition to being able to improve the bottom-line operating leverage every time we do an acquisition we're putting units over an existing network, every time that we add incremental growth, new sales, with good EVA, they're being spread over an incremental network. So we think reasonably, those items plus productivity, efficiency, market opportunities, they're going to continue to move up. So if you want to add anything else on FMS, Robert, that I haven't touched upon.

No, that's it. I mean, the fleet -- as the lease fleet gets larger and newer, that's where you're going to see the margin expansion.

This does conclude the question-and-answer session. I would now like to turn the call over to Mr. Greg Swienton for any closing remarks.

Well as I look at my watch, it's now about 12:15. So we're a little bit over our time, but we had our longer presentation. I think we've been able to entertain everyone's questions. Thank you for joining us, I appreciate it, and have a good, safe day.

Thank you. This does conclude today's conference. Thank you for participating. You may disconnect at this time.