Good morning, and welcome to Ryder System, Inc. Corporated First Quarter 2014 Earnings Release Conference Call. [Operator Instructions] Today's call is being recorded. And if you have any objections, please disconnect at this time. I would like to introduce Mr. Bob Brunn, Vice President, Corporate Strategy and Investor Relations for Ryder. Mr. Brunn, you may begin.

Thanks very much. Good morning, and welcome to Ryder's first quarter 2014 earnings 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 Robert Sanchez, Chairman and Chief Executive Officer; and Art Garcia, Executive Vice President and Chief Financial Officer. Additionally, Dennis Cooke, President of Global Fleet Management Solutions and John Williford, President of Global Supply Chain Solutions are on the call today. With that, let me turn it over to Robert.

Good morning, everyone, and thanks for joining us. This morning, we’ll recap our first quarter results, review the asset management area and discuss the current outlook for our business. We'll then open the call for questions. With that, let's turn to an overview of our first quarter results. Comparable earnings per share from continuing operations were a record $0.92 for the first quarter 2014, up from $0.81 in the prior year. This reflects an improvement of $0.11, or 14%. First quarter comparable results excluded non-operating pension costs and the benefit from a state tax law change. The prior year comparable results exclude non-operating pension costs and a foreign currency translation benefit. We beat our first quarter forecast range of $0.83 to $0.88 by $0.04 to $0.09. Our performance was driven by better-than-expected commercial rental and used vehicle sales results. Severe weather was a negative impact of $0.04 to overall company earnings; however, this was offset by other benefits including a property sale and some favorable insurance development during the quarter. Operating revenue, which excludes FMS fuel and all subcontracted transportation revenue, was up 4% to a record $1.32 billion. We saw solid revenue growth in rental, full service lease, and supply chain. Page 5 includes some additional financials for the first quarter. The average number of diluted shares outstanding for the quarter increased by 1.7 million shares to 53.1 million. This reflects the pause of our anti-dilutive share repurchase program last year. In December 2013, we announced a new 2 million share anti-dilutive repurchase program and started purchases under the program in early February. During the first quarter, we purchased 563,000 shares at an average price of $71.85. Our first quarter tax rate was 34.5% and includes the impact of non-operating pension costs and the benefit of a tax law…

Thanks, Robert. Turning to Page 9, gross capital expenditures for the quarter were about $600 million, that's up $146 million from the prior year. This increase reflects planned investments in our commercial rental and lease fleets. As a reference point, we are making no changes to our full-year gross capital spending forecast of $2.2 billion. We have realized proceeds primarily from sales of revenue-earning equipment of $128 million, up by $14 million from the prior year. The increase reflects higher sales prices per vehicle. Net capital expenditures increased by $132 million to $468 million. Turning to the next page, we generated cash from operating activities of $238 million during the quarter, down slightly from the prior year. This decrease was driven primarily by increased working capital needs, partially offset by higher cash-based earnings. We generated $380 million of total cash during the quarter, that's also down slightly from the prior year, reflecting lower operating cash flow. Cash payments for capital expenditures increased by $159 million to $579 million for the quarter. The company had negative free cash flow of $198 million during the quarter, below the prior year by $172 million. This decrease was driven primarily by planned higher spending on rental and leased vehicles compared to the prior year. Our full year cash flow outlook remains unchanged from the original forecast of negative $300 million. Page 11 addresses our debt-to-equity position. Total obligations of $4.5 billion increased by almost $260 million from year-end 2013. Total obligations as a percent to equity at the end of the quarter were 239%, up from 226% at the end of 2013. Leverage remains toward the lower end of our target range of 225% to 275% and should decline by year end. Equity at the end of the quarter was $1.9 billion, unchanged from year end 2013, as increased earnings were offset by share repurchases and dividends. At this point, I'll hand the call back over to Robert to provide an asset management update.

Thanks, Art. Page 13 summarizes key results from our asset management area. We continue to reduce used vehicle inventories, which are at the lowest level in the past 2 years. Used vehicle inventory held for sale was 7,200 vehicles, down from 10,000 units in the prior year, and 700 units below the fourth quarter. Used vehicle inventory is in our target range of 6,000 to 8,000 vehicles following higher levels for the past two years due to the lease replacement cycle. Pricing for used vehicles was strong particularly to trucks. Compared to the first quarter of 2013, proceeds from vehicles sold were up 2% for tractors and up 12% for trucks. From a sequential standpoint, tractor pricing was up 4% and truck pricing was up 16%. With inventory levels at our target range and strong market demand for used equipment, we’ve reduced wholesales sales activity and increased retail sales, which benefitted pricing. The number of leased vehicles that were extended beyond their original lease term decreased versus last year by around 130 units or 8%. Early termination of leased vehicles were 18% below 2013 levels and remained well below pre-recessionary levels. Our average Commercial Rental fleet was up by 3% versus the prior year and remained unchanged from the fourth quarter. I'll turn now to Page 15 and cover our outlook and forecast. In Fleet Management both Commercial Rental and used vehicle sales performed well during the quarter, driven by strong demand and pricing trends. We’ve seen these conditions continue into early April and expect these trends to remain positive, resulting in improved performance for these product lines versus our original plan. We expect rental pricing will increase 5% for the year versus the 4% increase we had in the original plan. In addition, we expect our rental fleet to…

Thank you. [Operator Instructions] The first question today is from John Mims from FBR Capital Markets. John Mims – FBR Capital Markets: Hey thanks, good morning guys.

Hey good morning, John. John Mims – FBR Capital Markets: So let me ask first, Robert one of the comments you made was with the used trucks inventory being down now as kind of a function of the lease replacements cycle. Is that starting to decelerate or you know how should we think about you know when -- with demand going forward, how much you still have left in terms of just pure replacement and just kind of where the average age of the lease fleet is now?

Yeah, in terms of the lease fleet age, we are – we saw it drop another five months in this quarter versus last year. It dropped two months versus year end. So, we talked about this fleet age continuing to decline through this year and into early 2015, so continue to see some benefits there, but we are getting, you know -- we are getting to the latter endings I would say of the replacement cycle. We are currently in the mid-forties, low-to-mid forties in terms of fleet age. We think that could get down to maybe the low forties down to the 40, 41 months, and then really taper off, that would be kind of our sweet spot. John Mims – FBR Capital Markets: The last few quarters you have averaged about a month a quarter, if I recall. Is there anything particular about this quarter that accelerated that de-ageing?

No , I’d say that’s similar to just rounding and included the growth that we are seeing in the fleet, it’s helping, but most of that is just rounding. John Mims – FBR Capital Markets: Let me ask on the rental fleet, obviously, you know winter weather helped you, you know probably I think you had more lease fleets out of -- more lease trucks out of service which probably pushed demand for the rental fleet. You know, as far as weather -- excluding weather, was the lease fleet kind of where you thought it should be for this quarter, and is that – the pricing gains you saw this quarter sustainable for the rest of the year even as you sort of grow the lease fleet, I guess the 4% that you said you’ll expand.

Rental fleet you mean, right? John Mims – FBR Capital Markets: Yeah, yeah rental fleet.

I’ll let Dennis explain on that, but the pricing benefits that we saw in the first quarter, we expect those to hold and continue through the balance of the year. Dennis do have any color?

Yeah, John the demand was robust, you know seeing improving economy, and you know frankly we are monitoring our turn downs also and trying to ensure that those don’t get too high, and we saw that increase. So, it wasn’t just the weather, it was also just demand. In general, it was higher, so our outlook is fairly strong in rental. John Mims – FBR Capital Markets: Okay. And then one final question is on that same line. Well Sanchez, you’ve seen some good new lease growth, but a lot of your existing lease customers are still supplementing fleets with rental. Have you started to see that shift where people are willing to commit more into leases or you expect to see that more this year, and if so how does that play into your outlook on the size of your rental fleet?

I think we started to see some of that shift since the second half of last year as our lease sales started to pick back up, but we are -- what we are seeing is the rental market continues to be hot even with customers that are not lease customers, pure rental, and I think as long as we continue to see that, we are going to manage that. We are going to rely more this year, I think, on redeployment and rate initially, and that’s currently the plan what we’ve got built in to our updated guidance. John Mims – FBR Capital Markets: Got it.

I would just add to this Dennis. I would just add that when you look at the macro trends that are playing out right now with the shortage in technicians and drivers and the new technology and the higher expenses that our customers are seeing, I think we are also starting to see that private fleet really look to us to say, can you help us out, because they are feeling the pains of these macro trends right now. So, it’s not only existing customers looking at a rental lease decision, you got the private fleet customers that are starting to look to us for help with these macro trends that are coming into play. John Mims – FBR Capital Markets: Are you still seeing any of those, I guess you could describe them as like serial renters who are keeping rental trucks paying the daily rate, but keeping them for months at a time because they are afraid of turning them back in and loose that capacity?

John, it’s Dennis again. Yes, I mean we’ll see that, but they are looking at always doing the trade-offs of is the better economics to go to leased trucks. So we are obviously encouraging those customers to do that if they have a strong outlook in their business to make a long-term commitment. John Mims – FBR Capital Markets: Okay, alright. Well thanks for the time and terrific quarter, thanks.

Thanks, John.

Thank you. The next question is from Todd Fowler with KeyBanc Capital Markets. Todd C. Fowler – KeyBanc Capital Markets Inc., Research Division: Great, thanks good morning. I want to make sure I understand the weather comments here in the quarter. Robert, you mentioned [$0.04] of weather, I’m trying to get a sense of kind of what you are thinking about what’s included in that $0.04 and then I think you said that that was offset by some property gains and some insurance, but the $0.03 related to the maintenance would be separate from the offset from the weather or the $0.04 of weather that you mentioned.

Yes the $0.04 is company why it includes the impact and Supply Chain in FMS, but that’s an additional $0.03 you could look at it that was an additional $0.03 that are being offset that really will carry over into the second quarter. So on a full year basis, I would say the weather impact is more like $0.07 and it’s been offset by in the first quarter by those other items that I mentioned and as you will see in the second quarter based on the guidance we give you we were seeing the business really picking up in other areas. Todd C. Fowler – KeyBanc Capital Markets Inc., Research Division: Okay and then the $0.04 of weather if you had to break it up between FMS and the Supply Chain you know could you give a little bit more granular on that and then specifically within FMS what was it, was it miles driven on the lease fleet or what were some of the headwins from weather on FMS?

I think if you keep it simple, it’s probably depending on where you put the offsets, it’s half and half, maybe a little bit more towards supply chain than FMS. In terms of the negatives, the negatives in supply chain were depleted volumes in automotive and dedicated where our customers had planned shut downs or just routes they did not run and that volume impacts our supply chain business. In FMS, the negatives were really around these customers not running as many miles. We had deferment of maintenance costs due to the fact that the vehicles couldn’t come in for repairs and those are the ones that are showing up in the second quarter. And then we clearly had more breakdowns and more maintenance cost associated with the vehicles being down due to the weather. Todd C. Fowler – KeyBanc Capital Markets Inc., Research Division: Okay, that makes sense. And then my follow-up, which is on the 600 unit growth in the lease fleet sequentially excluding the U.K. trailers. I think on the fourth quarter call you talked about 2000 units on a full year basis, it seems like you’re a little bit ahead of that. Is that the right way to think about it and as you think about your original plan versus something that was more front-end loaded than back-end loaded or you maybe just started off the year a little bit stronger than maybe what you anticipated on the leasing side?

Yeah, I would say, we are on track with where we expected to be in the first quarter. I mentioned on the call last quarter that we didn’t forecast that continued same sales activity into the second half of the year as we had in the first. I think it’s still too early on that also. So we’re kind of holding steady on the lease forecast that’s in the guidance we’ve given you and probably we’ll be in a better position to evaluate that after the second quarter. Todd C. Fowler – KeyBanc Capital Markets Inc., Research Division: Okay. That makes a lot of sense. Thanks for the time and congratulations.

Thank you, Todd.

Thank you. The next question is from Ben Hartford with Robert W. Baird. Benjamin J. Hartford – Robert W. Baird & Co. Inc.: Hey, good morning, guys. I guess it wasn’t clear, maybe you said it, I just haven’t picked up on it. Where are the units coming from? I think Art, you had said that the full year gross CapEx guidance is unchanged but you’re taking the rental fleet higher by a couple of hundred basis points. Where are those trucks being sourced from if CapEx is not changing in totality?

Yeah, it’s really two things. One is, we’re holding on to vehicles a little longer that we otherwise would be selling and probably the bigger issues, we’re moving vehicles that are coming off of leases, we are moving those into the rental fleets. So we are flexing. We are taking advantage of the asset management capabilities that we have to really bring the fleet up without any additional CapEx. Benjamin J. Hartford – Robert W. Baird & Co. Inc.: Okay. That makes sense. And then I don’t know if John’s on call, John Williford. I didn’t hear him.

I’m here. Benjamin J. Hartford – Robert W. Baird & Co. Inc.: Okay, good. Just wanted to address Supply Chain Solutions margins. I’m assuming that the first quarter was impacted by elevated expenses within the dedicated fleet. I think you had last said that you expected a similar trajectory of margin improvement in ’14 relative to ’13, say about 40 basis points. I’m assuming we can just ascribe the first quarter issues here to weather, nothing has changed to that outlook and we aught to be little close, to just quantify, kind of 6.7% run rate in 2Q and beyond. Is that fair?

Yeah, exactly. I think if you were to adjust for the weather impact and also for the lesser impact at the start up that we called out, we would’ve been right on track with we expected and what we guided to for the year before. Benjamin J. Hartford – Robert W. Baird & Co. Inc.: Okay, good. And then just last one, Robert, thinking about the lease fleet age normalizing in early 2015, miles per truck within the lease fleet being back to normal levels. You’ve got a lease fleet that’s bigger, sure there’s some puts and takes in terms of the mix of the profile with that lease fleet, but you’re got firm rental demand trends as well. No reason to think that – you guys have talked about previous peak margin as being a guidepost. I mean ’15 looks like it’s a pretty clean year and that should be the year that we have pretty good visibility to being back to those previous peak margins within FMS, correct?

Well, I don’t know if I’m ready to give guidance for 2015 yet, but your thinking is right. I think we had talked about this year continuing to make progress towards that 12% to 13%, we ended up last year at 10%, so that would get us into the…

About 160 in this quarter.

A rough 160 in this quarter. So, yeah, clearly if these trends continue, that would lead you into getting close to those ranges or in those ranges in 2015. Benjamin J. Hartford – Robert W. Baird & Co. Inc.: That was good. Thanks for the time guys.

Thanks.

Thank you. The next question is from Jeff Kauffman with Buckingham Research. Jeffrey Asher Kauffman – Buckingham Research Group Inc.: Thank you very much and congratulations. I just want to hone in a little on the tax rate. I thought it would be running little closer to 35, 36, is 37.2, the right rate to think about for the year now?

Yeah, we had guided Jeff at the beginning of the year that our plan for the full year was about 35.7 for the comparable tax rate. And for us, typically what you’d expect is a higher tax rate in the first half of the year and a lower tax rate in the second half of the year, really as we file our tax returns and we’re able to take advantage of reversals and things like that. So, we are looking at – the tax rate for the first quarter was on plan, so that’s what we expected. Second half, the tax rate was probably closer to 35% I’d say, and then you have a higher tax rate in the first half of the year. Jeffrey Asher Kauffman – Buckingham Research Group Inc.: Okay. So we’re sticking to the 35.7 for the year.

Yeah, that hasn’t changed. Jeffrey Asher Kauffman – Buckingham Research Group Inc.: Okay. And then just to follow up earlier, you talked about how the fleet was getting to about the right age, I know equipment is a little more expensive but we have been running kind of elevated capital levels. If I look at the non-growth capital outlook, are you saying we may gravitate toward kind of the 1.4-ish, 1.3-ish range over the next two years ex growth?

Our maintenance CapEx if that’s what you mean, that’s probably at the ballpark with what we’ve articulated, yes, and that’s excluding growth. So, remember, we had pretty big growth element this year. For lease, we had estimated at the beginning of the year about over $500 million, so we’re still on track with that. Jeffrey Asher Kauffman – Buckingham Research Group Inc.: Okay, guys. Thanks.

Thank you. The next question is from Scott Group with Wolfe Research. Scott H. Group –Wolfe Research, LLC: Hey, thanks, morning.

Good morning, Scott. Scott H. Group –Wolfe Research, LLC: I think last quarter, you shared that a good amount on the fleet growth was coming from private fleet conversion, I don’t know if you gave that number for this quarter. And then just kind of bigger picture, so it feels like leasing demand is getting better but leasing fleet is still up just kind of 1%. When you think we need to start seeing closer to mid single digit growth in the fleet or do you think that’s kind of an unrealistic expectation?

Well, no, Scott, I think that’s the target. That’s where we want to get to, right. It’s just – this is a journey we’re on of really dealing with some changes that are going on in the market that as we’ve mentioned really are favorable to outsourcing around fleets and the expansion of our product offerings also. So the growth could come, it’s going to be in Full Service Lease but it’s also going to be in some of the other products and it’s hard to pick in any given quarter where you’re going to see that more pronounced. But, no, I think you’re right in that the goal would be to over time be up in that higher single digit, mid-single digit number. But for the short run and really what we’re really trying to get to, we think 2000 is a really good number in terms of growth year over year and we’re on track to achieve that. We saw continued activity in sales, both in lease and some of the other product lines. We talked about a significant account that we won this quarter in contract maintenance which is really will become our largest contract maintenance account. So there is another examples we continue to make progress. And back to the number, you asked the question about the number of customers that had come from private fleet. Last quarter we said that a third of the growth had come from private fleet conversions. We’re generally in that same range now in the first quarter. Scott H. Group –Wolfe Research, LLC: Okay, that’s helpful. So, every year in the beginning year, you give some really good kind of earnings bridge and wanted to know if you can help us update that and then as something’s are going better maybe gains on sales, weather was a negative what are the other moving parts that are getting better and worse relative to that initial bridge?

Well we’ve outgrown through the -- we haven’t updated that bridge, but I would tell you I mean just based on the comments here we’ve given you you know that right now commercial rental and UVS are going to be better and what was in the bridge that’s really what’s driving the uplift. Supply Chain is going to be down a bit because of the weather impacting the first quarter. But really I guess that’s the primary trade-off. Scott H. Group –Wolfe Research, LLC: Okay and then last thing, does the start to think about net buy backs any time soon or is it more just anti-dilutive stuff going forward?

You know we’re going to stick with anti-dilutive for now. As you saw our leverage was up a little bit that current inline with what we expected we expect and the year in that to 25 range to 30 range. So, yeah unless there’s a big change from that number, I’d expect us to just continue with the anti-dilutive format. Scott H. Group –Wolfe Research, LLC: Okay, alright thanks guys.

Thank you.

Thank you. The next question is from John Barnes with RBC Capital Markets. John L. Barnes – RBC Capital Markets, LLC, Research Division: Hey good morning guys, nice quarter. First question is given the level of class A truck orders that we’ve seen thus far this year, can you talk a little bit about where you are in the order queue, how long it’s taking you to get equipment and do you have any concern that the availability of equipment could maybe impact the timing of some of the new leases coming on?

Remember, we secure slot dates at the beginning of the year with the OEMs and so those dates are kind of set for us and they are reserved for us. So we don’t – you know its one of the benefits that we bring to customers during these types of periods when things start to stretch out a bit is that we have the dates that we can sell into. So there’s been somewhat of an increase in the delivery times that we try looking about a week longer, but what we’re – what we see on our end because of the slot date strategy that we have it’s really turning into more of an advantage in this type of a period. John L. Barnes – RBC Capital Markets, LLC, Research Division: And if you needed additional equipment, is it readily available and then can you give, can you boost the numbers you have taken in those delivery dates?

Well yeah within certain ranges we can. John L. Barnes – RBC Capital Markets, LLC, Research Division: Okay, so minimal impact of the timing there. And then I guess you know going back to the fleet age, just given the forecast to grow at your full year leased fleet this year you know if you were to hit that forecast to growth level, where do you think the age of the fleet is going to be at year end and how do you compare that versus the goal?

We would be really close, right. We’re going to be in the 41, 42 range which gets us really close to where we went. I figure this thing will likely stabilize somewhere in the first or second quarter of next year and we’ll be really close by the end of this year. John L. Barnes – RBC Capital Markets, LLC, Research Division: Okay. And then should we then begin to see maybe a little bit stronger free cash flow generation because you won’t be – you know I guess what I’m asking is you know you are buying new equipment obviously to you spoke to new leased customers, you’ve gone through kind of a de-ageing process in some of your other equipment. Does that result in a little bit better free cash flow generation at that point, or do you I guess the high class problem would be that the lease business is growing so fast that it doesn’t right, am I thinking about that right?

Yes, yes John. This is ours -- would expect as the replacement cycle really starts to normalize we would spend less on that. We still have that growth element we’ve been talking about, but even that should start to abate somewhat as we’re starting to replace new technology. So you have that right, you would start to see that it doesn’t the replacement piece drop. Now we are obviously hoping that we could sell a lot of new leased vehicles into that so we’re going to spend a lot of growth capital on that. And then the other wild card you always had to factor is in rental, you know where we’ve kind of moved that depending on what’s happened in the market at that time. John L. Barnes – RBC Capital Markets, LLC, Research Division: Okay, and just given the utilization on the rental fleet, are there any further concerns about the age there you are comfortable with, with where you are in terms of the fleet age there?

John, this is Dennis. We are comfortable with where it’s at right. John L. Barnes – RBC Capital Markets, LLC, Research Division: Okay. Again, nice quarter guys. Thanks for your time.

Bye, bye. John L. Barnes – RBC Capital Markets, LLC, Research Division: Thanks.

Thank you. The next question is from David Ross with Stifel. David G. Ross – Stifel, Nicolaus & Co., Inc., Research Division: Good morning, gentlemen.

Good morning, David. David G. Ross – Stifel, Nicolaus & Co., Inc., Research Division: A couple of years ago really to the last few years you have talked about your customers when they renew their contract in full service lease don’t always get the same number of trucks, so say in 2007 they signed up for 12 trucks maybe when they renewed they only got eight or ten. Are you still seeing that lower level of replacement from existing customers when they renew or they are now renewing at the same amounts in terms of trucks, is it old contract or you are actually seeing it shift to an increased number?

Yeah I still think we haven’t got David what you see in the – the customer that had 10 needs 11. I think you see in them more likely to renew. So that could prove significantly from previous years, but there is kind of rising tide of every 10 truck fleet meeting in other ones, you know I don’t think we are there yet and I’ll let Dennis kind of elaborate on that a bit.

Yeah the other thing David is obviously a lot of our key customers will utilize our rental fleet to flex with capacity needs that they have and then they are making the trade off all the time. You know once the demand is sustained and they are renting all the time back to a previous question I answered that you are making the trade off between rental and lease and to make sense to go to lease. So we are kind of at the point now where I’d say it’s pretty flat, you know. A customer when they’re renewing its flat, but then they are using a rental fleet to flex, and then overtime making that trade-off into a more economical lease unit. David G. Ross – Stifel, Nicolaus & Co., Inc., Research Division: It’s helpful. And then on the used vehicle side why has truck pricing been so much stronger than truck pricing in the past couple of years and again in the first quarter?

Yeah, I think there’s a couple of things going on there, one is the shift from wholesale to retail. You know we talked about with inventory levels coming down we were going to start to work more on the retail channel and less the wholesale. So that’s given us about half of that boost and then the other half is just the markets is up. David G. Ross – Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then last question is just on dedicated. Very strong enough 12% X auto, can you talk about how that 12% growth breaks down in terms of new business wins or pricing was it maybe existing customer growth?

John.

Yeah sure. Well its – the 12% more than 12% its coming from new wins and then there are some amounts that crops up in terms of lost business every year. So and what we’ve been saying for the past more than one year our dedicated product is very attractive and the pipeline is strong and dedicated and our product is very attractive and so we have a very good win rate and a very good pipeline. And so we are seeing and we’re seeing that continue and accelerate. David G. Ross – Stifel, Nicolaus & Co., Inc., Research Division: What about pricing on the average dedicated contract. Is that up a percent year-over-year as well?

I’d say the margins on the contract is about stable. David G. Ross – Stifel, Nicolaus & Co., Inc., Research Division: Okay, thank you.

Yeah.

Thank you. The next question is from Thomas Kim with Goldman Sachs.

Can you please check your mute button? Thomas Kim – Goldman Sachs: Sorry about that. Yes, with regard to your conversations with customers, can you just describe how some of this are evolving with regard to the attempts to convert rental to lease?

The attempt to convert rental customers to lease, yeah those are ongoing discussion everyday. And you know typically its customers are coming in for what we call a lease extra. It's a lease customer who has an extra unit they're using seasonally. As was mentioned earlier sometimes that seasonal use of extended for a longer period of time and in times of uncertainty, but typically it’s just part of the normal sales process. You know our lease account manager will be in there talking on, the lease account manager will know how many vehicles they are renting and will talk to them if there are opportunities to convert them. So I would say, as Dennis mentioned, in this environment, there is more discussion and more opportunities around that. Thomas Kim – Goldman Sachs: Okay. But have they been sort of trending, those discussions generally been trending more favorably, just given the increased sort of market dynamics presently. And then to some extent a view that the economy does look like its maybe a little bit better going forward and with that increased confidence with the economy, there’s more sort of -- inclinations to lease instead of rent?

, : Thomas Kim – Goldman Sachs: Okay, thanks. And I want to ask a question with regard to what you’re seeing with regard to the OEMs. Obviously, the new orders have built up. There seems to be a backlog building. And as we look a little bit further forward, should we be concerned about the eventual deliveries of these trucks. And is there a typical sort of timeframe in which the new order activities sort of lags in terms of the impact – potential impact on FMS?

,: Thomas Kim – Goldman Sachs: Okay. If I could just ask a follow-on to that, to what extent of the order book are you able to sort of parse out and sort of figure out what might be replacement versus growth CapEx?

You’re talking about for the OEMs or for…? Thomas Kim – Goldman Sachs: Yeah, on the OEM side.

Yeah, well, I think the OEMs have been saying the majority of their stuff still continues to be replacement. I don’t think that we’re seeing an environment where the overall truck fleets have grown significantly. That’s the one that we’ve talked about. You probably have to see a GDP growth of – we used to think it was 2, it’s probably more like 3 or 4 because of all the efficiencies that go into the system and the miniaturization of product over time, you need more GDP growth to see the truck fleet population really rise significantly. Thomas Kim – Goldman Sachs: All right. Well, thanks for the detail.

Okay.

Thank you. The next question is from Justin Long with Stephens. Justin Long – Stephens Inc.: Thanks. Good morning. And congrats on the quarter.

Thank you, Jeff.

One of the items we heard about from another large dedicated provider in their first quarter print was that they faced the headwinds in dedicated due to issues finding drivers. Is this something that you’ve dealt with in the quarter as well, and going forward do you think that driver shortage in the industry could be a limiting factor to growth in your dedicated business?

Actually, I think there is a driver shortage; there has been for some time. As the economy strengthens, it’s going to get a little worse. I think it’s a reason to outsource and I think it’s driven some part of our growth. It’s hard to be sure and there’s a lot of issues that cause private fleet operators to decide to go with dedicated but that’s certainly one of them. A lot of the customers we’re talking to now in our pipeline and the recent wins have had trouble recruiting drivers. We think it’s a strength we have. So, yeah, it’s a challenge that everyone faces but that we view as a strategic benefit that should help drive growth.

Yeah, I think, Justin, just to add to that, I think that’s consistent with what you hear on the FMS side, the more challenging what we do becomes, the better it is for us because people are – you know, we specialize in it. People who are trying to do it on their own as a side business are going to struggle and gives us an opportunity to sell our outsourcing value props. So whether it’s driver recruiting or tech recruiting or the new engine technology or additional regulation, those are all – those tend to be over time favorable for outsourcing.

Right. And I guess I’m familiar with kind of that trend in outsourcing and how the driver shortage could help that but is there something specifically that maybe differentiates your ability to get drivers versus other dedicated providers in the market that could explain why you maybe didn’t see this issue in the quarter and someone else did?

I can’t speak to our competitors. We are one of the larger – we are not the – we are one of the largest players if that not the largest, and we have a long history. We have very low turnover. We think we’re good at dealing with drivers. A lot of the business we win is coming from private fleet conversions. So it’s not like we’re trading customers back and forth with our largest competitors. I think we’re all seeing this huge market of private fleet operators start to consider dedicated for a variety of reasons and driver shortage is one of them.

Okay, great. That’s helpful and maybe this one last one, sticking with the dedicated theme. When you think about your opportunity to shift customers from a full service lease to a dedicated contract, you’ve talked about around 2000 customers where you think it would make sense for that transition. I wanted to ask about the size of those customers you’re targeting. Do those tend to be the larger fleets in your customer base or would they be more kind of in line with the size of the average full service lease customer?

Yeah, it’s full range. My partner here sitting next to me has been really good at working with –together at combing through their customers and their prospects who’ve taken different approaches to different types of customers, including segmenting them by size. And we’ve been finding that there are great opportunities with very large fleet and you know lot of good project opportunities that are big and also a lot of medium sized and then even small deals. And we’re just taking different approaches and we’re trying to segment the market and attack all of them.

Okay, great. That’s good to hear. I’ll leave it at that. I appreciate the time.

Okay, thanks Jeff.

Thank you. The next question is from Art Hatfield with Raymond James. Arthur Hatfield – Raymond James & Associates, Inc.: Hey, morning everyone. Most of my questions have been answered by now. But just one quick one, I think this is for Dennis. When you talk about private fleet conversion and/or whether it’s maybe conversions from a customer who did their own maintenance converting to you or full service lease, is there any time where – how do we think about earnings from that I guess? Are those immediately accretive or do they take time to ramp that business up where it’s maybe two quarters out before you see the full accretion from that opportunity?

Art, let me try to answer it this way. First, you’re getting in the door with a lot of these private fleets. You know, a lot of time it’s not initially just with the full service lease, we’re coming in and you know let’s suppose their issue is with maintenance, the new technology or technician shortages that exist. We’re coming in and solving those problems initially, and those are accretive immediately. And just like we talked about (indiscernible) vehicles that we touched in Q1 for on-demand maintenance that gets us in the door. And once we’re in the door and we get to know the customer, they get to know us, then we’re talking contract maintenance. In fact, the large customer that Robert talked about earlier that we just signed up for contract maintenance, believe it or not, we got in the door talking on-demand and it led to contract maintenance. And who knows, pretty soon, you’d say, hey, why not full service lease, why not dedicated. So to answer your question, it’s accretive pretty much from the get-go with these deals, but we’re getting in the door. What I’m trying to say is, it’s not just with full service lease, we’re coming in with what we call them on-ramps, various low commitment products where we can get in the door and really allow the customer to get to know us. And then from there showing the multiple value-added services that we have to sell them up. Arthur Hatfield – Raymond James & Associates, Inc.: Right. That’s helpful. One last thing and you’d mentioned, you guys had mentioned the strong order rates that we’ve seen in the last several months, have your lead times to get trucks changed at all and the ability to get trucks in a short term?

Yeah I already mentioned earlier. It is very little, infact about maybe seven days slight shift. We have secured slot dates with the OEMs, so those big states firm even as business picks up and we’re able to fill the slot dates with the sales that we bring in. Arthur Hatfield – Raymond James & Associates, Inc.: Did your relationship -- do you think as we move forward is your relationship or your position with the OEMs maybe create a potential kind of I don’t know if I want to use the term competitive advantage, but something that you can help view in the sale process for a fleet conversion potentially?

There is no doubt because we’re – typically when lead time starts to stretch out we have the advantage of the slot date that can usually get your vehicles sooner. So that does become an advantage in our market once it starts to really heat up. Arthur Hatfield – Raymond James & Associates, Inc.: Thanks. That’s all I got today, thanks guys.

Thanks.

Thank you. And the next question is from Matt Brooklier with Longbow Research. Matthew S. Brooklier – Longbow Research LLC: Hey thanks, good morning.

Good morning, Matt. Matthew S. Brooklier – Longbow Research LLC: So just circling back to a previous question on the dedicated side, you talked to your ability that the fine drivers in the market and in a pretty tight market I assume that also comes at a cost. So my question being you know driver pay, is that starting to ramp up at Ryder and is it a potential headwin that maybe could get worse as the year progresses if the market remains tighter or gets even tighter?

There were some margin headwins. You know they tend to be in areas where it’s really hard to find drivers and we have to put in either leased drivers on a short term basis or in some cases where we have to provide service no matter what we provide kind of kind of expensive say truck load service until we get a driver hired. Certainly we had a little of that in the first quarter because of some of those, because of the weather. But we do see the impact, in terms of existing accounts where there’s a lot of pressure on driver wages. We work with the account, and we work with our make sure we have market based wages and you know we have attractive jobs and we keep our turnover rates are really low, specially relative to other modes of transportation. So we work on an account by account basis and when we do have to make an increase you know that maybe a bit more than you would expect. We work with the account to pass that on. Matthew S. Brooklier – Longbow Research LLC: Okay. And how long typically is the lag between having to take up pay and it probably varies from an account by account basis. But picking up the driver pay, eating that cost and then going back to the customer and hopefully 100% of that cost.

We work to make that lag either zero or very very short because we try to get out in front of that and we start talking to accounts about the pressure you know if we see maybe a little turnover and – it's certainly – it's usually a regional issue. And so if we see some region or part of – you know some DC that they have we’re experiencing a little more pressure we’ll get out in front of that and we’ll talk to the customer who will really try and time it as close as we can. So we are not eating anything. Matthew S. Brooklier – Longbow Research LLC: Okay. That’s helpful. And then so we had a nice market on the rental side. We are growing the fleet at this point; we are growing at a little bit more than we previously thought. I guess some concern here if the market were to decelerate, we don’t want to get caught out with I guess a larger, a larger fleet. How do you protect yourself from the downside? If the rental market does desell all of a sudden you feel like you are too big. What are some of the levers that you can pull to right size the fleet?

Yeah we feel really good about what we can do. We got a centralized asset management function that’s proven to be very effective. We put that in place over a decade ago, and you know what we are doing for example when we did it back in 2012 when we faced the very issue you are describing. Matthew S. Brooklier – Longbow Research LLC: Right.

Is we look at our rental fleet and we opened it up to sell our used equipment in the lease and release application and we are able to right size the fleet in three or four months by not back filling the unit. Today, what we do is we allow our lease sales force to sell the used equipment out of rental but then we backed over it immediately. So what we do is we shut off the backfill and we would continue to then sell into the lease application. In addition we turn up the out servicing more for older units that we have. As Robert mentioned earlier, right now we are expanding the fleet by taking units coming off a lease and putting them into rental. And you know we obviously wouldn’t do that, instead we’d outservice the units and outservice older units within rental. So we feel really good about our ability to match supply with demand and to respond to equipment.

And I guess just to add to that, I wanted to be clear that we are not buying more units in – and rental. We are simply redeploying some units from other applications into rental. And as Dennis mentioned we have numerous avenues to get out of vehicles and bring that fleet count down if the market were to turn. Matthew S. Brooklier – Longbow Research LLC: Okay. And just a follow up. When you guys got a little bit over extended in rental in 2012, were you buying new equipments or were you doing what you are doing now?

Yeah we had placed a very large order for rental equipment that year and unfortunately when the market turned, we had just placed the orders and they were all committed and coming in. The timing wasn’t very good at when that happened, it happened in February. So we are past that timeframe, we certainly don’t have an order anywhere near the size we did back then and this uplift in fleet is just redeploying that equipment. But I would tell you we learned during that process we turned some additional avenues for getting out of rental vehicles one of which Dennis mentioned about a role robust program to leasing vehicles out of our rental fleet which we’re comfortable that we can read, we can use again it was very helpful in 2012. Matthew S. Brooklier – Longbow Research LLC: Okay, that’s what I was getting at. I appreciate the time.

Thank you.

Thank you. Our final question today is from John Mims with FBR Capital Markets. John Mims – FBR Capital Markets: Hey thanks. Just one follow up and I was certain you were looking at you know when people talked about your relationship with OEMs and the ability to grow the leased fleet. You know when you reference the shift of deferrals for more outsourcing and kind of the pie of outsource market growing and you provide some numbers in your -- but if I do a back of [envelope] math I get like a 1% shift from private ownership into leased fleet would equate to about a 20,000 truck growth number for you. And those numbers get pretty astronomically big fairly quickly. And is that are you seeing that much of a shift where you could be talking in terms over the next couple of years in the 20, 30, 40,000 truck growth just based on that outsourced opportunity or is it coming much slower than that?

Yeah I think the way to look at, it’s actually larger than what you stated. 1% is 7.4 million commercial vehicles in the U.S. So 1% is actually 74,000 vehicles. So we don’t need to move the market a whole lot in order to really significantly grow the business. So yes, what we see as the long term opportunity is that and we did get – so one more vehicle out of a 100 would bring us a fleet growth of over 50%.

Yes. I would think in that 74….

Within, what’s already outsourced. John Mims – FBR Capital Markets: Right. So I guess with the background I mean from a network facility standpoint from an OEM ordering standpoint I mean, can you if the opportunity was there for you know lets say 70,000 trucks. I mean, is that something that’s obviously much larger than your fleet now. So is that in growth that you can absorb, you know in any sort of realistic fashion?

We believe we have capacity with our current network, correct me if I’m wrong – 50 to 60,000 vehicles that we could absorb with the current network without making significant investment in more facilities just technicians. You are just adding technicians and adding shifts. So obviously exactly how that kind of plays out and we’ll see as we get there, but the point is we got plenty of capacity of really growing the fleet from the level that we are at now. John Mims – FBR Capital Markets: Right, absolutely. Okay cool well thanks for the clarification. Again, great quarter.

Thank you.

Thank you. I would now like to turn the call over to Robert Sanchez for closing comments.

Great, thank you. Well we are at the top of our hour. I think we answered. We got a lot of calls, so that’s good news. And thank you for being on the call and have a safe day.

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