Good morning ladies and gentlemen and welcome to Kelly Services fourth quarter earnings conference call. All parties will be on listen-only until the question and answer portion of the presentation. Today’s call is being recorded at the request of Kelly Services. If anyone has any objection you may now disconnect at this time. I would now like to turn the meeting over to your host, Mr. Carl Camden, President and CEO. Mr. Camden, please go ahead. Carl T. Camden – President and Chief Executive Officer: Great, thank you, John. Good morning and welcome to Kelly Services 2007 fourth quarter and year end conference call. With me this morning to review our results is Mike Debs, our acting CFO. Let me start with a brief earnings update, recap our strategic progress, make a few comments on the current US economy, and then take you through our fourth quarter operating results by segment. Following that Mike will provide additional financial commentary on the quarter and guidance for the first quarter of 2008. Afterwards noting the limited visibility on the current economic climate, I’ll talk a little bit about our perspective on how 2008 is beginning to unfold, and then we will open the call for questions. Let me remind you that any comments made during this call including the Q&A may include forward-looking statements about our expectation for future performance, actual results could differ materially from those suggested by our comments, and please refer to our 2006 10-K for a description of the risk factors that could influence the company’s actual future performance. Now in addition we also make reference to non-GAAP performance measures. Please refer to the schedules attached to our press release for information on those performance measures and the comparison to our reported financial results. The fourth quarter capped…

Thank you. (Operator Instructions) And first go to the line of T. C. Robillard, with Banc of America. Please go ahead. Thomas C. Robillard – Banc of America Securities: Great, thank you, good morning guys. Carl T. Camden – President and Chief Executive Officer: Good morning. Thomas C. Robillard – Banc of America Securities: I just wanted to talk a little bit about the cost savings that you are going to expect from the Americas restructuring. Now that you guys have completed that can we expect that cost savings to be linear? I know you said, I believe, that it was $500,000 benefit that you got in the fourth quarter. Can we expect that tick to have a linear progression to kind of that annual $2 million level as we go through ’08? Or will it be a little front-end loaded, back-end loaded, just trying to get some granularity there? Carl T. Camden – President and Chief Executive Officer: It will be fairly linear. Nothing is ever perfect, T.C., but it will be pretty close. Thomas C. Robillard – Banc of America Securities: Okay and then just on following up on that, will ’08 have a full kind of $2 million in cost savings in the Americas Commercial? Carl T. Camden – President and Chief Executive Officer: Yes, that’s what we said and we expect it to be so. Thomas C. Robillard – Banc of America Securities: Okay, great, thanks guys, I’ll get back in the queue. Carl T. Camden – President and Chief Executive Officer: Good, no problem.

And next to the line of Toby Sommer, with SunTrust, please go ahead. Carl T. Camden – President and Chief Executive Officer: Hi, Toby. Toby Sommer – SunTrust Robinson Humphrey: Hi, Carl, I was wondering if you could give us some more commentary about the somewhat improvement, I guess, in the [euro rate] declines within the technical businesses. And to what extent your own internal actions are helping provide that improvement or is the market helping out. If you could just give us a little more color there. Carl T. Camden – President and Chief Executive Officer: The technical businesses, Toby, if you followed us, we started telling you on the first quarter that we were underperforming in the market and that we had gotten behind the curve on investment and recruiters and so on. And you have seen us now talking steadily about showing the improvement. I think that, I’m not certain that the overall marketplace for technical is improving as much as it is on the professional sides of the business. And I believe that what we are doing is primarily the case of us catching up to where the rest of the market is as opposed to generic improvement. Toby Sommer – SunTrust Robinson Humphrey: Okay, thank you. You mentioned that the UK business performed quite well for you. To what extent are you taking some share, is the market growing to an equal rate to the growth rate that you achieved in the quarter, or is Kelly perhaps exceeding the market there? Carl T. Camden – President and Chief Executive Officer: Yes, at minus 3% I doubt that we are exceeding the market in the UK Ireland side. I think what you see from the savings is a better handle on expenses. And if you notice while we have declined 3% in the UK Ireland overall we have improved 15% on the professional technical side. So what you are really seeing in Kelly’s case is a repositioning of the business mix away from some of the lower end parts of the commercial business and pretty successfully moving into the upper end parts of the professional and technical side. Toby Sommer – SunTrust Robinson Humphrey: I’m sorry. You’re right, Carl, I was referring to the professional and technical side in the UK where you did have good growth. Carl T. Camden – President and Chief Executive Officer: Yes, sorry. On the professional and technical side I don’t, we’re too small still to be having a major impact on share. In this case I view it as more a result of our opening new offices and with the renewed focus on it. Not particularly it’s signaling a strong level of growth in the UK market. Toby Sommer – SunTrust Robinson Humphrey: Thank you very much for the call.

Your next question is from the line of Michel Morin with Merrill Lynch, please go ahead.

Yes, good morning. Carl T. Camden – President and Chief Executive Officer: Good morning.

Two quick ones, first, gross margins apparently were impressive. I think it’s the highest gross margin rate since 1999. I was wondering if you could give us a bit more color. I think that you mentioned perm fees and worker’s comp. Specifically as we think about 2008, what kind of expectations would you have there specifically on those two items? And then secondly, in terms of the country results, I noted a bit of a deceleration in Mexico. And also if I look at the year-on-year numbers in Norway, just wondering what kind of dynamics that you are seeing in those two markets. Thank you. Carl T. Camden – President and Chief Executive Officer: Starting with the gross profit side, I’m hoping that if you see a pick up in the US in general that we would begin at some point begin to see an improvement in both the temp-to-perm and direct hire side on the Americas Commercial. Don’t expect any particular deceleration in perm placement fees in Americas PTSA. That’s doing fine. And there was nothing that would indicate any deceleration on the perm placement activities outside of the international segments. In terms of worker’s compensation, we’re not seeing any particular decrease in experience. Claims aren’t increasing. Things that you would typically look for by the way seeing that a recession is coming aren’t happening. In terms of the worker’s compensation type of activity, you are not seeing an acceleration in claims per thousand [FTE’s], that’s not taking place. A chunk of our worker’s compensation improvement was from better mix, better experience. A chunk of it was from lower cost estimates for past claims. For sure we think that the current experiences will continue and improve. And how past claims play out is always more uncertain but we are not expecting any dramatic decline in that area. In terms of Mexico, we have seen a spreading of the slowing of activity, the declining of the US economy affecting the Americas in general, the 6% decline that we have seen in cost in currency in Mexico, actually about the same level of decline that we have seen in the commercial business inside the United States. And I have to tell you to be honest that I don’t have any particular answer for what’s taking place in Norway. Although on a cost in currency basis the sales were still up in Norway 16.5%, and for the year it was 26%. Why the deceleration, I’m not particularly certain.

Okay, and then, Carl, just going back on the gross margin part of the question, what about state unemployment insurance? Have you received kind of the new rates for this year? I’m assuming that you have already at this point. Are you seeing a tick up in the rates there? Michael E. Debs – Interim Chief Financial Officer: We haven’t received all of the rates yet, but what we are seeing is that we would expect unemployment insurance to continue to come down in ’08.

Really? Michael E. Debs – Interim Chief Financial Officer: Like we have seen in ’07, not significantly but we continue to expect to see some improvement. Carl T. Camden – President and Chief Executive Officer: We are not experiencing high unemployment rates in the country as a whole in spite of all of the talks of recession, and Kelly in particular has not been experiencing high activity there either.

Okay, great, that’s very helpful. Thank you. Carl T. Camden – President and Chief Executive Officer: Very good.

Your have next on the line Ashwin Shirvaikar with Citi. Please go ahead. Carl T. Camden – President and Chief Executive Officer: Hi, Ashwin. Ashwin Shirvaikar – Citigroup Smith Barney: Hi, how are you? Good morning, nice quarter. Carl T. Camden – President and Chief Executive Officer: Thank you. Ashwin Shirvaikar – Citigroup Smith Barney: My question is on drivers, your EPS drivers backwards seems to imply, at least for the first quarter you have a modest step back in operating margins. Could you just sort of go through the push and takes there in some detail if you don’t mind? Carl T. Camden – President and Chief Executive Officer: We haven’t commented on operating margins in the first quarter. We would expect for the year to have improved operating margins. First quarter, as Mike was talking about is just always a very strange quarter given low volumes, impacts on tax rates, and so on. So not getting into the push and takes on operating margin in Q1 for us, you face a lot of uncertainties still inside the United States. We are not particularly forecasting any improvement, and with a weak US market, we think that we will still deliver good earnings with an improvements coming out of international, is how we see the first quarter playing out. Ashwin Shirvaikar – Citigroup Smith Barney: And for corporate expenses in the quarter seem to be up. What part of that was one-time because of the restructuring, or was this just a higher expense case? Carl T. Camden – President and Chief Executive Officer: Corporate expenses were down 2% for the quarter so I am not certain what you’re, in a year-over-year basis? Ashwin Shirvaikar – Citigroup Smith Barney: Let me revisit that number, I may have something wrong then. One last question if I can sneak it in, the tax rate I find we have some questions about the first quarter, was it [less] of here? Could you clarify what you said, I missed that? Michael E. Debs – Interim Chief Financial Officer: We expect the tax rate in the first quarter to be higher than what it will be for the full year. That is usually the case for us. Where we do have losses outside of the US that we can’t deduct, those usually occur more in the first quarter than later in the year, which drives our first quarter tax rate up. We expect it to be similar to the first quarter of the prior year though. Ashwin Shirvaikar – Citigroup Smith Barney: Got it. Michael E. Debs – Interim Chief Financial Officer: Okay, thank you.

Our next question is from the line of Ty Govatos with C. L. King. Please go ahead. Carl T. Camden – President and Chief Executive Officer: Hi, Ty. Ty Govatos – C. L. King & Associates, Inc.: How are you? Carl T. Camden – President and Chief Executive Officer: Good, great, yourself? Ty Govatos – C. L. King & Associates, Inc.: Okay. Could you kind of give us a [timeline] on what the light industrial market has been doing in the US? Is it still, I know in the second and third quarters was kind of stable. Is it still stable sequentially? Carl T. Camden – President and Chief Executive Officer: I do not have those numbers in front of me. There has been no significant variation that I’m aware of, and I think that I would have been, in the light industrial segment inside in the United States. Ty Govatos – C. L. King & Associates, Inc.: Could you elaborate on the 6% decline, in what areas most of those come from, clerical or otherwise? Carl T. Camden – President and Chief Executive Officer: Yes, don’t have those numbers here with me and I would say that except for government and education type of businesses, which we have been moving more into as recession resistant. We see it pretty much across the board in the commercial area. And it has always been a little more concentrated in light industrial than it has been elsewhere, but no particular changes in the [timeline] there. Ty Govatos – C. L. King & Associates, Inc.: Okay, the branches that you closed, there was an effort to consolidate revenues. Have you been successful with that keeping a lot of the revenues of the branches that were closed? Carl T. Camden – President and Chief Executive Officer: Yes. Ty Govatos – C. L. King & Associates, Inc.: Thanks an awful lot, I appreciate it, very nice quarter. Carl T. Camden – President and Chief Executive Officer: Thank you, Ty.

And a follow-up from T. C. Robillard, please go ahead. Thomas C. Robillard – Banc of America Securities: Great, thanks. Carl can you give us a sense, I know that you touched on it a little bit, but just wanted to kind of build on some of the key European markets. And I’m sure that you guys have been reading the same papers that we have all been reading with respect to mounting fears about a major slow down in Europe, even risk of a recession increasing there. I know that some of these markets aren’t that big for you relative to kind of Kelly’s revenues, but just if you could like France, Germany, and maybe some other. You guys definitely cover the UK well, but any other kind of continental Europe economies that you could shed some light on would be helpful. Carl T. Camden – President and Chief Executive Officer: Sure, in terms of France, we always tell people on the calls that our presence in France is smaller than everybody else’s but also dramatically different. We have almost no presence in heavy manufacturing, tourism, a lot of the areas that comprise the big bulk of the business in France. So we should never be used as an indicator of what is taking place in France. We are in the upper end of the business in France, heavy in professional technical, heavy in upper end clerical, etc. And for us, France has been a, was a good market. In the fourth quarter it was up 6.7% in cost in currency, better than our year-to-date performance with some acceleration. And we also said in the conference call that margins were increasing. Having said that you are much better off relying on Manpower [inaudible] to get a handle on what…

And we go to the line of Kevin McVeigh, with Credit Suisse. Please go ahead. Kevin McVeigh – Credit Suisse First Boston: Hey, Carl and Mike. Carl T. Camden – President and Chief Executive Officer: Hey. Kevin McVeigh – Credit Suisse First Boston: I know that the French is very small for you, but you did mention that the margins were up. I wonder what was driving that. Carl T. Camden – President and Chief Executive Officer: For us, its mix shift and increased perm fees. Kevin McVeigh – Credit Suisse First Boston: Okay, and then just in terms of I know that you are not going to give full year guidance, was there anything in particular that drove that decision more than macro certainly in the US versus Europe overall, or just what drove that decision? Carl T. Camden – President and Chief Executive Officer: We had primarily driven by just the decrease in visibility, but also an awareness that the majority of companies now have shifted in terms of IR communication to quarterly guidance, and not providing annual guidance. But whether that’s a good practice or not, or in particular a good practice now to given non-predictability in markets looking forward. Kevin McVeigh – Credit Suisse First Boston: Okay, and thank you very much. Carl T. Camden – President and Chief Executive Officer: Okay.

And you have a follow-up from Toby Sommer, please go ahead. Toby Sommer – SunTrust Robinson Humphrey: Thanks, Carl. This is to dovetail on that last question, in terms of visibility in the past you have talked about the visibility of the consumer products and your product launches, the communication that you get from your clients, call center shifts and the willingness of them to plan for classes in training further out in the future. Has that visibility in those two categories contracted? Carl T. Camden – President and Chief Executive Officer: What we found happening over last year is I looked at this because we told you repeatedly that customers weren’t particularly shying away from their plans to use temporary staffing. What would happen though is that a large lay-off of one particular restructuring at eight particular clients was enough to offset the small but anticipated growth in several tens of clients. So that we basically hovered in the commercial space in that minus 6% space for several quarters there. The customer’s forward view is still one of needing more help. It’s still one of scheduling classes out about the same periods of time that they always have, it’s still talking about projects. We just note that the disruptive effect of the sporadic, large restructuring in reductions in staff that take place in some of the large companies. Toby Sommer – SunTrust Robinson Humphrey: Okay, thanks. And then shifting gears to the state unemployment taxes and worker’s comp, sort of the social costs, in which states do you think that you have already got the information for 2008 rates? Has there been increases? And in which states have there decreases? Carl T. Camden – President and Chief Executive Officer: We don’t have that information here. I can just tell…

Our next question is from the line of [Andrew Phelps] with UBS. Please go ahead. [Andrew Phelps] – UBS: Yes, thank you. I have two questions. First, on Germany, I know that you did an acquisition there earlier in the quarter. I was just wondering if that had a fourth quarter impact and if you can qualify that? And then secondly, if you can distinguish between the trend that you see in temp and them perhaps perm conversions to your large markets in the US and UK. Thanks. Carl T. Camden – President and Chief Executive Officer: You do the Germany and I’ll… Michael E. Debs – Interim Chief Financial Officer: The Germany, I believe that we completed that acquisition late in November. So it had maybe one month, but remember December is an unusual month with all of the holidays. So not much impact on the quarter. Carl T. Camden – President and Chief Executive Officer: Both on the fee based business so it wouldn’t have a whole lot of impact on the top line results there. In terms of temp to perm conversions inside first the US, we’ve said that they were down inside US commercial. They are still down and they have been down about roughly the same rate for several quarters here, neither accelerating or nor decelerating. Inside the professional space, that tends to be more of a placement. Professional technical tends to more of a placement market than it is a temp to perm market. And there we see very nice fees, but that is primarily from perm placement rather from conversion. And inside the UK, I’m not aware of any particular acceleration or deceleration in that trend. [Andrew Phelps] – UBS: Okay, thanks.

(Operator Instructions) And we do have a follow-up from Michel Morin, please go ahead.

Yes, thanks. Carl, I think that you updated us on PeopleSoft in the UK, I was wondering if you can update us kind of on the roll-out globally? Carl T. Camden – President and Chief Executive Officer: We are about half way through putting out the modules that we had planned. We are running slightly behind schedule. That will probably slightly increase or increase the cost as we have a few more months. We are sorting all of that out still and we will put that in to our 10-K.

Okay and can you remind us of the cost savings that you were anticipating to get from this? Carl T. Camden – President and Chief Executive Officer: We haven’t put that out there yet and don’t know when we will do that. But for the moment, whether you achieve cost savings or not, having an up to date payroll system and so on is critical. Our country is like we said in the UK, we expect to see efficiencies. In other markets, it will just be a case of replacing outdated systems with a current system.

Okay, and then in terms of the actual spending on this year, what are those numbers? Michael E. Debs – Interim Chief Financial Officer: We’ll update that on the 10-K. I don’t have that right in front of me right now.

Okay. And then separately, there have been new line items on the balance sheet in terms of long-term debt you mentioned a refinancing in Japan. Is this just kind of an opportunity you had or is there a thinking that you do want to go in forward on this business with more long-term capital, and perhaps continue with buy-backs and show more willingness to take on financial leverage? Carl T. Camden – President and Chief Executive Officer: We have indicated in past conference calls that we were not debt adverse, that we were willing to employ more leverage on the balance sheet. You have begun to see some activities there, we will do it only where it makes sense. But also the opportunity in Japan was a particularly good opportunity for us and we took advantage of that.

Okay, and then just finally M&A, I think there were five deals that you had done last year with the pipeline looking for ’08, is your appetite still there considering the macro environments? Carl T. Camden – President and Chief Executive Officer: I won’t comment on the appetite, but I expect that ’08 will have a fair amount of activity in it as did ’07.

Great, thanks very much.

We do have a follow-up from Kevin McVeigh, please go ahead. Kevin McVeigh – Credit Suisse First Boston: Carl, could you just clarify what the organic growth in the fourth quarter was and in terms of the first quarter is that 4% is that organic or does that include any benefit from the acquisitions? Carl T. Camden – President and Chief Executive Officer: There is a continuing stream of benefit from acquisitions that’s in there. No, we have not separated out what would be the equivalent of the same branch or same store sales year-over-year. So I don’t have that forecasting type of number at my fingertips. Michael E. Debs – Interim Chief Financial Officer: We have looked as to whether the acquisitions have had a significant impact on our growth rate and it did not. Kevin McVeigh – Credit Suisse First Boston: Okay, thank you very much. Carl T. Camden – President and Chief Executive Officer: Thanks.

And we have a follow-up from Ashwin Shirvaikar, please go ahead. Ashwin Shirvaikar – Citigroup Smith Barney: Hi, Carl, I just wanted to go back to the buy-back question, as to understand what is your appetite for continued buy-backs, especially given the sort of the buy-back thing for Kelly because of its ownership structure? You had five million shares out there and you bought back 1.7 million. Carl T. Camden – President and Chief Executive Officer: And we still have authority to exercise on the, we still have authority yet to run out on the buy back program. I expect that we will use that if market conditions don’t change. I think that given the stock price below book value we will be active participants. Whether we will go back to the board for more authority, we will post that will depend upon both where the stock price is, its valuation, as well as our view on the macro economy at that time. Ashwin Shirvaikar – Citigroup Smith Barney: But this is all going to be open market for you. Carl T. Camden – President and Chief Executive Officer: Correct. Ashwin Shirvaikar – Citigroup Smith Barney: Okay. Thank you. Carl T. Camden – President and Chief Executive Officer: Yes.

Mr. Camden there are no further questions in queue. Carl T. Camden – President and Chief Executive Officer: Thank you all and we look forward to talking with you next quarter.

Ladies and gentlemen that does conclude your conference for today. Thank you for your participation. You may now disconnect.