Bob Brunn – Vice President of Investor Relations and Public Affairs Greg Swienton – Chairman and Chief Executive Officer Robert Sanchez – Chief Financial Officer Anthony Tegnelia – President of Global Fleet Management Solutions John Williford – President of Global Supply Chain Solutions

Dave Ross – Stifel Nicolaus Jon Langenfeld – Robert W. Baird Ed Wolfe – Wolfe Research John Barnes – BB&T Capital Markets Art Hatfield – Morgan, Keegan & Company, Inc. Alex Brand – Stephens, Inc. Todd Fowler – Keybanc Capital Markets

Welcome to the Ryder System, Inc. fourth quarter 2008 earnings release conference call. (Operator Instructions) I would now like to introduce Mr. Bob Brunn, Vice President of Investor Relations and Public Affairs for Ryder. Mr. Brunn, you may begin.

Thanks very much. Good morning, and welcome to Ryder's fourth quarter 2008 earnings and 2009 forecast conference call. I'd like to begin with a reminder that in 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 Robert Sanchez, Executive Vice President and Chief Financial Officer. Additionally, Tony Tegnelia, President of Global Fleet Management Solutions and John Williford, President of Global Supply Chain Solutions, are on the call today and available for questions following the presentation. With that, let me turn it over to Greg.

Thank you, and good morning, everyone. Today we'll recap our fourth quarter 2008 and full year 2008 results. We'll review the asset management area and provide our 2009 outlook for the business and after our initial remarks, we'll open up the call for questions. And we do have a lot to cover today, so let me get right into the overview of our fourth quarter results on page four. Net earnings per diluted share were $0.19 for the fourth quarter of 2008, as compared to $1.24 in the prior year period. EPS in this year's quarter included a $0.90 charge related to restructuring and other items. The restructuring item included charges related primarily to the previously announced discontinuation of supply chain operations in South America and Europe, as well as workforce reductions mainly in the United States. EPS in the prior year, in '07, included a $0.06 benefit related primarily to changes in Canadian tax laws. So excluding these items in each year, comparable EPS was $1.09 in the fourth quarter 2008, as compared to $1.18 in the prior year. Comparable EPS came in better than expected in our December commentary when we anticipated being at the low end of our forecast range of $1.03 to $1.13. The better-than-expected performance was mainly due to lower safety and insurance costs, and a lower tax rate. Total revenue for the company was down by 18% from the prior year. Total revenue reflects the impact of the previously announced change from gross to net revenue reporting for subcontracted transportation with one supply chain customer. In addition, lower fuel services revenue and unfavorable foreign exchange rate movements. Operating revenue, which excludes FMS fuel, and all subcontracted transportation revenue is down by 7%. Operating revenue was negatively impacted by unfavorable foreign exchange rates of 5%,…

Thanks, Greg. Turning to page 11, full year gross capital expenditures totaled approximately $1.3 billion up by $74 million from the prior year. This was driven by higher spending on contractual leased vehicles of $86 million partially offset by lower planned spending on transacttional commercial rental vehicles of $48 million. We realized proceeds primarily from the sale of revenue earning equipment of $265 million down by $109 million from the prior year. This decrease mainly reflects the planned reduction in units sold as a result of having a smaller used vehicle inventory. In 2007 we executed $150 million sale lease back but did not have a sale lease back in the current year-to-date period. Including proceeds from sales and the 2007 sale lease back net capital expenditures were approximately $1 billion up by $333 million from the prior year. We also spent $247 million on three fleet management acquisitions closed in 2008, Lilly in the northeast U.S., Gator in Florida and Gordon in Philadelphia as well as supply chains acquisition of CRSA Logistics. Turning to the next page you’ll see that we generated cash from operating activity of approximately $1.3 billion for the year up by $153 million from the prior years. This increase was mainly due to reduced working capital needs from improved accounts receivable collections and lower cash taxes. These increases were partially offset by a reduction in net earnings. Depreciation increased largely due to spending on contractual leased vehicles primarily from acquisitions. Including the impact of used vehicle sales we generated approximately $1.6 billion in total cash down by $109 million from the prior year. The decline was primarily due to the $150 million sale lease back in the prior year. Cash payments for capital expenditures were approximately $1.2 billion down by $83 million versus the prior…

Thank you, Robert. Page 15 summarizes key results in our U.S. asset management area. At year end our used vehicle inventory for sale was 6,300 vehicles, down slightly from the prior year but up by 1,700 units from the end of the third quarter. The increase from the third quarter is due to both seasonal outsourcing of rental units and softening rental and used vehicle demand trends. We sold 3,200 units during the quarter, down 42% from the prior year on a smaller average available inventory. As you may recall in the fourth quarter 2007 we sold a large number of used vehicles at whole sale levels in order to substantially reduce the size of our rental and used vehicle fleets. In the fourth quarter 2008 we sold fewer units but sold a larger proportion through our retail outlets where we received better pricing. Proceeds per vehicles sold were up by 5% on tractors as compared to the fourth quarter 2007 primarily due to the larger percent sold at retail prices. Proceeds per unit on trucks were unchanged versus the fourth quarter 2007. Both truck and tractor proceeds per unit however, declined by 7% to 8% from the third quarter reflecting softening pricing levels as well as a change in the types of units sold. At the end of the quarter approximately 7,600 units were classified as no longer earning revenue. This was up only by 200 units from the prior year but it was up by 2,000 units from the third quarter due to a higher used vehicle inventory. We expect our used vehicle inventories to be modestly up from current levels during 2009. Our total U.S. commercial rentals fleet in the fourth quarter was down on average by 5% from the prior year. We continued to reduce our…

We wanted to touch on our pension expense forecast due to the significant increase projected for this year. As a reminder, we froze our U.S. pension plan for most employees effective January 1, 2008. As a result most U.S. employees are not accruing new benefits under the plan; however, they retained benefits accrued prior to the termination date. We also froze our Canadian pension plan for most employees effective January 1, 2010. In 2008 our global pension expense was $3 million and we forecast this to increase to $65 million this year. The major driver of the increase was the decline in the asset value in our plans due to the overall market's performance in the latter part of 2008. The actual return on plan assets is below the assumed return and this item alone caused a $71 million increase in pension expense. A change in the discount rate, principally in our international plans, will benefit pension expense by $15 million this year. There were several other minor impacts as well with the reduction in the expected return assumption increasing expense by $5 million, and the cash contributions to the plans reducing expense by $4 million. For those who are interested we plan to publish a pension white paper in the next few days which will include much more detail related to our pension expense. The next page highlights the margin targets in each of our segments at the mid-point of their projected ranges. In 2009 on the basis of segment net before tax earnings to operating revenue we're projecting FMS margins to decline by 340 basis points to 9.7%. This is driven largely by the significant impact we anticipate from higher pension expense as well as the transactional, rental and used vehicle businesses, partially offset by cost reduction and…

On page 27, as I previously mentioned, our full year comparable 2009 EPS forecast is for a range of $2.70 to $3.40 per share. We're also providing a first quarter EPS forecast of $0.40 to $0.50 versus a comparable prior EPS of $0.96 last year. First quarter comparisons are more challenging in this softer economic environment as our earnings were relatively stronger in the first half of 2008 during a much better environment. Additionally, we expect particularly challenging comparisons in supply chain due to declines in auto production levels in the first quarter 2009. Many transportation companies have elected not to provide revenue or earnings forecasts in the current environment. We however, are continuing to provide this information due to the strength and relatively higher visibility of the substantial contractual portion of our business. As I discussed earlier on the EPS waterfall chart there is more uncertainty related to the transactional portions of our business and as a result our EPS forecast range is significantly wider than in recent years. In turning to the next page let me briefly summarize the key points in our 2009 plan on page 28. We're working to manage through the negative impact of last year's stock market performance on our pension plan, as well as the impact of the weak global economy on our transactional, commercial, rental and used vehicle businesses. As a result we're focused on implementing cost management and restructuring opportunities to address our results. Even in this soft economic and transportation environment we continue to convert new customers to outsourcing solutions with Ryder in all of our business segments. We're also strongly focused on customer retention and continuing our initiatives in the sales and marketing areas. We'll benefit from our prior acquisitions and continue to evaluate additional acquisition opportunities. The combination of organic sales and acquisitions should allow us to continue to grow contractual FMS revenue excluding the impact of foreign exchange. In Supply Chain we've taken and will continue to take steps to reduce our exposure to the automotive industry through increasing diversification of industries vertical-served. We've also increased our focus on Dedicated Contract Carriage where we see strong growth opportunities and solid margins. And finally we're taking the appropriate steps to manage our capital spending and fleet size in this soft environment. These steps will result in a continued strong balance sheet and positive free cash flow. That does conclude our prepared remarks this morning. We've covered a lot of material in today's call so I'd ask that in the interest of time that you limit yourself to two questions each. If you then should have additional questions you're welcome to get back in the queue and we'll take as many calls as we can. At this time I'll turn it over to the operator to open up the line for questions.

(Operator instructions). Your first question today is from David Ross – Stifel Nicolaus & Co. David Ross – Stifel Nicolaus & Co.: First question is on dedicate, Greg, I guess it was a little bit worse than we had expected on the revenue side. What was I guess the reason the customers did not renew? Was it customer bankruptcies? Was the dedicated operation not what they needed at this time? Could you talk a little bit more about that?

I think that you did see the earnings declines, I mean the revenue decline, but we had an earnings increase by 4% so that continues to increase. I would say that perhaps in the cases of some lost business, apart from the lost volume from the customers we retained, you have a pretty competitive environment out there. And with truckload and LTL with a lot of capacity, you can expect that there is a lot more competition and a lot more rate issues and some of that business we're not retaining. John Williford if you would want to add anything, you can.

The only thing to add to that is the – like in prior quarters, the customers we lost tended to be customers with lower operating margins than average and so in the fight in the re-bids on these customers, we weren’t as aggressive. We certainly weren’t willing to go into a loss on these customers and those are the accounts we’ve tended to lose. David Ross – Stifel Nicolaus & Co.: And then on the supply chain side, you mentioned diversifying away from auto. Currently I guess you have high tech telecom and consumers as the other sectors. Are you just beefing up efforts in those areas or are you branching out to new verticals?

We are branching out to more verticals and we’d like to have a greater presence in those, which I think is the right way to diversify. And John, if you would like to add anything?

We’re starting a retail CPG vertical and that’s where CRSA acquisition fits in. You can see the guy we hired in Asia comes out of that industry segment and we expect to hire someone to lead this vertical in the next couple months. And yes, you’re right, we are beefing up our – adding energy into coming out with new products in the existing verticals that we have that are all ready pretty strong like high tech and aerospace.

Your next question is from John Langenfeld – Robert W. Baird. John Langenfeld – Robert W. Baird: On the commercial rental side, you talk about this incremental hit to earnings in 2009 of being, what is it, $0.50 to $0.60? Could you compare that to what do you think the incremental hit was in 2008 on that one?

Tony, do you have some ballpark estimates?

John, it was more so in the 25 to 30 million range, in that if I compare '08's decline to '07. So it’s pretty much at the right-hand side of the range, it will be double in '09 versus '08 compared to what we saw in the '07 to '08 period and that’s because of the double dip that we’re experiencing now, which is much more severe than a more normal cyclical decline.

So we expect a lower fleet and some more pressure on pricing. John Langenfeld – Robert W. Baird: Can you explain or just talk a little bit about the qualitatively retention trends, extension trends, what you’re seeing with the pipeline as well on the leasing side?

I think on the pipeline we continue to see a growth but as I said in earlier calls, the pipeline is really aging because customers are deferring some of their decisions until they have some better feel of how their businesses will perform over the next four to three quarters, something in that range. As a result, we are seeing more of a desire for extensions for units to come to term. Typically our extensions are 12 to 16, 18 months and their preference is to make, in that regard, lesser of a longer term decision. So we do plan on more extensions in '09 because of that and that’s good for us during this fiscal year '09 because of what’s happening in the environment and our desire also to preserve capital . We are also moving some of our rental units to lease as well so that we more quickly adjust that fleet level to demand and those would go into lease and also preserve some capital. But the pipeline does remain strong even though they are taking a bit more time to make decisions and we would like to see more extensions in '09, which is consistent with how the customers are thinking as well.

Your next question is from Edward Wolfe – Wolfe Research. Edward Wolfe – Wolfe Research: First, on the guidance for first quarter, I mean it hit the mid range of 40 to 50. I’ve got to assume contribution margins are cut in half basically in the first quarter from, let’s call it 8.3% a year ago, down to somewhere in the 4% to 4.2% range. Is there something that’s particularly egregious that’s going on in first quarter? Is the pension expense mostly going on during that period, what’s going on with that guidance?

The pension expense is equally spread throughout the year, so it’s the same impact in each month and each quarter. It has a bigger impact in the first quarter where you generally have lower revenue earnings to begin with. We are also facing stronger comparisons especially in Fleet Management but I think if there’s probably really, really one big impact, it’s in the automotive production declines, which really hit in the first quarter. And we will be struggling to earn profitability in margins in the Supply Chain due to that in the first quarter. Edward Wolfe – Wolfe Research: That’s very helpful. The second question is, if I look on slide 22, where you kind of broke up the ups and downs. For used vehicle sales, you’ve got a $0.55 hit, which if I reverse out, is about $49 million change year-over-year and I’m just trying to understand the gain on sales for all of '07 were $39 million. So are the gains on sales going to become a negative or is this spread in other expense lines?

The gains will not become a negative. What you’re seeing there for the most part, that 50 to 60 million amount is pretty much a 50/50 split between a reduction in gains; we still will have positive gains in '09 as I had said and half of that is from reduction in gains and also half is because of our carrying cost increases. As the proceeds for vehicles decline, we re-value the inventories that we have on hand. So that’s about a 50/50 split of that $50 to $60 million but there will be positive gains in 09. Edward Wolfe – Wolfe Research: Is some of that in depreciation?

Somewhat yes.

Your next question is from John Barnes – BB&T Capital Markets. John Barnes – BB&T Capital Markets: Greg, as you’ve looked at the credit markets and given what you guys do, have you given any thought to actually hitting the debt markets? And how do you feel – the credit markets, are they open to you at this point?

I’d say that the credit markets are open to us. The commercial paper continues. The medium term notes are open to us. We still don’t like the rates. I think they’re still a little bit high. Robert, would you like to comment further?

No, I think that’s right. If we need to go out to market for a medium term note we can. We’re not too excited about the rates where our bonds are trading now, so right now, what has turned, I think more favorably over the last month or so is the commercial paper rates have come down versus where they went in September and certainly also in November. So we have gotten some help there but medium term notes are still certainly at rates that we’d rather not go out in. John Barnes – BB&T Capital Markets: And then as a follow-up to that, first, can you just elaborate a little bit on when you think you might get back in the market on your share re-purchase and if you don’t like the prices that your medium term debt's trading at right now would you consider buying some of that back instead of equity?

I think the decision to re-enter will really depend on the health and availability generally of liquidity in the marketplace and that will have a great deal to do with it. I think when we feel comfortable enough that money is freed up and the rates are good, we’ll reconsider it. That I don’t see in the near term. And Robert, if you’d like to comment further?

No, that’s right. And also in terms of buying back our own debt, in this environment that’s not something we’re looking to do, certainly as the markets are still pretty tight. Plus we do have commercial paper balances out there that we can work with. So, we do still have a lot of capacity in terms of available borrowing and that helps – that certainly helps us through the year. We don't see those balances dropping a whole lot throughout the year, so we think we’re still in pretty good shape as it relates to liquidity.

The other thing I’d mention is that we’d still want to have some capability for appropriate acquisition. We want to maintain that possibility and someday this economy is ultimately going to turn around as they all do, and we want to be in a good strong market position.

Your next question is from Art Hatfield – Morgan, Keegan & Company, Inc. Art Hatfield – Morgan, Keegan & Company, Inc.: I’m with Morgan, Keegan. Thanks for your time, gentlemen. On the asset management update, you note that proceeds for [Uniform] tractors were up 5% and that for trucks it was flat in Q4 compared to the prior year. But yet your inventories improved quite substantially sequentially from Q3. Are you kind of hanging on to price too much do you think? Or should we expect that pricing to really come in over the next several quarters?

I’ll let Tony address that.

Well, we did see a bit of an uptick in the fourth quarter for two reasons. We were unusually low in the third, but also we did some accelerated out servicing of our rental fleet towards the end of the third and into the fourth quarter particularly because we saw the deteriorating demand for rentals. So that did spike it up a little bit in the fourth quarter from the rental fleet. We will see as we go into '09 deterioration in the average proceeds for trucks and also for tractors. More so for trucks then we do see for tractors, and that’s because of a very strict asset management policy that we have. We do not want the used vehicle inventories to swell throughout the year or particularly at year end '09 because of such an uncertainty going into 2010. So you will see some deterioration those proceeds as we maintain the inventory levels pretty much at the $6,000 to $7,000 range as we near year end '09. Art Hatfield – Morgan, Keegan & Company, Inc.: And then additionally, I guess this would probably be for you too, Tony, on the early terminations, I know you talked about the extensions, but that was down year-over-year in '08, but did you see that number accelerate in the back half of the year?

We really didn’t see it accelerate in the back half of the year. And it was down in '08 compared to '07. We’re looking more so in '09 pretty much the same level that we saw in '07. We are getting a number of requests from customers to reduce their fleet sizes and their average mileage per unit does decline somewhat as well as the freight demand really falls. So you may see some role determinations rise a bit in '09, but we’re prepared for that with our asset management structure and how we manage our used vehicle sales operation.

It’s been pretty well under control. When you look at the chart on the appendix on page 40, if you've got the presentation there, both early terminations and early replacements are at lower levels then they were in '07. So I think it’s been pretty well managed.

Your next question comes from Alex Brand – Stephens, Inc. Alex Brand – Stephens, Inc.: I may have missed this on the guidance, but can you run through again what your FMS contract renewal assumptions are and especially tied into that what kind of rate pressure are you expecting on those renewals?

We historically have not shared for competitive purposes actual renewal rates. Tony can comment about what kind of pressure he’s seeing in the marketplace generally.

Well, I think generally we are seeing some real pressure in the marketplace. As customers do have the desire in some instances to reduce the size of their fleet. There is a lot of competition to try to maintain the positions that people have with those customers. But for the most part we’re projecting our organic growth rate in '09 to be largely the same as it was in '08. And we do have the strong pipeline. We have over 300 commissioned sales people out there, all that have very hearty quotas, so we think we’ll fare well on the contract side of the business as we go into '09. Alex Brand – Stephens, Inc.: It sounds like there’s going to be a white paper on pension expense so I can take a look at that in a couple of days. But can you just – I want to make sure I understand the cash for the pension expense make up this year is the $67 million, and then does that get you fully funded?

No, that won’t get us fully funded. But the cash we’ve got in the plan for the year is $100 million. And that is in the current environment that would get us to about a 65% funding ratio for ERISA purposes. So depending on what happens with the legislature out there, that funding percentage may be higher if some of the legislation that’s out there gets passed. The only other – the other thing I’d point out on cash flow is that there’s a part of the stimulus package that’s out there. There’s a bonus depreciation legislation which really ended in December, but if they’d extend that, that would give us an improvement in free cash flow about $70 million. So that’s an upside on the free cash flow.

Your next question is from Todd Fowler – Keybanc Capital Markets. Todd Fowler – Keybanc Capital Markets: Greg, back on the waterfall slide the improvement that you have in revenue and operational improvements in 2009 to $0.13 to $0.53. Can you talk a little bit about what some of the examples would be that would drive that, and how you end up at the higher range versus the lower range that you’ve given for the full year.

Sure. You can expect new sales in there, so in this environment we think we’ve got good sales opportunities and good business. But there’s a range, it depends on how much we can close, when – how fast it will close in the year because that has everything to do with when the revenue actually begins. In addition, we’ve got assumptions for what we can save in the way of costs and efficiencies and it depends both to degree and the timing on when those would be implemented. So it’s hard in this environment to pinpoint all that because there’s so much uncertainty. And there’s a little bit of risk factor in there as well. We’ve continued to get more news in automotive that there’s some downturns and slowdowns in production that three weeks ago we wouldn’t have forecast. So there’s a lot in the mix and that’s the reason for the breadth of that range. Todd Fowler – Keybanc Capital Markets: Is the bigger driver their sales opportunities and organic growth? Or is the bigger driver their more efficiencies and cost saves?

They may be fairly equal. Todd Fowler – Keybanc Capital Markets: Okay, fair enough. And then for a follow-up on the cash flow, if you’re looking at the commercial rental suites with no capital expenditures or no improvements to the fleet this year, how long can you continue to hold off investing in the fleet? What’s the age of the fleet and is that something that as you downsize and work through the fleet, that you don’t see CapEx requirements for the next 12 to 18 months, or is it something that once you get to the end of this year you’re going to have to reinvest maybe a little bit more heavily then historically to bring down the fleet age again?

Well Todd, as we see demand in '09 we’re intending to reduce our truck fleet from 10% to 15%, our tractor fleet from about 5% to 10%. So that will bring us into the earlier part of 2010 which is one of the lowest level fleets we’ve had for some time. We can – we’ll be fine through '09 with that fleet reduction. Getting into the season for 2010 there probably will be some CapEx getting into the season for 2010, which typically is about the May delivery time, but that will depend on the economic environment that we see going into 2010. So the demand continues to soften and continues to deteriorate. We try very expeditiously using our UVF operations to have the right asset level calibrated with demand and so we’ll watch demand levels, decide what refreshment is required. Probably mid-2010 there’ll be some increases in capital expenditures, to refresh only though perhaps, not necessarily to increase the fleet at all.

Your next question comes from Edward Wolfe – Wolfe Research. Ed Wolfe – Wolfe Research: Just a follow-up, in your guidance, Greg, you noted for the full year that you’re assuming that things don’t get better. What’s kind of your underlying GDP or industrial production or whatever you look at that you’re using?

GDP may be negative. Industrial production when you look at the ISM gauges and reports, they’ve been at low levels for quite some time so we don’t have a tight correlation to what GDP may be to a specific level of revenue earnings, etc. But we’re thinking that for 2009 it will be – it would definitely be negative. Industrial production may be down 7%, 8%. Real GDP may be down 2.5%. That’s kind of broad numbers we’re looking at. Ed Wolfe – Wolfe Research: Okay, so these are pretty grim based estimates in your opinion?

Yes, and until we see some evidence to the contrary that's the way we're going to plan it. Ed Wolfe – Wolfe Research: Makes sense. I understand that.

Your final question is from John Langenfeld – Robert W. Baird. John Langenfeld – Robert W. Baird: Two follow-ups, where did that commercial rental end the quarter? What was December down 20% or more?

In revenue? John Langenfeld – Robert W. Baird: Yes.

We'll check the exact sheet.

Rental revenue for the quarter was down about 7% overall for revenue pretty much. I'm sorry, it was down 10% – 10%. John Langenfeld – Robert W. Baird: Maybe I'm misstating my question, the rental, the commercial rental was down 15% all in. I guess I'm wondering where it actually ended in the month of December. In the month of December was it a lot worse?

Yes. I'm sorry, I thought you were speaking to the total quarter. There is no question that the demand for rentals is deteriorating meaningfully and it was really 17% to 20% in the month of December. And we will continue to see throughout all of '09 more than likely mid-teens decline in demand and therefore that will translate into revenue for the rental product line. And that is what's reflected in these numbers; that's why the waterfall has about a $50 million to $60 million decline, a decline in price levels and also a decline in demand and that's what's driving this $50 million to $60 million. John Langenfeld – Robert W. Baird: And then the other question was how did the miles driven on leased tractors trend in the quarter?

I think we announced 6% reduction in miles. I think that was for all units. Are you asking specifically about tractors? John Langenfeld – Robert W. Baird: Yes.

Yes. I don't have the breakdown.

Generally speaking it will be about the same. John Langenfeld – Robert W. Baird: About the same?

About 4% to 6% for the tractors as well.

Thank you. At this time I'd like to turn the call back over to Mr. Greg Swienton.

All right. Well, I thank everybody for their paying attention to the two question limit and that worked out well. We got to everybody's questions. In fact some got back in queue, so we're a little bit over 12:00 noon. I thank you for your participation and your questions. Have a good, safe day.

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