Ryder System, Inc. (Ryder), a Florida corporation founded in 1933, is a global leader in transportation and supply chain management solutions. Our business is divided into three business segments: Fleet Management Solutions (FMS), which provides full service leasing, contract maintenance, contract-related maintenance and commercial rental of trucks, tractors and trailers to customers principally in the U.S., Canada and the U.K.; Supply Chain Solutions (SCS), which provides comprehensive supply chain solutions including distribution and transportation services throughout North America and in Europe, South America and Asia; and Dedicated Contract Carriage (DCC), which provides vehicles and drivers as part of a dedicated transportation solution in the U.S. Our customers range from small businesses to large international enterprises. These customers operate in a wide variety of industries, the most significant of which include automotive, electronics, transportation, grocery, lumber and wood products, food service, and home furnishings.

On December 17,At the end of 2008, we announced strategic initiatives to increase our competitiveness and drive long-term profitable growth. As part of these initiatives, during 2009 we will discontinue currentdiscontinued SCS operations in certain international marketsBrazil, Argentina, and transitionChile, and transitioned out of specific SCS customer contracts in Europe in order to focus the organization and resources on the industries, accounts, and geographical regions that present the greatest opportunities for competitive advantage and long-term sustainable profitable growth. This will include discontinuing current operations in the markets of Brazil, Argentina, and Chile, and transitioning out of SCS customer contracts in Europe. We believe theseThese changes will allow us to focus on enhancing the competitiveness and growth of our service offerings in the U.S., Canada, Mexico, the U.K. and Asia markets. All prior period information presented in thisForm 10-K has been restated to separately present discontinued operations.

For financial information and other information relating to each of our business segments see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Item 8, “Financial Statements and Supplementary Data,” of this report.

Through our FMS business, we provide our customers with flexible fleet solutions that are designed to improve their competitive position by allowing them to focus on their core business, lower their costs and redirect their capital to other parts of their business. Our FMS product offering is comprised primarily of contractual-based full service leasing and contract maintenance services. We also offer transactional fleet solutions including commercial truck rental, maintenance services, and value-added fleet support services such as insurance, vehicle administration and fuel services. In addition, we provide our customers with access to a large selection of used trucks, tractors and trailers through our used vehicle sales program.

Over the last several years, many key trends have been reshaping the transportation industry, particularly the $63$61 billion U.S. private commercial fleet market and the $26$23 billion U.S. commercial fleet lease and rental market. The maintenance and operation of commercial vehicles has become more complicated requiring companies to spend a significant amount of time and money to keep up with new technology, diagnostics, retooling and training. Because of increased demand for efficiency and reliability, companies that own and manage their own fleet of vehicles have put greater emphasis on the quality of their preventive maintenance and safety programs. More recently, fluctuating energy prices have made it difficult for businesses to predict and manage fleet costs and the tightened credit market has limited businesses’ access to capital.

For the year ended December 31, 2008,2009, our global FMS business accounted for 65%67% of our consolidated revenue.

U.S.  Our FMS customers in the U.S. range from small businesses to large national enterprises. These customers operate in a wide variety of industries, including transportation, grocery, lumber and wood products, food service and home furnishings. At December 31, 2008,2009, we had 636568 operating locations in 49 states and Puerto Rico and operated 217212 maintenance facilitieson-site at customer properties. A location typically consists of a maintenance facility or “shop,” offices for sales and other personnel, and in many cases, a commercial rental counter.counter, and in 2009 excludes ancillary storage locations. Our maintenance facilities typically include a service island for fueling, safety inspections and preliminary maintenance checks as well as a shop for preventive maintenance and repairs.

Canada.  We have been operating in Canada for over 50 years. The Canadian private commercial fleet market is estimated to be $8 billion and the Canadian commercial fleet lease and rental market is estimated to be $2 billion. At December 31, 2008,2009, we had 4138 operating locations throughout 9 Canadian provinces. We also have 56on-site maintenance facilities in Canada.

Europe.  We began operating in the U.K. in 1971 and since then have expanded into Ireland and Germany by leveraging our operations in the U.S. and the U.K. The U.K. commercial fleet lease and rental market is estimated to be $6 billion. At December 31, 2008,2009, we had 4032 operating locations throughout the U.K., Ireland and Germany, 29 of which are owned or leased by Ryder.and operated 14on-site maintenance facilities. We also manage a network of 344341 independent maintenance facilities in the U.K. to serve our customers where it is more effective than providing the service inat a Ryder managed location. In addition to our typical FMS operations, we also supply and manage vehicles, equipment and personnel for military organizations in the U.K. and Germany.

Full Service Leasing.  Under a typical full service lease, we provide vehicle maintenance, supplies and related equipment necessary for operation of the vehicles while our customers furnish and supervise their own drivers and dispatch and exercise control over the vehicles. Our full service lease includes all the maintenance services that are part of our contract maintenance service offering. We target leasing customers that would benefit from outsourcing their fleet management function or upgrading their fleet without having to dedicate a significant amount of their own capital. We will assess a customer’s situation, and after considering the size of the customer, residual risk and other factors, will tailor a leasing program that best suits the customer’s needs. Once we have agreed on a leasing program, we acquire vehicles and components that are custom engineered to the customer’s requirements and lease the vehicles to the customer for periods generally ranging from three to seven years for trucks and tractors and up to ten years for trailers. Because we purchase a large number of vehicles from a limited number of manufacturers, we are able to leverage our buying power for the benefit of our customers. In addition, given our continued focus on improving the efficiency and effectiveness of our maintenance services, we can provide our customers with a cost effective alternative to maintaining their own fleet of vehicles. We also offer our leasing customers the additional fleet support services described below.

Contract Maintenance.  Our contract maintenance customers include non-Ryder owned vehicles related to our full service lease customers as well as other customers that want to utilize our extensive network of maintenance facilities and trained technicians to maintain the vehicles they own or lease from third parties. The contract maintenance service offering is designed to reduce vehicle downtime through preventive and predictive maintenance based on vehicle type and time or mileage intervals. The service also provides vehicle repairs including parts and labor,24-hour emergency roadside service and replacement vehicles for vehicles that are temporarily out of service. Vehicles covered under this offering are typically serviced at our own facilities. However, based on the size and complexity of a customer’s fleet, we may operate anon-site maintenance facility at the customer’s location.

Commercial Rental.  We target rental customers that have a need to supplement their private fleet of vehicles on a short-term basis (typically from less than one month up to one year in length) either because of

Used Vehicles.  We primarily sell our used vehicles at one of our 5755 retail sales centers throughout North America (11 of which are collocated at a FMS shop), at our branch locations or through our website atwww.Usedtrucks.Ryder.com. Typically, before we offer used vehicles for sale, our technicians assure that it isRoad Ready^TM, which means that the vehicle has passed a comprehensive, multi-point performance inspection based on specifications formulated through our contract maintenance program. Our retail sales centers throughout North America allow us to leverage our expertise and in turn realize higher sales proceeds than in the wholesale market. Although we generally sell our used vehicles for prices in excess of book value, the extent to which we are able to realize a gain on the sale of used vehicles is dependent upon various factors including the general state of the used vehicle market, the age and condition of the vehicle at the time of its disposal and depreciation rates with respect to the vehicle.

Our FMS business strategy revolves aroundmission is to be the leading leasing and maintenance service provider for light, medium and heavy duty vehicles. This will be achieved through the following interrelated goals and priorities:

As an alternative to using our services, customers may choose to provide these services for themselves, or may choose to obtain similar or alternative services from other third-party vendors.

Our FMS business segment competes with companies providing similar services on a national, regional and local level. Many regional and local competitors provide services on a national level through their participation in various cooperative programs. Competitive factors include price, equipment, maintenance, service and geographic coverage. We compete with finance lessors and also with truck and trailer manufacturers, and independent dealers, who provide full service lease products, finance leases, extended warranty maintenance, rental and other transportation services. Value-added differentiation of the full service leasing, contract maintenance, contract-related maintenance and commercial rental service has been, and will continue to be, our emphasis.

In addition to our continued focus on organic growth, acquisitions play an important role in enhancing our growth strategy in the U.S., Canada and the U.K. In assessing potential acquisition targets, we look for companies that would create value for the Company through the creation of operating synergies, leveraging our existing facility infrastructure and fixed costs, improving our geographic coverage, diversifying our customer base and improving our competitive position in target markets.

Through our SCS business, we offer a broad range of innovative logistics management services that are designed to optimize a customer’s global supply chain and address key customer business requirements. The term “supply chain” refers to a strategically designed process that directs the movement of materials, funds and related information from the acquisition of raw materials to the delivery of finished products to the end-user. Our SCS product offerings are organized into three categories: distribution management, transportation management and professional services, distribution operations and transportation solutions.services. These offerings are supported by a variety of information technology and engineering solutions which are an integral part of our other SCS services. These product offerings can be offered independently or as an integrated solution to optimize supply chain effectiveness.

The global supply chain logistics market is estimated$498 billion, of which the North America and Asia supply chain logistics markets are $263 billion. Over the past few years, we have seen significant fluctuations in the variables that impact supply chains. We have seen the price of fuel rise and fall, the cost of Asian labor increase faster than anticipated, and capital become much harder to be $487 billion. Several key trendsobtain. In addition, neither the U.S. trucking market nor U.S. ports are affectingfacing the marketcapacity constraints they were a few years ago.

Such fluctuations demonstrate how unpredictable the variables that impact supply chains have and will continue to be. To handle this uncertainty, companies are looking for third-party logistics services. Outsourcing all or a portion of a customer’s supply chain is becoming a more attractive alternative for several reasons including: (1) the lengthening of the global supply chain due to the location of manufacturing activities further away from the point of consumption, (2) the increasing complexity of customers’ supply chains,(3PL) providers who can create and (3) the need for new and innovative technology-based solutions.execute flexible networks. In addition, industry consolidation is increasing as providers look to expand their service offerings and create economies of scale in order to be competitive and satisfy customers’ global needs. To meet our customers’ demands in light of these trends,achieve this, companies need 3PL providers who are strategic partners. By aligning into industry verticals, we provide an integrated suite of global supply chaincan better create solutions with sophisticated technologies and industry-leading engineering services, designed to helpfor our customers managethat meet the needs of their supply chains more efficiently.industries.

For the year ended December 31, 2008,2009, our global SCS business accounted for 26%23% of our consolidated revenue. For the year ended December 31, 2008, approximately 50% of our global SCS revenue was related to dedicated contract carriage services.

U.S.  At December 31, 2008,2009, we had 102106 SCS customer accounts in the U.S., most of which are large enterprises that maintain large, complex supply chains. These customers operate in a variety of industries including automotive, electronics, high-tech, telecommunications, industrial, consumer goods, paper and paper products, office equipment, food and beverage, and general retail industries. We continue to further diversify our customer base by expanding into new industry verticals, including retail/consumer goods. Most of our core SCS business operations in the U.S. revolve around our customers’ supply chains and are geographically

Mexico.  We began operating in Mexico in the mid-1990s. At December 31, 2008,2009, we operated and maintained 700 vehicles in Mexico. At December 31, 2008,2009, we had 7798 SCS customer accounts and managed warehouse space totaling approximately 2 million700,000 square feet. Our Mexico operations offer a full range of SCS services and manages approximately 3,0002,000 border crossings each week between Mexico and the U.S., and Canada, often highly integrated with our domestic distribution and transportation operations.

Asia.  We began operating in Asia in 2001. Although our Asian operations are headquartered in Singapore, we also provide services in China via our Shanghai office and coordinate logistics activities in countries such as Malaysia.2000. At December 31, 2008,2009, we had 4730 SCS customer accounts and managed warehouse space totaling approximately 795,000552,000 square feet. As partAsia is a key component to our retail strategy. With the 2008 acquisition of our strategyCRSA Logistics and Transpacific Container Terminals, we were able to expandgain significant presence in Asia. We now have a network of owned and agent offices throughout Asia, with our customers into major markets, we will continue to refine our strategyheadquarters in China and focus our efforts on growing our operations in that region.

Our largest customer, General Motors Corporation (GM), is comprised of multiple contracts in various geographic regions.North America. In 2008,2009, GM accounted for approximately 17%13% of SCS total revenue and 4%3% of consolidated revenue. We derive approximately 48%42% of our SCS revenue from the automotive industry, mostly from manufacturers and suppliers of original equipment parts.

Professional Services.Dedicated Contract Carriage.  Our SCS business offersAlthough offered as a varietystand-alone service, dedicated contract carriage can also be offered as part of knowledge-basedan integrated supply chain solution to our customers. The DCC offering combines the equipment, maintenance and administrative services that support every aspect of a customer’sfull service lease with drivers and additional services to provide a customer with a dedicated transportation solution that is designed to increase their competitive position, improve risk management and integrate their transportation needs with their overall supply chain. Our SCS professionals are availableDCC solution offers a high degree of specialization to evaluate a customer’s existing supply chain to identify inefficiencies,meet the needs of customers with sophisticated service requirements such as well as opportunities for integration and improvement. Once the assessment is complete, we work with the customer to develop a supply chain strategy that will create the most value for the customer and their target clients. Once a customer has adopted a supply chain strategy, our SCS logistics team, supported by functional experts, and representatives from our information technology, real estate and finance groups work together to design a strategically focused supply chain solution. The solution

Our SCS business strategy is to offer our customers differentiated functional execution, and proactive solutions from deep expertise in key industry verticals. The strategy revolves around the following interrelated goals and priorities:

In the SCS business segment we compete with a large number of companies providing similar services, on an international, national, regional and local level, each of which has a different set of core competencies. Additionally, this business is subject to potential competition in mostThere are a handful of the regions it serves from air cargo, shipping, railroads, motor carrierslarge integrated companies we compete with across all of our service offerings and industries; and other companies that are expanding logistics services such as freight forwarders, contract manufacturers and integrators.who we only compete with on specific service offerings (transportation management or distribution management) or industries. We face different competitors in each country of operation. Most of our competitors tend to have strength in one country or region over others. Competitive factors include price, service, equipment, maintenance, geographic coverage, market knowledge, expertise in logistics-related technology, and overall

Our safety culture is founded upon a core commitment to the safety, health and well-being of our employees, customers, and the community. It is thiscommunity, a commitment that made us an industry leader in safety throughout our75-year history and contributed to our being awarded the Green Cross for Safety from the National Safety Council. history.

Safety is an integral part of our business strategy because preventing injury improves employee quality of life, eliminates service disruptions to our customers, increases efficiency and customer satisfaction. As a core value, our focus on safety is a daily regimen, reinforced by many safety programs and continuous operational improvement and supported by a talented and dedicated safety organization.

Training is a critical component of our safety program. Monthly safety training topics delivered by location safety committees cover specific and relevant safety topics and managers receive annual safety leadership training. Regular safety behavioral observations are conducted by managers throughout the organization everyday and remedial training takes placeon-the-spot and at every location with a reported injury. We also deliver a comprehensive suite of highly interactive training lessons through Ryder Pro-TREAD to each driver individually over the internet.

Our safety policies require that all managers, supervisors and employees incorporate processes in all aspects of our business. Monthly safety scorecards are tracked and reviewed by management for progress toward key safety objectives. Our proprietary web-based safety tracking system, RyderStar, delivers proactive safety programs tailored to every location and helps measure safety activity effectiveness.

Gregory T. Swienton has been Chairman since May 2002 and Chief Executive Officer since November 2000. He also served as President from June 1999 to June 2005. Before joining Ryder, Mr. Swienton was Senior Vice President of Growth Initiatives of Burlington Northern Santa Fe Corporation (BNSF) and before that Mr. Swienton was BNSF’s Senior Vice President, Coal and Agricultural Commodities Business Unit.

Robert E. Sanchez has served as Executive Vice President and Chief Financial Officer since October 2007. He previously served as Executive Vice President of Operations, U.S. Fleet Management Solutions from October 2005 to October 2007 and as Senior Vice President and Chief Information Officer from January 2003 to October 2005. Mr. Sanchez joined Ryder in 1993 and has held various positions.

Robert D. Fatovic has served as Executive Vice President, General Counsel and Corporate Secretary since May 2004. He previously served as Senior Vice President, U.S. Supply Chain Operations, High-Tech and Consumer Industries from December 2002 to May 2004. Mr. Fatovic joined Ryder’s Law department in 1994 as Assistant Division Counsel and has held various positions within the Law department including Vice President and Deputy General Counsel.

Art A. Garcia has served as Senior Vice President and Controller since October 2005 and as Vice President and Controller since February 2002. Mr. Garcia joined Ryder in December 1997 and has held various positions within Corporate Accounting.

Gregory F. Greene has served as Executive Vice President since December 2006 and as Chief Human Resources Officer since February 2006. Previously, Mr. Greene served as Senior Vice President, Strategic

We sponsorhistorically sponsored a number of defined benefit plans for employees in the U.S., U.K. and other foreign locations. In the past few years, we have made amendments to defined benefit plans which freeze the retirement benefits for non-grandfathered and certain non-union employees. Our major defined benefit plans are funded, with trust assets invested in a diversified portfolio. The cash contributions made to our defined benefit plans are required to comply with minimum funding requirements imposed by employee benefit and tax laws. The projected benefit obligation and assets of our global defined benefit plans as of December 31, 20082009 were $1.48$1.60 billion and $976$1.28 million, respectively. The difference between plan obligations and assets, or the funded status of the plans, is a significant factor in determining pension expense and the ongoing funding requirements of those plans. Macroeconomic factors, as well as changes in investment returns and discount rates used to calculate pension expense and related assets and liabilities can be volatile and may have an unfavorable impact on our costs and funding requirements. We also participate in twelve U.S. multi-employer pension (MEP) plans that provide defined benefits to employees covered by collective bargaining agreements. In the event that we withdraw from participation in one of these plans, then applicable law could require us to make an additional lump-sum contribution to the plan. Our withdrawal liability for any MEP plan would depend on the extent of the plan’s funding of vested benefits. Economic conditions have caused MEP plans to be significantly underfunded. If the financial condition of the MEP plans were to continue to deteriorate, participating employers could be subject to additional assessments. Although we have actively sought to control increases in these costs and funding requirements, there can be no assurance that we will succeed, and continued upwardcost pressure could reduce the profitability of our business and negatively impact our cash flows.

We retain a portion of the accident risk under vehicle liability and workers’ compensation insurance programs. Our self-insurance accruals are based on actuarially estimated, undiscounted cost of claims, which includes claims incurred but not reported. While we believe that our estimation processes are well designed, every estimation process is inherently subject to limitations. Fluctuations in the frequency or severity of accidents make it difficult to precisely predict the ultimate cost of claims. In recent years, our development has been favorable compared to historical selected loss development factors because of improved safety performance, payment patterns and settlement patterns; however, there is no assurance we will continue to enjoy similar favorable development in the future. For a detailed discussion on our accounting policies and assumptions relating to our self-insurance reserves, please see the section titled “Critical Accounting Estimates — Self-Insurance Accruals” in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

None.

Our properties consist primarily of vehicle maintenance and repair facilities, warehouses and other real estate and improvements.

The following graph compares the performance of our common stock with the performance of the Standard & Poor’s 500 Composite Stock Index and the Dow Jones Transportation 20 Index for a five year period by measuring the changes in common stock prices from December 31, 20032004 to December 31, 2008.2009.

The stock performance graph assumes for comparison that the value of the Company’s Common Stock and of each index was $100 on December 31, 20032004 and that all dividends were reinvested. Past performance is not necessarily an indicator of future results.

The following table provides information with respect to purchases we made of our common stock during the three months ended December 31, 2008:2009:

The following table includes information as of December 31, 20082009 about certain plans which provide for the issuance of common stock in connection with the exercise of stock options and other share-based awards.

The following selected consolidated financial information should be read in conjunction with Items 7 and 8 of this report.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with our consolidated financial statements and related notes contained in Item 8 of this report onForm 10-K. The following MD&A describes the principal factors affecting results of operations, financial resources, liquidity, contractual cash obligations, and critical accounting estimates.

Ryder System, Inc. (Ryder) is a global leader in transportation and supply chain management solutions. Our business is divided into three business segments, which operate in highly competitive markets. Our customers select us based on numerous factors including service quality, price, technology, and service offerings. As an alternative to using our services, customers may choose to provide these services for themselves, or may choose to obtain similar or alternative services from other third-party vendors. OurOur$ customer base includes enterprises operating in a variety of industries including automotive, electronics, transportation, grocery, lumber and wood products, food service, and home furnishing.

TheFleet Management Solutions (FMS)business segment is our largest segment providing full service leasing, contract maintenance, contract-related maintenance, and commercial rental of trucks, tractors and trailers to customers principally in the U.S., Canada and the U.K. FMS revenue and assets in 20082009 were $4.01$3.28 billion and $6.14$5.76 billion, respectively, representing 65%67% of our consolidated revenue and 92% of consolidated assets.

TheSupply Chain Solutions (SCS)business segment provides comprehensive supply chain consulting including distribution and transportation services throughout North America and in South America, Europe and Asia. SCS revenue in 20082009 was $1.64$1.14 billion, representing 26%23% of our consolidated revenue.

TheDedicated Contract Carriage (DCC) business segment provides vehicles and drivers as part of a dedicated transportation solution in the U.S. DCC revenue in 20082009 was $548$471 million, representing 9%10% of our consolidated revenue.

2008 wasIn 2009, we managed through the impacts of a yearprolonged economic recession and the cyclical impacts in commercial rental, used vehicle sales, and SCS automotive volumes and concentrated on cost improvement actions. In the second half of 2009, we successfully implemented our plan to disengage SCS operations in South America and Europe. Throughout 2009, we experienced significant accomplishments for us, as we delivered strong earnings, operating revenue growthvolume declines across all business segments resulting from the weak overall economic environment and positiveprotracted freight recession. However, our free cash flow following more than two full years of a U.S. freight recession. We also successfully completed four accretive acquisitions in 2008. However, in the fourth quarter of 2008, we saw significant deterioration in general economic conditions, particularly affecting our transactional commercial rental business. In December 2008, we announced several strategic actions, including discontinuing certain operations and workforce reductions, that will betterliquidity position us for the market conditions we anticipate in the upcoming year.remained strong.

Total revenue was $6.20$4.89 billion, down 6%19% from $6.57$6.00 billion in 2007. Revenue comparisons were impacted by a previously announced change from gross to net revenue reporting in a subcontracted transportation agreement, which had no impact on operating revenue or earnings. Excluding this item, total revenue increased 5% primarily as a result of higher fuel services revenue.2008. Operating revenue (total revenue less fuel and subcontracted transportation) was $4.70$4.06 billion in 2008, up 1%2009, down 11%. Operating revenue growthdeclined primarily due to lower commercial rental revenue and reduced SCS automotive industry volumes. To a lesser extent, operating revenue was drivenalso impacted by lower SCS and DCC fuel pass-throughs, unfavorable foreign currency movements and lower FMS contractual revenue, including acquisitions in our FMS business segment, new and expanded business in SCSrevenues partially offset by lower commercial rental revenue.the benefit of acquisitions.

Net earningsEarnings from continuing operations decreased to $200 million from $254$90 million in 20072009 from $258 million in 2008 and net earnings from continuing operations per diluted common share decreased to $3.52$1.62 from $4.24$4.51 in 2007. Net earnings2008. Earnings from continuing operations included certain items we do not consider indicative of our ongoing operations and have been excluded from our comparable earnings measure. The following discussion provides

Excluding the special items listed above, comparable net earnings from continuing operations were $255 million, up 1% from $252down 65% to $95 million in 2007.2009. Comparable earnings per diluted common share from continuing operations were $4.49, up 7% from $4.21down 64% to $1.70 in 2007. Earnings growth2009. Results reflect significantly lower earnings in FMS, driven by the FMScurrent economic slowdown and DCC business segments was largely offset byfreight recession, which resulted in a decline in SCS earnings.global commercial rental and full service lease performance and lower used vehicle sales results. Results in 2009 were also impacted by higher pension expense. Earnings were favorably impacted by cost reduction initiatives, including workforce reductions implemented in early 2009.

Free cash flow was up 80% to $614 million in 2009. This increase reflects lower capital expenditures partially offset by lower earnings and higher pension contributions. With our strong earnings and cash flows, we repurchased a total of 42.7 million shares of common stock in 20082009 for $256$116 million and made voluntary pension contributions of approximately $100 million. We also increased our annual dividend by 10%9% to $0.92$1.00 per share of common stock. In addition, during 2008, we paid $246 million and acquired the assets of Lily Transportation, Gator Leasing, Gordon Truck Leasing and Transpacific Container Terminal Ltd. and CRSA Logistics Ltd.

Capital expenditures increaseddecreased 52% to $1.27 billion compared to $1.19 billion$611 million in 2007.2009. The growthdecrease in capital expenditures reflects higherreduced full service lease vehiclevehicles spending for replacementsdue to lower new and expansion of customer fleets.replacement sales in the current environment, and planned minimal spending on transactional commercial rental vehicles. Our debt balances grew 3%decreased 13% to $2.86$2.50 billion at December 31, 20082009 due to acquisitions and share repurchase programs.the utilization of free cash flow to repay debt. Our debt to equity ratio also increaseddecreased to 175% from 213% from 147% in 2007.2008. Our total obligations (including off-balance sheet debt) to equity ratio also increaseddecreased to 183% from 225% from 157% in 2007. Leverage ratios were impacted by the unrecognized pension plan losses, share repurchases, foreign currency translation adjustments and acquisitions.

In 2010, we plan to manage through the cumulative impacts of a prolonged recession on full service lease, while driving benefits from actions taken in 2009 as well as new initiatives. Earnings per share growth is expected from improved commercial rental andperformance, productivity initiatives, better used vehicle sales operations, stronger SCS results, lower annual pension expense and lower volumes, particularly in the automotive industry. We expect tobenefit of 2009 stock repurchases. These items are partially offset theseby significantly reduced full service lease results, the negative impacts through cost reduction initiatives, operational improvements and the carryover impact of acquisitionsvehicle residual value changes and share repurchases. In 2009, we will continue to focus on our contractual revenue growth and retention strategies, including the evaluation of selective acquisitions, while retaining financial discipline. some currently intended compensation restoration.

Total revenue for the full-year 2010 is targetedforecast to be $4.90 billion, which is flat compared with 2009. Operating revenue for the full-year 2010 is forecast to be down 2% to $4.00 billion compared with 2009. In FMS, core contractual leasing and maintenance revenue is expected to decline 4%, or down 5% excluding foreign exchange, reflecting the cumulative effect of customer fleet downsizing. Commercial rental revenue is forecast to grow by 9%, driven by moderately higher demand, somewhat higher pricing and improved utilization. Total SCS revenue is forecast to decrease by 10%2%. SCS operating revenue is anticipated to 16% whiledecrease by 3%, or 6% excluding the impacts of foreign exchange and fuel, reflecting the impact of non-renewed contracts. Total DCC revenue is expected to be unchanged. DCC operating revenue is expected to decrease by 5% to 11%. The 2009 forecast for total revenue includes1%, or 2% excluding the adverse impact of fuel due to lower anticipated fuel prices and unfavorable foreign exchange rates.freight volumes.

In transportation management arrangements where we act as principal, revenue is reported on a gross basis for subcontracted transportation services billed to our customers. We realize minimal changes in profitability as a result of fluctuations in subcontracted transportation. Determining whether revenue should be reported as gross (within total revenue) or net (deducted from total revenue) is based on an assessment of whether we are acting as the principal or the agent in the transaction and involves judgment based on the terms and conditions of the arrangement. Effective January 1, 2008, our contractual relationship with a significant customer for certain transportation management services changed, and we determined, after a formal review of the terms and conditions of the services, that we were acting as an agent based on the revised terms of the arrangement. This contract modification required a change in revenue recognition from a gross basis to a net basis for subcontracted transportation beginning on January 1, 2008. This contract represented $640 million and $565 million of total revenue for the yearsyear ended December 31, 2007 and 2006, respectively.2007.

See Note 2, “Accounting Changes,” for a discussion of the impact of changes in accounting standards.

We have completed various asset purchase agreementsfive FMS acquisitions in the past twothree years, under which we acquired a company’s fleet and contractual customers. The FMS acquisitions operate under Ryder’s name and complementcomplemented our existing market coverage and service network. The results of these acquisitions have been included in our consolidated results since the dates of acquisition.

On December 19, 2008, we completed the acquisition ofacquired substantially all of the assets of Transpacific Container Terminal Ltd. and CRSA Logistics Ltd. (CRSA) in Canada, as well as CRSA operations in Hong Kong and Shanghai, China. This strategic acquisition addsadded complementary solutions to our SCS capabilities including consolidation services in key Asian hubs, as well as deconsolidation operations in Vancouver, Toronto and Montreal.