Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Tom Wadewitz – JP Morgan
Tom Wadewitz – JP Morgan
I appreciate your comments on pricing; I think that’s obviously a point of a lot of interest for people. I was wondering if you could give a little more granularity on how things are playing out near term because I think there’s probably some degree of skepticism about the realizability to maintain this positive pricing story given how weak the economy is. Can you give us any sense of recent contract re-pricings that you’ve had and the car load business and how the discussion has gone and whether the rates have actually been up on those contracts in line with what you’re talking about for the 5% to 6% in ’09?
Clarence Gooden
I would say the discussions this year have been more tense than they were in the past. As I said, we are getting price increases it looks like in the total aggregate in the 5% to 6% range which is pretty consistent with what we’ve gotten in the past. We have 80% of our contracts for next year already signed and in place and the remaining 20% of our contracts that we have left to negotiate are either in the process of being negotiated or will be renegotiated within the first half.
Significantly and specifically in coal we had two fairly large legacy contracts that we were able to renegotiate. We’re very, very positive about what we can do in our price.
Tom Wadewitz – JP Morgan
Have you seen a change in terms of a car load contract that you negotiated in August and what you were able to achieve and then a car load contract that you negotiated in November or December and what you were able to achieve in price or have those levels been pretty similar?
Clarence Gooden
Been pretty similar.
Tom Wadewitz – JP Morgan
On the margins side, we appreciate the transparency in terms of the fuel benefit obviously it was pretty significant with the timing lag. If you take that out that’s a pretty significant change to the margin so I get that it would have been down something like 290 basis points. Maybe you offset some of that with the casualty comparison that’s difficult. Is it fair to think that ex the fuel impact that margin deterioration would continue in first quarter, do you think that will get a lot worse given that it’s tough to react in the cost side? Any comments you can give us on margin near term.
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