Good morning and welcome to the Fourth Quarter Conference Call for Investors and Republic Services. Republic is traded on the New York Stock Exchange under the symbol RSG. Your host this morning is Republic Chairman and CEO, Jim O'Connor. Today's call is being recorded and all participants are in a listen-only mode. There will be a questions-and-answer session following Republic's summary of quarterly earnings. I will provide you with specific instructions for questions later in the call. At this time it is my pleasure to turn the call over to Mr. O'Connor.

Good morning and thank you all for joining us. This is Jim O'Connor, and I would like to welcome everyone to Republic Services Fourth Quarter Conference Call. In addition to reviewing our fourth quarter and full year performance, we will also discuss our guidance for 2008. Tod Holmes, our Chief Financial Officer; and Ed Lang, our Treasurer, are joining me as we discuss our fourth quarter performance. I would like to take a moment to remind everyone that some of the information that we discuss on today's call contains forward-looking statements, which involves risk and uncertainties and maybe materially different from actual results. Our SEC filings discuss factors that could cause actual results to differ materially from expectations. Additionally the material that we will discuss today is time sensitive, if in the future you listen to a rebroadcast or a recording of this conference call, you should be sensitive to the date of the original call, which is February 6, 2008. Please note that this call is the property of Republic Services Incorporated. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Republic Services is strictly prohibited. During the fourth quarter, we continued to deliver on our pricing initiatives and realize margin improvement. We believe the current pricing environment is sustainable across all lines of business and our key results for the quarter were Republic's revenue growth of 3.9% to $796 million, we achieved internal growth of 4.7% with 6% of price improvement and volume decline of 1.3%. Our fourth quarter volume growth comparison was affected by a slow down in residential housing construction activity and lower associated landfill volumes. Price growth continues to be strong. Core price is up 4.3%, price is the most important factor for covering rising costs and…

Thank you, Jim. I will begin my review of the company's financial results by discussing revenue. Again as Jim indicated, the fourth quarter revenue rose 3.9% to $796 million from $766 last year. Internal growth was 4.7; total price growth was 6% with 4.3 from core price, 60 basis point increase from fuel charges, and a 1.1% increase from commodities. During the quarter, we benefited from our ongoing price increase initiatives and strategies in all lines of business. And we have been successful in 2007 in securing adequate price increases to provide decent returns on our substantial investments. For 2008, we expect price in the 4% range. I might add that the current fuel prices, we could see an additional 60 basis points of price due to higher fuel cost that we saw in the fourth quarter. Also, for 2008, we did not forecast any increase or decrease in the price commodities and for the full year 2007, we actually benefited from a 90 basis point increase in commodity prices. Our fourth quarter volume declined by 1.3%; however we had one additional work day in the fourth quarter. And if we adjust it for that that additional work day, the fourth quarter decline would have been about 1.9% or consistent with what we saw in the third quarter. Our quarter volume was down 1.5%, non-core volume was up two-tens of 1%. Temporary roll-off volume was down as Jim indicated 15% and landfill volume particularly in the C&D area was down 1.6%. Our commercial and residential volumes were both up about up 1%. Our divestitures did account for the remaining eight-tens of 1% reduction in our revenue and that was primarily due to the let-go [ph] divestiture in the fourth quarter. So, we will see that rollover impact as we go…

Thank you, Tod. Republic's EPS for the fourth quarter was $0.44, which is 29% improvement versus the fourth quarter of 2006. Our full year as reported EPS was $1.51. After adjusting for remediation costs and the sale of our processing and landscape business, full year earning per share was $1.66. This performance is inline with the increased guidance we provided on our third quarter call. I will now review our financial guidance for 2008. We anticipate that full year earning per share would be in the range of $1.78 to $1.82. Republic's operating margins will continue to improve to approximately 19% for the full year 2008. Free cash flow will be $340 to $350 million, which is in excess of 100% of net income. Internal growth will be 2% to 3.5%. We expect core price to increase by 3.5% to 4% and volumes will be down 0.5% to 1.5%. Our cash flow guidance assumes capital spending of approximately $325 million. 2008 business objectives continue to be focused on improving margins by achieving appropriate price increases to offset inflationary costs and business risks improving our market position, standardizing significant business processes, maximizing efficiency of service delivery and customer service and rationalizing our cost structure. I would like to thank all of the employees of Republic Services for their dedication and hard work, which resulted in our strong performance in fourth quarter. Republic organization would also like to thank Art Dudzinski, who served as Western Region Vice President and we wish him the best in his retirement. Operator, at this time we would like to open the call to questions. Question And Answer

Thank you we will now begin the question-and-answer session. [Operator Instructions]. Our first question comes from Brian Butler.

Good morning.

Good morning Brian.

First question just kind of looking at the outlook for 2008, you had a huge improvement in margins between 2006, 2007 somewhat in the order of 160 basis points, and when you are looking at 2008 you kind of got into 50 basis points with...it's kind of similar pricing outlook 3.5% to 4% with some volume decline, is there some costs that are really growing more than expected that's eliminating kind of the margin expansion there?

I think we have got headwind from fuel pricing and then some from insurance.

Also Brian, we had a commodity benefit from 2006 to 2007 and our view looking forward would be that commodities maintained at the current level and don't necessarily go up, so we wouldn't see that commodity benefit.

Okay, and then my follow-up question is on the guidance you have out there can you talk a little bit what's built in those expectations from the perspective of economic activity in the U.S. in general?

Well, Brian I think if you have been following us, we have historically got away from trying to predict the economy and most of...I mean for the last two or three years we have been giving guidance on the upcoming year based on what we saw, what we have experienced in the fourth quarter. So, again what we are forecasting for 08 is really built around what we experienced in the fourth quarter of 07.

Great, thank you very much.

Thank you.

Our next question comes from Bill Fisher.

Good morning.

Good morning, Bill.

Just on the landfill volumes, I think you guys had made some company specific moves on curtailing certain waste say out of Canada and some other things during the year, and then I know you are also working on some expansions. Just wanted to see if you can give any color on when some of those events might kind of anniversary and how that plays out during the year?

I think the Canadian...I don't have...Bill, I don't have the exact dates here. But the volumes that we cut off in Michigan were predominantly sludges coming out of Canada which I think was in the first part of the year and should pretty much be annerversarying out early on in 08. And we did curtail some other waste streams that we were taking in the States. Again either because of the social political impact of those waste streams after further review looking at, how they may affect our facility. So that should anniversary out too about the same time. We also closed West County during 08, and that's during 07 and that had -- that's going to have some carryover impact, but all in all we have got a number of expansions, we have never been refused an expansions, and we would anticipate that we would get one or two or three expansions approved early on here in 08 predominantly I think most of those in the southeastern parts of United States.

Okay, great. And just to follow on, Tod on the CapEx, is there a increase this year, just general inflation or some new contracts. I was just wondering if the current economy persists and keeps you on the lower roll-off and land field. Is there an opportunity to reduce that at all or is that pretty cash in stone?

No, there certainly is an opportunity, I think you saw that in 2007, we do adjust based upon what we see in the business and capital here is very flexible. We can move equipment around, which we have done in 2007 and slowed down the replacement capital in certain markets as it was necessary. I think a lot of this increase in capital really comes from trucks, if you think back to 2006, we were buying truck bodies and...excuse me, chassis and the engines before the change in the emission requirements. So we had built up a pretty good inventory of trucks at the end of 06, which we then deliver to our operations, in the first four months of 2007. And so now in 2008, we are back to more of a normal type of truck purchase scenario. So I think that's really the key driver there would be the vehicles. Again our capital spend should be somewhat less than DD&A and also obviously we think our free cash flow, because of that factor the spread between capital spend and DD&A and our non-cash taxes should allow us to get free cash flow in the range of a 100% to 110% of net income. 07 was an unusual year, but I think our free cash flow was 129% or something like that of net income that was huge. But if you look steadily at this company, good times and bad we...cash flow has always been in excess of the net income.

Thank you.

Our next question comes from Jonathan Ellis.

Great, good morning guys.

Good morning.

Just wanted to talk a little bit about...you mentioned some of the new contracts and expansions that you are anticipating for 2008; can you talk about your directionally or in quantitative terms what benefit that should have to volumes this year, what you are factoring in that down 0.5% to 1.5% for the year ?

Well, I mean the majority of the volume forecast been down to 0.5% to 1.5% is the rollover impact of our construction decline over the course of 07, so, that's the majority of it. As far as growth goes, I mean we have renewed contracts. We have picked up a contract in Downers Grove, Illinois. We expanded our operating position, which will I think will experience in the fourth quarter in Palm Beach County. We have successfully renewed and expanded our service offering in Orange County, Florida. But that contract won't start up until January of 09. So, some of the capital that Bill Fisher asked about will be...probably be...is driving our 08 capital number, but it won't really or actually receive any value from it until this contract starts backup in 09. So, I mean we have been very successful in all these contract including renewal...other renewals in South Florida have been a significant increase prices, which again I think our an indication that the sectors looking to improve return on invested capital. So we have seen pricing move anywhere from five as high as 10% on some of our residential and franchise offerings.

Great. And just the follow-up; in term of your outlook for the coming year both on price and volume if you can talk either in quantitative terms, directionally, what your view is on how franchise versus competitive markets will trend?

Well competitive markets on pricing are going to trend higher. We have got index pricing. We anticipate, I think built into our 08 forecast is about 3% CPI so again with fuel headwind there we will lag recovery there, but obliviously it would be up at the 3.5% to 4% price, we are getting in excess of that in our competitive market, or in the markets, where we have discretion as it relates to pricing, so...

Just on the volume side.

Well on the volume...again, I mean the volume...on the volume side, we are basically seeing modest growth in all lines of business other than our residential, industrial collection, basically construction and demolition. And I think probably anywhere from 0.5% to 1% maybe little north of 1% depending on the line of business.

Great, thanks.

Thank you.

Our next question comes from Corey Greendale.

Hi, good morning.

Good morning, Corey.

Jim, you sort of got to this little bit with your answer just a second ago, but can you speak a little bit, more specifically about trends, you are seeing in non-residential construction and the commercial lines of businesses if there is any spill over of the economy in those areas yet?

No, we are still seeing relative strength there, which should translate into continued commercial growth from our container growth and should translate into a permanent industrial growth. We still see, the American Institute of Architects index in the mid-50s, which really would project a relatively strong industrial and commercial growth for construction in 08 and 09. And I think some of their highest buildings are in 07 and are anticipated in 08, which again reflection of continued to strength there now. We like a lot of people have paid significant amount of intention to articles with regards to commercial construction, but we have not experienced it. And again as you all know, we won't see that impact assuming there even is one, I think the indexes say there won't be, but assuming there is one we won't see that from anywhere from 12 to 18 months depending on the size of the project.

Thank you, that's helpful. And Tod, was there a closure, post-closure true-up in the quarter, and what was the magnitude of that?

Yes, you are referring to the 143 adjustment.

Correct.

And that was approximately $4 million. And if you look back to the fourth quarter 06, it was in that same range also.

$4 million is favorable, I assume.

Yes.

Thank you.

Thank you. [Operator Instructions]. Our next question comes from Jagdeep Ghuman.

Good morning.

Good morning Jag.

A couple of questions here; one, where are you in terms of your contract renewals both within collection and on the disposal side, I just reached the ballpark percent and also in 08, what do you expect to renew?

I don't have the list, but we have successfully renewed every contract the only contract of any consequence of immaterial to the whole company was the loss of the City of Houston, and wasn't lost to a competitor, it was lost back to the Public Works Department in Houston. But much beyond that, Jag, I think we don't have any material exposure and some of the contracts I just related to you we have a significant amount of opportunity. Again I think we appear to be one of the leading contenders too in another county offering in the central western part of Florida, which we hopefully would hear something on here in the next three or four months.

Okay, fair enough and as a follow-up; Jim, you had mentioned that for 08 of course the share repurchase will remain cornerstone for your cash balance strategy. However as you look out to 09 and beyond, do dividend increases become more of the focal point, have we kind of cycled through the bulk of share repurchases here?

Jag I would say that you will see a pattern of behavior consistent with what you saw this past year or past couple of years, where as the cash flow grows, we put the additional cash flow into the dividend, however the share repurchase continues to remain the cornerstone for the distribution strategy of our cash particularly at these levels in the stock price, there is substantial value to be captured here and we intend to capture through the share repurchase program. So, at this point, I would say looking out ahead even with some appreciation in stock price share repurchase will play a big part in cash distribution, but with a higher dividend mid-year.

Got it, okay thank you very much.

Thank you. Operator, anybody else on the line? Hello? What do we have to do to get the operator back?

Hello, Scott your line is open.

Good morning guys can you hear me.

We can hear you now, Scott.

I am Scott Levine, JP Morgan. You mentioned Jim that residential construction related roll-off poles were down similar to prior quarters, but was there any change in the geographies in terms of relatively weaker or stronger markets in that area.

No, I mean I think the geographies are still we are seeing weakness in Florida, Nevada, California areas that we have big business interest and where we would have a lot of volume. I mean we have seen it in other parts of the country, but I think prominently in those areas and I don't think it's any surprised anybody that we are seeing it. I think that the key here to me is that we would rather see the...this part of economy stronger if it doesn't reflect volume lost to competition or the marketplace. It doesn't indicate that the pricing environment is changing. And I think those are the real positives here that pricing totaling up in this sector in light of a lot of pressure, and a lot of equipment inventory build up. So I think when we get through the cycle whenever that is, again the gain should be relatively substantial to the bottom-line here.

Got it. One quick follow-up; can you mention or did you mention what percentage of your debt is currently at floating rates?

I think we got it about 44% floating and 56% fixed.

Thank you.

Our next question comes from Leone Young.

Yes good morning.

Good morning, Leone.

It's great to see that landfill pricing go up sequentially, and I was just wondering if you could give us a little bit more color in terms of a lot of the strength coming from renewing your contracts on the spot side or maybe a little color you have on geographies or lines business with obviously C&D being the toughest?

I think, as it relates to landfill pricing in general, we said that number of quarters ago that we have contracts that are anniversary out we are going to be moving price up. And that's what you are starting to see in our landfill pricing. If you went back to the fourth quarter, I think 06 you would see landfill pricing about 2.5% and maybe off, tenth of 1% or so, but somewhere in that range and now we are reporting all over 3%. So we continue to stick with the plan. We are not giving out long-term contracts and we are continuing to hold our C&D, our pricing levels in some of our larger facilities. We have a couple of facilities that are exclusive to C&D, and we have been holding our price up and that both sites are in Virginia and Maryland predominantly. And we continue to hold pricing in those particular markets while we are seeing obviously volume decrease is there. So, again I mean that is our business strategy, at Republic it is easy to want a secure volume, but I think in the longer-term airspaces is expensive to build. And we are going to keep the price up, so that we don't have to chase it back up later on.

Right. And knowing there is always exceptions, in general, are you seeing your competitors take the same line, at this point?

Again I can't speak specifically to our competitors, but I would think we are not...our volume loses, when we review them are due to the economy. And we don't see a shifting in market shares. We believe that we are getting our fair share in the markets. And therefore, the only conclusion I can draw is that pricing is competitive.

Terrific, thank you.

There are not further audio question at this time. [Operator Instructions].

Operator, I think we are going to conclude the call at this stage.

All right.

Okay,I would like to thank you. And I would like to remind everyone that a recording of the call is available for the next 24 hours by calling area code 203-369-1381. And additionally there is a recording of the call would be available on our Republic's website at republicservices.com. And again I would like thank all of you for participating and spending time with us this morning and have a good day. Thank you very much.

That does conclude today's conference. You may disconnect your lines. Thank you.