Good afternoon and welcome to the third quarter 2009 conference call for investors in Republic Services. Republic Services is traded on the New York Stock Exchange under the symbol RSG. Your host this afternoon is Republic Chairman and CEO, Mr. Jim O’Connor. Today’s call is being recorded, and all participants are in a listen-only mode. There will be a question-and-answer session following Republic’s summary of quarterly earnings. (Operator Instructions) At this time, it is my pleasure to turn the call over to Mr. O’Connor. Good afternoon, Mr. O’Connor. Jim O’Connor: Good afternoon and welcome. I would like to thank all of you for joining us today. This is Jim O’Connor, and I would like to welcome everyone to Republic Services third quarter conference call. Don Slager, our President and Chief Operating Officer; Tod Holmes, our Chief Financial Officer and Ed Lang, our Treasurer, are joining me as we discuss our third quarter performance. I’d 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 involve risks 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 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 November 02, 2009. 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. I am pleased to report that we are raising our 2009 financial guidance for the second time as a result of our…

Thank you, Jim. Well, third quarter 2009 revenue as reported rose approximately 149% to $2.07 billion from $834 million last year. Clearly this increase of $1.24 billion relates to the merger with Allied. Since we are measuring the performance of the operations on a combined company basis, the remainder of my comments assumes the companies were merged on January 1, 2008. The prior year combined company financial data reference in my comments can also be found on our website. On a combined company basis, there was a year-over-year decline in Q3 internal growth of 12.8% and this consists of core price which was a positive 2.8%. We continue to see core price improvements in all lines of business including collection at 3.3% and landfill pricing at 2.2%. Industrial pricing of 2.6% was less than other collection lines because a temporary work had price increases less than the industrial average. Price increases to our index based customers were pressured by lower CPI, which is simply a function of contractual terms. Approximately 50% of our revenues are tied to index based pricing and we will see this phenomenon in the fourth quarter and into 2010. Price increases to other customers remain strong and are relatively consistent with prior quarters. We stated before that the price increase percentage should be measured relative to cost inflation, it’s the spread or difference between the two that drives margin expansion. Since we are experiencing a lower inflationary environment we expect the price increase percentage to be lower than the price increase in prior periods when cost inflation was clearly higher. The key here is that we have not changed our pricing strategy and we will continue to price to improve margins and to earn an appropriate return on our substantial investment. Now, let me talk about…

Thanks Tod. During the quarter we executed our first debt offerings since the merger; a tenure note for $650 million with a coupon of 5.5%. This transaction was significantly over subscribed and the rate was lower than the initial price. The proceeds of this offering were used primarily to repay all outstanding bank debt and tender for $325 million of existing 2010 and 2011 debt maturities. We decided to utilize this favorable rate environment to retire our existing debt and reduce future refinancing risk. In addition to extending maturities at a lower coupon we are able to retire a portion of the debt discount associated with merger accounting which is reported as non-cash interest expense. The third quarter financial impact of the premium for the tender offer and the write-off of the related debt discount was a negative $0.05 of EPS. The 2010 EPS benefit associated with lower interest expense and lower debt amortization costs is slightly greater than $0.01. Now, that Republic has a bench mark transaction in the market we can move forward with additional liability management cost savings opportunities. We recently began this process by calling two existing maturities. A $450 million note maturing in 2013 with a coupon on 7% and 7.8% and a convertible note was a coupon of 4.25%. Republic has over $1.1 billion of excess capacity in its bank facility to fund these costs. We will likely execute a new long term debt offering to finance a portion of these debt maturities. The financial impact in the fourth quarter associated with the call premium on the 7 and 7.8 notes and write-off the debt discount on the two offerings will be approximately negative $0.09. The 2010 EPS benefit associated with the fourth quarter refinancing activities will reduce interest expense in debt amortization costs…

Thanks Ed. I would like to start by saying how proud I am of the entire Republic operating team for the improvements they have made in our area on safety. Republic has reduced its worker’s comp in auto liability claims by approximately 24% year-over-year. I wanted to recognize our general managers and safety professionals throughout the organization for their leadership in delivering these excellent results. Your dedication to safety and our strong safety programs will continue to benefit our overall performance. We’ve learned a lot about our people and our operating platform during the business integration in the economic downturn. We have shown the ability to quickly right size our fleet and workforce to meet the changing economic conditions while maintaining a quality work environment. We have adjusted our capital spending and operating expenses while still investing correctly in the business and delivering quality service. We maintained and in some cases improved collection productivity in the phase of declining volumes while improving safety. We consistently priced our services to offset inflation and improved returns while effectively acquiring new business. We’ve done all this amidst integration activities that are delivering synergies ahead of plan. In short, we are successfully uniting two companies into one strong high performing team. Republic is maintaining its focus on the fundamentals of our business and steadily making improvements in our core competencies and business processes. As the economy improves we are well positioned to realize operating leverage. We started our annual planning process; this is very important step in completing the merger integration. Our field organization is developing operating plans using a single budgeting platform for the first time. During 2010 we will continue to see the benefits of adapting best practices, common IT systems and compensation programs that reinforce our focus on return on invested…

(Operator Instructions) Your first question comes from Hamzah Mazari - Credit Suisse.

Just a question on your Q4 guidance; when you are back into it, it looks like its $0.31 to $0.33. I am just curious what the delta between the low end and the high end of your guidance is. Volumes are running flat sequentially. So is that delta related to a pricing on the CPI side or is there something on the cost side. Any color you can add there? Jim O’Connor: Well, I think that you know the company is doing an excellent job on the cost side. There certainly is the CPI phenomenon that we’re seeing here beginning in the second half of this year will carry into next year. Again, Republic doesn’t give quarterly guidance, obviously when you get to the third quarter with our annual guidance people kind of back into it and compare it to their results. I would say that we have the opportunity again to bring the cost and maybe a little bit better than what is expected. Remember that there is seasonality in certain lines of business such is the residential collection where you get particularly up in the Midwest and north where you get a lot of the yard clean up and much heavier weights and costs associated with those lines of business. So on balance I think we feel pretty positive about the fourth quarter and do you want anything here?

No, I think we feel very good about the year. We continue to escalate and give increased guidance on earnings as we have got more clarity, and again, I think I go back to some of the comments that Don made in our opening comments as to focus of the organization, improving the class structure, keeping in mind that as we have seen the economy deteriorate there has been a significant effort by the field organization to continue to stay on pace with ‘08 productivity which has been a significant contributor to our success this year. So, all in all I think we’ve got a great year.

Then just a follow up question, as you look across your portfolio, how much of your customer base would you say is mispriced, and by that I just mean how much of an opportunity do you have to prune low margin business from your portfolio. Is there any long hanging fruit there or is that process sort of on going, how should we be thinking about that?

Hi Hamzah, this is Don. We have been at this pricing thing pretty steadily, now for the last three or four years as you know, and I think we have really been through the portfolio, I don’t think there is much left. There maybe a customer too that was under a long term contract that we got to sort of terminate out or renegotiate but there is not a great deal of loss left in the portfolio.

Your next question comes from Scott Levine - JP Morgan.

On disposal pricing, look like the number was you think it’s a 2.2%. You said you are seeing some continued discipline in the marketplace there. What are your expectations there? Going forward are there any mixed issues in the quarter. Jim O’Connor: Well, I mean I think part of our landfill and disposal pricing is indexed price like a lot of the rest of our business. So, we are seeing some pressure come back in certain markets, we have seen Huston, we have seen Mecklenburg County which is Charlotte we have seen Los Angeles come in with flat to negative CPI adjustments. So those are putting some pressure on. But all in all the intensity of the review by the fields organization on disposal prices and our commitment to continually move it up is still there.

Yes, if I could add to that, remember too Scott, the mix in that business, what we called the open market volume at landfills that volume is not under our contract that limits our pricing, the CPI that open market volume that has decreased with the economy. So when we are telling you that we have seen 18% reductions in our roll up business, those over market customers that come to our landfills have seen those kinds of reductions as well. So when you add to the whole mix issue we have had fewer tons to price in those landfills as well. So that all kind of comes out in the math.

Also, we saw that you guys recently sold Miami Data operations to a services that was not a required divesture, would you guys consider or you contemplating selling other markets voluntarily. Jim O’Connor: Well, I mean we are always reviewing our portfolios of business. In the case of Miami, we looked at our ability to further integrate the business with disposal and really didn’t see anything in the near term or the intermediate term. So, we got a very good deal from Waste Services and are able to integrate it and take advantage of their market integration. So, the rest of our markets in Florida have municipal based disposal and we still feel very high on those. But again, as these two companies continue to come together we are going to continue to look at the returns that each of the marketplaces are giving us and we’ve got well over a 100 to a 150 markets that we are reviewing right now. So, we see that opportunity to improve or we see an opportunity to do an exchange or a divestiture, we will take advantage of those, but right now we feel really good about the portfolio.

I think if you take Miami, again, Dade County is really a separate market than the greater Miami to Jim’s point. I think we would probably get solid number four in the market place. And in most of the markets we are in we are at one or at number two, and so we just had a weaker position to start.

Your next question comes from Michael Hoffman - WSI.

On the price side, having extraordinarily low inflation across the whole business model, so can we frame price with regards to the real prices as opposed to nominal and whether you are seeing any improvements going forward with the spread, so as you are coming out of 2009 going into 2010 do you actually see a better real price relative to 2009, so that’s part of the why margins should continue to improve and cash flow improves. Jim O’Connor: Well yes, I mean I think it kind of goes Michael with some of the opening comments that I think each of us made here that we are still looking at the spread between core pricing and inflation, and spread is still well in excess of a 100 basis points which should be a contributor to margin expansion for us. So, I don’t see any reason why we wouldn’t continue to see that and I think when we get ready to give guidance for 2010 you will see that we’ll be giving guidance for a margin expansion.

Okay. This is not my second question; I just want to make sure I understood you correctly. You are still expecting the spread to be in place and improve regardless of what the inflation environment is.

Yes, and if you do the math we’ve got about half of our revenue is the index price. So if you think CPI pricing is going to go down by 200 basis points that’s a net impact to our price of 100 basis points, math is pretty simple. Jim O’Connor: Yes. Again, we look at the margin expansion that we spoke to and that we have achieved somewhere in that 100 basis point range we feel very good about that.

Then 2010 expiration of cap gains taxes and I get that you are in the process of integrating two companies coming up in the anniversary of that but can you talk about the acquisition environment for you and whether those are opportunity to take advantage of a lot of businesses that may chose itself because of capturing capital gain at a lower rate in 2010 and what’s your position compete for that? Jim O’Connor: I guess we’ve not looked at our business portfolio on the basis of how the federal government sets the tax rates, we really look at the integration benefits to the acquisition whether it’s to latch on Collection Company or filling in for a void that we have in terms of disposal capacity. So, we are going to take advantage of those. If there is not any reason, we have got plenty of cash flow to do that. I mean obviously we are committed to delevering the company. But we are not going to pass up a good opportunity in a particular market to fill out the integration process. So, as those become available we are going to review those, and if we don’t look like we are participating for the most part we usually are, it’s just that we can’t meet the seller’s expectations.

Your next question comes from Jonathan Ellis - Bank of America.

I wanted to just first of all talk about; you mentioned that 50% of revenue is tied to some form of index. But can you give us a sense when that how much of that 50% of revenues is tied to CPI and or other indices on more of a real time basis versus more lag, and really what I am getting at is, how much of an incremental, assuming that CPI remains kind of in the current run rate, how much of an incremental downside of pressure could there be as you move into 2010 and some of those contracts begin to reset. Jim O’Connor: Well, again, we’ve looked at it and the math again is pretty simple. I mean if we are doing somewhere between 3% and 3.5% price on what was an inflationary environment that was probably 2.5% or something like that, and you think it’s going to go to 1% or maybe less than that. It could have a 100 basis point impact on our price year-over-year from -- actually between 75 and 100 basis points ‘09 to ‘10, and again it’s a functional what’s going on with CPI, it’s a function obviously as you are alluding to of the contracts themselves and when they reset, but we are starting to see them reset here in this third quarter and they will continue to reset all the way through probably the third quarter of next quarter.

Okay. So on more of a rolling basis than opposed to a step function change in one quarter next year perhaps. Jim O’Connor: Right. It’s going to come in on a rolling basis, you will see a series steps I guess is a better way to put it.

Then my second question is just in light of the formula I guess irrespective of your contracts. Any thoughts on opportunities to potentially raise either existing fees or introduce additional fees or introduce additional fees, I know one of your large competitors has put an administrative fee in place with some success, any thoughts on your fee structure generally speaking to complement what you are doing from a pricing standpoint? Jim O’Connor: I don’t think so Jonathan, I think we have evaluated the fee structures that we have in place today. We feel that they are appropriate today. But I mean again as the business environment changes and as it relates to fees or administration fees, we will obviously look at those and evaluate those at the appropriate time, but right now we feel real good about where we are at.

Okay. Just to be clear, you do not have an administrative fee in place right now. Jim O’Connor: That’s correct. Let’s clear that up okay, just because I know we are talking over each other here. We do have in certain markets where we do have administrative fees in place, they are not true to a great degree, and they are not necessarily through out the entire organization nor do we plan at this particular time to standardize those administrative fees.

Your next question comes from Corey Greendale - First Analysis

I believe, if I heard you correctly Tod, in your comments you said something about recycling volumes been weaker than expected, could you just put that in context with the other comments about volumes basically being stable and trending as expected in the waste part of the business.

I would say, what we saw actually was a step up sequentially from the first quarter to the second quarter in our materials recycling facility volumes, and I think we are hopeful that they were going to continue to move up. They probably went up by about 7% or 8%, and actually what we saw I think is as the price moved up the volumes came back a little bit. So our third quarter volumes were probably more in line with our first quarter volumes. Now, some of that might be a mix issue with the mills, I think I have just been looking at our hedging strategy and one of the things that we are hearing is that there are tax incentives associated with virgin fiber, which maybe would be set to expire later this year, and so that maybe a driver. So it could be a short phenomenon, it should be just the mills in China ramping up inventory for these holiday selling season and maybe starting to back off a little later in the third quarter.

Okay and my follow question is about the landfill pricing. I think there have been at least some instances of municipal or county sites raising their price more as a source of revenue, is that something you are seeing? Are you seeing it’s any great degree and do you think that could help support maybe greater landfill pricing in some markets than that would offset some of the lower CPI and other markets?

I will think we have seen than to any degree Corey, we have seen a few examples of it that continues that certainly helps the pricing environment, but I don’t think it’s necessarily, I think it’s also to really say that’s the new trend in municipal pricing. Jim O’Connor: I don’t know if it would help us anyways where we have that situation. I think if municipality or the unit of government has a disposing facility, for the most part when we recognize that as a source of income, additional income, I think they will probably look at like at it like they do their other fee structures in light of tax basis environment.

Your next question comes from Richard Skidmore - Goldman Sachs.

Just a question for you Jim, you now have the Allied waste business for nearly a year, just interested in hearing what your thoughts are in terms of the top one or two best surprises, if you will, and what are the maybe on or two biggest concerns that you have now as you have this business now for a year? Jim O’Connor: It’s not really surprising to me because I think when we actually were in preliminary discussions, we realized the strength of both organizations people, and we ask that human element, I guess, I would refer to it as, that’s probably the biggest basset that we have. It’s the reason that we have been able to put such a great integration plan together, and execute against them, and while I know you probably just use these words somewhat loosely is that since I have had it it’s really, this was a merger of equals more so and if think what you look at is that both companies brought significant amount to the table. So I guess what I really am on to street talking to individual investors and they ask me this question really the integration process has far exceeded my highest expectations and a lot of that is due to the people’s efforts, the quality of the people and the planning process, and then our ability to execute against it.

Then just following up on that a little bit with regards to the synergy target for 2010, based on the commentary it sounds like you are expecting about $20 million incremental synergy benefit in ‘10 versus ‘09, is there a reason that that wouldn’t be a bigger number given the overall cost structure of the business.

Well I think it will probably be a little bit bigger than that. Again, in terms of total synergies while we originally note that $150 million we are looking more towards $165 to $175 and we think that in this calendar year in terms of absolute dollars realized we should get something in the range of about $120 million. So, the difference being the $120 and $165 to $175 not all of that will come next year, some of it will obviously be a roll over into 2011 depending on the timing, but I would say that we should be getting maybe something in the $30, $35 million in 2010.

Then the cost structure and the cost of the team. Jim O’Connor: Right, cost of attaining also drop off in 2010.

Thank you. That is all the time we have for questions today. I will now turn the call back to Mr. O’Connor for his closing remarks. Jim O’Connor: Thank you, operator. In summary, I am very pleased with our third quarter results and will continue to stay focused on achieving appropriate return on capital through improved pricing, maintaining labor productivity through route and disposal optimization. We continue to meet and exceed expectations while realizing merger synergies, generating higher levels of free cash flow performance, reinvesting in our people and business platforms to ensure customer service, and a high quality and safe work environment, continuing to reduce debt, improving our credit profile and taking advantage of refinancing opportunities to reduce interest expense. I would like to thank our field organization for their continued focus and exceeding financial targets and integrating our national operating platform. I would like to remind everyone that a recording of this call is available through November 16th, by 203-369-0795. Additionally, I want to point out that our SEC fillings and a discussion of business activities along with the recording of this call are available on Republic’s website at www.republicservices.com. Thank you for spending time with us today and have a great evening.

Ladies and gentlemen, this concludes the Republic Services conference call for today. Thank you for participating you may now disconnect.