Good afternoon, and welcome to the Fourth Quarter and Full Year 2013 Call for Investors in Republic Services. Republic Services is traded on the New York Stock Exchange under the symbol RSG. 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). It is now my pleasure to turn the call over to Mr. Lang. Good afternoon, Mr. Lang.

Thanks, Angie. Welcome, and thank you for joining us. This is Ed Lang, and I would like to welcome everyone to Republic Services' fourth quarter and full year 2013 conference call. Don Slager, our CEO; Glenn Culpepper, our CFO, and Brian DelGhiaccio, Vice President of Investor Relations are joining me as we discuss our performance. Before we get started I would like to take a moment to remind everyone that some of the information we discuss on today's call contains forward-looking statements, which involves risks and uncertainties and may be materially different from actual results. Our SEC filings discuss factors that could cause actual results to differ materially from expectations. The material that we discuss today is time-sensitive. If in the future you listen to a rebroadcast or recording of this conference call you should be sensitive to the date of the original call, which is February 6, 2014. Please note that this call is the property of Republic Services, Inc. Any redistribution, retransmission or rebroadcast of this call in any form without expressed written consent of Republic Services is strictly prohibited. I want to point out that our SEC filings, our earnings press release, which includes GAAP reconciliation tables and a discussion of business activities, along with a recording of this call are all available on Republic's website at republicservices.com. And finally, I want to remind you that Republic's management team routinely participates in investor conferences. When presentations are scheduled, the dates and times are posted on our website, along with instructions for listening to the live webcast of the event. With that, I would like to turn the call over to Don.

Thanks, Ed. Good afternoon everyone and thank you for joining us as we discuss Republic Services 2013 performance and 2014 guidance. I am pleased to report our fourth quarter and full year performance exceeded our financial guidance. Republic team continued to execute on our long term strategy and maintained our track record of generating strong free cash flow. We are managing the business for long term success including investments in growth, acquisitions and productivity improvements. After reinvesting in the business and consistent with our approach to cash utilization we return the majority of free cash flow to our stockholders. I will now discuss some our financial highlights. Fourth quarter adjusted EPS was $0.53. These results include $0.03 of favorable development in insurance claim costs and $0.03 of reduced environmental cost. Full year adjusted EPS was $1.97. We achieved the upper end of our guidance range even without the $0.06 of favorable items recorded in the fourth quarter. This level of performance was in line with our expectations and consistent with the guidance we provided on our third quarter earnings call. Full year 2013 adjusted free cash flow was $714 million, which exceeded our guidance of $675 million to $700 million. This level of performance continues to demonstrate the strong cash flow characteristics of our business. Full year 2013 EBITDA margin was 29%. The improvement in our second half 2013 margin performance includes an increase in landfill special waste which was lagging during the first half of the year. Core price in the fourth quarter was 3.4% and our average yield was 1.3%. We continue to see better price contribution from the open market to offset lower CPI-based price resets. Fourth quarter volume increased 2.5%, volume growth continues to be concentrated C&D roll off, national accounts and landfill special waste. Throughout…

Thanks, Don. Fourth quarter 2013 revenue was approximately $2.1 billion, an increase of $113 million from the prior year. This 5.6% increase in revenue includes acquisitions of 60 basis points and reflects the following three components of internal growth; pricing, volume and recycled commodities. First, pricing. We had an average yield growth of 1.3%. Fourth quarter average yield was consistent with our third quarter performance and in line with our expectations. Core price in the fourth quarter was 3.4%. As a reminder, core price is defined as price increases to customers in changes and fees, excluding fuel recovery net of price decreases. Average yield in the collection business was 1.2% which includes 2.8% yield in the industrial business and 1.6% yield in the commercial business. Average yield in the post-collection business was 1.9% led by landfill which increased 2.1%. We continue to see better open market pricing to help offset lower CPI-based resets. As a reminder 50% of our revenue has a contractually based pricing restriction and a majority reset in the second half of the year. Fuel recovery fees increased 0.2%. Most of this change relates to an increase in the rate charge to recover fuel costs. Second, fourth quarter volumes increased 2.5% year-over-year. The collection business was positive 1.1%, primarily due to an increase in industrial volume. Growth in the industrial line of business includes C&D and other temporary activity which was up 6.4% and the permanent business was up 3%. The post collection business consisting a third-party landfill and transfer station volume was positive 6.4% which includes an increase in landfill special waste of approximately 18%. Special waste landfill volumes began to slow in the second half of 2012 which created an easier comparison. Our landfill MSW volumes were down 2%. Our defection rate, which represents the…

Thanks, Glenn. Fourth quarter 2013 interest expense was $90 million, which included $12 million of non-cash amortization. Our full year 2013 effective tax rate was 36.5% of adjusted earnings and was impacted by favorably closing out open tax years under audit and realizing additional federal and state credits on our 2012 tax returns. In 2014, there were two tax related changes resulting in a $0.13 EPS headwind. First, in 2014 we expect to return to our normal statutory effective tax rate of approximately 39.5%. When compared to the 36.5% effective rate in 2013 this result in an EPS headwind of approximately $0.11. Second, during 2013 we realized alternative fuel tax credits under a provision of the IRS tax code. Similar to bonus depreciation Congress did not extend this provision beyond 2013. The expiration of the fuel tax credit results in a $0.02 EPS headwind. Full year 2013 adjusted free cash flow was $714 million. Adjusted free cash flow included net capital expenditures of $856 million. With the expiration of bonus depreciation at the end of 2013 we expect cash taxes to increase approximately $60 million in 2014. Our 2014 adjusted free cash flow guidance range of $675 million to $725 million is relatively consistent with our 2013 performance. We expect to overcome the cash tax increase with growth from the business and reductions in capital spending. Finally I'll discuss the balance sheet. At December 31, our accounts receivable balance was $891 million and our days sales outstanding was 38 days or 25 days net of deferred revenue. Reported debt was approximately $7 billion at December 30, and excess availability under our bank facility was approximately $1.5 billion. I'll now turn the call back to Don.

Thanks, Ed. Before closing I'll provide 2014 financial guidance. We expect 2014 adjusted earnings per share to be in a range of $1.93 to $1.98. Excluding the $0.13 of tax-related items this represents mid to high-single digit earnings growth. Our guidance assumes that fuel or recycled commodity prices remain at current levels for the full year. We anticipate 2014 adjusted free cash flow in the range of $675 million to $725 million. This level of performance is relatively consistent with 2013 even though we have to overcome a $60 million increase in cash taxes. We expect annual revenue growth of 3.5% to 4.5% which includes average yield of 1% to 1.5%, volume growth of 1.5% to 2% and contribution from acquisitions of approximately 1%. Our expected yield performance is relatively consistent with our 2013 performance. We expect a step down in CPI price resets offset by higher levels of price contributions from our open markets. Our expected volume performance anticipates construction and business activity will continue to improve, partially offset by a modest decline in our residential business. Pricing levels for municipal bins and residential subscription work continues to be challenging and we will only renew business if it meets our return criteria. We anticipate 2014 EBITDA margin of 28.5% to 29%. As Glenn mentioned our full year EBITDA margin in 2013 was 28.6% excluding the favorable insurance and environmental items recorded in the fourth quarter. Our 2014 EBITDA margin guidance is consistent with or slightly up versus the normalized 2013 performance. 2014 net capital expenditures are expected to be approximately $820 million. During 2014 we will continue to focus on managing the controllable aspects of our business by enhancing the quality of our revenue, investing in profitable opportunities and reducing cost. We will enhance the quality of revenue by…

(Operator Instructions). Hamzah Mazari from Crédit Suisse your line is open.

Good afternoon. Thank you. The first question is just on the gross margin. Could you give us a sense, Don and Glenn what type of incremental margins you are seeing on the volume growth that you are getting? We had talked about sort of a 40% mid 40% incremental EBITDA margin a year ago maybe more. And then within that gross margin that you guys reported is that $0.06 favorable number that you quoted on insurance claims and $0.03 on environmental cost? Is that in the gross margin line as well?

I will take the second question first Hamzah. The $0.06 yes that is in the gross margin line. So our gross margin for the fourth quarter was 30.3%. If you take out those two items our gross margin would have been about 28.6%.

Sure and I will take the first question. So first remember we’ve got some mix issues going on here Hamzah. So some of the growth, a lot of the growth is coming from national accounts, which as you know a lot of that revenue is tied to subcontractor work and some of these brokered recycling tons, so that comes at a lower margin but still a good return. And the other big part of growth is coming from our construction C&D type hauling. So I will tell you that we still use our ROI based pricing tools in all of the decisions that we make to grow the business so whether it’s a small commercial customer or municipal bid or large national account in all the prices we use for our C&D, hauling in our local markets is all based on improving ROI. So we know that as we build the density of the business and continue to make good ROI-based decisions we’re growing the business profitably.

Great, and just a follow up question, I will turn it over. You talked about open market pricing offsetting lower CPI. Any change you are seeing in terms of discipline or rationality amongst either the majors or private this quarter relative to the last quarter or previously? Thank you.

Okay, I don't think there’s much of a change what we have seen previously. I think the larger companies tend to be from what we can still more ROI-focused and tend to be more rational. Smaller players do tend to fly underneath the price umbrella that's provided by larger companies and those trends will continue and are not very surprising.

Great. Thanks a lot.

Thank you. Corey Greendale for First Analysis. Your line is open.

Hi, good afternoon.

Hi, Corey.

Hi. Don question on the guidance. With the EBITDA margin at the low end, you are suggesting could be flat to down slightly, you've been very clear about touch to get a lot of margin expansion in the low CPI environmental but you also pointed out the benefit eventually from growing volumes. So if the low ends are conservative or what could happen to the result of hitting the low end of EBITDA margin guidance?

Well. Our guidance is 28.5% to 29% EBITDA margin. And for both the fourth quarter and for the full year on kind of normalized basis I think we said that it was 28.6%. So in fact our guidance range is relatively even too up from 2013.

Okay. That sounds like the low end, just being conservative if I am hearing you right. So…

I'd say it's a fair bridge from where we were in Q4. Q4 had a lot of special waste as we said right. So that was one of the reasons Q4 performed as well as it did. So special waste is a little bit lumpy that's not going to carry right into the first part of the year and probably it will be more evenly spread out through 2014 that we anticipate.

And it sounded like the residential line of business is somewhat of an outlier in terms of the pricing discipline. Can you just talk about why you think that's different and volume trends overall and what you are seeing there?

Well same conditions exist in residential that have existed through the last couple of years. You have got municipalities that are not in say a very healthy state of general finance and so they are really pressuring haulers. We've seen a little bit of more of challenging environmental at least in some markets from pricing activities for new bids and extensions on business. So that's been challenging. I just think we are at the bottom of that cycle and hopefully working our way out of it. We are going to work through the rest of this let's say re-pricing some of those residential contracts and we look to CPI to improve over the long run. I don't think anybody believes that CPI is going to stay as low as it is forever. So on the 0.5 year average CPI is three plus percent and I think as we go forward a year or two we should start to get some relief on and get back to some normalized CPI environment and that will help things out as well.

And I could say one more thing is -- I think occasionally you see spikes in parts of your business right now but certainly a little more competitive in some markets and as I said in my comments we just decided that we are just not going to price below a reasonable return on that business. And so at some point I think competitively think things will have to change. Because I don't think people can continue to do some of that business as cheaply as they are doing.

Okay. [inaudible]. Thank you.

Thank you. Adam Thalhimer from BB&T Capital Markets. Your line is open.

Good afternoon guys. Nice quarter.

Thank you.

I wanted to ask first about the C&D business. Are you seeing any margin improvement in that business?

Yeah. Absolutely. Our industrial line of business that we've seen, it's really a nice story. We've seen year-over-year growth in units, year-over-year growth in price per unit and as a result year-over-year improvement in margin. So just as it should occur. And we talked about this on our Q3 call as we that part of our business turn off and we expect that to continue through 2014.

And then I wanted to ask about the commercial business I think you said that it is a slight positive in 2014. I mean can you expand on that like in recent quarters you talked about some greenshoots in terms of commercial volumes. What are you seeing there?

Well. Commercial volume is in absolute units it's up. The margins are pretty stable there. We continue to have pretty good pricing in the open market commercial. As I said that offsets some of the price headwinds in our CPI-based pricing book of business. What we haven’t seen is a dramatic increase in service levels but I would say that if you did an eight quarter chart and drew a straight line through service increases and services decreases you would say that it’s an improving environment across both of those metrics over an eight quarter period. So we would look for that to continue in ’14. At what rate we can’t necessarily forecast but we look for it to continuing to improve.

Okay, thanks guys. Congrats again.

Thank you. Joe Box from KeyBanc Capital Markets your line is open.

Hey, good evening guys.

Hi, Joe.

Can you just put a little bit of color around the $35 million reduction in net CapEx. Just kind of curious is that more asset disposal, maybe spending little bit less on recycling or just maybe an early benefit of one fleet?

Yeah I would say it’s a couple of things. You know we pulled a little bit forward into ’13, bought a few trucks early and we are spending a little less on recycling build out in ’14 and in the last two years again. We are still reworking a number of facilities in ’14 like some of those private [haulers] aren’t as capital intensive is the one we took on last year and a year before. So we’re still moving on recycling platform forward. It's really those two things.

Okay, that’s helpful. And then it’s been about quarter since the Atlanta is closed. Can you maybe just give us an update on the fundamentals in that market?

Yeah I would say that it really hasn’t helped us much. We probably got a little bit of revenue out of it, nothing to make a headline out of. We’re a best situated landfill in that market and so we tend to be the highest price because of convenience factor. We’re not predisposed to lower our rates to track the volume and I would say that most of the volume has found its way to Orange County to the County site.

Understood. Thanks guys.

Thank you.

Thank you. Michael Hoffman from Wunderlich, your line is open.

Thank you very much. Nice job on the year-end.

Thanks, Michael.

Can you talk about what is it you measure to manage when you are talking about your standardized maintenance program and the things you will be looking for that being a success and you have lapped yourself on some of this already so part of those metrics in fact proving to be valid and therefore it actually gives you confidence about ongoing success.

Sure, well we measure a number of things both in maintenance and directly fleet metrics and non-fleet metrics. So we measure absolute cost per hour as a baseline. I will tell you that some of our divisions were spending money poorly and having high cost per maintenance that we can bring down some more spending money, not enough money and having more breakdowns and major component failure. And so their baseline cost per hour was maybe lower than is reasonable and those divisions are going to have a higher cost per hour to have a better end result. We look at total maintenance spend per route and those kind of things but we also look at driver down time. We look at how many hours per week trucks were sitting on the side of the road broke down because of component failure. We look in the pure metrics of routing mishap we look at what percentage of our repairs are schedule versus non schedule. A world class fleet would operate at about 80% of the work scheduled, so those repairs being not only preventive maintenance but things that you are supposed to catch during preventive maintenance during routine maintenance checks and during driver checks of their trucks. So we’re catching things before they break. Things are being scheduled appropriately. Our technician time we moved to a format of standard repair times across our fleet. So our technicians know exactly how much time we expect those repairs to take and we better manage our workforce on the floor shop. We measure inventory levels. So everyone of our maintenance our one-fleet rollout has resulted in a substantial drop in our parts inventory, that we use at every facility. Spare truck ratio, at some point we’re starting to see the earliest fleets that…

That's great thanks. And then second one, Glenn or Ed cash flow from operations about 15, $1.58 billion to $1.55 billion this year it looks like that number was down if just do the simple capital spending plus the mid-point of free-cash flow. So what's -- is that you are having some negative working capital swing here or what's happening there and why would we see an incremental negative working capital spend particularly in light of everything Don just talked about, I was thinking about it the other way.

It's really just cash taxes Michael will be up significant next year through the expiration of bonus depreciation we -- that's a $60 million headwind.

Okay. And then one housekeeping item what's the share count you are using when you gave your guidance?

That 366 million share [inaudible], Michael.

I am sorry you broke up Glenn.

It's about 360 shares was about our year-end share count.

Okay, great, thanks.

Thank you. Alex Ovshey from Goldman Sachs. Your line is open.

How are you guys?

Hi, Alex.

Don I want to ask you about pricing, can you talk about how you see the pricing on the collection side average yield feel as you guys currently trend relative to the landfill side?

To the landfill side?

Yeah, can you just talk about how you see pricing on landfill relative to the collection side in 4Q?

Yeah I would say landfill specifically MSW trends down, have been sort of flat for us. I've seen special ways to trend it up and C&D as the landfill has trended up MSW has been a little bit pressured. We've consistently been raising price to the landfills, watching them and doubling volume along the ways we talked about that trend continuing in Q4 but total landfill in Q4 yield was 2% down a little bit from Q3, I would think flattish throughout the rest of the year.

Got it, thanks for that. And then on the industrial side can you talk about what is driving the improvement in the volume, do you have the sense of the new residential construction market repair model, the non-residential construction what that could be? Do you have a sense of sort of how the ends markets are performing and sort of given if you are seeing an industrial business?

Well first I would tell you that both permanent, our permanent rollout and our temporary rollout were both up in Q4. We don't really make a distinction between residential construction and commercial construction because it really doesn't mean anything to us and how we run our business. So I really don’t have metrics to share with you there. As I shared before I mean it was up pretty dramatically in Q3 and it performed well in Q4. We expect it to maintain that kind of trend through 2014. So it's a bright spot for us what we've all been waiting for. And we all said for many years the business sort of builds around household formation so as we see more new home construction and then we see more business development around the new home construction infrastructure business formation come in and that's going to fuel the commercial business as well. So it's happening the way we thought would happen, maybe it took a little longer to get started but we’re looking forward to a pretty good trend in ’14.

That's all, thank you.

Thank you. Derek Sbrogna from Macquarie. Your line is open.

Hey, thanks for taking my question guys. Just wanted to dig in a little bit. Over the last couple of quarters you have seen volume growth of 2.5% to 2.7% and the overall guidance for 2014, 1.5% to 2% range is that really just a function of what we have seen over the last couple of quarters with the special waste in the C&D coming out?

That’s the biggest factor there Derek. If you look at our 2.5% in the fourth quarter special waste landfill volumes drove about 90 basis points of that and our collection business which is 75% of our revenue was 1.1% growth in volume. So we would see ourselves as continuing to grow all of those things but the special waste had an easier comparison in the fourth quarter this year compared to the last year and that’s what really drove the 2.5%.

Okay and just one more. Last quarter you guys bumped the repurchase authorization and then were pretty quiet in Q4. Was that really just a function of pulling forward the CapEx into Q4 and specifically if you could talk a little bit more about appetite for buybacks in 2014? Thanks.

I will just tell you that we’re committed to the buybacks and that's been pretty consistent in our history and we’re committed to buyback in 2014. We think we've had probably the steadiest trend in the industry on cash yield. You are going to see us continue to spend on the buyback in 2014. It could be around $400 million or so.

Great, thanks very much.

Great.

Thank you. Al Kaschalk from Wedbush Securities. Your line is open.

Don, Glenn I just wanted to clarify, did you say total price in ’14 was being guided 1% to 1.5% or is that core price?

That was our yield.

Yield, okay. So help me appreciate, I fully get the CPI mix headwinds. I heard your comments about competitive markets maybe easing and your churn being relatively consistent or flat. It still doesn’t sound like you will get healthy or improving competitive markets because I would think that would lift that pricing guidance that you provided. So are you not able to get to the market with a better price, given defending volume or what’s happening there, is it mix?

Well let’s start with you know the big headline in CPI is actually going, is going to happen us negatively in ’14. So that’s kind of about is a 60 basis points move in CPI so you know that’s that tends to be you know a little bit of tail that wags the dog for us. We have talked about it so. We expect that we will be as active in the open market in ’14 as we were in ’13 and we think the open market will allow us to get little bit more price in ’14 than ’13 to offset the CPI headwinds and the resets that we’ll face. So absolutely the nutshell. So we do have some dynamics improving. Again pricing in CNG roll-offs going up, price in special waste has held up and actually gone up nicely. We got to be consistent with our pricing cadence through ’14 in the open market, we got to hold our line of landfill pricing like we have historically and hit our marks. So we believe that as I said CPI at some point will start to give us a positive bounce but we don't control that. So we just got to operate around it for now.

Okay so 60 basis headwind is what you calculated for.

From CPI, right.

All right, okay. And then just a second part and the margin story on the [XT] items are obviously up a little bit for ’14 with the guide, but with that pricing backdrop and some of the net special waste and I guess the closure of one recycling facility I would think margins would have a little better room going directionally higher than say 28.5% and 29%. So first I guess the broader question would be are you planning, should we be on the lookout for further closures on recycling facilities due to economics? And then two generically I think you have always thought special waste has been a tougher margin business than the collection business?

No, the last question first. Special waste has not necessarily been a -- it's been a great business for us and a good margin business for us. The larger the special waste job the tighter the margin becomes but special waste performed very nicely for us in not only in volume but in margin. So we hope to see that continue. The best you can do when you are building business plan is look at the current trends and look at the actions you are taking and build them together. So we think the 28.5% to 29% margin performance for '14 is a strong performance. We don't have a lot of business closures or work closures that we can be concern ourselves with. It really comes down to the headwind from the CPI environment and we don't start to see benefits from the one [inaudible] till the second half of the year and all the other cost initiatives that we talked about continue. So we think it's a pretty good story and if CPI starts to give some relief in the out years then we just grow from there. We still believe that in the long run we can see margins over 30% again but it's going to take some better CPI environment for us to experience that.

Just curious was the Murph closure in a top 25 market or outside of that?

No, it was a smaller one.

Thanks, Don.

Thank you. Barbara Noverini from Morningstar. Your line is open.

Hi, good afternoon everyone.

Hello?

Can you give us a little extra color on the recycling component of your municipal privatization. For example in your recent deals, do these cities already have a second program in place, have you found that these deals are predicated and adding to or upgrading, struggling with second programs as well?

No, I don't think recycling is kind of a decision point for privatization of a municipal collection operation. Generally they are relatively small contracts and simply the city is looking at the capital spending requirement for fleets. So containers, and then we prefer to kind of step away from the business not wanting to make those type with long-term tactical commitments.

Got it. Thanks.

I am showing no other questions at this time.

Thank you, Angie. I would like to thank all Republic employees for their hard work, commitment and dedication to operational excellence and creating the Republic way. Thank you for spending time with us today and have a great evening.

Thank you. Ladies and gentlemen, this concludes the Republic Services Conference Call for today. Thank you for your participation. You may now disconnect.