Good day ladies and gentlemen, and welcome to the second quarter 2011 Waste Connections Incorporated earnings conference call. [Operator instructions.] At this time I would now like to turn the conference over to Mr. Ron Mittelstaedt, chairman and CEO. Please proceed.

Thank you operator, and good morning. I'd like to welcome everyone to our conference call to discuss our second quarter 2011 results and provide a detailed outlook for the third quarter. I'm joined this morning by Steve Bouck, our president; Worthing Jackman, our CFO; and several other members of our senior management team. Our second quarter results were strong by almost any measure - revenue, margins, earnings per share, and free cash flow all exceeded the upper end of our expectations. Strong pricing, record recycling commodity values, and increasing disposal volumes, as well as improving roll off activity drove solid organic growth in the period, which was supplemented by better than expected contributions from recently closed acquisitions. Margins in the quarter expanded year over year despite a 100 basis point increase in fuel expense as a percentage of revenue. Adjusted earnings per share grew almost 22%, compared to Q2 2010 and free cash flow through the first 6 months of 2011 was more than 20% of revenue, up 42% over the prior year period on a dollar basis. And, we returned about $30 million to stockholders through share repurchases and dividends. As many listeners and investors already know, we acquired County Waste, located in New York's Hudson Valley and completed a $250 million senior note financing early in the second quarter. More recently, we closed a new $1.2 billion five-year credit facility providing us with more than $600 million in available excess revolver capacity, and we were upgraded by Standard & Poors to BBB, putting us among the highest investment-graded rated companies in our sector. Put simply, the year has played out very well for us so far. Before we get into much more detail, let me turn the call over to Worthing for our forward-looking disclaimer and other housekeeping items.

Thank you Ron, and good morning. We must inform everyone listening that certain matters discussed in this conference call are forward looking statements intended to qualify for the Safe Harbors from liability established by the private Securities litigation Reform Act of 1995, including statements related to expected volume and pricing trends, recycled commodity prices, contribution from closed acquisitions, potential acquisition and privatization activity, share repurchases, dividends, available borrowing capacity, anticipated capital expenditures, as well as our third quarter 2010 and full year 2011 outlook for financial results. Such forward looking statements are subject to various risks and uncertainties, which could cause actual results to differ materially from those currently anticipated. These risks and uncertainties are set forth in the company's periodic filings with the Securities and Exchange Commission. Stockholders, potential investors, and other participants are urged to consider these factors carefully in evaluating the forward looking statements and are cautioned not to place undue reliance on such forward looking statements. The forward looking statements made herein are made only as of the date of this conference call and the company undertakes no obligation to publicly update such forward looking statements to reflect subsequent events or circumstances. On the call we will discuss non-GAAP measures such as adjusted operating income before depreciation and amortization, adjusted earnings per share, and free cash flow. Please refer to our earnings release for a reconciliation of such non-GAAP measures to the most comparable GAAP measure. Management uses certain non-GAAP measures to evaluate and monitor the ongoing performance of our operations. Other companies may calculate these non-GAAP measures differently. I'll now turn the call back over to Ron.

Thank you Worthing. We are extremely pleased with our performance in the second quarter. Revenue was $390.2 million, up 18.1% over the prior year period. Internal growth in the quarter was 5.5%, broken down as follows: positive 2.8% from core price, positive 0.8% from surcharges, positive 0.5% from volume, and positive 1.4% from recycling, intermodal and other services. Net pricing, or core price plus surcharges, was 3.6%. This is up 20 basis points sequentially from the prior quarter, due to a slight increase in surcharges related primarily to higher fuel prices. Given these higher fuel prices, we expect the net pricing to remain above 3% for the remainder of this year. Volume growth in Q2 was positive 0.5%, which was a half to a full point above our expectations, primarily due to increase in special waste and C&D disposal volumes and roll off activity. We expect a portion of this modest improvement to continue into the second half of the year, but remind listeners that volume on a reported basis in Q3 should be negative due to the difficult comparison in the third quarter of 2010. As listeners may recall, we reported a positive 3.2% volume growth and called out a notably large special waste job that had contributed about 2% of that volume in 2010. Looking at landfill volumes, disposal volumes in the second quarter, adjusted for the impact of acquisitions, were up about 6% year over year due to increases in special waste and C&D volumes. MSW volumes were slightly negative. Almost 60% of our landfills reported year over year increases in overall disposal volumes in Q2 and a little more than half of our sites reported increase in just MSW volumes. These trends are expected to continue into Q3. Roll off pulls per day in the second…

Thank you Ron. In the second quarter revenue increased 18.1% from the prior year period to $390.2 million, 12.6% of which from acquisitions and 5.5% from organic growth. Adjusted operating income before depreciation and amortization in the quarter increased 19.2% from Q2 2010 to $128.1 million. As a percentage of revenue, this was 32.8% in Q2 or a 30 basis point increase over the year ago period. Organic growth, which is primarily attributable to higher-margin items such as pricing, increased disposal volumes, and record recycled commodity values, caused many expense categories in our base business, except for fuel, to decrease as a percentage of revenue, reducing total cost of operations as a percentage of revenue compared to the prior year. This improvement, though, in gross profit margins in Q2 within our base business was offset on a consolidated basis by the impact of the County Waste acquisition. County Waste, which was reflected in our full quarter results, came on at about the same EBITDA margin as our base business. However, when consolidated, its higher third-party disposal costs as a percentage of revenue offset margin improvement within our base business, while its lower SG&A expense as a percentage of revenue blended down that line item. These differences are due to its higher mix of collection and recycling revenue compared to our base business. Looking on a consolidated basis, the following are certain line items that moved a notable amount from the year ago period as a percentage of revenue, again due to a combination of opening leverage and County Waste revenue mix. Facility costs, Leachate treatment expense, and other miscellaneous operating costs decreased 50 basis points. SG&A decreased 40 basis points. Direct labor costs decreased 40 basis points. Brokerage, passthrough, and recycled material costs decreased 25 basis points. Fleet maintenance and…

Thank you Worthing. Again, 2011 has played out very well so far. In the first half of the year, revenue grew 13% year over year, EBITDA increased almost 16%, margins expanded 70 basis points despite significant increases in fuel costs, and free cash flow averaged about 20% of revenue, up over 40% on a dollar basis. With six months reported and Q3 guided, we're on track to potentially report $1.5 billion in revenue for the full year excluding the impact of any additional acquisitions that might close during the remainder of the year, and free cash flow for the full year should again hit or exceed 16% of revenue. 2011 is coming in better than expected and 2012 is setting up to be another banner year. Our strong free cash flow, combined with our low leverage and access to low-cost capital, provides tremendous flexibility to fund both our disciplined growth strategy and return capital to our shareholders. We appreciate your time today and I will now turn this call over to the operator and open up the lines for your questions. Operator?

[Operator instructions.] Your first question comes from the line of Hamzah Mazari from Credit Suisse. Please proceed. Hamzah Mazari – Credit Suisse: Good morning. The first question is just around pricing. If you could just give some more color as to what you're seeing in pricing in some of your secondary markets relative to the franchise business. And given the uptake that you're seeing in volume, driven by special waste and roll off, are you guys beginning to get more aggressive at the landfill or do you plan to in the back half of this year or is that more of a 2012 story?

Let's see. First, on the first part of your question, I think the pricing on our collection business and the comparative footprint is and continues to be stronger than our exclusive business because of where the CPI was for last year that we are using in most of the resets that have happened it exclusive business in the first half of this year. Now, as the CPI rises this year, we would expect to get that in the benefit of our exclusive business for 2012. So that should be an incremental help in 2012 for us, assuming that the CPI continues to rise throughout this year. So we are averaging somewhere just below 2% on that side of the house for our business and we are running right around 4% or just under in most of our markets on the competitive. So the pricing is not quite double in the competitive market where we're not governed by the CCI. With regard to your question on disposal volume, I think your question was are we going to going to more aggressive. I think you mean in increasing prices more on the disposal side as volumes rise. I think that's where you were headed. Hamzah Mazari – Credit Suisse: Yeah, that's right.

With so much of our business being a fixed business, either meaning it's internally based into our landfills or it's contractual into our landfills, other than our C&D business and special waste business, there's not a tremendous amount of benefit to be gained by pushing price more than our guidance of about 3% per landfill. So I don’t see that changing. We've pretty much done our landfill adjustments for this year, and any incremental nominal adjustment to the landfill above what we've done would probably be offset by volume loss at this point because I think the economy is still fairly fragile. So I don't really see that being a material driver for us. Hamzah Mazari – Credit Suisse: All right. And then just if you could just touch on your commercial business, what you're seeing there. You touched on high unemployment, is that business running flat sequentially or are you give beginning to see a pickup in either the weight of the containers or service increases relative to decreases there?

Well, actually in Q2 relative to Q1, both our new business compared to our lost and our closed businesses throughout our system, our new business starts outpaced our lost and closed businesses, which was a reversal from Q1. And Q1 lost businesses and closed businesses outpaced our new starts. And our service increases also outpaced our service decreases commercial system which also was a reversal from Q1. So the commercial business is now better than flat and is in positive territory on a six-month basis where at the three-month basis we were a little underwater if you will. So yes, it did improve somewhat in Q2, so I would say that that tends to point to two things. One, because we do the vast majority of our rate increases in Q1, you tend to see the highest amount of lost business activity and potential service decreases and rollbacks in that first 90 days after a rate increase. So we're seeing that abate some, but I think we're also seeing the at least stability in the economy if not real material improvement.

Your next question comes from the line of Scott Levine with JP Morgan. Please proceed. Scott Levine – JP Morgan: I think you guys indicated obviously that the year's coming in better than initial expectation. If you could break down further with regard to the environment in which you're operating, clearly recycling commodity prices are higher than what you did in the initial guidance, but with regard to the business environment is that trending in line with initial expectations? I sense that commentary regarding the operating landscapes, stable but not really improving much. How would you characterize that?

I think you hit on one thing. Certainly commodity pricing is better than we budgeted and then we guided. We pointed out in our beginning of the year call that we were cautious around commodity pricing and that if that stayed at a higher level that would be upside to our guidance and earnings and that has played out in Q1 and Q2 and at this point in Q3, and so that has come in as we thought it potentially could. The other area of upside has been greater magnitude of special waste projects into a number of our landfills, primarily driven at this point mostly by fed infrastructure projects that we're getting contaminated soils out of, such as river dredgings it Pacific Northwest and other areas where ship channels are being deepened and we would consider those infrastructure projects. So that has come in somewhat better. Roll off activity has improved nominally, and as I said, the commercial business is at least on a number of account basis and a volume of disposal basis flat, albeit that the price for that is somewhat lower for your newer customers than the one you lose. So on a dollar basis, volume was a little down in the commercial business. So those would be the material areas and then other than fuel if you take what I just said, what you have is a price-led revenue line and a high-margin led revenue line with special waste, and you basically have flat-to-down costs in virtually every line item. So you get nice margin expansion. We're actually down headcount this year, excluding the County Waste acquisition. We are down headcount this year throughout our system over last year, where we were down last year as well. So cost controls, headcount, and productivity are very, very good. And we're seeing that benefit as well. Scott Levine – JP Morgan: And I think you noted as well in your scripted comments that the western region was positive on pulls per day for the first time since '08. Was that surprising? Do you expect that trend to continue? Does it say anything about regional trends? I know that market flagged for your recently.

Yeah, it was surprising because really what has been driving the western region down. Western region is our six-state exclusive market region west of Colorado. What's been dragging that down is a continued decline in California. And the other states in that geographic area have mostly been flat to up. But for the first time we saw at least some stability in California and even a few little pockets of improvement although I would say that I think the declared will continue in California because of the heavy reliance on residential housing in California and that market is just decimated still. But that was where we saw it flatten out with California and in the other states continued some nominal improvement. So that region did show that it was up. Scott Levine – JP Morgan: One last one on the M&A landscape. Can you comment on whether there's been any meaningful change there, either in multiples paid or maybe in terms of your profile or areas of interest?

Number one, on multiples paid, no. There's always an increasing demand request from buyers as the market moves up, but at the end of the day we pride ourselves on remaining disciplined and looking at deals the same way year in and year out and that means there's several we don't get and there are those that we do. So multiples aren't really changing because we look at this on a discounted cash flow basis and a return on capital basis. And no material change in pipeline. We have a very strong pipeline. I think I mentioned on the last couple calls that we thought this could be a record year and I think still sets up to be a record year. We have some large, exclusive transactions in our pipeline as well as some decent-sized competitive market transactions, as well as some privatizations, some of which have been discussed, some of which are still too early to discuss and we don’t count those in acquisition. But as far as organic growth they are very good opportunities. I think we remain, again, cautiously optimistic about what 2011 will bring from acquisitions and how that will roll into '12.

Your next question comes from the line of Michael E. Hoffman with Wunderlich Securities. Please proceed. Michael E. Hoffman – Wunderlich Securities: Nice job once again. So on a free cash flow you guys are suggesting you're going to hold your guidance at 16%, which is a $240 million, but if you've run at almost 20% for the first half, that means you're at 13% for the second half, and it's hard to imagine that your free cash flow an average price of business model changes that much first half to second half given the characteristics of what's going on in the business.

Well, first off, we said at least 16%, so give us a little credit for potentially exceeding 16%. Secondly, again, as we said, the second half of the year it's hard to compare the first half because you've got much higher outlays for landfills and other construction projects, so capex will go up relative to the first half. And also cash taxes. We've got a high cash tax payment in Q3. The one thing that comes along with making more money that analysts like to see is that we actually pay more taxes. And so we've got higher cash taxes second half of the year as well. So we're just trying to caution people not to try to annualize six-month numbers and get to a full year number of $290 million, because that wouldn't be responsible. So somewhere in that $240 million to $250 million is a good target as we sit here today. Michael E. Hoffman – Wunderlich Securities: Okay, but it's safe to say that you're more likely to exceed the guidance than not?

I think we're more likely to do at least 16%. Michael E. Hoffman – Wunderlich Securities: And with regard to the capital allocation, the same question comes to mind. To return 55 back, that leaves you $90 million in the second half and it's sort of where you are on the dividend and you're talking about sort of $73 million value at repurchase which is approximately 2 million shares. We can comfortably, realistically look at you doing that?

Yes, that's also second half weighted. Our target, less acquisition activity, increases dramatically. Our target has been to repurchase between 4 million and 5 million shares this year. Obviously the dividends are added to that. So we've only bought 1.5 million shares. That leaves 2.5 plus million shares to target second half of the year. Michael E. Hoffman – Wunderlich Securities: And that's even if the $70 million that was mentioned earlier in the conversation that Ron mentioned earlier, that there's potentially an incremental $70 to get you to $200 million of required revenues this year. All that allows that still to all happen?

That's correct. There's nothing changed about return of capital targets. Michael E. Hoffman – Wunderlich Securities: Okay. And then I appreciate not talking about Colonie in the context of the negotiation. Could you comment on their commissioner - I forget what the person's title is - provided a whole lot of data in an interview. Is that data accurate?

I do not know. There's been so many interviews, both newspaper and television that I am not certain exactly what data it is. If you're speaking about, if her name is Paula Mahan, she's the town supervisor who oversees the town, if the data came from her, then I would say that it's probably accurate because she's been the lead in negotiations and is very up to speed. I'm just not sure which interview, because I've had probably 30 cross my Blackberry in the last week and a half or two. So I would have to assume it is, if that's who was quoted. Michael E. Hoffman – Wunderlich Securities: So it was, and so it's a 25-year deal. It's an operating agreement, a 25-year deal, $23 million up-front cash payment and there's progress payments each year. After the first five years they go up a bit, and there's a host fee and an opportunity to expand the size of the landfill and there's a fee above 175,000 tons a year incrementally that comes to the community. That's the data. And it's a $100 million value for the 25 years, is sort of the way they characterize it.

If that's how they've laid it out, that all sounds accurate at this point. Michael E. Hoffman – Wunderlich Securities: Okay, so the question I have is two things. One, the $23 million would be cash outflow this year? That's the way we should think about modeling it if this is successful?

Correct. Michael E. Hoffman – Wunderlich Securities: And they're talking about a July 28 vote. Hypothetically, if they did it then, it's an automatic, you then are the operator and we start to see the benefit of that in the model from that point forward?

No. There is a minimum of a 16-, more likely a 90-day transitionary process in the state of New York that is required if there is any operator change or disposition of assets by municipal government. So there are public notices. So the earliest date would be early October hand off. It could be later in the fourth quarter. Michael E. Hoffman – Wunderlich Securities: Okay. And then can you help us understand what part of county that doesn't go to Colonie now that you could be able to capture, or give us a sense of that internalization leverage?

No, I really can't comment on that right now. You characterize in your commentary or the summary from Miss Mahan accurately. The landfill is permitted to take about 171,000 tons a year. County Waste currently takes about 110,000 tons a year. They're about there. And County Waste controls 600,000 tons. Michael E. Hoffman – Wunderlich Securities: Okay, that's perfect. That helps very well. And there was an opportunity for a fairly significant franchise addition. Is that part of your 70 that you're alluding to?

As far as franchise or exclusive market opportunities? Michael E. Hoffman – Wunderlich Securities: Yes.

Yes. Michael E. Hoffman – Wunderlich Securities: Okay, and that's still progressing well then, I gather?

Well, we feel it is. We're working on it. We're working on several. But until they're there, they're not. So we remain, as I would say, cautiously optimistic. Michael E. Hoffman – Wunderlich Securities: Okay. And then switching back to upstate New York, there was a bit of a bad actor in that market. It wasn't you all, and it wasn't Colonie, over the last few years, on landfill pricing. Clearly you all are seen as very disciplined operators, so one, with your presence, but two, is that other player starting to behave better regarding price?

Without knowing exactly who you're referring to, and without wanting to infer anything negative on anyone, I can tell you that the nice thing for us about County Waste is we use predominantly municipal sites, so they have been relatively fixed in price. We use a few long haul sites, and we have not had any impacts from anybody's disposal gyrations in the northeast as it relates to County. So anything aside from that would be speculative from me.

Your next question comes from the line of Al Kaschalk of Wedbush. Please proceed.

Just to [inaudible] a little bit further, if we may, on the customer environment? If you could maybe share, as you look forward here in terms of upcoming negotiations, do you anticipate a little bit more pressure given some of the economic backdrops that some of the counties and cities are facing from a budget constraint? Or do you expect it to work more constructive in your favor?

Well, I think there's multiple answers to that question, depending on the geography of the country and what type of operation it is. I would tell you that generally, and if you’ve followed us for years, I think our mantra on this has not changed. I think generally contractionary periods that bring about difficulties on the financial budgets of local government who we deal with are generally opportunities for us. It will generally bring about some give up in pricing but by doing that we are expanding the scope of our services and lengthening the length of our relationships and our contracts with them that much more than offset the give up in pricing. So yes, I do expect, and we are seeing, that rate increases, field surcharges, those are more difficult right now for local government, whether there's contracts or not, politically to swallow because of the nature of the unemployment and the economic picture of their constituencies so they are political hot buttons. However, there are tradeoffs that we get when that happens, and they tend to benefit us. So I think it's an opportunistic environment. Having said that, you're seeing the type of pricing and surcharges we're delivering despite those things, and what you're not seeing is rate increases that we are foregoing and we are lengthening and strengthening franchises and we're still delivering those results. So I think it's an overall good environment for us from that standpoint. I think we as a company and we as an industry have to be very cognizant of pushing a price in this environment and surcharges in this environment with local government because of the financial conditions many of them are in, particularly I can tell you on the west coast.

Right, so obviously it will be a strategic balance for you on that front, particularly given the consciousness of where we're at in various counties.

Yeah, and counties are doing different things. We just got through talking about Colonie New York. There are various reasons, but some counties are considering and looking at privatizations or the sale of assets, be they collection or disposal, because of their budgetary conditions. And so we're looking at a number of those opportunities as well.

And then maybe a little bit of forward-looking here, but given the discretionary spending numbers and the economy, volume [inaudible] recovery which you've talked about endlessly, does that change how you think about comparative markets in terms of your acquisition profile or are you going to stick to your guns that the priority remains in these franchise markets?

Number one I don't think anything we're seeing in the economic landscape is necessarily materially different within our competitive landscape or our exclusive other than the fact that our exclusive happens to be in the west coast and the west coast probably has the highest unemployment right now because it probably had the greatest reliance on residential housing. Again, I think the good news in that is you've got a place like California with unemployment of 13%, you've got a place like Oregon and Washington with unemployment in the 12.5%-13% level. That's in our numbers. That's in our numbers today. And 100% of that improvement over time we're going to get back at very high margins because the cost structure really doesn't change there. So I'd tell you we're as interested as ever as acquiring companies in the exclusive because that amount of volume's out of their numbers too. And it's going to come back and we're going to get that. So in that way we're buying it, if you will, at a lower basis than it will be after a true recovery. So I don’t think that this changes. We still, fundamentally, on many fronts, believe that the franchise model, the exclusive market model, is a far superior, in a number of ways, business than the competitive model business, whether that be suburban or other. And that has not changed.

Your next question comes from the line of Bill Fisher with Raymond James. Please proceed. William Fisher – Raymond James: Quickly for Ron, just on the landfill volumes, if you throw out special waste, which is always a wildcard, just looking out the next 12-18 months do you feel like there's more bid opportunities for larger bids on the landfill side, like in the Pacific Northwest for instance, that could help boost things in '12 or '13?

Well, you know, not specifically any just one-off large bids, Bill. We do have, hopefully coming at the end of '12 and into '13, some rail based waste contracts in the northwest that in and of themselves are large. They really wouldn't benefit '12. They would benefit more like '13 and into '14. So those, because they come up at the end of '12 and don’t even start until '13, is why I say that. I wouldn't really say there's anything singularly material from a large landfill bid standpoint, other than individual special waste jobs, that I see out there on the MSW side. I think it's just an overarching improvement in the economy. Ultimately as unemployment drops, and hopefully it will, consumption will improve and we'll just get the benefit of that through our transfer and disposal system as well as our collection system. And I think that will be what it takes to really see sort of a next leg up in the MSW volumes at the landfill. William Fisher – Raymond James: Gotcha. And then on an incremental $70 million acquisitions you're looking at, would they be more or less in your existing footprint? Or is this in totally new markets?

It's a combination. William Fisher – Raymond James: And then this lastly, for Worthing, you mentioned all the free cash details. Do you have any updated capex number for the year or a range?

Yeah, we're still targeting between $130 and $135.

Your next question comes from the line of Corey Greendale with First Analysis. Please proceed. Corey Greendale – First Analysis: A couple questions about the volume for the quarter. Special waste continues to be solid, so can you just talk a little bit about the pipeline for that and are you really looking at this as more pent-up demand from projects that were maybe on the shelf over the past several years? Or is there reason to think that this relatively robust activity can continue indefinitely?

I think it's somewhat like the question earlier. It's geographically driven. If you look at our special waste activity that we're seeing, in, for example, Texas, Louisiana, Oklahoma, that is driven by escalating demand for oil and crude and natural gas. And so we're seeing escalating activity because of the, basically the crude crisis and the crude pricing in this country as well as natural gas as an offset to that. So that's driving special waste projects and I'd call it the southeast. If you look at the northwest, that’s, I would say, delayed pent-up demand for projects that were on the docket with local and state funding the last several years that got stripped out of those budgets because of local budget crises but through TARP and other means have received federal funding to finally go forward. So that is some pent-up demand there. It depends on the geography. Obviously as we look at next year it's very hard to project will there continue to be special waste jobs for infrastructure or will a lot of that get done this year and then there'd be more of a hiatus. And you tell me what you think the price of crude is and I'll tell you how much special waste will happen in the southeast. Corey Greendale – First Analysis: Thank you for that, and on the roll off activities, if you look at the overall macro numbers on construction activity there's nothing there that would indicate that roll off pulls per day should be up. Is there anything specific you can point to that would be counter to the macro data that would explain that?

No, I think it's just sort of the time of year. Again, it's some pent-up demand. You're doing cleanups for individual homeowners, roof jobs. There's more redevelopment going on, new construction, across the country. It is that incremental pull at a Target store that did 7 pulls a month that's now doing 8, because they've seen some improvement in their business. That's really what's driving it. It's just sort of nominal improvement across the board in every little area. Nothing large, nothing significant, but just nominal incremental improvement across the area throughout the country.

And Corey, you've got the law of small numbers there. We've lost so much business in many markets that it doesn't take much of a change to make that number positive year over year. Corey Greendale – First Analysis: Good. And just one quick one on County. Is there anything about the way their contracts are structured that would suggest that the bottom line flow through of changes in commodity prices would be different from your existing business?

No.

And at this time there are no further questions. I would now like to turn the call back over to Mr.. Mittelstaedt for closing remarks.