Ladies and gentlemen, thank you for standing by, welcome to the Heckmann Corporation 2012 Third Quarter Conference Call. Today’s presentation, all parties will be in a listen-only mode. Later we’ll conduct a question and answer session. [Operator Instructions] Today's conference is being recorded today, Friday November 9, 2012. I would now like to turn the conference over to Brandy [inaudible] with Investor Relations. Please go ahead. Brandy [inaudible] : Thank you, operator. Hello everyone, and thank you for joining us to discuss Heckmann Corporation's 2012 Third Quarter Financial and Operating Results. Some of the comments we will make today are forward-looking. Generally, the words: aim, anticipate, believe, could, estimate, expect, intend, may, plan, project, should, will be, will continue, will likely result, would and similar expressions identify forward-looking statements. These statements involve a number of other risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks and uncertainties include a variety of factors, some of which are beyond our control. These forward-looking statements speak as of today, and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call. For a more detailed described of these risk factors, please refer to our filings with the United States Securities and Exchange Commission, including our Annual Report on Form 10-K, as well as our earnings release posted on the Heckmann Corporation website for a more detailed description of the risk factors that may affect our results. Copies of these documents may be obtained from the SEC or by visiting the Investor Relations section of our website, www.heckmanncorp.com. Also, please note that certain financial measures we may use on this call, such as adjusted EBITDA, are non-GAAP measures. Please see our press release for a reconciliation of these non-GAAP financial measures. Joining us on the call today from Heckmann Corporation are Dick Heckmann, Executive Chairman, Mark Johnsrud, Vice Chairman and Chief Executive Office, Jay Parkinson, Chief Financial Officer, James Devlin, President of the Recycling Division, and Chuck Gordon, President of the Fluids Management Division. With that, I would now like to turn the call over to Dick Heckmann.

Thanks, Brandy, and good afternoon everybody. Thanks for joining us. We’re doing things a bit different this quarter so we could take advantage of the quarterly to announce the results of our shareholder meeting earlier today. And as we get larger, it gives us an ability to do more for you and get more transparency to you. As announced in the release, the shareholders overwhelmingly approved all three of our proposals, over 88% of the shareholders voted with well over 95% approving each proposal. So we’ll plan to close the Power Fuel merger as soon as we can get it done. We will – we have put on the company’s website, actually a hour ago, a presentation reviewing the quarter. In a few minutes we’ll take you through that presentation with discussions from Jay Parkinson, our CFO, Chuck Gordon, President of our Fluids Handling Division, James Devlin, the Chairmen of the Recycling – President of the Recycling Division, Mark Johnsrud, the Chairman and CEO of Power Fuels. And we’ll take you through each segment of the business to give you an update on where we are and what we think of the marketplace and where we think we’re going. Without Power Fuels – well, to summarize, we had a very strong quarter considering the natural gas prices and some of the [inaudible] of those who compete in parts of our business. But it was for us a very strong quarter. Without Power Fuels, Heckmann revenues grew 95% year-over-year to 93.1 million over the third quarter of last year, and up sequentially from second quarter. Pro forma with Power Fuels, our revenues would have been 190 million for the quarter. Again, without Power Fuels, our adjusted EBITDA grew 57% to 17.3 million. We did not adjust any startup or onetime operating…

Thanks, Dick. If everyone could please turn to page 8 of that presentation, I want to review some financial highlights for the third quarter. I’d like to note at the beginning that these only pertain to the legacy Heckmann business. The Power Fuels results are not on this page but we’ll get to those. So for the legacy Heckmann business as Dick mentioned, revenues for the quarter came in at 93.1 million of note. That’s a sequential increase over Q2 and obviously a pretty dramatic increase over the prior year’s quarter. As Dick mentioned, business conditions were challenging, yet we grew revenues during the quarter with minimal CapEx of just something we’re very proud of, and we really think speaks to the differentiation of the business model and the recurring nature of the revenue stream that we’ve built up here. Adjusted EBITDA for the quarter came in at 17.3 million. I’d like to note there that we took no operating adjustments to that number for the quarter. The only adjustments that we’re recording here are adjustments for stock-based compensation. So transaction costs for the Power Fuels merger, and there’s also a non-cash loss in there under disposals, some older assets we acquired in the past, but have since replaced with newer assets. As you can there on the right part of the page as well, we saw both gross margins and reported EBITDA margins increase sequentially from Q2 to Q3. And another point I want to talk about here is our capital expenditures, because I think this is a very important point to talk about here, and I think really represents a real change in the business on a go forward basis. For the third quarter our CapEx was $7 million. If you give us back the cash proceeds from…

Thanks, Jay. If you turn your presentation, I’ll start on page 12 with the Eagle Ford. We had a solid quarter in the Eagle Ford. We continued to add drivers, we have 26% more drivers at the end of the quarter than we had at the beginning of the quarter. And we ramped up the driver population to support one of our big integrated customers that asked us to increase our presence on their site by about 60%. We’re just starting that ramp up now. We really didn’t see the benefit of the ramp up until November. But we started adding drivers throughout the quarter. Secondly in the Eagle Ford, and this goes back to mirroring some of the product lines that Power Fuels have, we become very, very aggressive in expanding our product offers. We’re doing a lot more work around rigs, hauling both mud and cuttings, and also in the rental business. And finally, in the Eagle Ford, we have two significant Power Fuels customers that have asked us to work with them in the Eagle Ford and we’re starting to see the benefit of leveraging some of the good relationships that Power Fuels has in North Dakota with some of the same producers that are operating down in the Eagle Ford. In the Utica, we acquired a disposal well. That disposal well is in startup right now. We should start taking commercial water the beginning of next week. We have a second well that’s set to close by the end of this month. That water will be taking commercial – commercial water by the end of December. And again, we have a very good opportunity with one of Power Fuels large customers to potentially do a lot more work in the Utica. We have a – we…

Thanks a lot Chuck, I appreciate it. If you’ll look at slide 14 on our deck. Many of you are aware that we closed the AWS, at least our majority investment in it, in September 10. We wanted to highlight this, it’s not large in and of itself, but it’s really an example of our strategy to move beyond trucking, being an integrated environmental services provider. And it’s really the epitome [inaudible] … with respect to disposal and reprocessing, and eliminate a lot of unnecessary trucking out of the Marcellus. So again, it’s economically sustainable, and clearly it’s environmentally sustainable, given a reuse of that water, and it’s a good win for our customers and a really good project. The other thing I’d like to do at this time is point out some personnel that’s really responsible to make that happen. And that John Luey’s, Heckmann Corp. EBP of business development really led that along with Chuck Gordon, just really an example of getting close to our customers, trying to understand what their needs are in developing solutions that are good for our shareholders, and certainly good for our customers in the environment. So a nice win there. Again, as we look at the project thus far, our Pro Forma [inaudible] contemplated about 3,000 barrels a day. Just last week we ramped up to 4,000 barrels a day. So we’re pleased that we’re ahead of our Pro Forma, which we thought was very, very obtainable. And we anticipate the plant ramping up to honor about 6,000 barrels a day in Q3 of 2013. So we’re exceeding Pro Forma. It’s got extremely attractive internal rates, returns that are in significant access of our weighted average cost of capital. So very, very important as we think about capital efficiency and utilization. And…

Thanks, James. I’d just like to take a few minutes and provide an update on the Bakken. The Bakken, in general – in the general area is about 15,000 square miles, but in the last year to year and a half we’ve started to see it grow because we’re starting to take a look at the Montana side of the Bakken, continues to expand. And companies drilling in that area are having very good results. I’d say overall we are seeing technology becoming a bigger and bigger factor in the region, and we’re seeing more down spacing. Rigs are much more efficient than they were before, and as the area grows, we’re just seeing more activity outside of the normal traditional area. We’re hearing a lot of questions about where returns are at, and we’ve seen one leading operator recently has stated that at a $60 oil price, they’re still seeing internal rate of return of in excess of 20%. One big factor that’s realized that has changed in the last three to four months, is that the discount WTI that has been a problem for Bakken producers, is starting to change, because they are able to deliver oil to the Louisiana sweet market as refineries are able to accept rail cars. And that is making a difference of anywhere from 5 to $20 a barrel. And so it’s a very big positive impact for the basin. Oil production in the Bakken continues to increase. For the month of September, the oil production will be over 750,000 barrels a day. At the beginning of the year it was just a little over 500,000 barrels of oil produced per day. There’s currently approximately 5,000 Bakken and Three Forks wells in production. And we believe based on the current number of rigs…

Thanks Mark. Okay, that’s kind of the review. If you go to the final page 18, the Power Fuels integration along with our company. We never competed with Mark. We’ve not had any overlap with customers where we had to compete. So the transition should be seamless. We’re going to maintain our existing regional offices, maximizing best practices obviously. We’re not expecting nor are we projecting cost synergies. These are going to be revenue synergies as Chuck talked about in the Eagle Ford and the Utica just to start. There are customers of Power Fuels that have asked us about Power Fuels to move in to those shales with them. And of course, that’s exactly what we’re doing. We are establishing a common accounting platform. The HEKnet system is really attractive to our customers. They want it installed as fast as we can do it. We need to have a common platform to do that. So we have picked a platform that we already had installed, and we’re going to use it across both the recycling business of James, and across Mark’s business, and that is the paperless collection and safety and compliance records that we do for the customers. As we said on the last call, one of the customers has reduced its invoices from an annual run rate of 18,000 to 48. So it’s a big deal. We also are the only company that’s allowed to file the environment forms in Louisiana electronically. We expect to continue to be approved by other states to do that, taking that burden off the customer, and giving us more products to sell and to deliver. And then with respect – you know, I’ve said on lots of calls, Mark built his business internally, no acquisitions. And as we have gone through…

(Operator instructions). Our first question is from the line of Hamzah Mazari with Credit Suisse. Please go ahead. Hamzah Mazari - Crédit Suisse AG, Research Division: Good afternoon. Thank you. The first question is just on CapEx. You know, you folks talked about being at an inflection point. Maybe if you could give some color on what is normalized CapEx for both your businesses and it seems like you’re still in a build-out stage on the recycling side, but I assume that that doesn’t cost a whole lot. If you want to just talk about that? Jay Parkinson – CFO: Hey, Hamzah, it’s Jay. I think that what you’ll see, you know, for a pretty aggressive maintenance CapEx line for this business, the combined business going forward, you know, you’re probably somewhere close to the run rate depreciation, so maybe in the $80 million range and then there’s some growth CapEx above it. That is very flexible. As you can see, we can scale the CapEx, even the maintenance CapEx up and down very quickly to react to market conditions, which is something I like about this business. I think that growth CapEx on what you’ll see going forward is we’ll be able to tack onto the network to lever the network but the CapEx number will be – the growth CapEx number will a lot smaller just because a lot of the really intense capital investments are behind us. So I would look for something probably half again on what the maintenance CapEx line is, you know, on a go-forward basis for something in the normal range. In any case, we see it being well inside of EBITDA. Hamzah Mazari - Crédit Suisse AG, Research Division: That makes sense. And then could you talk about if you saw CapEx…

Your next question is from the line of Scott Graham with Jefferies. Please go ahead. R. Scott Graham - Jefferies & Company, Inc., : Hey, good afternoon. So the – if I’m calculating this correctly, the Heckmann Water business looks like it increased revenues on a comparable basis by something in the 20% territory. Does that sound right? Jay Parkinson – CFO: Oh, that’s probably a little more than that year over year. I guess the other point I’d talk about, you’ll see all this – this is Jay, you’ll see all this when it comes out. The water business also grew revenues sequentially quarter over quarter as well. R. Scott Graham - Jefferies & Company, Inc., : Yeah, no, I’m calculated that. Keystone was – I’m talking about actually the organic and if I wasn’t clear, sorry, but there’s Keystone in there as well, right? So whatever the case, you know, 20, 20% plus, so that’s a – that’s a pretty good number. I think that the, you know, just the question from here is that if you’re – you’re obviously gaining share because of the activity that’s slowed down. The share gain is coming from getting into being – becoming larger in some of the – adding more shales. So I guess I’m wondering when do we – is this – let’s say if the growth or if we get a zero growth and maybe even negative growth right now in the spending that’s taking place, let’s say second half of this year, maybe even first half of next year, what is your thinking that you can maybe beat that and outperform the market by? Is this a quarter where we can extrapolate for a couple more quarters in terms of how much you can beat the market…

Scott, and I – we made this transaction knowing that there was a spike in the Bakken and we knew what his normalized margins were and so did Mark and we – as you properly point out, we pointed those out very specifically in the proxy materials. And you know, we’d really rather deal with a normalized margin. I think the answer is mid-30s is his normalized margins and Chuck, do you want to talk – do you want to say anything about where you’re going with yours? Charles R. Gordon – President, COO: Sure. I think that as we look at the HWR margins, it’s important to remember that our margin is, today is primarily a trucking margin and we believe we can get the trucking margins up over 20% going into next year. Our challenge now is to move into some of the additional product lines that Mark’s doing, particularly rentals. We’ll certainly enhance the EBITDA margin of our business. And I haven’t put all that together yet for next year on what we expect a weighted average to be, but certainly as we move into some of the product lines, some of the rig work that Mark does, some of the trailer configurations he has, and then also expand our rental business outside of North Dakota, there’s a significant opportunity for margin enhancement on the legacy HWR business. Dick Heckmann – Chairman: And I would add, Scott, I would add that we also are going to be real happy about rising natural gas prices because of the pipeline is a huge EBITDA contributor with very – almost no marginal costs for additional revenue. So I think that the big operation that we built in some of these dry gas plays, those margins will improve with the gas…

Thank you. Our next question comes from the line of Brian Post with Roth Capital Partners. Please go ahead.

Good afternoon. Thanks for taking my call. I guess the first question is about what’s going on in the Mississippi Lime. That’s a pretty significant investment. Is the revenue that’s going to come for that purely incremental or did the reallocation take it away from somewhere else? Charles R. Gordon – President, COO: No, what we were able to do is actually move into the Mississippi Lime. Our investment is in driver hiring and training costs. We were able to move trucks out of the existing plays and not lose any revenue at all. We just – we’ve continually driven the utilization of the trucks up. But we’ve moved, I think probably by the end of this month, or certainly by the end of the year, we’ll have 40 trucks and all in the Mississippi Lime working. And we won’t have – shed any revenue in the other plays.

Okay. And then a follow up on the AWS acquisition. Two parts to the question. What – there’s clearly running below maximum utilization. What were the things that were holding that back and what can you guys do better as a new majority owner? Dick Heckman – Chairman: If you look at that business, it’s hitting exactly – actually, it’s over our pro forma so it’s beating our expectations thus far on pro forma. It was scaled up at such a size, at 12,000 barrels per day, you know, we do expect that looking at where we are today, if we stay at a ramp and say 4,000 barrels a day up to six, that would be a 50% improvement on where we are today and we’ll be achieving and beating our pro forma, again, which is in significant excess of our weighted average cost to capital, so we’re very happy about that investment. It’s sized to do significantly more but you know, we’re going to make the returns that we projected we would.

Brian, the other side – the other part of that answer is this is – that question goes to everything this company has been doing for the last 2 ½ years. And that is, you build it, they’re going to come. And this plant is built for an expansion of the Marcellus and has every new well goes into the Marcellus, more water needs to be recycled and reused and you can’t recycle 10,000 barrels a day until you can recycle one. And the same plant that recycles one doesn’t make any sense recycling one unless it can recycle 10 or 12. And it’s the same thing with our yards and the system. And as Jay and I have both pointed out, and Mark has alluded to this inflection point where we think we are now, where we are in every shale with these services and Appalachian was underutilized because there wasn’t enough water in the area to go there. But the producers up there literally came to us and said, would you please buy this and would you please do this and if you do it, and run it, we’ll get you the water because we want to know when we start drilling these well, we’ve got to know where that water’s going to go. And we’ve got to know what the rules are. So this is kind of this classic inflection point where we invest in the assets and then wait until they come. And Chuck – the same thing with the 40 trucks going to the Mississippi Lime, you can’t possibly be efficient in the first six months you put trucks on. You know, your dispatchers have to learn how to do it. I mean, in the [inaudible], we’ve gone from one ship to two ships. So we’ve got the same truck driving twice as much, hauling twice as much water, which elevates, you know, which gives us the ability to take – put it somewhere else. And that also comes as the water volume goes up, when 2,500 more wells go into the Bakken next year, there’s going to be a lot more water and you’ll get more efficient at it. We will get more efficient at it.

Great. Thanks. As far as the valuation you guys paid for, was it done in a traditional Heckmann multiple or did you guys get that a discount? For the AWS.

You mean traditional in that we always get great deals?

That, but usually you [inaudible] target 4 to 5 times EBITDA. Jay Parkinson – CFO: Yeah, I think that’s one that’s ramping up. I think, you know, you’re probably directionally correct and I think the other way we like to look at these is not just EBITDA multiple but what is the return on capital profile look like for the business. And I think as James alluded to, we believe the return on capital there significantly [inaudible] our cost to capital. And then if you – we also, again, isn’t reflected purely in the pro forma numbers but that’s a very strategic transaction for the company going forward as well. There’s a lot of additional you can put on that.

Now, we’re nearing our end time. We do ask that you please limit yourself to one question. Our next question. Our next question is from the line of Gerry Sweeney – Boenning and Scattergood Please go ahead. Gerald J. Sweeney – Boenning and Scattergood: Good afternoon, guys. I have one question, but it may have three short pats. Hopefully that will do. I’m fairly interested on the Recycling side. You know, TFI, obviously the recycling of sands, muds, drilling, I think that’s exactly where TFI is looking to go and expand their product offering. How big is that market? What type of margins were people getting and what do you need to expand TFI/Recycling to start getting into the other markets? What needs to be done to sort of expand that? James Devlin – Recycling Division: We’re currently fine tuning the size of the market. It was more significant than we even imagined. You know, so we’re very comfortable that if we could make this drill cutting in mud, we could make this a 5 to $750 million a year business and still have market share less than 10 or 15%. So we see plenty of room to run there. You know, the – some of the projects that we’ve looked at thus far, which we’re engaging in pursuing have EBITDA margins north of 50, but more to Jay’s point, have return on invested capital in significant excess of what our weighted average cost to capital is today. You know, we hope, but there’s no guarantee that we might be in a position to move towards an LOI in the very near future as we’re looking at two projects as we sit here today. But again, a significantly sized market. And then also, we’re interested in the disposal too. We want to be vertically integrated. We’re going to process three and recycle that volume to the extent possible, but we think that we can squeeze more margin out with a vertical integration play for a Class C exempt disposal site and we’ll be looking hard at that as well.

Your next question is from the line of Eric Stine with Craig Hallum. Please go ahead.

Hi, everyone. Thanks for taking the questions. All right, I was just wondering if you can touch on the competitive environment in the Bakken and I guess I’d like to focus on the equipment leasing part. You know, hearing that it is getting a little more price competitive. So number one, are you seeing that and number two, just wondering how you see that playing out longer term just because – I mean, I know that’s your highest margin business. You know, but arguably the lowest entry too. Charles R. Gordon – President, COO: You know, good question. I guess the way I’d take a look at it is we are seeing more companies up there. We’re seeing more competition. But at the same point, I think that as we become – and we’ve been pushed very hard on is to become a one-stop shop. It’s a lot easier to do business with one company that provides all those services then to go out and do – try to work with four or five vendors. That’s what we’re hearing from our customers. The second part is that as there gets to be more and more of a focus, as consolidation happens at the EMP level, they’re taking a look at how do they reduce the number of vendors that they’re working with, number one. And number two is that they have to make sure from an HS&E standpoint that everybody’s compliant. So if there gets to be groups up there that have smaller product lines, we’re being asked by our customers today to either – if there’s something that we can’t provide, that we can help them get it because they’re not wanting to hand out additional master services agreements. So we see that there’s other barriers that are coming in not only the assess so that you can do it on a, you know, from a small standpoint, the larger companies are not wanting to add additional vendors. Does that answer your questions?

Our last question is from the line of Spenser Joyce with Hilliard Lyon. Please go ahead. Dick Heckmann – Chairman: This will be the last one we can take. Spenser Joyce – Hilliard Lyon: Thanks, guys. I’ll make this one pretty quick for you. Can you talk just a little bit about driver retention and training, any color there? Are we seeing any kind of streamlining to that process as far as finding willing and talented guys, getting them and keeping them on the road or maybe on the flipside, are there any frictions or inefficiencies we could still potentially look to iron out going forward? Charles R. Gordon – President, COO: Well, you know, in start-up businesses like this, there’s always lots of frictions and efficiencies. And we’ve learned a lot about that. I think what we’ve learned the most – the single biggest thing we’ve learned from watching Power Fuels is their driver retention and the fact that they were the first ones that we’ve seen that they certainly were way ahead of us in understanding the importance of driver housing. Your retention goes up, your safety record gets better, your customer care gets better, obviously, with the longer-time drivers and the get tired to sleeping in their cars and in Wal-Mart parking lots. And what we are now doing as we move into other areas is we are providing some of the things that Mark started providing years ago and I think that is a great advantage that we have. And as I mentioned earlier, we got customers that force us to train for 90 days before we can let them loose in a truck. You can’t train a guy for 90 days and then lose him. And so driver retention is – I think going to be one of our great advantages. The other thing I would say is that the bigger these customers get, the more control they want over our driver training and driver retention in terms of oversight and so I think you’ve hit really right at the core issue of I think one of the great advantages that we come to here is what we started there and we’re spending a lot of time with it.

And now we are out of time for questions. I’d like to turn it back to management for closing remarks.