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

Good morning Fray and good morning and thank you for joining us today. This is Jim O'Connor and I would like to welcome everyone to Republic services first quarter conference call. Tod Holmes, our Chief Financial Officer and Ed Lang, our Treasurer are joining me as we discuss our first quarter performance. I would like to take a moment to remind everyone that some of the information that we will 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 recording of this conference call, you should be sensitive to the date of the original call which is April 24, 2008. Please note that this call is the property of Republic Services Incorporated. Any redistribution, retransmission, rebroadcast of this call in any form without the express written consent of Republic Services is strictly prohibited. During the first quarter, we continue to deliver on our pricing initiatives and realized margin improvement. We believe the current pricing environment is sustainable across all lines of business. Key results in the quarter were republic had revenue growth of 1.8% to $779 million. We achieved internal growth of 3.7% with 6.2% of price improvement and volume decline of 2.5%. Our first quarter volume decline was affected by a slowdown in the residential housing construction activity and associated lower landfill volumes. Price growth continues to be strong. Core price is up 4%. Pricing is the most important factor for recovering rising costs and increasing operating margins and return on invested capital. Within our landfill business, our core price was up approximately 3.4%…

Thank you Jim. I'll begin my review with the company's financial results by discussing revenue. Again, as Jim indicated, first quarter revenue rose 1.8% to $799 million from $766 million last year. Internal growth was 3.7% which is in line and maybe slightly above our guidance for the full year. This is really led by price growth, total price growth was up 6.2%, 4% increase from core price, a 1.1% increase from fuels surcharges and 0.3% increase from environmental fees. Also commodities continue to be strong and we had 0.8% increase from commodities. So, again during the quarter, we continue to benefit from our ongoing price increase strategy in all lines of business. Our first quarter volume declined 2.5%. This is slightly above our full year guidance for this year. However if you will recall from our last quarter call we'd indicated that we thought the volumes would be a little bit weaker in the beginning of the year versus the end of the year due to the declines of volumes throughout last year and the fact that they would have -- those declines would anniversary out as we went into the latter part of this year. Temporarily roll-off volume as Jim indicated was down 15%, landfill volume down 5%. Commercial volume and residential volumes were both up low single digits. Divestitures accounted for the remaining 1.9% reduction of our revenue. And if you will recall we have sold in the fourth quarter of last year our LETCO soils business in Texas; that's the primary impact there. Now let me talk about our operating margins, first quarter year-over-year change. Year-over-year operating margins increased by 320 basis points as Jim indicated from 15% to 18.2%. During the first quarter 2007, we recorded a pre-tax charge of $22 million related estimated cost…

Thanks Tod. Republic's EPS for the first quarter was $0.41, which is 46% improvement versus the first quarter of 2007. After adjusting for remediation expense and additional income taxes, the first quarter EPS was up 11%. We would like to reiterate our current earnings guidance for the year of $1.78 to $1.82 EPS for the full year 2008. With the passage of the Economic Stimulus Act earlier this year, Republic's cash flow will improve due to bonus appreciation resulting from higher deferred taxes. We provided 2008 cash flow guidance of $340 million to $350 million. The 2008 depreciation guidelines will increase free cash by approximately $25 million. However, as Tod stated, we plan to increase our 2008 capital spending for commercial and residential collection vehicles for several reasons. There will be new engine standards beginning in January 1st 2010. That increased the cost of vehicles by $10,000 to $20,000 a unit. Therefore making this investment before 2010 will lower future capital spending. Additional vehicles purchased in 2008 will benefit from bonus depreciation. And by taking delivery before the new engine standards are implemented, we will minimize operating issues as manufacturers adopt to a new process. Our capital spending during the first six months of 2010 will be reduced to adjust for advance purchases. We are maintaining our 2008 cash flow guidance at $340 million to $350 million while possibly increasing our capital spending by up to $25 million. We will update cash flow guidance at the end of the second quarter as we historically have done. 2008 business objectives continue to be focused and improving margins by achieving appropriate price increases to offset inflationary costs and business risk. Improving our market positions, standardizing significant business processes, maximizing the efficiency of service delivery and customer service and rationalizing our cost structure. I would like to thank all the employees of Republic Services for their dedication and hard work which resulted in this strong performance in the first quarter. And operator at this time, I would like to open the call for questions. Question And Answer

Thank you. At this time we are ready to begin the question and answer session. [Operator Instructions]. First question does come from Scott Levine of JP Morgan. You may ask your question.

Good morning guys.

Good morning Scott.

Waste Connections mentioned on your call weather and we saw a little bit of volatility in terms of weather in certain parts of the country; didn't mention weather in your prepared comments. Now your footprint is in lot of warmer weather regions or tilted towards those markets. Did you see any unusual behavior there; was there any impact on the volumes that you could quantify?

Scott we do have some seasonality as you well know. I mean again it predominately resides in the mid-west, in the Mid-Atlantic States. We probably seeing some impact there. Probably not to the same degree that some of our national competitors have. But it is a factor. It's just a little hard for us to sort all of that that out when we look at the volumes changing from the fall to winter quarters. But just before I'd like you to do a follow-up here. What I'd like to do is go back to some comments I have here and I missed something so bear with me Scott. I'd like to highlight that Republic continues to manage its business to adjust our cost and capital investment but the challenges of the slowing economy that we are experiencing, we continue to see a pricing discipline in the industry which is I think long over due. And therefore we can expect I think to deliver higher margins and returns in 2008 and we are comfortable with our earnings guidance as I said in my comments that we provided in February. So I want to reiterate that that even in light of the volume declines we believe that we continue to see pricing to be rational, we continue to see margin improvement and we continue to see escalating free cash flow. So with that Scott, I will give you an opportunity to do a follow up.

Very well, thanks. I was hoping whether I'd would get a quick update on Countywide. I think we saw news items at the US EPA was getting involved here. I was hoping like you could provide a little bit more clarity there.

Yeah. We did sign a consent order in the last 10 days with US EPA. But pretty much following the same work elements that Ohio EPA has already outlined with the addition that we may go to early closure of the 88 acres that are affected or -- that are under remediation. It does not affect the currently active part of the facility. So we don't anticipate it this time; any additional remedial costs. We still believe that the charges that we took are appropriate and still represent the best engineering estimates to talk us through remediation.

Great. Thanks Jim.

Thank you.

Bill Fischer of Raymond James, you may ask your question.

Yes. Good morning.

Good morning Bill.

Yeah. Jim, just on the landfill volumes, just want to see if you can give any color on... if you thought that declines there might moderate a bit as you move through the year. I think you had some noise last year in terms of some specific strange pull back on or if there's any other permanent expansions and things you might get?

Well as far as the volumes, I mean I think some of the change in the receipt of special waste materials in the Detroit market area, those should anniversary out; those were some sludges out of Toronto and sludges from the city of Detroit. We've also obviously stopped taking aluminum draws [ph] around the country. So, we've seen some impact from that but, in... really not material in nature to the business. As far as the landfill volumes that are predominantly effected by the construction in demolition being dropping off and they have also been affected really due... somewhat probably related to the economy but, I think predominantly in the southeastern part of the United States where we seen extremely dry conditions and we haven't seen really much change in that, in the first quarter, we've seen our unit rates be much lower, so our third party deliveries would be a lot lower to our facilities.

Okay, and just following-up kind of on the C&D side, you have lot of collection only businesses. With the C&D mix and the landfills, still be about the same as on the collection side or is there any difference there?

Well, I think what you have seen Bill is as we went through the last year, the C&D mix of our total business has continued to decline as that piece of the business has slowed down in the residential construction. So, I would say that both on the roll-off, the temporary construction roll-off is a little bit smaller portion of our total revenue effect, I think you can see it in the 8-K that the roll-off revenue is down despite some positive pricing there, and probably a little bit of non-construction growth there. And I think that same factor holds true on the landfill side where the C&D volumes are down. Now a lot of those declines were coming as we move through the sequential quarters last year and I guess the question that remains for all of us is how we hit a trough here and in terms of that slowdown, it's a little bit hard for us to see it's early in the year, it's... certainly the winter time and seasonality is a much larger factor here in this first quarter than in the other quarter. So we are not really going to have a clear picture until we move out of the first quarter seasonality and also maybe see where this economy takes us.

Corey Greendale of First Analysis. You may ask your question.

Hi, good morning.

Good morning Corey.

Kind of following up on that question, could you comment on monthly volume trends as the quarter progressed and into April and are you starting to see any of your customers on the commercial side downsizing their service levels at all?

Well I don't... I think the reconnaissance from the field is our commercial business is still modestly growing and we've not yet seen any -- any trend in our customer base to lower service deliveries or frequencies. So that still pretty much remains intact. As far as the volumes, I kind of go back to some of Tod's comments here. It's a little hard for us to sort out what's actually happening in the winter quarter with some of our volumes and how much of it is just the seasonal impact. But I think it's a fair statement to say that... look we still see obviously continued decline over the prior years quarter, and whether that's related to weather or not it is a concern to us. But, again I kind of keep coming back to the same issues again Corey that the business is still able to show pricing growth. We are still able to show margin growth in light of the volume declines and these are volume declines that are unrelated to activities in the market other than lack of demand for either residential and/or commercial construction. So, I continue to look at the margins expanding and I continue to look at the escalation of free cash flow or our ability to generate significant amounts of cash flow and it's just really too hard for us to say what further headwind volume could produce as the year goes on and our guidance again has been based always on the fourth quarter and we did anticipate that the volumes would be a little weaker in the first quarter and in the second quarter and then we would start anniversary out in the third and fourth, and I think we've been consistent there. So, it's just a little harder to comment exactly on where all the volumes are going. I did one of the things Scott and that is we need to remember this business is scalable. And so when we look at a change in business activity we are able to reduce the number of hours, we are able to reduce the equipment by slowing down the replacement. We are able to move equipment and therefore maintain... maybe with a little bit of a lag affect maintain the productivity that we've had in the past which is certainly a key element in maintaining and growing margins. And I think our field organization has done an excellent job of adjusting the economic conditions.

That's helpful. And second question is on pricing. I saw that there was a benefit from an environmental fee again, that had sort of drifted down over the last couple of quarters. Did you implement a new fee or upsize that fee and should we expect that kind of benefit for the rest of the year and if I could cheat and sneak in a quick third one. Tom could you just quickly run through all the margin impacts. Again I... the numbers I got didn't add up to 320, so I just want to make sure that I got them right?

Could we do this on the margin, could I just do it offline with you since I... I've already done it once, and maybe you can just give me a quick call after the call and I'll glad to do that.

Fine.

Okay. As it relates to the environmental fee, we did increase the environmental fee effective January 1st of '08. We moved here from 2% to 3%. It's still lower than our other two national competitors. But we feel that in light of the impacts that we were seeing from cost increases, monitoring expenses, and cost of secure... additional capacity we thought that it was more than appropriate to do that. So, that will remain in place.

Leone Young of Citi. You may ask your question.

Yeah, good morning.

Good morning Leone.

I understand that especially in this first quarter it's difficult with volumes between seasonality and weather but how about the third factor. Can you comment a little bit about what you are seeing in terms of competitive behavior on price, not just the national but perhaps some of your larger independents; any change there with worsening economy?

No. In fact, again... we look at... I was out on the road with Ed Lang up in Boston and New York. I guess it was, Ed, what about two weeks ago, two or three weeks ago. We do have a couple of anomaly markets that -- where we are seeing some price decrease from a couple of independents. But when I look at our larger markets and our larger urban markets and I look at our larger independents that really can actually have... could impact the market to some degree. They act very rational and in my opinion have been holding the temporary construction prices to the historical levels that we have seen. So I guess the answer to the question... short answer is we still believe it's stable with a few fuel isolated anomalies.

Great. And turning just to turns you are seeing in commercial construction. I know there's a lag in the garbage business which is great. But in particular what are you seeing in commercial constructions in some of your key markets like Florida and Las Vegas?

Well, I mean... again, most of the... we really haven't seen a whole lot of impact there. But I mean I can tell you this it's probably what gives rise to the question. We do... we have seen a number projects canceled meaning that they are not coming out of the ground and that we wouldn't anticipate volume. So I would think we'd probably start to see some impact from some of what we are hearing about in Florida and in Las Vegas and Southern California probably in the latter part of '09 as some of the larger projects won't finish until that time.

[Operator Instructions]. Our next question does come from Jonathan Ellis of Merrill Lynch. You may ask your question.

Thank you and good morning guys.

Good morning Jonathan.

Just... I know you touched on landfill pricing but wondering if you could walk through a magnitude of price growth in the commercial collection, residential collections and permit roll-off businesses.

I mean when you look at... let's start with residential. It's predominantly indexed priced, whether it's in our franchise of business or whether it's in our contract residential municipal business. So, I mean there it's going to trend to the CPI which is running in right around 3%.

I am sorry, I guess, you mean on price on contract renewals in the municipal business is what I meant to say?

Contract renewals? Okay.

Yes.

Well the contract renewals have significantly outpaced the CPI. As we have been in renegotiating and/or rebidding, our franchises and/or municipal contracts, I think we are starting... we were seeing pricing move anywhere from 5% to 10% depending on the return expectation or the return delivery that we were achieving in the contract or the franchise. Our pricing has escalated in those areas anywhere from 5% to low double digits.

Okay, great. And then just on the landfill side, can you update us on how far you are through working through the long-term disposal agreements and what type of price increases you are achieving on those contracts?

Sure. I think it was probably about six quarters ago we've kind of brought up the fact that landfill pricing would move and we'll continue to escalate as these contracting anniversaried out. I'd say we have probably got another four quarters to go, we are probably about 2/3rd of the way through them and I think it's reflected in our pricing. If you look over the last several years, we've moved pricing from approximately 2.5% to 2.8% up now to a little over 3%, 3.4%. So, I mean... I think you are starting to see it materialize and I think it will continue to grow. And again when I was on the road two weeks ago, I think you should see landfill pricings move up towards the 4% range. And then now whether it will move much higher than that will depend on... will return on the individual markets and the demand. But at the end of the day, I think, 4% to 5% would be somewhere where we settle in the next 12 to 24 months.

At this time, we show no further questions.

Okay. Thank you Fray, I appreciate it. And at this I would like to remind everyone that this call is available for the next 24 hours by calling area code 203-369-3289. Additionally a recording of the call will be available on Republic's website at republicservices.com. And I'd like again to thank all of you for spending time with us today. Please have a good day, and good bye.