Good day, ladies and gentlemen, and welcome to the First Quarter 2008 Waste Connections Earnings Conference Call. My name is Natasha and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. [Operator Instructions] I would now like to turn the call over to Mr. Ron Mittelstaedt, Chairman and Chief Executive Officer. Please proceed sir. Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Okay. Thank you, operator, and good morning. I'd like to welcome everyone to our conference call to discuss first quarter results and our detailed outlook for Q2. We will also discuss the potential impacts of the spiraling fuel costs could have on the full year if diesel prices remain at current record level. I am joined this morning by Steven Bouck, our President; Darrell Chambliss, our COO; Worthing Jackman, our CFO; and several other members of our senior management team. As stated in our earnings release, we are extremely pleased with our results in the quarter. Revenue, margins, earnings, and free cash flow all met or exceeded our expectations despite significant increases in fuel costs during the second half of the quarter. Although, harsher weather conditions and a more difficult economy pushed revenue towards the lower end of our outlook, positive volume growth and rising landfill volumes in the quarter remained a differentiator for us within the sector. Before we get into more details, let me turn the call over to Worthing for our forward-looking disclaimer and other housekeeping items. Worthing F. Jackman – Chief Financial Officer, Executive Vice President: 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…

Thank you. [Operator Instructions] And your first question comes from line of Jagdeep Ghuman with Credit Suisse. Please proceed. Jagdeep Ghuman – Credit Suisse: Good morning. Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Hey, Good morning, Jag. Jagdeep Ghuman – Credit Suisse: Couple of questions for you. I'm sorry if I missed this, what are you currently paying for fuel? Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Fuel right now is about $410. Jagdeep Ghuman – Credit Suisse: $410. Okay. So, you're assuming some acceleration from there. Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Yes, I think it's rising about $0.10 a week over the past few weeks. Jagdeep Ghuman – Credit Suisse: Okay. Are there any initiatives that you could put into place to save your... can you step up more purchases or any kind of opportunities to increase on fuel surcharge? Worthing F. Jackman – Chief Financial Officer, Executive Vice President: Yes, as we mentioned in the call, Jag, fuel surcharges moved up about 50 basis points Q1 over Q4 and there are expected to move up again by a similar amount or more in Q2. So absolutely that is occurring. There are also a variety of both operating and maintenance initiatives that we have designed to minimize the amount of fuel being used on the routes and those are almost too numerous to detail from automatic shut-off idling devices on engine to shut-off engines when they are idling beyond a certain amount of time to re-routing the logistic changes. So there is a number of things being done on both the revenue enhancement side, as well as the cost minimization side. Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: And, Jag I'd…

Your next question comes from the line of Leone Young with Citigroup. Please proceed.

Yes, good morning.

Hi, Good morning.

Could you talk a little bit about the continued strength in the landfill volumes that you're seeing? Any color on that would be appreciated.

Yes, again just as in prior quarters there are certain sites where we see nice year-over-year increases. Those continue to be in the southern part of the Central Valley, some parts of the plain states where you have seen some recovery from ice damage and ice storms that you saw late in Q4 or early in Q1. And obviously those... some year-over-year increases we have at those sites, you've got some year-over-year decreases in other sites. So, it's not a... we are not trying to apply that at 6% at every location, but obviously some were up and some were down and that it’s about 6% up on a same-store basis.

Great. And also in terms of the weather impact, and I understand that it's really difficult to tell what's the economy and what's the weather in the first quarter, but were the storms in your particular geographic area more concentrated in March than would you say? Worthing F. Jackman – Chief Financial Officer, Executive Vice President: Pacific Northwest could have been... that statement could be said for all the three months. But in other parts, you are right, it was more of a March weighting.

Great, thanks.

Your next question comes from the line of Corey Greendale with First Analysis. Please proceed.

Hi, good morning.

Good morning.

Question first of all on the volumes, you talked about kind of overall and by region, was there any weakness in non-residential construction, if you can break that out, or in the commercial business and if you haven't seen weakness in the commercial business people downsizing their service level is the reasonable thing we might start to see that as the years goes on? Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Yes. Corey, there was... I would tell you there was no, I mean, first off there's not a not a lot of non-residential construction that goes on January through March in most parts of the country. So it's tough to know if there was much decline there. We did not see any material movement there and we have really, to be very honest, not seen... we took a look back quite a number of years, knowing this question might come up, we have not seen a material move on the commercial side to service decreases. There is no one negligible move at this point in time across all four of our geographies.

Okay. And then, Ron, you were talking about it's the lag in recovering increases in fuel prices given your model. Is that inevitable? I mean, if fuel presumably at some point stabilizes but fuel continues to go up at this rate as the year goes on. Is there a scenario where you're only going to get the CPI increases or the average for the years so maybe you're not going to recover everything next year? Is that not how it works? Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: That's not how it works.

Okay. Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Again, there was a timing issue and it does depend on the slope of the curve, you're correct, Corey, in that in that depending on what contracts are speaking off and when it reset, could you miss a recent spike? The answer to that is yes. The reality is that you can offset that in other areas but on any given period, you should see recovery of what occurred in the prior 12 months. That's the lag. So, you're not... you're always going to be behind that curve somewhat if the curve is anything but flat.

Okay. And just one last question, Ron, I was just wondering how you're feeling, how the recovery is going and if you're full speed working on acquisitions or if that is the... if you pull back a little bit, you're getting more back into the swings of things now?

Corey, thank you for asking. I'm doing well and I am off of crutches and out of a wheel chair and walking on my own as of a week ago. So I am... we're back trying to look for acquisitions.

Great. Anyway thanks.

Your next question comes from the line of Bill Fisher with Raymond James. Please proceed. Bill Fisher - Raymond James & Associates: Good morning. Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Hi. Good morning, Bill. Bill Fisher - Raymond James & Associates: Just back on the landfill side. Can you touch on this… the overall landfill pricing trends and if there are any special waste opportunities at all this year? Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Bill, number one, landfill pricing really has remained unchanged and I would expect that from the year again. We do our price changes for both the hauling and the landfill side predominantly in early Q1. So those are done and so that price would... has been pretty consistent between about 3% and 4% depending on the site. Number two, yes, I mean, we had special waste in the first quarter, we had special waste in the fourth quarter, we will have some in Q2 as far as whether it is accelerating over sort of historical or prior year level. We are not anticipating that right now in this environment because those limited speculative real estate development going on right now and that's what drives most special waste in this industry. So as you see a recovery in real estate market, which we're not anticipating any time soon, you would see a corresponding escalation in special waste activity. There are some river bed drayage and clean-up jobs out there, we are bidding on that obviously do not relate to a real estate development and we could see some of those in Q2 and Q3. Bill Fisher - Raymond James & Associates: Okay, great. And then you mentioned the acquisitions, opportunities, and [inaudible] capital gains, higher taxes, are you actually getting some enquiries on that, just from people that you have talked to in the past that certainly have more interest? Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Yes, we actually are. I mean, I think and again we wouldn't want anyone to read anything into that by any means. I would just tell you that if you are a quality company and you are at all thinking about selling at some point over the next one to three or four years that with the prospect of capital gains tax is potentially doubling and going from 15% to approaching 30% depending on what happens in the election that is a significant impact to a seller going forward that we're not going to be observing the cost of they are. So I mean they're thinking through whether they want to take the risk of, therefore business improving beyond 15% or more or whether they are better in this environment to look at an exit now. And know what their capital gains exposure will be. Bill Fisher - Raymond James & Associates: Okay. Great. Thanks a lot.

Your next question comes from the line of Scott Levine with JPMorgan. Please proceed. Scott Levine – JPMorgan: Good morning, guys. Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Good morning. Scott Levine – JPMorgan: On margins, came in a bit better in the quarter than we expected, I guess the fuel is really kind of partial quarter impact. In second quarter on the margin side, are there any drivers in the cost side or is the integration of Colorado may be proceeding a little better than you expect, can you talk about some of the factors that are driving the margin outlook in the face of fuel price increases? Worthing F. Jackman – Chief Financial Officer, Executive Vice President: Yeah, I guess it was in the question as to how we’re able to recover more of the fuel in Q2 than we saw in Q1. Scott Levine – JPMorgan: Correct. Worthing F. Jackman – Chief Financial Officer, Executive Vice President: Again, we saw a lot of the same line items, we expect to show improvement year-over-year. I think the other one that kicks in a little more in Q2 than we saw in Q1 is just an improvement in the overall cost of maintenance given a lot of the preventative maintenance programs, and a lot of the capitals are put in the business, we're starting to see more of a benefit this year and reduced maintenance costs and that should be evident in Q2. On the acquisition side, again the improving performance of Colorado Springs is evident by the fact that we set the 50 basis point margin hit to overall margins from acquisition, which means primarily Colorado Springs is expected to be cut in half in Q2 to about 25 basis points. So that is…

Next question comes from the line of Jonathan Ellis with Merrill Lynch. Please proceed.

Thanks. Good morning, guys.

Good morning.

Ron, I am glad to hear that you are on the mend.

Thank you.

Just very quickly on revenues. If I caught this correctly, it sounds that your revenue guidance for the year is roughly equivalent to what it was that’s compared to as part of your fourth quarter call. And just given the escalation in fuel prices, I would have thought that higher surcharge revenues would have driven the top line for full year a little bit higher than you had guided to previously.

Yes.

Ellis, remember there is a $10 million band in the revenue guidance, a little bit high.

Okay. So you are utilizing that flexibility.

There is no reason to change revenue guidance at this point, given the concerns over the economy.

Okay. And on the surcharges that you have in place, if you could tell us what roughly… what percentage of your, either from a customer standpoint or total revenue base, is being surcharged right now? Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Yes, on a... you've got to break it down into sort of the two footprints of our business, Scott. On the 45%... excuse me, Jonathan, on the 45% of our business that is competitive, approximately 90% of that is being surcharged. Right? On the 55% of our business that is exclusive, it breaks down in a number of different ways, effectively about 75% of that business in this year we're getting either a higher CPI or a fuel surcharge. 25% of it we're not getting one of those two. So if you look at it in that way there is about 30% of our business in total that is not getting a surcharge or equivalent. Okay? Of that business that is exclusive we're getting about half of that in surcharge, so call that 30%.

Okay. All right. And what you've seen thus far, given the escalation of fuel prices, are you starting to get any pushback from municipalities given that obviously your surcharges are becoming a larger and larger portion of the total bill?

Yes.

Consumers don't have a limitless pocketbook.

Yes, I mean consumers do not have a limitless pocketbook, number one, and number two, many municipalities due to the economic condition, following sales tax revenues, following property tax revenues are having significant economic issues as well. Now there is a silver lining to that because we are, in many cases, a very large tax collector for those municipality. So, they… some of them are using the opportunity to increase the fuel surcharge or the price as an opportunity to increase their franchise or host fee to help balance the budget. So that is occurring and we're getting some upside surprises in some communities that we didn't expect from that. But others are reticent to increase surcharges right now and because of the economic times and their our overall budget play.

Okay.

But price sensitivities are not just limited to municipalities. Ronald J. Mittelstaedt – Chairman of the Board, Chief Executive Officer: Yes. Worthing F. Jackman – Chief Financial Officer, Executive Vice President: They make no mistake. It goes across competitive markets as well.

All right. And just to be clear, the assumption that you're going to be able to fully recover the escalation in fuel cost this year as you move into '09, did that assume... does that give any flexibility in terms municipalities pushing back on surcharges or does that assume that existing customers will continue to allow you to scale up surcharges appropriately?

Well, it obviously assumes that we will be able to do a combination of the both and it also assumed a projected failure rate in certain municipalities and certain competitive market customers. So we still have that confidence despite the fact that there is potential for some pushback from specific customers. We have factored that in.

Just got to remember rising CPI, as you track the data leads to stronger core price sticking in the municipalities.

Okay. And just very… one last question on volumes for the second quarter, it appears, if I'm doing the math correctly, that your expectations for volumes in the franchise markets may be a little softer than previously anticipated and/or you are seeing further deterioration in competitive markets vis-à-vis the guidance you provided last quarter. Could you just comment maybe on volume trends in your second quarter for the franchise versus competitive markets?

Yes, I think our caution is geared more towards competitive markets.

Okay. Would you say that the volume trends in franchise market is held relatively steady?

Well, obviously it is not steady but it is projected to remain positive.

Okay. Thank you, guys.

Your next question comes from the line of Brian Butler with FBR. Please proceed.

Thank you. Good morning, guys.

Hey, good morning, Brian.

Just a question back on pricing, real quick, can you kind of compare and contrast the different pricing levels, the franchise versus the competitive markets?

Sure, I mean Q1 was no different than what we have discussed in the past. And that is that pricing within our competitive markets is close to 2x what we were getting in our franchise markets at this point in time.

So, competitors are still also following through and pushing price.

Sure, I mean definitely. It's a cost push price increase.

Also to circle back on that price, not price, the pressure or kind of the push back from the municipalities and the franchise business, are you guys going down the road of kind of renegotiating the contracts in order to maybe not raise prices as much as that occurring at all in the franchise market?

No, that's really not occurring too much. We are in several cases renegotiating contract where we are capping CPIs in the current year or perhaps the following year in exchange for instituting fuel surcharges in the current year and in the following year to protect ourselves going forward in those contracts. So that is something we are doing and the reality is I'm happy to cap the CPI at 3% to 4% in exchange for the fuel surcharge on an ongoing basis in those... in many contracts.

No, it sounds like a... that's a good trade-off. And then last question, intermodal business, has that been benefiting at all from the higher fuel prices and just could if you comment on that how that’s been going over the last quarter?

Overall... first of all I'd say the railroads definitely are pushing through higher fuel surcharges. I think the railroads are pushing through a surcharge that exceeds 30% in the upcoming quarter. So that is getting passed through. That said it's not... the higher surcharges are not a big driver to our intermodal business, just given the percentage of overall cost that the rail service represents.

Right. Have you seen any increase in just… in volume to that business? Are you people deciding to use the rail versus ground transport, or I mean trucks? Worthing F. Jackman – Chief Financial Officer, Executive Vice President: No appreciable difference right now.

Okay. Thank you very much, guys.

I show no further questions in the queue.

Okay. Well, thank you operator. If there are no further questions, on behalf of our entire management team we appreciate your listening and interest in the call today. Worthing, Steve, and I will be in the office for the remainder of the day. If there are any direct questions we did not cover that we are allowed to answer under Regulation FD and Regulation G, we will be happy to do so. Please call us. We thank you and we look forward to speaking with you on our next call or earlier at upcoming investor conferences. Thank you.

This concludes the presentation and you may all now disconnect. Good day.