Ladies and gentlemen, thank you for standing by and welcome to the Waste Connections Fourth Quarter 2015 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this conference is being recorded, Tuesday, February 9, 2016. I would now like to turn the conference over to Ron Mittelstaedt, Chairman of the Board and CEO. Please go ahead. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Okay. Thank you, operator, and good morning. I'd like to welcome everyone to this conference call to discuss our fourth quarter 2015 results and provide a detailed outlook for both the first quarter and full year 2016. Our outlook excludes any impact from our pending combination with Progressive Waste Solutions. I'm joined this morning by Worthing Jackman, our CFO; Darrell Chambliss, our COO; and several other members of our senior management team. As noted in our earnings release, favorable revenue trends and an approximate 180-basis point year-over-year margin expansion in solid waste drove exceptional results and an almost 50% conversion of EBITDA to free cash flow in 2015 and they are continuing to provide continued momentum into 2016. Strong pricing growth and better than expected volumes that benefited solid waste in first nine months of the year continued in Q4, enabling us to once again exceed our expectations and our outlook for the quarter. We look forward to completing the previously announced combination with Progressive Waste, integration planning meetings are well underway and we still expect the transaction will close during the second quarter. Before we get into much more detail, let me turn the call over to Worthing for our forward-looking disclaimer and other housekeeping items. Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Thank you, Ron,…

Thank you, sir. And our first question comes from Tyler Brown with Raymond James. Please proceed with your question. Patrick Tyler Brown - Raymond James & Associates, Inc.: Hey, good morning, guys. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Morning, Tyler. Patrick Tyler Brown - Raymond James & Associates, Inc.: Hey, Ron. So, thanks for all the color upfront. But can you give us a little more color on what is driving the special and C&D trends? If I look at my notes, it looks like you've had a couple of years of pretty robust trends. I just want to make sure that there is not anything that we should be thinking about, like the lapping of maybe a big project or the New York C&D landfill, just anything to think about next year or 2017 that could change that trend? Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Yes... Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: I would say there is nothing notable on the special waste side like you – you called out the right thing on the C&D side. In early 2015, we opened a new C&D landfill up in the Hudson Valley, and that will anniversary itself, as we move through Q1 of this year. Patrick Tyler Brown - Raymond James & Associates, Inc.: Okay. So, overall though the economic still feels pretty good at least in the waste world? Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Yes. Tyler, I mean, to your original question, I mean special waste is driven predominantly by speculative real estate development, both commercially and industrially. It is usually contaminated site clean-up, and we get that throughout our footprint, of course, we have a large footprint, in the West where we get a…

Our next question comes from Al Kaschalk with Wedbush Securities. Please proceed with your question.

Good morning, guys. Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Hey, Al. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Hey, Al.

Excellent year again. Appreciate that. Just a couple of clarification questions. First on, Worthing, when you were talking about the notable increases in costs, the risk management piece struck me as a little bit high, but could you just clarify that when you adjust for the E&P, what that would have increased for the year and for the quarter? Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Well, it's more of an issue, while incident rates are down; it's more of a prior year increase in severity. So as some of the prior year claims develop, especially those, for instance, in California, you can get an out of period impact like this.

Right. Okay. Ron, I would like to maybe participate in that management meeting where the East region finally gets to pump their chest for a 7% growth on the fourth quarter. Was that weather induced or how much of that would you say is maybe some turn in the economy? Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: I think it was burning. It was mostly burning. Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Feeling the burn. No. Remember, Al, on a volume growth basis, the East region was slightly over 3% in total, some lines of business were 6% to 7%, but overall the volume in the East was little over 3%. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Which was still very strong... Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Yes. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: ...or second only through our West region which was approaching 3.5%, and, Al, it was, as you know, a relatively mild winter up until recently in the East, up until very recently in the last two weeks or three weeks, it was a mild winter, later on set in the fourth quarter. So, things stayed strong, construction continued, and we really saw it across our – certainly the Carolinas were strong for us, and, as was Upstate New York, both of which are part of our Eastern region, as was Tennessee. So, all of those, it was pretty broad-based.

Great. Okay, very good. Then just on E&P, I appreciate the backdrop here and the tough comp in Q1. Are there any indications, I guess, from your customer base that really in Q2, is it just more of a flat outlook in terms of starting on that quarter or is there a little bit of pickup that's expected, whether that be a slight increase in oil price or just a better comp from an acquisition or some type of growth? Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: No, look, Al, you're really just cycling on about a $35 million revenue number in Q1. Again, like we've said back in October, we thought it'd get worse before it got better; you're seeing probably we're at the low point here in Q1, because not only do you have the continued decline in activity, but also you have weather impact in some of those areas as well. So, clearly, we do think it will recover a little bit in the second half of this year because obviously the $35 million on a run rate put you at $140 million for the full year. And so, a lot of folks out there still believe we might have some pickup as you kind of get into second half of this year and ramp into 2017. But, we don't see any – there is nothing of note from an acquisition standpoint or anything else that's going to drive the numbers. I mean, you're just looking at comps that in last year in Q1, we did about $70 million of E&P revenue, and it cycled down to just over $50 million in Q2, that's why Q1 is the hardest comp.

All right. Okay. I appreciate it, good luck, guys. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Thanks, Al.

Our next question comes from Scott Levine with Imperial Capital. Please proceed with your question.

Hey, good morning, guys. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Hi. Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Hey, good morning.

So, just to be clear with regard to my revisions to the 2016 outlook versus your preliminary, is this predominantly just factoring in the greater conservatism on E&P, bonus depreciation and maybe some adjustment to CapEx plans? Just want to get a better sense of whether the outlook for the core solid waste business is intact, strengthening, weakening, just looking for a little bit more detail there. Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Yes. I'd say our solid waste is a little bit stronger. Obviously, Q4 was a good quarter and as we talked before about the momentum in the 2016, but I think the three things you identified with regards to resetting E&P for the continuous decline in crude since Q4, or since really since October of last year. Obviously, bonus depreciation was passed in December, but you've seen it soak up most of that through expectations on higher CapEx, because we typically try to take advantage of that. So, in a nutshell, you put all those together and you see the kind of consolidated revenue down just a little bit, but EBITDA within the band and free cash flow is slightly better.

Got it. And then regarding the E&P business, maybe just a little bit more color on the individual basins and either how they've behaved or how you expect them to behave at least through this year, any noteworthy changes in view by major basin there? Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Yes. The trends we've seen through most of the last year just continued, obviously pricing stabilizes as you saw, because this was kind of a third straight quarter where year-over-year pricing was down just about 15% last year. And so while pricing has stabilized, it does become a volume game. Obviously, we've had the most volume impact in basins like the Permian or Eagle Ford, given asset positioning. But as we've always called out, the Bakken has been the most competitive on price, given the competitive landscape up there. So I'd say that there is no appreciable change in trends by basin. You've seen the impact of crude that was $50 a barrel back in October is now sitting at $29 a barrel.

Got it. One last one if I may, on capital allocation. So your tone suggests we should expect kind of a typical year and no real change to the traditional capital allocation program. You're pushing close to three times though, and it is a large deal. I just want to push you a little bit on that. Is your expectation – it sounds like those factors really don't have any bearing with regard to your plans on capital allocation for this year in any way. Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: No, that's right. Whether it's pre-BIN or post-BIN, again you've got a balance sheet that's just under three times levered. You've got cash flow that's about 1/6 of outstanding principal, which is unmatched in the industry. So you've got ultimate flexibility to fund, again a dividend program that averages about 20% of our free cash flow, traditional M&A activity. If you put the $125 million of estimated revenue that Ron talked about, that's about 30% at most of the free cash flow. That still gives you 50% of free cash flow to use for either increased M&A activity or to repurchase shares on an opportunistic basis, and that would put in 2% to 3% of outstanding shares. So, no, the capital allocation doesn't change pre and post deal because again the shape of the balance sheet and the strength of the free cash flow to outstanding debt remains very similar albeit just bigger numbers.

Got it. Thanks, Worthing.

Our next question comes from Michael Hoffman with Stifel. Please proceed with your question. Michael Hoffman - Stifel, Nicolaus & Co., Inc.: Thank you, all, for taking my questions, and, sorry for the scratchy voice. Hey, Ron, so the stock market is just wringing its hands thinking we're going into a recession. When you look at every truck goes across the scale every day, what's the truck weight or the container weights telling you about the consumer? Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: That they continue to be in pretty good shape. Obviously, the precipitous decline in crude over 2015, we know what that's done to the E&P business and our E&P business. But, the reality is that it's put a tremendous amount more discretionary income for many people, most everyone, and this is a consumer-centric business. So the vast majority of our business is individual small businesses and individual households. That ultimately makes up 70%-plus of who pays us, and that 70%-plus are in better shape than they were a year ago. So we're just not seeing at this point any declines anywhere in the economy. We're continuing to add routes in certain markets due to capacity issues. And I'd say we're nearing the point of "full recovery" from where things were declining, but still not quite there in some of our systems. Michael Hoffman - Stifel, Nicolaus & Co., Inc.: Okay. So, on that vein, when you think about where you're adding capital – new incremental capital in the fleet, is it across front-end loader or automated side loader roll-off or is it concentrated? How do we think about that? And then could you contrast it on what you think you're seeing the private market do? Ronald J. Mittelstaedt - Chairman & Chief Executive Officer:…

Our next question comes from a Corey Greendale with First Analysis. Please proceed with your question.

Hey, good morning. Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Hey, Corey.

Hey. First question I had is the E&P impacts to the guidance and given the reduction in revenue, I would have expected more of an impact on EBITDA, so are you doing something to offset that, can you just talk a little bit about that? Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Well, it's whenever we get preliminary guidance, Corey, we know there's still three months of learning to go through and so we leave ourselves sufficient amount of cushion.

All right. Fair enough. And then I had a couple of questions about solid waste price. So, core price actually accelerated sequentially in Q4 that's not the usual seasonal pattern, so, if you go back to market for more increases or is something happening with fuel surcharges, just what drove that? Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Yes, it's just a normal implementation. I mean some people get an early start on the Q1 price increases and it benefits Q4 a little bit. You'll see a little uptick Q4 to Q1 in both core price, but also in surcharge rollbacks such that net price will probably add or slightly better than what we did in Q4. But again, you will see next year that our net price will peak in Q1 and they have kind of an expected same trends that we typically think about which means higher price in Q1 and it mathematically just reduces a little bit as you move through the year. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Yes, and, Corey, when you move some of the PIs up by a month or so and pick some of that up in December, remember, you're doing it on a seasonally lower revenue base. So that also explains just mathematically some of the incremental what it looks like on a margin basis – or excuse me, on a reported basis. And to Worthing's point, I mean you see that even greater, because Q1 is your lowest seasonal quarter. So, it's not really that price per se is changing, it's that your denominator is changing. Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: All the way, the price came about where we expected for the period.

Okay. Understand. And then on the fuel surcharge, I think you're rolling more of that into core price, but it moved more in Q4 than it had been. So, can you just help us to think about how changes in diesel prices will correlate with your fuel surcharge? Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Yes, again, it's just more of a timing issue as to what the comps look like. Again, we've not been a company that's focused on surcharges, compared to many others in the industry. So, again you'll see some just small numbers moving through the P&L on a rollback standpoint. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Yes. And it lags a bit – it lags at least a quarter, Corey, so that's more indicative of the larger drop sort of that happened throughout the third quarter that gets fully reflected in either a rollback or reduction of the surcharge or a conversion of a component of the surcharge to permanent price. So, think of that as a backward looking indicator more than a forward.

Okay. And last and I don't know if you will comment on this at this point, but how should we think about internal growth for the combined company, is the 4% to 4.5% reasonable for the whole company or how should we be thinking about that? Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Yes. Again, we've spoken with investors, Corey. I think our focus has been more on cash flow generation and the quality of that conversion of EBITDA to free cash flow, I would hope that cash flow growth exceeds EBITDA growth and EBITDA growth exceeds revenue growth. Again, I think early on, we're looking at improving the quality of revenue and the EBITDA that it generates and minimize the amount of CapEx against that EBITDA that gets generated. So again, I don't think we'll set organic growth targets right now for the combined company as we're more focused on initially improving the quality what's in the P&L and the free cash flow generation.

Understood. Thank you.

Our next question comes from Barbara Noverini with Morningstar. Please proceed with your question.

Hey, good morning. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Good morning, Barbara.

It appears that we're hearing a tale of two economies in North America lately and you've already touched on the strength of the consumer, but aside from the obvious oil and gas sector weakness, are you starting to see other pockets of the industrial economy weakening? Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: First off, Barbara, we have very limited exposure to the industrial economy within all our business model that represents probably only about 3% of revenue or so. So, we're not a great proxy for anybody who wants to understand that economy. In that 3% of our revenue, we're really not seeing a decline in the U.S. so far in our model. So, that's just something we're not seeing. I can't speak about anything more broadly than the 3% of revenue we have.

Okay. And then, I mean now that we've experienced several quarters of weakness in E&P. Can you comment on the M&A landscape, are you starting to see more attractive valuations in this space now? Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Well, we're not, how do I best say it, not that we wouldn't look at acquiring something in the E&P space, if there was an asset we felt we needed and it was appropriately priced for $29 oil. But, in order for us to improve our E&P business, it's purely just a function of rig activity. And we do not need any additional assets, we have comfortably the best position assets in this space with a very large lead over who is in second place. And it's all just a function of activity which is a function of oil plays. So, I'd never say never, but it's not something we're actively out look at right now.

All right, very good. Thanks very much.

Our next question comes from Andrew Buscaglia with Credit Suisse. Please proceed with your question. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC (Broker): Hey, guys, thanks for taking my question. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Sure. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC (Broker): Can you just comment on the free cash flow growth in 2016. Can you just walk through the puts and takes again, just so we're clear, how you're getting that growing and specifically if you can comment on the working capital? Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Yes, look, I think you've seen us over time generate in that kind of 15.5% to 17% of revenue or range over the past several years and as we look at the upcoming year, obviously CapEx is down nominally year-over-year, as we've guided on a working capital standpoint, working capital is normally a slight benefit, as we look ahead to the CFFO. So, I think you'll see cash flow from ops again go towards that upper end of what we've typically guided, being 27% of revenue and again the rest of it's just pure math. Andrew E. Buscaglia - Credit Suisse Securities (USA) LLC (Broker): Okay. And then can you just comment on, you haven't touched too much on recycling and intermodal in 2016. I know we're expecting more headwinds in recycling, but can you just comment on specifically what you expect? Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Yes, both on recycling and intermodal, again recycling, the headwinds continue to abate, again last year, more of the headwinds were associated with OCC. OCC has now kind of anniversaried itself and we're about to anniversary kind of the weakness within metals and plastics, as…

Our next question comes from Joe Box with KeyBanc. Please proceed with your question.

Hey, good morning, guys. Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Hey, Joe. Good morning.

Worthing, can you just help us with the solid waste margin trajectory in 2016? One thing I want to be cognizant of is the timing of fuel benefits, especially relative to some of your higher cost hedges that are going to be rolling off. If you could just help us square the cadence of margin expansion, I think that'd be helpful? Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: Sure. Well, the high cost hedges that were in place last year expired at the end of last year. Now what's in place for the high cost hedges that we put in place last year that we managed at top mid-year last year that will weigh out of this year compared to market prices. No, but if you look at Q1, fuel savings are about – between $1.5 million and $1.8 million. Again, that will work its way up just a little bit as you move through the year, given timing of some of the local fixed-price distribution contracts that rolled off last year and started benefiting this year. And so you'll see probably about around a $7 million plus or minus benefit at current fuel prices from fuel year-over-year. So call that 35 basis points on a range of 30 basis points to 40 basis points. Away from fuel, we expect to see another kind of 20-basis point to 40-basis point improvement on kind of the aggregation of various line items. So when you kind of add fuel to that, you're looking at anywhere from 50 basis points on the low end to about 75 basis points on the upper end in solid waste margin expansion on a year-over-year basis. How that flows through in any one quarter can vary. But on a full year basis, that's what we'd expect to see.

Okay, great. That's good color, thank you. And then, Ron, I think you mentioned earlier that you're starting to see some headwinds in geographies where there is oil exposure. I guess what I am trying to understand is what products you're seeing it in specifically. Is it just related to C&D, are you starting to see it spill into commercial? And then, how isolated is it? Is it maybe on a county-by-county basis, or is it maybe even a little bit broader than that? Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Yes. First off, Joe, I would tell you that it is what I would consider very isolated. It tends to be in a county-by-county basis, to your point, and it tends to be really in one segment. It tends to be in high-end real estate and the construction thereabout. So, in places outside of Houston, outside of Austin, in certain parts of Texas, where there tends to be concentrated oil wealth, you're seeing a reduction in construction activity in high-end real estate there. So that's a very small portion of our business. Of course, you're seeing the same thing in a small market like Williston, North Dakota, where the Bakken – the largest city where the Bakken is, and you've seen that market go from over 80,000 to 90,000 oil-related jobs down to under 25,000 in a one-year period. So when you take out 70% of the population that's going to hotels and restaurants and strip centers, it has a big impact. But that market's a $5 million to $10 million market for us. So it goes to $3 million to $7 million. So it's just these are very isolated, they're in the scheme of things, they're rounding errors that you never see, but they do exist where there was a lot of oil concentration.

Got it. Thanks for the color, guys. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Yes.

Our next question comes from Charles Redding with BB&T Capital Markets. Please proceed with your question.

Hey, guys, good morning. This is Payne Porter (58:14) for Charles Redding. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Good morning.

Hey. Just a quick question dealing with due diligence here, but kind of just looking at some of the preliminary meetings that you guys have had with the Progressive guys; have you identified any of the 10% to 15% of underperforming assets that you guys are looking to divest at this point? What is the priority there, are you looking at more U.S.-based assets or they're going to be Canadian-based assets, just any color that you can add on sort of those divestitures and swaps? Thanks, guys. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Sure, no problem. Well, first off, we identified through our due diligence before we ever went into a definitive agreement that there was 10% to 15% of the revenue in the combined company, all of which that was within the U.S. None... Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: It means about 15% to 20% of the U.S. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Right. None of the revenue in Canada. That was in one man or another inconsistent with our strategy of how we create value long-term in this space. And so, that tells you that that's $200 million to $300 million of revenue in the U.S. We know what that revenue is, and post-closing, we will look to rationalize that, most likely in swaps, where it can help somebody adjacent to that revenue that is consistent with what they do. And they may have a piece of business that's more consistent with what we do throughout our network. That would be the first priority and how we believe most of this will get handled. We have not had any of those discussions; that is not something that is proper to do or even legal to do pre-closing. We have had a lot of inbound inquiries, we've told everybody the same thing that once things are closed and we understand the details of the business better than we do today, we'll sit down with people when appropriate, but, that won't happen until the transaction is closed. Worthing F. Jackman - CFO, Executive VP & Head-Investor Relations: I think these are markets that we've identified to us as strategic non-fits with our model. Obviously from a HSR standpoint, we're still undergoing that review and that dialog right now.

Sure. Thanks, guys, I really appreciate it. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Sure.

We have another question from Tony Bancroft with Gabelli & Company. Please proceed with your question. Tony Bancroft - Gabelli & Company: Hey, good morning, gents. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Good morning, Tony. Tony Bancroft - Gabelli & Company: Just to jump on the last question there, I know there wasn't any comment on the bin call regarding the New York City contract. But just since we're not going to hear from them this quarter, is there any update there? And is that somewhere – I know you just mentioned that you can't really discuss where you want to be, where you want to be. But is New York City a place in general where you see yourself in the future? Is that somewhere you want to be, or is there anything you can add some color there? Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Sure, Tony. I mean some of it we can add some color, but some of it we can't. First off, Progressive is moving forward with the contract they have under negotiation with the Department of Sanitation in New York City, and I believe that it will be executed prior to the closing of our transaction. We know that contract, we've reviewed that contract. I think the City and Progressive have done an enormous amount of work over the last six years to get what is an extremely comprehensive and well thought through document that works for both – contract that works for both sides. We're very supportive of that agreement and think it makes a lot of good long-term sense for the companies going forward. And so that's where that's at and I think that's what you would hear if you talked to Dan Pio or somebody from Progressive. Secondly, I think there is a little misunderstanding in the market. And when we've talked to investors, we have clarified this as we've gone around and answered individual questions. There is no interplay between Progressive's existing collection transfer and disposal operations in New York City and the New York City transfer and disposal contract. There is none. Those are two completely independent entities, completely independent decisions. In other words, the waste that is picked up by Progressive today and go through their transfers to their landfill in Seneca Meadows, it will never go to the City's marine transfers that Progressive operates and vice versa. So it's completely independent and an autonomous decision that has no financial interplay with each other. So, I want to make sure you or whoever is thinking about that contract understands that. Tony Bancroft - Gabelli & Company: Thanks so much. I appreciate it.

We have no further phone questions at this time, sir. Ronald J. Mittelstaedt - Chairman & Chief Executive Officer: Okay. Well, if there are no further questions, on behalf of our entire management team, we appreciate your listening to and interest in our call today. Worthing and Mary Anne Whitney are available today to answer any direct questions that we did not cover, that we are allowed to answer under Regulation FD and Regulation G. Thank you, again. We look forward to speaking with you at upcoming investor conferences or on our next earnings call.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.