Good morning. My name is Jenisha and I will be your conference operator today. At this time, I’d like to welcome everyone to the Fourth Quarter and Year-end 2013 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) I will now like to turn the call over to Mr. Ed Egl, Director of Investor Relations. Thank you, Mr. Egl. You may begin your conference.

Thank you, Jenisha. Good morning, everyone and thank you for joining us for our fourth quarter 2013 earnings conference call. With me this morning are David Steiner, President and Chief Executive Officer; Jim Fish, Executive Vice President and Chief Financial Officer; and Jim Trevathan, Executive Vice President and Chief Operating Officer. Before we get started, please note that we have filed a Form 8-K this morning that includes the earnings press release and is available on our website at www.wm.com. The Form 8-K, the press release and the schedules to the press release include important information. During the call you will hear forward-looking statements which are based on current expectations, projections or opinions about future periods. Such statements are subject to risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties are discussed in today’s press release and our filings with the SEC, including our most recent Form 10-K. David and Jim will discuss our results in the areas of yield and volume which unless stated otherwise are more specifically referring to internal revenue growth or RG from yield and volume. Additionally any comparisons unless otherwise stated will be with the fourth quarter of 2012. During the call, David and Jim will discuss our earnings per diluted share, which they may refer to as EPS or earnings per share on an as-adjusted basis. David will also address operating EBITDA margin as defined in footnote B in today’s press release. Our EPS, as well as income from operations margin and operating EBITDA margin for our traditional solid waste business have been adjusted to exclude items that management believe do not reflect a fundamental business performance were not indicative of our results of operations. These measures in addition to free cash flow are non-GAAP measures. Please refer to the earnings press release footnote and schedules which can be found on the company’s website at www.wm.com for reconciliations to the most comparable GAAP measures and additional information about our use of non-GAAP measures. This call is being recorded and will be available 24 hours a day beginning at approximately 1:00 p.m. Eastern Time today until 5:00 p.m. Eastern Time on March 4th. To hear a replay of the call over the Internet, access the Waste Management website at www.wm.com. To hear a telephonic replay of the call, dial 855-859-2056 and enter reservation code 31500809. Time-sensitive information provided during today’s call which is occurring on February 18, 2014, may no longer be accurate at the time of a replay. Any redistribution, retransmission or rebroadcast of this call in any form without the express written consent of Waste Management is prohibited. Now I’ll turn the call over to Waste Management’s President and CEO, David Steiner.

Thanks, Ed, and good morning from Houston. Looking at 2013, we built strong momentum in the first three quarters of the year. And that momentum continued into the fourth quarter with our traditional solid waste business growing margins by 150 basis points. However, quarterly EPS results, particularly fourth quarter EPS results can be impacted by accruals sometimes positive and sometimes negative. In the fourth quarter of 2013 we had $0.11 more expense from accruals than in 2012. $0.02, of that $0.11 was offset by tax benefits, so we had a net of $0.09 more from these type of accruals per share than we had in 2012. This $0.09 consists of $0.06 from incentive compensation and $0.03 from risk management. Without these accruals, our earnings would have continued to show a strong year-over-year growth in the fourth quarter. So our traditional solid waste business is strong and our earnings momentum continues. Indeed, we have seen that momentum extended to January as preliminary results show income from operations improving 12% and income from operations margin expanding about 110 basis points when compared to January of 2013. Looking at the full-year, we had a very successful 2013 as we met all the goals that we set out to accomplish. Our plan to increase yield, better managed costs, and have disciplined capital spending paid off in 2013 and should lead us to continued success in 2014. In 2013 we achieved full-year earnings per share of $2.15 and free cash flow of $1.32 billion, all despite $0.10 of unanticipated headwinds from our recycling business. In 2013 we expected yields to be between 1% and 1.5% and we exceeded that target. For the full-year our collection and disposal yield was 2.1% with each quarter sequentially higher than the previous one, culminating with the fourth quarter at…

Thank you, David. I'm going to review the results of the fourth quarter and expectations for 2014. I will start by discussing our SG&A costs and cash flow performance, then I'll expand on David's comments about the results of operations, yield and volume in our various lines of business. I'll conclude with a discussion of our financial metrics. Results for SG&A were better than we projected at the beginning of the year. We anticipate costs being flat when compared to 2012 and for SG&A costs as a percent of revenues improved 10 basis points. I'm pleased with the overall results of SG&A costs for the year improved $4 million to $1.47 billion and improved as a percent of revenue by 30 basis points to 10.5%. For the fourth quarter, SG&A costs were $376 million, an increase of $20 million. As a percent of revenue, SG&A costs rose to 10.7%. Both increases are a result of the accruals that David mentioned. This will not be our 2014 run rate as we expect that SG&A dollars will remain flat in 2014 and that SG&A as a percent of revenue will improve from 2013. We saw that in January that SG&A improved $8 million as compared to January 2013. Turning to cash flow, for the full year we generated $1.32 billion of free cash flow, an increase of almost $500 million when compared to 2012. We accomplished this in part by growth our net cash provided by operating activities, $160 million to $2.46 billion and by maintaining discipline on capital spending. Our capital expenditures for the year were $1.27 billion. If you exclude divestitures, free cash flow for the year grew nearly $400 million to $1.18 billion. Without the prepayment that David mentioned, free cash flow would have been $1.24 billion. In the…

(Operator Instructions) Your first question comes from the line of Hamzah Mazari of Credit Suisse.

Good morning. Thank you. Just a question on volume, if we adjust for the low margin national account business that you’re walking away from and maybe some weather impact, could you maybe comment on what the underlying volume growth is for 2014 that you’re guiding through and also maybe comment on how you balance volume loss with negative operating density?

Yes, when we look at 2014, it’s probably about 60% to 65% of the volume loss. In 2014 it’s going to be from national accounts and as you know that’s generally very low margin business. We just recently lost our largest national account, which was low single-digit margin because we didn’t want to reduce or stay flat on the price. We wanted to get a price increase because our margin was low single-digit and so we knew that was coming and it was the right business decision to make. The other -- sot that’s going to account for roughly 50% or two-thirds of the volume loss in 2014, but the remainder -- we have the first quarter is going to have a tough Sandy comp still from Superstorm Sandy and obviously we had bad weather, so you’ve got a little bit of an effect there. And then we still expect that our pricing program is going to drive out a bit of our commercial volume. So most of what you see in 2014 is culling out that low margin business then the year-over-year comps in the first quarter. As far as the density goes -- look that's a fundamental premise of this business that if you can create route density, obviously you can service the customer at a much lower cost. But we can’t let that benefit that we get upset our pricing program, right. We got to be the pricing leader and if we aren’t then no one else is going to do it. So we’re going to be the pricing leader. We recognize that you get benefits from density. We certainly are looking to grow our commercial volume, but we will not grow our commercial volume at the -- we won't grow our commercial volume at the expense of price.

Very helpful. And a question on SG&A, if we assume that bonuses continue into the future, how should we think about SG&A going forward? Is it fair to say that it should run up to 10.5%, 11% on a normalized basis if we assume that management continues to get bonuses?

Hamzah, on SG&A look, I think I was pretty pleased with how we turned out in 2013. We were actually specifically flat; we were actually down a little bit about $4 million. And we’ve guided to flat in dollars in 2014, so when you think about it on a percentage basis, look as top line increases we expect that percentage will start to get down to the 10% and potentially below 10% range. To really be in the low nines, I think you’re going to need to see a pretty robust rebound in the overall economy. I mean that’s for us that has to be the big driver of top line growth -- the pricing strategy is clearly the right strategy as you heard from my numbers, but in order to get revenue to really take off, it’s got to be from robust economic growth we can't afford that price volume tradeoff in the wrong direction. So, when we think about SG&A as a percent of revenue, I would expect that the flat SG&A will produce – obviously it's going to produce a lower percentage because of some increase in top line. We're going to get down to – not going to get down to 9% until we really see the overall economy take off but I'll tell you, there is still room for dollars on SG&A both on the labor and the non-labor front. We're not giving any guidance for 2015 but I would expect they'll hear the same message when we talk next year of being flat year-over-year.

Great. Just last question, I'll turn it over. Any update on the divestitures. It seems like you had some this quarter. How should we think about where you are and what process? Thank you.

Yes. When we look at the divestitures, as we said, we're looking – we're assuming $100 million of divestitures during the year. We've got a few in the pipeline particularly in the non-core business. We looked at our Chinese joint venture and we may look to monetize that this year. And that $100 million I would tell you I think there is some upside to that, but the bulk of that divestiture would be non-core solid waste. We should have $50 million to $100 million of dispositions in the core solid waste business but the upside would be all those non-core asset sales.

Okay, great. Thanks a lot.

Your next question comes from the line of Derek Sbrogna of Macquarie.

Hi, guys. Thanks for taking my question.

Good morning.

Good morning. I'm just wondering if you could talk a little bit about – it's very encouraging to see the internal revenue growth stays strong in fourth quarter 2% and you're guiding flat for 2014. Can you just talk about some of the things you're seeing and doing which gives you confidence that you'll be able to offset some of the CPI headwinds with some of the business that is not linked to CPI?

It's a great question because when we look at yield, frankly we don't look at the number, the 2.4% in the quarter, the 2% for 2014. We don't particularly look at that yield number. When we build our plan, we build our plan to determine the amount of dollars that will drop to the bottom line from all of our pricing actions because pricing actions are not just core price increases but it's also rollbacks, it's also the effect of lost business. There's a lot of different effects that go into what drops to the bottom line from pricing. So when we look at that, when we look at dollars to the bottom line, we think dollars to the bottom line will be very similar in 2014 to where they were in 2013. Now, you hit the nail right on the head. In order to get that we're going to have to do more robust price increases to offset the CPI. That CPI is what's going to drive the yield down toward the 2%. So as we look at 2014, we don't think there will be a material difference in the amount of dollars driven to the bottom line, but CPI will mute the numbers a little bit as far as yield goes.

Okay, that's helpful. And just one more. It's good to see the CapEx guidance essentially in line with 2013 levels. Is there anything we should be thinking about with regards to that number? I actually would have assumed it would have gone a little bit higher just kind of thinking that you would have seen cost inflation with regards to capital purchases and some of the initiatives you guys have put in place with the onboard computers and stuff like that?

Yes, when you look at CapEx, what we're doing in 2014 is making sure that we put the right amount of capital into our core solid waste business. We talked about it in the past. We just have to make sure that we aren't under investing in the core business and we aren't, and so primarily what you'll see in 2014 is that we are going to cut back on those types of investments that haven't been getting us the kind of returns that we want over the last few years, primarily recycling. And so we're not going to starve the core business, the CapEx will be a little bit down because of what we call sort of growth capital and capital for those other types of businesses that generally have not been earning their return on capital for the last two years.

That's very helpful. Thanks very much.

Certainly.

Your next question comes from the line of Bill Fisher of Raymond James.

Thank you. Good morning. Just on the EPS growth, I think the midpoint is around 8% and obviously I mentioned organic growth is around 1%. Can you touch on some of the drivers there? Obviously you have a possibly lower share count, acquisitions and David you mentioned the pricing actions but it seems like you got to have some good cost controls because gross margins would seem to have rise?

Yes. Look, when we look at that 2014 just to try to sort of put it in context, I think that there is some potential upside on yield, I think there is some potential upside on free cash flow. But as you well know, Bill, the last two years we've predicted our recycling operations to be last year $0.02 negative, ended up $0.12 negative. The year before we had a similar type of result. And so we wanted to be very cautious on predicting – we said it before, we can drive sort of 8% to 12% earnings growth through the price volume combination but in order to get up into that low mid teens, we got to get help from waste to energy and from recycling. We haven't done that in the last few years. And so when we put together the plan, we said let's assume that we're going to be very cautious on getting any benefit from it. And frankly, when you look at the beginning of the year with slower growth in China, with the weather that's been impacting recycling volumes, I think that's a good assumption. So we wanted to be conservative because of those two big tailwinds or headwinds that we've had in the last couple of years.

Bill, one of the reasons we talked about January which we've really never done before but one of the reasons we talked about January is because we didn't want folks to – two reasons. One is we were encouraged by our own results but most importantly we didn't want folks to mistake kind of the accruals there at the end of the year for a change in trend. And January clearly showed to us that the trend that we'd seen really for the first probably 10 months of the year is continuing into next year. So when we think about 2014, for whatever its worth, right, I mean January is one month out of 12 but we felt good about what we saw. I mean SG&A costs being better by $8 million but we felt good with what we saw really overall, I mean in line with a really tough weather month our core business was actually better than prior year. So, I think we've got a pretty good start going there and we'll see what February brings. February has been a tough weather month as well.

Okay, thanks. And hoping to follow-up with that David, you're keeping the yield north of 2% and I think last year you had some good success on the regulatory fee. Are there any new incentives or strategies this year? I notice the commercial price is really strong for you in Q4.

Frankly, 2014 is going to be sort of the same – it's a repeat of 2013. It's going to be the same things that drive it. Again, we talked a little bit about the CPI headwind that we have to overcome, but it's going to be the same types of things. But Bill, we'll never rule out doing something during the course of the year. We didn't build in any plans to increase that, but we'll see how the year plays out. And look, the reality is that as we've gone through the various cycles, we have never seen a dramatic amount of pushback to the fees. I think customers get the point that our cost structure is going up every year and so we have to recover that. So, could it happen in 2014? Absolutely. Is getting our target dependent upon it? No.

Okay, great. Thank you.

Certainly.

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

Hi. Good morning.

Good morning, Corey.

I think David that you said something like half or two-thirds of the volume decline that you're projecting for '14 is because of national account. I'm just trying to get a sense what do you think is underlying market growth – volume growth in the market in 2014? And then on top of that, how much are you projecting the year of losing because of you being aggressive and being the price leader?

Again, I think 2014 from an overall volume perspective is going to be fairly similar to 2013. Look, we said it now for the last couple of years that what we need to see in order to really get robust volumes is we need to see an economy that's driven by housing starts, by new business starts and by industrial production, right. We can't seen an economy where growth is driven by non-infrastructure government spend and by the service sector. And so I think that's the big question for 2014. Are we going to start to or are we going to continue to see the rebound in housing and are we going to start to see new business generation? Again, when we plan for '14 we're planning like we aren't. Like we aren't going to see a dramatic uptick, and so from an overall volume point of view, I think what you’ll see in 2014 will be similar to what you see in 2013 with collection volumes at least for us, with collection volumes remaining negative and landfill volumes remaining positive.

Okay. And I would like just to offset the expectations, you’ve given all the things you’re seeing in Q1. When do you expect that Q1 will be the worst year-over-year comp in volume and it improves as you get to the end of the year?

Yes, I would be surprised if Q1 is not the worst year-over-year. Now the large national account that I talked about, we lost about $90 million of national account business last year. Our largest national account will lose in sort of mid-year this year. So, you’ll get a little bit of that affect in the back half but because of the weather affects and because of the sandy affects and because of the national accounts, yes I would expect the first quarter to be toughest comp a quarter and for it to improve going forward.

Okay. And by the effect it had on the competition of national accounts, is that coming from your large national competitor or are you seeing new businesses like Oakleaf forming?

I think it's a combination of both. And from a -- it doesn’t matter where it's coming from, because even if it's a broker it's coming from our large national competitors. We don’t do business with brokers. From our point of view we don’t see why we would strengthen a competitor by acting as a subcontractor for these new brokers in various markets. We don’t understand why you would help a competitor. So, we don’t do business with the national brokers. So, even if the bid isn’t won by our large national competitors they are doing business with those brokers so they’re getting some of that business. I think the answer would be; yes, predominantly we’re losing at the large national players either directly or indirectly because they’re working for the brokers.

Okay. And one quick one for Jim, there’s a -- in the press release you talked about the $0.09 impact, some of that is the bonus accruals, but some of it is also risk management; can you just elaborate a little on that what, is that a one-time adjustment of what your expectation is for risk management expenses going forward?

All right. So the risk management was a benefit actually prior year. We typically expect with our safety improvements we’ve been seeing $0.01 to $0.02 per year. This year we actually went the other way. We had a couple of incidents, so we ended up with $0.01 charge; last year was a $0.02 benefit on risk management adjustments. So, is it a one-timer? Certainly the trend would say that we wouldn’t see a repeat of that, but it's hard to say it's a one timer.

Yes, when you look at our safety numbers, our safety numbers are actually improving which what it leaves you to believe that we would have gotten a positive accrual. The problem is we had a couple or a few large incidents that we accrued for in the fourth quarter. So, again, like Jim said you’d expect it to be positive, but you just never know when these large incidents are going to happen.

Got it. Thank you.

Thank you.

Your next question comes from the line of Adam Thalhimer of BB&T Capital Markets. Adam Thalhimer - BB&T Capital Markets: Hi, good morning guys.

Good morning. Adam Thalhimer - BB&T Capital Markets: Thanks for the detail you provided in terms of the yield and volume in your various businesses. I’m curious from your perspective is the yield volume trade off working better on the industrial line than the commercial line. Because on the commercial line it looks like you’re getting 5% price, but then giving up 5% volumes whereas on the industrial side you’re getting a lot of price, but not giving up as much volumes?

Yes, when you look at a particular dollar’s point of view maybe you’d say the commercial is doing better. But I think you’re right and it goes back to the earlier question about route density. You don’t have the same issues with route density on the roll off side as you do with the commercial side. But look, in this business there is a few large chunks of business that you can go after very quickly. You can get large residential contracts, you can get large national accounts and you can get temporary roll off business. You can sort of flip a switch and get any of those three. The problem is you’re going to get those three at very low margins. And we know that if we go out -- look if the large player goes out and grabs a bunch of volume of low margin what's the rest of the industry going to do? And so, from our perspective we’ve got the right trade off. What we’re expecting to see is our volumes recover with the economy not for all volumes to recover because we keep our price flat. We’re going to continue to push our price and make sure that we get above that 2% so that we can expand margin.

Adam, it's also worth mentioning that, that some piece of our volume loss is not a function of price, we don’t know exactly how much that is, but some piece of it is related to -- for service and we are really focused at this point on customer service and improving the experience to the customer. And that doesn’t -- getting that volume back has no negative impact on the price side as we would have if we were simply lowering price to get more volume, but we’re keenly focused on that. Adam Thalhimer - BB&T Capital Markets: Got it. Okay, that’s very helpful. And then just as a follow-up, in terms of, you guys are obviously being aggressive on pricing which is probably a good thing for the whole industry. What exactly are you seeing in terms of how your competitors are responding to that?

Yes, I would say that we would love to see all of our competitor’s large and small leave at it and follow, but we recognize that generally they aren’t going to leave. So, mostly what we’ve seen is what I would call rational behavior. Like there always is, there are pockets where you see some unusual actions generally those are in markets where you’ve seen a lot of stress put on volumes, that we just recently saw a competitor lower their own price by $4 million in the North East on a disposal contract sort of paying against themselves. We saw a competitor drop price by -- at the landfill by 20% to 25% in South Florida because both of those markets are fairly challenged. But that’s the kind of behavior that for us is going to cost us a lot of volumes and again we can’t go out and do that type of behavior because look, if you look -- I have always said we can lead the industry in one or two ways. We can’t control what they do. I mean, we have absolutely no control over what anyone else in the industry does other than us. But as the largest in the industry we can take one or two stances. We can say we’re going to go after volume and give away price or we can say we’re going to go after price and give away volume. And both of those can lead to what we call sort of a spiral affect either downward or upward. We long ago, look Jim said it; you can’t lower price and create demand. Cherie Rice who used to be with our company used to say, with shoes if you lower the price of shoes people buy more shoes. When you lower the price of garbage people don’t create more garbage. So, when you’re working with a fixed pie you’re always going to be benefited by driving yield up because you can’t steal enough volume to make up for that yield. And if we go and start stealing volume then it creates that domino effect of everybody is stealing everybody’s volume and that’s not a path that we’re willing to go down. Adam Thalhimer - BB&T Capital Markets: Got it. Okay, thanks for the color.

Thank you.

Your next question comes from the line of Al Kaschalk of Wedbush Securities. Al Kaschalk – Wedbush Securities: Good morning, David.

Yes. Al Kaschalk – Wedbush Securities: Could you just clarify on the sandy headwind what that is for ’14 in terms of a comp headwind on a volume basis?

Yes, again that’s primarily in Q1. If you look at it in Q4 you saw that it was 0.6%. I would expect it to be a little bit more muted in the first quarter, but probably somewhere between that sort of 0.3% to 0.6%. Al Kaschalk – Wedbush Securities: Okay. And then should we assume the balance is national accounts?

Yes, I mean so you’ve got national accounts and you’ve got the commercial business going down but all of that is offset by landfill volumes going up. And again, if that goes back to the trade upright, if you tell me that my low margin national account business is going to go down and my landfill business is going to go up, I’ll take that tradeoff six ways to Sunday.

Al, again if you haven't heard it from the other guys, what you probably have that the weather is throwing volumes out of whack. Now we are pleased with the results as we said in January, but we’ve had several operations, especially in February where we’ve been shutdown in a big part in the South, I mean you expect to be shutdown in the North and Mid West, but when Atlanta shuts down for two days that generally is not expected going into the winter. So, I think there’s going to be an impact from the weather that, that is yet to be determined.

Al, we say it every year that you can’t make a call on full-year volumes based on the first quarter because of the seasonality. So we have said that every year since I have been here, to Jim’s point more or so this year than ever before because it has been ridiculously a brutal winter not just in the places where we always have a brutal winner but in places where you don't have brutal winners. We had two days of school shutdowns in Houston, Texas from the winter weather. You saw what happened in Atlanta. So, what I would say, Al, is we have no idea what Q1 volumes are going to be. We'd expect that to not be robust. But again I don't think that's an indicator of what you're going to see for the full year. We'll really know what full year volumes are going to do once we see the seasonal upturn in March, April, May. Al Kaschalk – Wedbush Securities: Here's the broader question, David, and I appreciate the color from both you and Jim. You're guiding us for 1% volume decline and better than 2% pricing. If I look at the others in the industry, all the other metrics – those metrics have flipped and I certainly appreciate you going out and focusing on price. But can you explain why that is such a diverse message coming from you or why – I prefer you talk about your business but why you're seeing metrics that are different than the rest of the crew?

Yes. Look, I think we've seen a lot of metrics that are different than competitors. And again, you got to take out the fourth quarter accruals. But let's take a look at the full year and again, when we talk about metrics what we're talking about is income dollars and margins. So take a look at those metrics. In every line of business we increase dollars, we increase margins. I can only speak for us but we did it in every line of business. There's only one thing I can tell you, we've seen what happened when we hit that 1% yield and 1.5% volume, we saw it, we saw it in 2012. I guarantee you what's going to happen, margins go down and income from operations dollars go down particularly when the volume that you're picking up is low margin business. You just can't get enough yield in order to make up for – you can't get enough volume in order to make up for lower yield. I think everybody in this industry would acknowledge that you need to get sort of 1.8% to 2% yield in order to expand margins. So that's the question. Do you want to expand income from operations and margins do you want to see them go backwards? You have to get the yield in order to do that. Again, we've seen many times what happens in our business when we give away price to get volume and it's not a healthy tradeoff when it comes to income from operations dollars and margins. Al Kaschalk – Wedbush Securities: So it's fair to say that – and not that you want to quantify our guidance for '14 although it would be helpful, how much in basis points do you expect EBITDA margin to improve in '14 relative to '13 on an apples-to-apples basis?

Yes, and again remember as we look at 2013 we had to sort of look at the core solid waste business because of the negative effects from recycling and waste to energy and that was 150 basis points. Next year we should get detriments from those two businesses and we think if that plays out like that, we should get 50 to 100 basis points of margin expansion. Al Kaschalk – Wedbush Securities: Finally, on this waste to energy business, you take the impairment charge, why be in that business? Why aren't we thinking about or maybe you are but what strategic nature does that provide to your portfolio?

Yes. The waste to energy business is really two different businesses, right. The waste to energy business is electricity which is what they sell out of the back end of the plan and it's basically – landfill is the front end of the plan, right. They take in waste and they charge a tip fee. And so when we looked at it, we say that the electricity certainly is not core to us and it's not something that we have deep expertise in. Obviously our folks at Wheelabrator have expertise but we're not a power company, so we don't have a deepen expertise as folks whose primary business is power. And so you're absolutely right. On the power side, it's not strategic. On the tip fee side, it's absolutely strategic. We always saw the Wheelabrator plants to bottom with landfill because they can keep taking in waste and they never fill up. And so when we look at it from that point of view, it's absolutely strategic. Al Kaschalk – Wedbush Securities: Okay. Thank you.

Thank you.

You have a question from the line of Michael Hoffman of Wunderlich.

Good morning, gentlemen.

We don't have a question from the line of Michael Hoffman, we will have many questions from the line of Michael Hoffman.

How are you doing, David?

Good, Michael. I'm doing great.

Well, I got to have to live up to that now. I only really had one written down, but I guess I could make a bunch more up.

Don't feel like you have to live up.

Okay. So, if I can follow-on the last question, the way that was answered would say a creative thought about maintaining that strategic exposure to the tip fee side but finding somebody else who could actually leverage the electricity side is not off the table.

Yes. Look, when we look at the electricity side, we're always looking at what we can do to improve it. In the past we've hedged it but yes, I mean we're always looking for ways that we can take that – where we can take the volatility out of the earning stream.

Okay. On the volume side, where should – you give us some great tables, so one of them is called operating revenues by lines of business and when we think about where things are gone because of, like, lost national account or Sandy, can you point out – like is the lost national account coming out of the industrial line or is that coming out of commercial because there was a pretty steep decline in both?

Yes. A little bit of both. It depends on what type of national account customer you have but it's going to come out of both. I'd say roughly sort of 50-50, maybe a little bit more lean toward the permanent roll off side.

Okay. So one other things that hasn't been discussed and I have to believe you're seeing this is that if you want a same-store basis in your commercial business which is – that small container business which is – if you're going to get what you pointed to earlier, housing starts leads to new household formation which leads to new business formation. This volume shows up there. How would you characterize the volume in the container that's still there year end and year out?

Yes. Let's talk a little about the commercial business because I would tell you, Michael, when you looked at the lines of business, what I would tell you is look, if we're going to lose low margin temporary roll off business, I'm not going to lose a heck of a lot of sleep over that, right. If we're going to lose low single digit national account business, I'm not going to lose a lot of sleep over that. Now don't get me wrong. I would love to have that volume. The problem is what does that do for the pricing dynamic? But when I'm losing those low margin lines of business, I'm not particularly upset by it. I would tell you that the commercial line of business is the one – if you could tell me which one line of business do we want to get focused on to stem the losses, I would tell you it's the commercial line and it's because again going back to that earlier question. The route density is – the benefit you get from route density is incredible and that's why as Jim said, that's why we're sort of putting some more effort into customer retention without using products, right. But when you look at that small container business what you've seen over the last couple of years is sort of the amount of waste going into container, very sort of mildly from negative 2% to positive 2%. So we just haven't seen that real kick start that's going to dramatically change those commercial volumes. Again, I think in the natural economic cycle you'll see it, right, as new houses get built no one builds a new gas station in the middle of nowhere. No one builds a new grocery store in the middle of nowhere, but as new subdivisions start getting built then they got to build a gas station, they got to build a drycleaner. And so I think new business starts naturally trend behind housing starts. And so if we continue to see housing starts positive into '14, I would hope that we start to see more new small business creation and if we can get that 2% to 3% GDP, hopefully that – at a very minimum will at least stabilize those volumes.

So, if I take what I'm hearing what you're saying is that there is a slightly positive trend line that's starting to replicate or match this improving housing start number but not enough yet to change the economic model, but the direction – it's moving in the right direction?

I think that's absolutely right.

Okay. Changing gears, capital spending, would you break – the 1.2 to 1.3 or take the midpoint 1.25, how does that break out in your definition of growth versus maintenance?

Michael, we said last year that we had kind of redefined that. There was some growth – had otherwise been considered capital previously that kind of we re-titled to maintenance capital. If we had a contract that came up for re-bid, previously that would have been considered growth capital as we went through the process of evaluating and that now is considered maintenance capital, I mean even if the contract requires new vehicles. So, at this point the growth capital number has shrunk pretty considerable and what we’re left with is a maintenance capital number that’s probably in the $900 million to $1 billion range, growth capital is the $200 million to $300 million. Jim and I have taken a very discriminating view as David said when we look at -- when we make capital expense decisions we discriminate and we discriminate against those who provide low returns.

Michael when you look at what I traditionally call growth capital, I’ll divide it into three categories. You’ve got landfill gas to energy, you’ve got alternative technologies and you’ve got recycling. Those are sort of the three big buckets that we spent what we’ll call “growth capital on the last five years”. In 2014, you’re not going to see a lot of spending in recycling or in alternative technologies. You’re going to see more -- you’ll see we’re spending in landfill gas to energy, but you’re not going to see it in those two areas and the obviously question is why? Well because we aren’t seeing the returns in those areas. And so, again as Jim said, we certainly aren’t starving the business, we think we’re at a good level of CapEx, and we don’t expect to see that dramatically go up over the next few years.

Okay. And speaking of recycling, when you think about your efforts on going back to a customer like you did post the great recession in establishing pricing floors, what's the reception been on, we really need to talk about the quality you’re sending us and if you don’t send better quality we got to charge you more?

Yes, I think the reception has been I would say, has been fine. We haven't, those are not hard conversations to have. I think the more important thing Michael is what's going to happen going forward. I mean, I like in this to what we did in the early 2000’s with the fuel surcharge. When we first started the fuel surcharge rather municipality said, well we don’t have a fuel surcharge in our contract, so we’re not going to allow you to pay it if you take an exception for the fuel surcharge and we said fine, we’re not going to bid. After a while that became an industry standard. Other industry players said, well gosh we’re getting killed by fuel too, so we’re not going to bid if there’s not a fuel surcharge. And now virtually all contracts have been with a fuel surcharge. And so going forward the question is, we’re not going to bid these contracts if they don’t have the types of provisions that we need in order to make money. The question is, is the industry going to do like they did with the fuel surcharge and say gosh, we aren’t making any money either so we’re going to -- we’re not going to bid these contracts. That’s going to be the big question going forward. Is someone going to be optimistic enough that they’re going to bid contracts without the protections that they need in order to make sure they make a return on the investment or are they going to do like we do and say, look we want to do -- we want to be the largest recycler in North America, we don’t have any intention of not being. But we also are not in this to lose money and we got to systemically change the way our contracts work going forward so that we can make sure we make an adequate return. The contamination level only gets to a certain amount of dollars. The rebate is a big part of it too. So, you have -- and then again educating the consumer. So you have to go at it from all of these angles and so I would tell you the reception has been fine, but just getting a good reception from municipalities and changing those contracts doesn’t get us anywhere near where we want to be from a return point of view. The only way we get there is if we fix these contracts going forward.

Okay. And then, Jim Fish on cash flow from operations, what's it going to -- is it just margin that gets you from 17.6% of revenues to 20% target or is there working capital as well?

Yes, so there’s probably four things and we saw them in January and I think we’ll see them for the rest of the year that’s the drive cash flow from operations and ultimately free cash flow. Those four things, well and I guess I’m speaking about free cash flow here because I’m including capital in there, but cash flow from operations healed of course and cost control, both SG&A cost control and operating cost control and then when you take that to free cash flow CapEx. And of course as you mentioned working capital and it's an item we haven't talked about on this call, but it's been an area of focus for us particularly in the last two quarters of the year. To give you a couple of numbers we improved our DSO by two days, not happy with that -- happy with it it's in the right direction but not happy with the number. We’ve got to improve DSO more than that, and I think you’ll see that in 2014 our days to pay. We really didn’t start working on that in earnest until August. And from August through December we improved our days to pay by -- we increased that metric by three days. And really there’s quite a bit more to come there in 2014 as those pay cycles, we didn’t change payment terms until November, December timeframe. So, I think you’ll start to see a benefit in working capital from continued improvement in DSO and then a full-year of improvement in days to pay.

Okay, that’s great. And then just couple of housekeeping items. In your guidance, what share count are you using to do the $2.30 to $2.35?

What we would expect Michael is that we offset dilution that we bought back at least enough shares to offset dilution.

I think we were $470 million at the end of the year or so and we would buy back shares as David said in 2014 to offset dilution.

And your dilution runs about 2% to 3% of share count?

Correct.

That’s about right.

Yes, okay. And then the tax rate in ’13 is supposed to be lumpy in the quarters, how do we think about that in ’14, because it tends to have a pretty -- since you’ve given an EPS number, it tends to have pretty dramatic impact on EPS by quarters.

Yes, we can get you the quarterly number, that the annual number is basically flat at about 35%.

Right, okay great. I hope I didn’t disappoint you. I could come up with some more if you want, but I’m good.

That was excellent.

Thank you guys.

Thanks Michael.

Your next question comes from the line of Alex Ovshey of Goldman Sachs.

Thank you. Good morning. David, can you hear me?

Hi, Alex. Yes.

Excellent. So just one question and a follow-on to it; can you talk about how you expect your yield to perform at the landfills relative to the collection business in 2014 and just from a volume perspective could we expect that volumes at the landfill at some point are going to begin to narrow with what you’re seeing on the collection side or is there is a reason to think you can continue to outperform on the landfill side volume wise relative to collection?

Yes, we certainly expect volumes at the landfill to be positive in 2014. And like we said, particularly in the landfill line of business where you’re seeing positive volumes that should lead to better yield.

Okay. Thank you.

Thank you.

Your next question comes from the line of Barbara Noverini of Morningstar.

Good morning, everybody.

Good morning.

Jim, you referred to asset rationalization in your closed collection facilities and specifically mentioned a few cash flow negative landfills. We’ve talked about this in the past, but how much of this that was just reported was related to recycling assets and further is it fair to say that asset rationalization is continuing in your recycling portfolio as you work through these contracts nor would you say you've got a pretty good handle on projected future cash flows of your portfolio at present?

So a bigger portion of that asset impairment -- the biggest portion of it was of course the landfills, a piece of it was recycling facilities. We’re not aware of any additional impairment’s at this point, but we always review our assets and we’re appropriate we would close the facilities. We felt like this year we’ve gone through a pretty expensive analysis and by the time we got to the fourth quarter we’re prepared to make a call on those.

Okay, great. And just, quickly on the large national accounts businesses that you were talking about earlier, how much of that is related to disappointment on your end from what they’re demanding on the solid waste front versus the recycling front. Have you seen that demand -- from those customers in recycling is above what you’re prepared to give at this point?

No, when you look at the national accounts, most of the national accounts do want recycling, and frankly that’s one of the positives that we have, that we have the largest network of recycling facilities. So, the more recycling they want the better chance we have at winning the bids. Basically what it's come down to is that, our primary competition as we talked about is, other large national players and then the brokers. And I think the brokers are probably – they're both very competitive but the broker's model which by the way we have a brokerage model too, the broker's model is go out and try to get very low margin work done by subcontractors and as long as there's folks willing to do that, they're going to be able to continue to reduce price. From our point of view, we always say we don't need to practice our business. We've got plenty of ways to practice. We don't need to go out and do it for low margins. And so if other folks want to fill up their capacity with that low margin business that's quite all right. When the economy comes back and we start seeing better volume, we'll have that access capacity that we can stretch and to get new volumes at higher margin and obviously those competitors won't.

Okay. Good. That's it for me. Thanks very much.

Thank you.

Your final question comes from the line of Jeff Osborne of Stifel. Jeffery Osborne - Stifel Nicolaus & Co.: Great. Good morning. Just a couple quick questions from my end. I was wondering, David, on the national accounts side, you mentioned there was a 90 million headwind in 2013. And the largest customer, I think you articulated, would come off-line in mid this year. Would you expect that number to be higher than 90 million in terms of lost revenue in 2014?

You mean as far as new loss revenue or the [Technical Difficulty] cross over geographic market areas, they become a national account. So a lot of those national accounts are regional. And the bulk of our national account business is great business because we can create that route density. And so I wouldn't expect that we're going to lose another $90 million of national accounts in 2014 and we'll continue to add sort of the smaller regional national accounts. So, overall the net effect will be that we will lose some national accounts but we expect that our national accounts EBIT dollars will actually be flat to up. Jeffery Osborne - Stifel Nicolaus & Co.: Understand. In that same vein, can you just touch on the commercial side of the business in terms of service frequency increases, excluding the national account lost sales in 2013? What kind of trajectory or the rhythm was through the year, and maybe touch on January? Are you seeing greater frequency increases excluding the lost customers?

Yes, we haven't seen the January numbers but again what we saw in 2013 was sort of a fairly narrow band of positive, negative sort of down 2%, up 2%. We had a couple of numbers that were up 2% or 3% or down 2% or 3%, but basically what I would say is that the overall trend in 2013 was slightly positive and we would expect that trend to continue in fact, probably get a little bit better in 2014. Jeffery Osborne - Stifel Nicolaus & Co.: Excellent. And my last question is just can you touch on the couple hundred million in growth CapEx that you mentioned before? I think it was to Michael's question. In particular I was looking for where you are in terms of your natural gas fleet. Did you accelerate that last year with the accelerated depreciation? And then would you look to decelerate the amount of new nat-gas vehicles in 2014 added or just an update as to where that is exiting the year and what the plans are for this year would be helpful?

Yes, Jeff, Jim Trevathan here. We still plan to buy about 90% of our new trucks will be natural gas trucks. We're installing about 15 new locations across the country where we've put the infrastructure in and we'll continue that. The payback was excellent in 2013 and we expect the very same in '14. I don't see any change in that strategy at all around implementing natural gas fleet but our customers like it. It's obviously cleaner air. Both residential and commercial customers appreciate it and we'll continue that focus. Jeffery Osborne - Stifel Nicolaus & Co.: And just to put it in perspective, Jim, in terms of the percentage of the fleet today, are you in the mid-teens or where about are we?

16%. Jeffery Osborne - Stifel Nicolaus & Co.: 16%, okay, thank you very much.

16% is the total fleet. We put about 900 trucks on the road that were natural gas in '13. We moved that percentage up a couple of points. Jeffery Osborne - Stifel Nicolaus & Co.: Thank you.

Thank you.

Thank you.

I would now like to turn the call back over to Mr. David Steiner for closing remarks.

Thank you. As we said, from a business point of view, 2014 is up to a great start. But from a personal point of view 2014 is not such a great start. We recently lost two of our corporate family to cancer. I wanted to say that our sympathies go out to the families of Jim Perry and Scott Stadelman. I can promise you that they may be gone, but they’re not forgotten. Thank you, operator.