Jim Alderson - IR David P. Steiner - CEO LawrenceO'Donnell, III - President and COO Robert G. Simpson - Sr. VP and CFO

Scott Levine - JP Morgan Nicole Deblase - Deutsche Bank Jonathan Ellis - Merrill Lynch Brian Butler - Friedman, Billings, Ramsey Chris Hussey - Goldman Sachs

Good morning. My name is Nicole and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Waste Management's Third Quarter 2008 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 would now like to turn the call over to Mr. Jim Alderson, Director of Investor Relations. Thank you Mr. Alderson, you may begin your conference. Jim Alderson - Investor Relations: Thank you, Nicole. Good morning everyone and thank you for joining us. With me this morning are David Steiner, Chief Executive Officer; Larry O'Donnell, President and Chief Operating Officer and Bob Simpson, Senior Vice President and Chief Financial Officer. David will start things off with a summary of the financial results for the quarter and a review of the details of our revenue growth, including price and volume trends. Larry will discuss operating costs and Bob will cover the financial statements. We will conclude with question-and-answers. This call is being recorded and will be available. This call is being recorded and will be available 24 hours a day beginning approximately 1 PM Eastern Time today until 5 PM Eastern Time on November 13th. To hear a replay of the call over the Internet access to Waste Management website, at www.wm.com. To hear a telephonic replay of the call, dial 800-642-1687 and enter the reservation code 66401070. As is our custom, I will remind you that during the course of this presentation, we will be providing estimates, projections and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to a number of risks and uncertainties which are described in detail in Waste Management's Annual Report on Form 10-K for the year ended December 31, 2007, and in the company's press release this morning. These risks and uncertainties could cause actual results to differ materially from those described in the forward-looking statements. During the course of the presentation, we will discuss free cash flow, which is a non-GAAP financial measure. We will also discuss net income earnings per share, earnings per share growth, income from operations, income from operations as a percent of revenue, operating expenses and operating expenses as a percent of revenue, all adjusted for certain unusual or non-operational items which are also non-GAAP financial measures. David's, Larry's and Bob's comments on these measures will be on as-adjusted basis. We have defined and reconciled those items as part of the earnings press release for the release 8-K filed today, which can be found on the company's website, at www.wm.com. As I stated earlier, this call will be available for a replay for a two-week period. Time-sensitive information given during the course of today's call, which is occurring on October 30, 2008, may no longer be accurate at the time of the replay. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Waste Management is prohibited. Now I will turn the call over to Waste Management, CEO, David Steiner. David P. Steiner - Chief Executive Officer: Thanks, Jim. Good morning from Houston. I'm pleased to say that because of our disciplined approach to pricing and cost control. We again achieved our primary financial goals of growing earnings, expanding operating margins and generating strong free cash flow to return to our shareholders. This strategy is working and we intend to maintain it. We exhibited the same discipline when we withdrew our offer to purchase Republic. With the uncertainties caused by changes in the credit markets, we just not believe its prudent to move forward with that transaction. We are in $0.63 per diluted share in this year's third quarter, which is an increase of $0.9 per share. This is also a 16.7% increase in earnings per share compared with the third quarter of 2007. We increased income from operations as a percent of revenue year-over-year by 60 basis points to 18% in the third quarter of this year. Excluding the impact of rising diesel fuel prices, income from operations as a percent of revenue would have expanded by a 100 basis points in the third quarter inline with our full-year expectations. Turning to our revenue performance, we grew revenues by a $122 million or 3.6% in the third quarter of this year over last year's third quarter, with the most significant contributions coming from yield on our collection business, our fuel surcharge and higher recycling commodity prices. Our internal revenue growth from yield in our base business was 2.7% in the third quarter. If you include the benefit of our fuel surcharge program and higher commodity prices, internal revenue growth from yield increased a total 6.5% during the third quarter of 2008. Our combined revenue growth from yield in the industrial, commercial and residential lines of our collection business was 3.6% in the third quarter or 6.9% if we include the effect of our fuel surcharge. Looking at the commercial collection line of business with the fuel surcharge, yield reached 8.9% in the third quarter of this year. On the same basis, the yield components of internal revenue growth in our residential and role-off lines of business were 6.2% and 4.8% respectively. Without the fuel surcharge in our commercial, residential and roll-off lines, internal revenue growth from yield increased 4.4%, 4.1% and 1.9% respectively. These levels of revenue growth from higher yields show that we've maintained our pricing and fuel surcharge discipline, in spite of lower volumes. Again, we intend to maintain that discipline. During economic downturn, when volumes are declining, it becomes even more important to maintain our pricing discipline. As we've seen over the last few years, with a 1% increase in yield, we can lose 3% to 5% of our volume and still increase our profit. Turning to the volume side, internal revenue growth from volumes on base business declined 3.2% in the third quarter of 2008. Most of the volume loss in the quarter was in the collection side of business, which fell by 5.4%. Our collection pricing programs coupled with our operating excellence initiatives, which Larry will speak more about, remain the primary drivers of our earnings growth and margin expansion. The net result is once again higher income from operations and significant margin expansion in our collection line of business. The income from operations from our collection business grew by 7% in the third quarter of this year compared with the same period of 2007. And our income from operations margin in our collection business expanded by a 120 basis points. Turning to yield and volume on the disposal side of our business, we saw a year-over-year increase in third-party revenues that are landfills for the second quarter in a row. This was caused by higher yield on MSW and an increase in special waste volumes. In the third quarter of this year, the internal revenue growth from yield for MSW stood at the highest level we've seen since 2005, which is due to our continued focus on disposal pricing excellence. We expect the momentum to continue, as contracts come up to renewal and as we get better information from our new landfill scale-house software. Volumes also improved in our special waste line of business. Our recycling operations were benefited by $12 million in the third quarter from higher recycling commodity prices. However, recent volatility in the commodity markets leads us to expect to receive no year-over-year benefit from recycling in the fourth quarter. In fact, our year-over-year earnings per share could fall by as much as $0.03 as a result of the volatility in the commodity markets. The recycling commodity prices are really the only significant effect we've seen from the economy. Our solid waste volumes continue to run about the same pace they have all year. This shows the recession-resistant nature of our business. And with over $3 billion of public sector business and our strong residential business, we expect to get through a recession much better than other industry. So, we are very pleased with our third quarter results, not only because we accomplished our primarily financial goals, but also because it shows the strength of our people and our business and validates our strategy to maintain our pricing discipline and control our operating costs. When we look at our full year guidance, if we look just at our solid waste business, we would fully expect to exceed our previously announced range of $2.19 to $2.23 per share, because our volumes have held up very well. However, there are a number of uncertainties outside of our solid waste business. Two weeks ago, when 90- day LIBOR was approaching 5%, we estimated that we would have $0.03 negative impact from interest expense in the fourth quarter. 90-day LIBOR has stabilized since then and we now don't expect such a dramatic result. Just in last few weeks, we've seen the paper markets experience the same type of volatility and as of today, we expect up to a $0.03 negative earnings effects from our recycling operations. Our assumption is that those markets will not stabilize like the LIBOR rates. But we certainly can't predict market swings in such a volatile market. So if we didn't see all the volatility, we would fully expect to exceed the upper end of our full-year guidance because our solid waste business again continues to perform well. However, given the uncertainties, we just did not think that it would be prudent to specify a new range for our full year guidance at this time. So, although nobody is certain what the economy will do over the next 18 months, I am certain what Waste Management will do. Waste Management will continue to focus on pricing excellence and operational excellence. Waste Management will continue to focus on growing earnings, expanding margins and generating strong free cash flow. And we at Waste Management will continue to see opportunities, because we believe that companies that are the strongest going into an economic downturn, will emerge from the downturn even stronger. With our solid balance sheet and our cash generating capabilities, we believe that we're well positioned to provide a solid in investment for our shareholders. With that, I'll turn it over to Larry, who will review operating cost results. LawrenceO'Donnell, III - President and Chief Operating Officer: Thank you, David and good morning everyone on the call. Operating expenses in the third quarter of 2008 were $2.221 billion, an increase of $78 million from the third quarter of 2007. These increases were primarily from higher fuel and commodity prices and labor disruption costs. Operating expenses as a percent of revenue were 63% in the third quarter of 2008, the same as in the third quarter of 2007. During the third quarter this year, we had a labor disruption in Milwaukee that cost us $26 million, 19.5 million of that was related to our withdrawal of Milwaukee bargaining unit from the Teamsters Central State pension plan and the institution of a 401K plan for our Milwaukee employees. We requested our Milwaukee bargaining unit to withdraw some of Teamsters Central State pension plan, because the plant is in critical under funded status. In the third quarter of 2007, we had a labor disruption in Oakland. Excluding the impact of the labor disruption costs in both and higher diesel fuel and recycling prices in the third quarter of this year, operating costs in the third quarter of 2008 would have been $46 million lower than they were for the same period last year. Excluding these costs and their associated revenue, operating expenses as a percent of revenue would have stood at 61.1% in the third quarter of this year, or a decrease of 120 basis points compared with the third quarter of last year. I'm pleased with the disciplined approach exhibited by our team in managing our controllable operating cost during the quarter. Our continued progress on our operational excellence initiatives and the recovery of our higher costs to our pricing excellence and fuels surcharge programs were the primary drivers of the continued improvement in our operating results. As a percent of revenue, our labor and benefits costs improved by almost 75 basis points during the third quarter of this year compared to the same quarter last year, after adjusting for the impacts of labor destructions in both quarters. On an absolute-dollar basis net of these labor disruptions costs, we reduced our labor and employee benefit costs by $6 million when compared with the third quarter of 2007. We reduced our driver hours by about 585,000 hours in the third quarter of this year compared to the same period in 2007. Just over 50% of this reduction would due to our field managers flexing down our labor costs as volumes have declined, with the remainder due to divestures. Lower workers compensations and auto and general liability costs, helped drive a 35-basis point improvement in risk management cost as a percent of revenue compared to the prior-year quarter. We improved our total reportable entry rate to 3.6 in the third quarter this year, an 18% improvement compared to the same period in 2007. We are very pleased with this achievement, which shows that our focus on safety protects the communities that we serve, while generating value to our shareholders and our employees. As a result of our improved safety performance, our risk management cost were benefited by a $10 million reduction in our reserve for prior year's claims. Our third quarter 2007 results included a favorable adjustment to those liabilities of $3 million. With the improvements, we continue to make in safety, we expect to receive additional benefits in future quarters. But we can't predict when or to what extent that might happen. Transfer and disposal expenses, which include those costs that our collection companies pay to third-party landfills and transfer stations, improved by over 80 basis points as a percent of revenue in the third quarter 2008. Our maintenance and repair costs improved by over 30 basis point as a percent of revenue in the third quarter of this year compared to the third quarter last year. The efforts we've made to standardize our fleet and to institute a solid preventative maintenance program have helped to offset the higher costs we've seen in labor rates, steel parts, and then oil-based supplies such as lubricants. Higher direct diesel fuel costs caused an increase of over a 150 basis points in operating expense as a percent of revenue. Diesel fuel prices were very volatile, rising sharply at the beginning of the quarter and falling sharply as the quarter ended. Fuel cost rose on average by about $45 per gallon or about 50% in the third quarter of 2008 compared with the third quarter of 2007. These higher diesel fuel costs caused our direct fuel costs to increase by $69 million in our direct fuel cost ... and our indirect cost and our indirect fuel cost charges by a subcontract transportation haulers increased by $14 million, for a total increase of $83 million. This additional cost was fully offset by our fuel surcharge recovery. Due to the higher recycling commodity prices in the third quarter of 2008, our cost of goods sold category increased by about 70 basis points due primarily to higher recycling rebates to our customers. While this negatively impacted our reported operating expenses as a percent revenue, the overall impact on our recycling earning and returns is positive. I'm pleased with the progress we continue to make. As David discussed, the business is defensive in nature and has strong recession-resistant qualities. Coupled with the disciplined approach our team has shown in controlling our costs and executing our operational improvement and pricing strategies, we remain confident that we will continue to make progress on our primary goals of generating strong free cash flow, growing earnings and expanding margins. I expect to shrink of our company in the talent and discipline of our 45,000 employees who enable us to emerge from the current economic environment as an even stronger company. With that, I'll turn the call over to Bob. Robert G. Simpson - Senior Vice President and Chief Financial Officer: Thank you, Larry. SG&A expenses were 10.5% of revenue during the third quarter of 2008, which was inline with our expectations and a 20-basis point improvement when compared with the prior-year quarter. Our year-over-year cost increased $4 million in the third quarter of 2008 compared with the third quarter of 2007, primarily due to the cost associated with our proposal to acquire Republic. Depreciation and amortization expense for the third quarter 2008 was down $5 million when compared with the third quarter of 2007. The year-over-year decline is generally due to the impacts of lower landfill volumes. However, in the quarter, we did recognize a $6 million landfill amortization charge for revisions of closure and foreclosure estimates. As a percent of revenue, depreciation and amortization expense was 9.2% compared with 9.7% in the prior-year quarter. Interest expense was $114 million in the third quarter of this year, a $14 million decrease from 2007. This decrease is due primarily to the lower interest rate environment that existed during the quarter. Interest income decreased $5 million year-over-year in the third quarter of this year due primarily to a decrease in the average investment balance compared with the prior year. Moving to income taxes, in the third quarter of 2008, our effective tax rate was 39.3% which includes approximately $4 million of income tax benefits from return to accrual adjustments. In the third quarter of 2007, we realized $14 million of income tax benefit resulting in an effective tax rate of 36.1%. We expect our effective tax rate for the remainder of the year to be approximately 40%. Total reported debt increased by $36 million at the end of the quarter compared with the end of the second quarter of this year. However, our debt-to-total capital ratio decreased over the same period from 59.5% to 58.8%. We generated strong cash from operations during the third quarter. Our free cash flow was $524 million for the quarter, down slightly from the prior-year period primarily due to a planned increase in fleet purchases. For the first nine months of the year, we generated $1.2 billion in free cash flow, so we are on the way to achieving our full-year target. As we said on our second quarter call, we ceased purchasing our shares in the open market when we made our proposal to acquire Republic Services. We therefore only repurchased approximately 260,000 shares for $9 million during the third quarter. We also paid $133 million in cash dividends based on our quarterly dividend of $0.20 per share. At yesterday's closing stock price, our dividend payment equates to a yield of more than 3.7%. We've have senior notes totaling $386 million that mature in November of this year and a $315 million letter of credit facility that must be replaced in December. Our intention is to refinance the node and replace the credit facility, but if credit market difficulties prevents us from establishing these objectives on acceptable terms, we have over $650 in cash currently available, as well as almost $900 million in unused capacity on our revolving credit facility. These are unprecedented times in the credit markets, but we are not as dependent on these markets as many other companies. We have a number of options available to us and we continue to generate strong cash flow from our operations. One of the great things about Waste Management is our ability to produce consistent strong free cash flow year after year. And with that Nicole, let's open the line for questions. Question And Answer

[Operator Instructions]. Your first question comes from the line of Scott Levine of JP Morgan. Scott Levine - JP Morgan: Good morning guys. David P. Steiner - Chief Executive Officer: Hey good morning, Scott. Scott Levine - JP Morgan: With regard to the CapEx, can all the flow you are looking for in the third quarter, I'm not sure if I heard whether you guys discussed what your plans were for this year and to whether you're going to looking to comment perhaps, below what your prior expectations were there and if what adjustments you'll be looking to make within the budget? Robert G. Simpson - Senior Vice President and Chief Financial Officer: You know Scott our CapEx spending for the full year will be a little bit under what we've previously forecasted. But I will tell you we haven't made a consorted effort to cut CapEx back, especially in the areas of fleet. We continue to spend in that area. However in landfill construction and in another areas where the economy has caused some lower volumes or pricing that efforts have caused lower volumes, we certainly have cut back on our CapEx spending. We still think the guidance that we gave in the second quarter where we... is still where we ended the year target as the free cash flow of $1.4 billion. Scott Levine - JP Morgan: Got you. And then on the SG&A side 10.5% of sales here. Could you give us some thoughts with regard to where were you guys think you can ultimately get to on the G&A side, and also let us know, on the technology side what investments you're currently making on both computing or otherwise? David P. Steiner - Chief Executive Officer: Looking at our long-term goal, looks like I'm reminded constantly by my boss is not that long term is to get our SG&A as a percent of revenue to something under 9%, we've been making investments in a number of areas to help accomplish that and I certainly would expect us to be down significantly in the coming years. And then we'll give guidance for 2009, when we get to that point in February. Scott Levine - JP Morgan: Got you, one last one, what things are assurances would you give folks with regard who we're looking at the way competition and pricing evolved during the last downturn, I mean obviously, there are differences between this one and that one, or expectations. But what differences in the current operating environment give you confidence that at a minimum operating expense in competition will be much more rational today than they were 5, 6 years ago? David P. Steiner - Chief Executive Officer: Yeah, Scott; I certainly can't speak for, what the competition does. What I can do is speak for what Waste Management does. And it's what we said in the script what we've recognized that this company twofold. One is that returned invested capital is the most important metrics that our shareholders value and secondly, that you get huge leverage out of pricing; when a 100% of your price falls to the bottom-line, but only somewhere between 15% and 35% of your volume falls at the bottom-line, the leverage means that you can, for every 1% price increase, you can lose 3% to 5% of the volume. That's exactly what we've seen over the last few years. Our company has come to understand the great leverage on pricing and what that means to profit. And so, speaking for Waste Management, that's what gives us the result to make it through this downturn continuing to maintain our pricing. And the second thing Scott is that so far our volumes have held up fairly well through the downturn. So, we certainly will maintain our pricing discipline we don't have any intention to change that. Scott Levine - JP Morgan: Okay, one last one if I can sneak one in as well. On to recycling side, if you give us a sense here in terms of the conservative card you're using or some of the mechanics or competition that goes into that $0.03 estimate and what variables or hedging strategies you are using or may be looking to implement? LawrenceO'Donnell, III - President and Chief Operating Officer: Yes Scott, when we look at the recycling business what we've seen just in the last couple of weeks is just tremendous volatility in the recycling commodity prices. So what we did is we just looked at given what those prices are today what impact will that have. Who's to say what those commodity prices are going to do to the rest of the quarter that's our best estimate based on what we saw as prices are currently. What we saw those that were in the business back in the 90's, I mean it took months for the price to go down, and dropped the way it did. And here it's taken just a matter of weeks now as David mentioned, LIBOR rates have been pretty volatile and they have recovered. So does that mean this is going to be a drop fast, its going to recover quickly, it's just really hard to say but we thought that it was prudent to at least let people know we are watching this, we are looking at it and taking appropriate action. Scott Levine - JP Morgan: Understood. Thanks. Jim Alderson - Investor Relations: Thanks Scott.

Your next question comes from the line Nicole Deblase with Deutsche Bank. Nicole Deblase - Deutsche Bank: Hey guys. David P. Steiner - Chief Executive Officer: Hey Nichole. Robert G. Simpson - Senior Vice President and Chief Financial Officer: Good morning. Nicole Deblase - Deutsche Bank: Good morning. A couple of questions for you. I was hoping you could give an update on your free cash flow deployment strategy, given that the Republic deal is not going to happen? David P. Steiner - Chief Executive Officer: Yes, Nicole obviously in our mind the best investment we can make right now is not in someone else's business, it's in our own business. When we look our share price, we certainly think that it is something that we would like to invest in. On the other hand, you've got this volatility in the credit markets that has created a lot of uncertainty. So once the credit market sort themselves out. Once we get through this refinancing in November and the facility in December then we can make a determination as to how we redeploy our cash. But at the current time, we are not in the market repurchasing our shares. Nicole Deblase - Deutsche Bank: Okay got it. Thanks for that. And then if you could give an update on the wheel upgrader [ph] business. I know you guys are bidding for a few RFPs there? David P. Steiner - Chief Executive Officer: Yes the wheel upgrader [ph] business just like our solid waste business continues to perform very well. We do have a few bids in both domestically and internationally. And we expect to win our their share. When you look at the volatility in the credit market, the good news about those bids is two-fold, one most of those bids are not financed by us, they would be financed by the municipality. So that what we call design building operate bids, not build own and operate bids. And so the financing comes from other sources. And two, to the extent of those projects carry forward, those are three and five year time horizons before you're really spending significant amount from money. So we don't think that the credit market volatility will have any effect on us. The business continues to perform very well. Nicole Deblase - Deutsche Bank: Okay great and then one more if I may. Looking at the 2009, some of your competitors have talked about volumes could potentially get worst given the economic outlook. How much that remains for you guys to trim not just from the SG&A line, but also on the COGS line going into 2009 and would you guys potentially do some restructuring? Robert G. Simpson - Senior Vice President and Chief Financial Officer: Well one thing that we have demonstrated is you've seen volumes decline we've done a really good job of flexing down our costs. We've put tools out into the field, so that they can plan their labor needs based on what we see in the way of volumes. And I would expect that we would continue to use those tools that are out there and continue to flex down if that's what volumes do. I think we've demonstrated the ability to do that and we would continue to do that going forward. Nicole Deblase - Deutsche Bank: Okay, thank you. David P. Steiner - Chief Executive Officer: Thank you. Jim Alderson - Investor Relations: Thanks Nicole.

[Operator Instructions]. Your next question comes from the line of Jonathan Ellis with Merrill Lynch. Jonathan Ellis - Merrill Lynch: Good morning guys. Jim Alderson - Investor Relations: Good morning. David P. Steiner - Chief Executive Officer: Good morning. Robert G. Simpson - Senior Vice President and Chief Financial Officer: Good morning Jon.. Jonathan Ellis - Merrill Lynch: You mentioned the collections volumes were down 5.4% I think if I heard it correctly, but you didn't provide any details specifically on each market. I'm wondering could you walk through residential commercial roll off on what the volume declines were in each of those markets? Robert G. Simpson - Senior Vice President and Chief Financial Officer: Yes absolutely. In the commercial line, we saw volume losses pretty consistent with what we've seen in the past at 4% negative for the quarter. In the industrial line, they were negative 8.6%. We said before that we thought that the industrial line has sort of troughed out. Its still has a negative rate, but we're seeing a decline sharply and that's what we've seen for last few quarters. We've seen it running anywhere between 8.5% to 9.5%. The other thing that I think gives us some encouragement that we've seen a trough in industrial volumes is that C&D volumes actually were pretty good this quarter at negative 4%. They've been running more in the negative 15% to 25%. And so we think that we've seen a trough in the industrial volumes and on a residential side we were down 3.9%. Jonathan Ellis - Merrill Lynch: Thanks, great and just if I do comparison of the collection and disposal volumes, it seems like there was much more of a moderation on the landfill side this quarter as volumes were down less relative to the collection side were volumes are still down at roughly the same pace they were in the past quarter. So, Larry can you talk a little bit about why perhaps your volumes decline in the landfill side maybe moderating may be moderating more than volumes decline in the collection side? LawrenceO'Donnell, III - President and Chief Operating Officer: Yes, and the one thing I can tell you that is not happenings in that we're not dropping price. We said on the MSW line it's the highest pricing we've seen since 2005. So quite frankly when you look at it, obviously we have very well positioned assets. When you have well positioned assets and fuel costs are very high, people are going to come more to your landfill than they are going to go more distant landfill. And on the special waste side, frankly I think we have the best sales force in the business, and so we've done a great job of making sure that we get those jobs at good prices. Jonathan Ellis - Merrill Lynch: Okay. Great. And if you could just talk very quickly about the recycling business and specifically, as we look out into 2009 and I know you're not going to provide more guidance until fourth quarter call, but based on the assumptions that you have or the $0.03 impact in the fourth quarter, is it safe to assume a similar impact through at least the first three quarters of next year and specifically, what I am asking about is will price really be the only factor there or perhaps are you strategically making changes so that your volumes trend differ in recycling business going into next year. LawrenceO'Donnell, III - President and Chief Operating Officer: Jonathan we're going to sort of look at the whole business model with the way these commodity prices are going. Obviously, rebates are going to have to change dramatically from where they've been in the past and we're going to be taking a look at that. The good news is, we made investments in equipment to really ensure that we've got great quality in our outbound tons. And I think what you're going to see is through this period of time, those smaller players that haven't been making investments, they're going to have a really had time making it, because those tons they're going to have a hard time moving them at all. Where at least what we've got we've got high quality tons, we've got outlets that in the past we really only were focused on serving North America. Now, we've got outlets all over the world for our material. So, we're going to take a look at our whole operating model and make sure we're making the best decisions going forward. Jonathan Ellis - Merrill Lynch: Okay, great. And this is my final question, given the precipitous decline in diesel prices over the last few weeks, at what point would you possibly consider looking to hedging for purchase agreements? David P. Steiner - Chief Executive Officer: Yes, we are fully hedged on our fuel, thermal fuel surcharge program. And so we don't see a need to go out and hedge fuel. But what we have done is started to look at that markets to understand how those would affect our business. We don't currently have any plans to hedge, but for the first time I think you had got a great point. For the first time we're actually looking at it to see if it makes any sense. But we don't have currently any plans do anything. Jonathan Ellis - Merrill Lynch: Great, thanks guys. David P. Steiner - Chief Executive Officer: Thanks Jon. Jim Alderson - Investor Relations: Thank you.

Our next question comes from the line of Brian Butler with FBR. Brian Butler - Friedman, Billings, Ramsey: Hello. Jim Alderson - Investor Relations: Hey Brian. David P. Steiner - Chief Executive Officer: Good morning Brian. Brian Butler - Friedman, Billings, Ramsey: A question on when you look at Allied Republic deal now that you kind a back way from looking the purchase Republic, do you see any divestiture opportunities that you guys would be interested in that might spin-off from that? David P. Steiner - Chief Executive Officer: Yes, certainly. I think there is going to be a lot of opportunities in the next year, as we see the economy turn down not just the Republic assets, but in all areas of our business. I think there's going to be huge opportunity. Now having said that, our multiple has come down. So the multiples we are going to pay are going to come down. But we fully expect to take advantage of any opportunities that we can find, purchase-grade assets. Brian Butler - Friedman, Billings, Ramsey: Okay. And then on the pricing in the kind of that rule of thumb of 1% price offset, 3% volume. Is there a some point where if volumes remain negative long enough, that fixed cost kind of catch-up and that rule kind of breaks down and what... how close... well I guess what's the best way to think about how closely might be to that or how long that would have to occur in order to happen? David P. Steiner - Chief Executive Officer: Yes, we have not specifically... you again you raised a great point. We haven't specifically looked at where that point turns. But when you have got a business the size of ours, it's a long way away from where we are today. Brian Butler - Friedman, Billings, Ramsey: Okay. And then two more, but this one's I think a easy one. On price, could you breakup price like you did volume for the segment? Robert G. Simpson - Senior Vice President and Chief Financial Officer: Absolutely. And we mentioned in the script... Brian Butler - Friedman, Billings, Ramsey: Well was it mentioned in the script, that's okay. Robert G. Simpson - Senior Vice President and Chief Financial Officer: Yes, both were then without the fuel surcharge. Brian Butler - Friedman, Billings, Ramsey: Okay and then the last one just on the commodities, have you or do you currently look at hedging any other commodity exposure on that piece or would you consider doing that in the future? David P. Steiner - Chief Executive Officer: Probably just the opposite of the oil hedging question, probably not a great time to hedge when you're at a three year trough. We have some of our older volumes hedged, we also have floor pricing on lot of our contracts. Certainly hedging can smooth out volatility, but I think the last thing it want to do is hedge in a market that is as volatile as it is today. Brian Butler - Friedman, Billings, Ramsey: Okay great thanks a lot guys. David P. Steiner - Chief Executive Officer: Thank you. Jim Alderson - Investor Relations: Thanks Brian.

Your last question comes from the line of David Feinberg with Goldman Sachs Chris Hussey - Goldman Sachs: Hi its Chris Hussey calling for the David. Question may be you can have this out and thinking about the cyclicality; there've been some markets in the United States who've been arguably in recession for a year a longer. California would come to mind. How has your business in California held up cyclically competitive dynamic et cetera If we just would have narrow on that to be maybe an example of what the entire country can look like in 2009? David P. Steiner - Chief Executive Officer: Yes, that's a good question and I would probably only refine it little bit, and that is to say, let's take a look at California and Florida. Because California is largely a franchise business for us. So California has actually held up very well. On the other hand, Florida isn't as predominantly franchised. Plenty of franchises there but not as much as California. And what you've seen is the landfill volumes dropped dramatically in South Florida. So, when we look at it, certainly those are two areas of the country where, when times are good, you're going to do really well and when times are bad, you're not going to do as well. Its why frankly, we look at our business model as the best business model because we have $3 billion in franchise business. We have great residential businesses but we also have a lot of open market businesses. So when times are good, we're going to do great, when times are not so good, we've got that solid bedrock of franchise business to fall back on. Same with the geography, we've got a national scope of geography. So, when the times are going good in places like Florida and Las Vegas and California, our Midwestern group didn't look so great. But right now our Midwestern group looks wonderful, because they never went through the dramatic upturn so they're not going through as dramatic of the downturn. And so its why we think our business model works the best, to have diversity in business both franchise and open market and to have diversity in geography, we think pays off in the long run. It's such certainly sometimes that will pay of in short run but it always pays off in the long run. Chris Hussey - Goldman Sachs: Do you think Florida is down so much that it actually stabilizes from here or you think it takes another like that? David P. Steiner - Chief Executive Officer: Yes that's a good question, I wish I could predict that but certainly if I look at it from a roll-off volume point of view, it's hard to imagine at getting much worse. Now, we might have said that a year-ago too. But when you look at the overall volumes from the roll-off line of business and C&D, you have seen it started to trough and in the C&D case frankly it started to come back a little bit. So it's like anything else. Cycles happen, there's going to be downturns, there's going to upturns. I assure if I am sitting here, I can promise you that at some point in time it will turn and we're going to be well poised to take advantage when it does. Chris Hussey - Goldman Sachs: Thank you guys. David P. Steiner - Chief Executive Officer: Thank you. Jim Alderson - Investor Relations: Thank you.

I will now turn the call back over to Mr. David Steiner for any closing remarks David P. Steiner - Chief Executive Officer: Thank you. So in summary we had another great quarter and our business continues to perform very well. But sometimes we get so focused on our business that we forget that life isn't just about business, its about people. And the financial turmoil that's affected the financial industry cost our industry one of its best Leon Young. And I want to speak on behalf of all of us here at Waste Management, when I say that we will certainly miss her expertise and her counsel, but he will always have our friendship. So thank you all for joining us and we look forward to seeing you on the road over the next few weeks.

Thank you for participating in today's Waste Management conference call. This call will be available for a replay beginning at 1 '0 clock PM Easter Standard Time today through 11:59 PM Eastern Standard Time on Thursday November 13, 2008. The conference ID number for the replay is 64401070. Again the conference ID number for the replay is 64401070. The number to dial for the replay is 1800-642-1687 or 706-645-9291. Again thank you for your participation in today's conference call. You may now disconnect. .