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Five analysts and top management from four sector firms examine the Environmental Services sector in this 57 - page Environmental Services Issue from The Wall Street Transcript available at (212/952-7433) or http://www.twst.com/info/info627.htm

TWST: Alan, how has the group done over the past year or so from your perspective?

Mr. Pavese: We tend to look at the environmental service group as a broader base, obviously with the larger solid waste companies making up a disproportionate share of the market cap, and the filtration/separation group being in there as a smaller portion of the sector. Both have outperformed the market for various reasons. On the solid waste side, the outperformance hasn’t been as great as it was in 2000. That’s primarily due to the fact that there have been some earnings expectations and mismanagement issues in a number of the competitors during the first half of this year, particularly with Waste Management (NYSE:WMI) and Allied Waste (AW). Although the fundamentals in the solid waste part of the environmental services sector have held up relatively well, the earnings expectations set earlier in the year by management included the assumption that there would be a recovery in fundamentals that would benefit earnings during the second half. As a result of that, earnings expectations for the top companies had to come in quite a bit at midyear. This hurt the solid waste group’s outperformance somewhat during the first half. But it seems things are back on track now — fundamentals are holding up relatively well and stocks are starting to outperform again.

TWST: Alan, what is your view with regard to the rest of this year and into 2003?

Mr. Pavese: I would agree with most of what Richard said, particularly on the filtration and separation side. I think the fortunes of the group will be very much tied to industrial production. Similarly, we’re expecting that manufacturing and industrial production will start to rebound early next year. It probably won’t be a very strong second half this year. But it should recover next year as capacity utilization starts to ramp back up at some point after a long lull. That will certainly be a big boost. The other aspect of what I think the market has been pricing in on the filtration side is a bit more questionable. There has been a lot of psychological sensitivity to the water and drought situation across the US right now, and I think there are a lot of people anticipating that there could be a windfall benefit to some of these filtration/separation companies over the next four or six to eight quarters. As a result, I think you have to be very careful about how that situation might actually play out economically. In some cases, where these drought situations are going to be addressed by municipal, state or federal budget types of actions, you have to distinguish between what is simply going to be water transfer — pipes and pumps moving water from where there are great sources of water to where there are great needs for water — and other, more important types of projects that could benefit these companies more significantly. The solid waste group seems to have stabilized quite nicely here, and we’re not seeing any additional softness. I think if we just remain in these current conditions, even with relatively flattish revenue growth, that group will also be able to generate, on average, something in the mid- to high single-digits pretax profit growth from a number of internal opportunities within the group. Whether it’s Waste Management’s cost savings programs, Allied Waste’s debt reduction or other companies’ acquisition programs, I think you will see some good value creation there and, again, better outperformance of the market than has been the case in the first half of this year.

Environmental Services - In an in-depth (8,700 words) Analyst Roundtable, Richard C. Eastman, a Senior Analyst & Managing Director at Robert W. Baird & Co. and Alan Pavese, a Director & Research Analyst at Credit Suisse First Boston, examine the outlook for the sector and share specific stock recommendations.

Waste & Environmental Services - In an in-depth (5,100 words) Analyst interview, Kevin P. Monroe, a Research Analyst at Thomas Wiesel Partners, examines the outlook for the sector and shares specific stock recommendations.

Waste Companies - In an in-depth (4,500 words) Analyst interview, Amanda Tepper, a Senior Analyst at JP Morgan, examines the outlook for the sector and shares specific stock recommendations.

Outlook for Solid Waste Companies - In an in-depth (5,600 words) Analyst interview, Thomas P. Ford, a Vice President at Lehman Brothers, examines the outlook for the sector and shares specific stock recommendations.

CEO interviews (average 2,500 words). Top management of four - sector firms examine the outlook for their firm and the sector.