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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: May we start out with an overview of your coverage?

Mr. Monroe: On the environmental services side I cover the solid waste companies, the top three being Waste Management (WMI), Allied Waste (AW) and Republic Services (RSG). I cover two filtration companies, Donaldson (DCI) and Pall Corp. (PLL). I cover a water utility, Philadelphia Suburban (NYSE:PSC), and one medical waste company, Stericycle (SRCL). I also have an industrial coverage universe.

TWST: What do they need for a solid pickup? A strong economic recovery?

Mr. Monroe: You basically need to see commercial construction pick back up. Right now residential construction is still pretty solid, depending on what area of the country you’re in, but you’d need a widespread increase in commercial construction, which right now continues to decline at an accelerating rate. People have operations and medical procedures regardless of what’s going on with the economy. And the fundamentals are also attractive on the water utility side. There’s a lot of consolidation still taking place there — and continuing. And it’s a regulated business so a water utility comes in, buys a water system and spends X amount of dollars to upgrade that system and the regulated model allows 10% return or so. That’s a pretty consistent model and there’s a lot of consolidation opportunity still remaining in the US. So companies like Philadelphia Suburban are continuing to benefit from that. TWST: Will the pressure on federal and state municipal governments hold back spending on water improvements? Mr. Monroe: It is actually forcing outsourcing, and this is more on the water utility side. Municipalities have to upgrade their water systems so they will sell that system to someone like Philadelphia Suburban which will come in, buy the water system and they’re regulated, so they get return on whatever cap ex they have to spend to upgrade the system. If the municipality still wants to own the water assets, it can outsource the management of it to someone like a USFilter, which is owned by Vivendi Environment (VE), or someone like a Suez (SZE), which will come in and upgrade the systems in return for a 20-year contract whereby they will invest to upgrade the systems but then they have 15 more years to operate the contract and get return on their investment that way. Basically the municipalities are saying, “Okay, we need to do this, but we can’t do it ourselves because we can’t raise the capital, so we will outsource it to some of these players.” That is what is forcing consolidation with players like Philadelphia Suburban or outsourcing with players like USFilter.

TWST: So even in this kind of lackluster environment, the funding is still available for this kind of thing.

Mr. Monroe:I think the money is available but it is always an issue in terms of where it comes from. That is one of my issues. Based on EPA estimates, and other estimates out there, the nation’s water systems are in need of anywhere from $250 billion to $1 trillion in investment over the next 20 years. Well, I do think it is a major issue of where that money is exactly going to come from and most likely it will come from increased water rates although that can be a political issue. This is also driving consolidation as companies like Philadelphia Suburban, which, if it buys a municipality’s water system, invests its own money to upgrade that system but then rates will likely be going up in that system to recoup the investment. From a political standpoint, the municipality I guess isn’t sending an increased water bill, it is coming from Philadelphia Suburban.

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.