Hawkins: I'd like to do a review of our experience at Waste Management with you, if I could.

    Shareholder: Sure.

    Hawkins: You remember they had major accounting issues before when Waste Management was on its own - and its stock melted down from $40 to the low $20s. Well, we took a major stake at that point. And that investment was very successful.
    The company then merged with USA Waste to solve a management issue. Waste Management's board brought in USA Waste in order to get John Drury and Rod Proto. It was unanimously viewed by Wall Street as a good solution…. It went up into the high $50s.
    Looking in the rear view mirror, Waste Management was a very successful investment at that juncture. And we had about 5% of our assets committed to it at the end of the second quarter when the company's stock was trading at $54 per share. At that point, it got to our appraisal. And we were in the throes of cutting our position back.

Task of putting the companies together was too much….
    Hawkins: But [then] CEO John Drury had to admit through his doctors that he could not come back to the company because of his brain cancer. All of the management responsibilities then went to Rod Proto. And in our view, those management responsibilities were too significant for this one person to handle in terms of putting two companies together, two accounting systems together and two cultures together - what have you. They've been very challenged by the issues of USA Waste being combined with the old Waste Management.
    A number of other issues have come up subsequently. And clearly, some of them are substantive….

We don't feel like Waste Management is a mistake.
    Hawkins: However, the case that remains is that here's a company with the best landfills in the country, in an industry where the competition has really shrunk to two major companies. Browning Ferris and Allied have combined into a single company [Allied Waste]. And USA Waste and Waste Management have combined into the other [Waste Management].
    Meanwhile, waste streams are growing. The supply of landfills is limited. And we believe as a long-term investor, a year from now we will look back and say that we have the best assets, great management, good systems and a very good earnings stream that will be highly rewarded in the equity market. So we don't feel like it's a mistake.

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