Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Hamzah Mazari - Credit Suisse.
Hamzah Mazari - Credit Suisse
Just a question on your Q4 guidance; when you are back into it, it looks like its $0.31 to $0.33. I am just curious what the delta between the low end and the high end of your guidance is. Volumes are running flat sequentially. So is that delta related to a pricing on the CPI side or is there something on the cost side. Any color you can add there?
Jim O’Connor
Well, I think that you know the company is doing an excellent job on the cost side. There certainly is the CPI phenomenon that we’re seeing here beginning in the second half of this year will carry into next year. Again, Republic doesn’t give quarterly guidance, obviously when you get to the third quarter with our annual guidance people kind of back into it and compare it to their results. I would say that we have the opportunity again to bring the cost and maybe a little bit better than what is expected.
Remember that there is seasonality in certain lines of business such is the residential collection where you get particularly up in the Midwest and north where you get a lot of the yard clean up and much heavier weights and costs associated with those lines of business. So on balance I think we feel pretty positive about the fourth quarter and do you want anything here?
Tod Holmes
No, I think we feel very good about the year. We continue to escalate and give increased guidance on earnings as we have got more clarity, and again, I think I go back to some of the comments that Don made in our opening comments as to focus of the organization, improving the class structure, keeping in mind that as we have seen the economy deteriorate there has been a significant effort by the field organization to continue to stay on pace with ‘08 productivity which has been a significant contributor to our success this year. So, all in all I think we’ve got a great year.
Hamzah Mazari - Credit Suisse
Then just a follow up question, as you look across your portfolio, how much of your customer base would you say is mispriced, and by that I just mean how much of an opportunity do you have to prune low margin business from your portfolio. Is there any long hanging fruit there or is that process sort of on going, how should we be thinking about that?
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