Republic Services, Inc.

Good afternoon and welcome to the Republic Services fourth quarter 2018 investor conference call. Republic Services is traded on the New York Stock Exchange under the symbol RSG. All participants in today's call will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Nicole Giandonotto, Senior Vice President of Investor Relations and Treasurer.

Good afternoon, and thank you for joining us. I would like to welcome everyone to Republic Services' fourth quarter 2018 conference call. Don Slager, our President and CEO, and Chuck Sirianni, our CFO, are joining me as we discuss our performance. I would like to take a moment to remind everyone that some of the information we discuss on today's call contains forward-looking statements, which involve risks and uncertainties and may be materially different from actual results. Our FDC filings discuss factors that could cause actual results to differ materially from expectations. The material that we discuss today is time-sensitive, If in the future you listen to a rebroadcast or recording of this conference call, you should be sensitive to the date of the original call, which is February 7, 2019. Please note that this call is the property of Republic Services, Inc. Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of Republic Services is strictly prohibited. I want to point out that our SEC filings, Our earnings press release, which includes gap reconciliation tables and a discussion of business activities, along with a recording of this call, are all available on Republic's website at republicservices.com. Also, included in our press release are unaudited supplemental schedules that include a pro forma view of fourth quarter 2017 revenue and costs had we adopted the new revenue recognition standards as of January 1st, 2017. During today's call, all references to changes versus the prior year are based on the 2017 pro forma figures, which are comparable to 2018 results. Finally, I want to remind you that Republic's management team routinely participates in investor conferences. When events are scheduled, the dates, times, and presentations are posted on our website. With that, I would like to turn the call over to Don.

Thanks, Nicole. Good afternoon, everyone, and thank you for joining us. We are very pleased with our strong finish to 2018. Full year 2018 EPS was $3.09 and in line with our guidance range. Free cash flow was $1.2 billion and exceeded the upper end of our guidance range. Total acquisition investment was over $200 million. Total cash return to shareholders was $1.2 billion, and total shareholder return was 9%, compared to the S&P 500's negative return of 4%. The team delivered these results despite a $145 million headwind from the recycling business. We accomplished this by capitalizing on strong solid waste trends to drive both price and volume growth, strengthening our market position and improving route density through acquisitions, executing our plans to mitigate recycling headwinds in the short term while advancing our long-term strategy to transform the business, and efficiently returning cash to our shareholders. During the fourth quarter highlights, we delivered double digit growth in earnings per share, invested $87 million in value enhancing acquisitions, and divested $79 million of non-strategic assets. We also returned $284 million to shareholders through dividends and share repurchases. Throughout the fourth quarter, the pricing environment continued to be favorable. We achieved core price of 4.3% and average yield of 2.7%, our highest pricing level in nearly a decade. We also achieved an all-time low customer defection rate of sub-7%. We attribute these accomplishments to our laser focus on enhancing the customer experience and delivering superior service. Additionally, we successfully converted 27% of our CPI-based contracts representing $660 million to a waste-related index or fixed rate increase of 3% or greater. These waste indices are more closely aligned with our cost structure and continue to run higher than CPI. During the quarter, we also continue to see underlying volume growth in our collection and disposal businesses. Excluding the impact of non-regrettable losses and a difficult special waste comp, total volume increased 90 basis points over the prior year. Our recycling business also improved in the fourth quarter. The team continued to tightly manage operating costs and increase recycling collection and processing fees. As expected, the current market conditions continue to serve us as a catalyst to transform recycling into a more durable, and economically sustainable business. Additionally, we opened our first next-gen recycling processing center in Plano, Texas. We call it next-gen because unlike a traditional processing center where we primarily sort and remove items that are not recyclable, here we are leveraging state-of-the-art technology to extract items that are recyclable. This positive sort configuration allows us to produce a higher quality product with less labor. The facility also includes a 5,000 square foot learning resource center for the community, so residents can learn the proper way to recycle and reduce their environmental impact. Our partnership with the City of Plano is an example of our new recycling business model. We are paid an appropriate fee to process the material, and the majority of the commodity value is rebated back to the community. This contract structure enables us to invest in new technology while earning an appropriate return on our investment. Lastly, given we operate one of the largest vocational fleets in the US, we are continuously evaluating innovative approaches and technologies to improve the performance, economics, and environmental impact of our trucks. Earlier this week, Mack Trucks announced our partnership to design and test electrification in a fully integrated garbage truck with zero diesel propulsion components. We are proud to be partnering with MAC and optimistic that this will result in a significant step towards an even cleaner, more efficient fleet. With that, I'll now turn the call over to Chuck to discuss our fourth quarter financial results in greater detail.