Republic Services, Inc.

Good afternoon and welcome to the Republic Services fourth quarter 2021 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 Stacey Matthews, Vice President of Investor Relations.

Hello. I would like to welcome everyone to Republic Services' fourth quarter 2021 conference call. John VanderArk, our CEO, and Brian DelGaccio, our CFO, are joining me as we discuss our performance. I'd 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 SEC 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 10th, 2022. 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. 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'd like to turn the call over to John.

Thanks, Stacey. Good afternoon, everyone, and thank you for joining us. Our fourth quarter performance capped off a very strong year of financial results and operational execution. We outperformed expectations throughout the year and exceeded the high end of our upwardly revised guidance. During 2021, we generated adjusted earnings per share of $4.17, which increased 17% over the prior year, produced $1.52 billion of adjusted free cash flow, which increased 23% over the prior year, expanded EBITDA margin 60 basis points to 30%, improved free cash flow conversion 350 basis points to 44.8%, and increased customer retention rates to an all-time high of 95%. Profitable growth remains our strategic priority, and we continue to believe that investing in acquisitions is the best use of free cash flow to create long-term value. In 2021, we invested over a billion dollars in acquisitions to further enhance our market position and increase free cash flow. This is the highest level of acquisition investment in over a decade. Our acquisition pipeline remains robust with opportunities in recycling and solid waste and environmental solutions. Yesterday, we announced our agreement to acquire U.S. Ecology. This acquisition propels Republic into a leading position in the environmental solutions space and as a platform of high-quality assets and difficult to replicate infrastructure. I will discuss this strategic acquisition in more detail before we open up the call for Q&A. In addition to investing in acquisitions, we return $800 million to our shareholders through dividends and share repurchases. We delivered outsized growth and profitability by executing our strategy. Our strategy is supported by three differentiating capabilities, customer zeal, digital, and sustainability. With respect to customer zeal, our customer retention rates remain at a record-setting level of 95%, and NPS remains well above pre-pandemic scores. During the fourth quarter, we delivered outsized revenue growth throughout the business, Core price reached an all-time high of 5.4%, and average yield increased to 3.4%. Volumes increased 3.6% compared to the prior year, and acquisitions contributed an incremental 490 basis points to total revenue growth. Full-year combined yield and volume of 6.7% was the highest level in company history and over 200 basis points above the next highest year of performance. Turning to digital, we continue to make meaningful progress on the rollout of the next phase of the RISE platform. We have now implemented tablets in approximately 90% of our large and small container fleet. With these new capabilities, we generated operational efficiencies and delivered over 1 million automated proactive notifications to customers last year. We will begin deploying tablets to the residential fleet early this year and expect to be complete by mid 2023. Next, turning to sustainability. We continue to partner with developers to capitalize on landfill gas to energy opportunities. We expect four of these projects to be completed this year, with another 14 in our pipeline expected to be completed over the next couple of years. We see an opportunity for another 40 projects beyond the current pipeline. We are also making recycling investments beginning in 2022 to forward integrate in the plastics value chain. These investments will provide a platform for future revenue growth with attractive returns and drive a more sustainable world for future generations. We will absorb these investments within our normal level of capital spending. Our sustainability performance continues to be well regarded as Republic Services was named to the Dow Jones Sustainability Index for the sixth consecutive year. Additionally, our MSCI ESG rating was upgraded to an A, which is the highest rating in our industry. One of the primary factors leading to the upgrade was an increase in our human capital management score. This reflects our strong culture that embraces inclusion and diversity. These strong financial and operational results would not have been possible without our dedicated employees. In appreciation of their hard work throughout the pandemic, we paid each frontline employee $500 Committed to Serve award in the fourth quarter. Combined with the award paid in January of 2021, our frontline employees received an additional $1,000 during the year. This brings our total support provided through our Committed to Serve initiative to $50 million since the beginning of the pandemic. The strength of our 2021 results clearly demonstrates our ability to create sustainable value and provides the foundation from which we will continue to grow. That said, we expect another strong year of performance in 2022. Specifically, we expect to deliver adjusted earnings per share in a range of $4.58 to $4.65 and generate adjusted free cash flow in the range of $1.625 billion to $1.675 billion. This represents high single-digit to low double-digit growth over our 2021 performance. It's important to note that this guidance, as well as any assumptions we discussed in today's call, do not contemplate the impact from the pending acquisition of U.S. Ecology. We will provide updates to our guidance, if needed, once the transaction closes. I will now turn the call over to Brian.