Republic Services, Inc.

Good day and welcome to the Republic Services first quarter 2022 investor conference call. Republic Services is a traded on the New York Stock Exchange under the symbol RSG. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the start 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 a touch-tone zone. 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. Please go ahead.

Hello. I would like to welcome everyone to Republic Services' first quarter 2022 conference call. John Van Der Ark, our CEO, and Brian DelGaccio, 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 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 May 5th, 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 available on Republic's website at republicservices.com. On today's call, we will provide forward-looking non-gap measures related to recent acquisitions and projects under development. We are unable to reconcile these estimates to relevant gap measures without unreasonable effort because purchase accounting adjustments are not complete and the timing of development projects can vary. I want to remind you that Republic's management team routinely participates in investor conferences. When these events are scheduled, the dates, times, and presentations are posted on our website. With that, I would like to turn the call over to John.

Thanks, Stacey. Good afternoon, everyone, and thank you for joining us. We had a strong start to the year, which keeps us well-positioned to achieve our full-year goals. The outcomes we are delivering reflect our focus on profitably growing investment the recycling and solid waste business, and expanding our environmental solutions business so we can offer the most complete set of products and services to our customers. The investments we are making in the business are taking hold and creating undeniable value while further strengthening our three differentiated capabilities of customer zeal, digital, and sustainability. During the first quarter, we delivered revenue growth of 14%, generated adjusted earnings per share of $1.14, which is a 23% increase over the prior year, and produced $531 million of adjusted free cash flow, which is a 14% increase over the prior year. We continue to believe that investing in acquisitions is the best use of free cash flow to create long-term value. Earlier this week, we closed the acquisition of U.S. Ecology. This acquisition propels Republic into a leading position in the environmental solutions and as a platform of high quality assets. We have customer overlap between our $1.5 billion manufacturing vertical and US Ecology's $1 billion book of business. We estimate our cross-selling opportunity at $75 to $100 million. We're excited to welcome US Ecology employees to the Republic team and will benefit from their deep expertise in specialty waste handling. We also invested $66 million in other acquisitions during the quarter. We also have approximately 400 million of deals in the advanced stages of closing, all of which are in the traditional recycling and solid waste space. In addition to investing in acquisitions, we returned $349 million to our shareholders. This includes $203 million in share repurchases and $146 million in dividends. We are experiencing meaningful traction developing our differentiated capabilities where actions are leading to outcomes. Our aspiration is to deliver a world-class customer experience which we call customer zeal. Our customer retention rate remains at a record-setting level of 95%. This has enabled us to generate the highest level of pricing retention in company history and generate outsized revenue growth throughout the business. During the first quarter, core price reached an all-time high of 6%, and average yield increased to 4.2%. Volumes increased 3.6% compared to the prior year, and acquisitions contributed an incremental 390 basis points to total revenue growth. Regarding digital, we completed the rollout of RISE tablets in our small and large container fleet. We continue to see tangible benefits of this proprietary technology for our customers and within our operation. We will begin deploying tablets in the residential fleet later this month and expect to be complete by mid 2023. We recently went live with the finance and procurement modules of our new ERP system, which will streamline back office activities and empower our local leaders with enhanced data. Next, turning to sustainability. We continue to believe that environmental sustainability and economic sustainability go hand in hand. We are passionate about doing things that are good for the future generations in a way that generates profitable growth for our business. In March, the company announced our plans to expand our participation in the plastics value chain with the nation's first integrated plastics recycling facility. The Republic Services Polymer Center will address the growing demand for recycled plastics while enabling CPG brands to meet their sustainability goals. Based in Las Vegas, this will be the first of three to five centers nationwide and is scheduled to open in late 2023. We expect this polymer center will generate an incremental $50 million of revenue with an EBITDA margin at or above total company performance. Earlier today, we announced our joint venture with Archaea. to develop 39 renewable natural gas projects that are landfills. These projects generate attractive returns and accelerate achievement of our ambitious 2030 sustainability goal of increasing biogas sent for beneficial reuse by 50%. The projects are expected to come online between 2023 and 2027, at which point approximately 70% of our total landfill gas collected will be beneficially reused. This joint venture, together with our 17 landfill gas-to-energy projects under development, are expected to generate approximately $100 million of incremental EBITDA. We continue to be recognized for our commitment to sustainability. Republic Services was named a Barron's 100 Most Sustainable Companies list for the fourth time. I will now turn the call over to Brian.