Good afternoon, welcome to the Republic Services fourth quarter and full- year 2022 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 Aaron Evans, Vice President of Investor Relations. Please go ahead. I would like to welcome everyone to Republic Services fourth quarter and full- year of 2022 conference call. Jon Vander Ark, our CEO, and Brian DelGhiaccio, 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 February 15th, 2023. Please note that this call is 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 GAAP reconciliation tables and a discussion of business activities, along with the recording of this call, are 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 would like to turn the call over to Jon. Thanks, Aaron. Good afternoon, everyone. Thank you for joining us. The Republic team finished the year strong by executing our strategy designed to profitably grow the business. We outpaced expectations throughout the year, delivering results that exceeded our full-year guidance, even in the face of increased volatility in the broader marketplace. During 2022, we achieved revenue growth of 20%, including a 10% from acquisition, delivered adjusted EBITDA growth of 16%, generated adjusted earnings per share of $4.93, which is an 18% increase over the prior year, and produced $1.74 billion of adjusted free cash flow, a 15% increase over the prior year. We continue to believe that investing in value-creating acquisitions is the best use of our free cash flow. We invested $2.7 billion in acquisitions in 2022, which includes the acquisition of US Ecology. The integration of US Ecology is going well, with cost synergies tracking ahead of plan. Revenue contribution from US Ecology outperformed our expectations by nearly $50 million for the year, with almost all of the overperformance occurring in the fourth quarter. We continue to adjust prices related to US Ecology and our broader Environmental Solutions business to better align with the capital invested and resources deployed. Pricing actions taken to date have been successful as our customers recognize the high value of service we provide. Additionally, we are building momentum cross-selling our complete set of products and services, with approximately $40 million in new sales to date. Aside from US Ecology, we invested $500 million in value-creating acquisitions during the year. All of these deals were in the recycling and solid waste space. As part of our balanced approach to capital allocation, we returned nearly $800 million to shareholders through dividends and share repurchases. Regarding customer zeal, we continue to enhance our culture of delivering a world-class customer experience to win new business and drive customer loyalty. Our customer retention rate remains strong at 94%, and we exited 2022 with our highest NPS scores of the year. We delivered outsized organic revenue growth during the fourth quarter with simultaneous growth in both price and volume. Core price on related revenue increased to 8.4%, and average yield on related revenue increased to 6.7%. This is the highest level of pricing in company history. Organic volume growth was 1.5%. Volume growth was broad-based across our market verticals and geographies. Moving to digital. In early 2022, we implemented the finance and procurement modules of our new ERP system, which streamlined back-office activities and provided our local leaders with enhanced data. Currently, we are building our new asset management system, which is expected to increase maintenance technician productivity and drive better warranty recovery. We expect to implement the new asset management system beginning in 2024. We continue to make progress on deploying RISE tablets in our collection business. We finished the implementation for all large container and small container routes during 2022 and completed 37% of residential routes by the end of the year. The remaining residential routes are scheduled to be complete by mid-2023. This is a key component enabling further connectivity with our customers, including real-time service notifications. The adoption of RISE has helped drive operational efficiencies and cost savings worth approximately $50 million annually. Sustainability is core to our strategy and one of our differentiating capabilities. We believe Republic Services is in a unique position to leverage sustainability as a platform for profitable growth while making a positive impact on the environment. For example, our Polymer Centers are advancing circularity of plastics. This is the first time a single U.S. company will manage the plastic stream from curbside collection to delivery of high-quality recycled content for consumer packaging. Development of the first center in Las Vegas is on track and is slated to come online in late 2023. Development of our second Polymer Center is already underway. This facility will be located in the Midwest and will serve as a hub for aggregating and processing recovered plastics in the region. This center should come online in late 2024. The investments we are making to develop these Polymer Centers is being absorbed through our normal capital expenditure process. Additionally, the development of our renewable natural gas projects is progressing well. All 57 of these projects are being co-developed with partners, with a majority structured as a joint venture. We expect four of these projects to come online by mid-2023. As part of our approach to sustainability, we continually strive to be a workplace where the best people from all backgrounds come to work. Employee engagement improved to a score of 85 with 97% participation. Turnover rates in the fourth quarter improved to the lowest level we've experienced in nearly two years. As a result, we are better staffed to capitalize on growth opportunities in the market. Our comprehensive sustainability performance continues to be widely recognized as Republic Services was named to the Dow Jones Sustainability Index for the seventh consecutive year. Our 2022 results clearly demonstrate our ability to create sustainable value and strengthens the foundation from which we will continue to grow our business. Looking forward, we expect to deliver high single-digit growth in revenue, EBITDA, and free cash flow in 2023, even with the headwinds from lower recycled commodity prices and higher interest rates. More specifically, we expect 2022 revenues in a range of $14.65 billion-$14.8 billion. This represents high single-digit growth compared to the prior year. Adjusted EBITDA is expected to be in the range of $4.275 billion-$4.325 billion. This represents high single-digit to low double-digit growth compared to the prior year. We expect to deliver adjusted earnings per share in a range of $5.15-$5.23, and generate adjusted free cash flow in a range of $1.86 billion-$1.9 billion. Our acquisition pipeline continues to support outsized levels of activity in both recycling and solid waste and Environmental Solutions. We are targeting at least $500 million of investment in value-creating acquisitions in 2023. Our 2023 financial guidance includes a rollover contribution from acquisitions that closed in 2022. I will now turn the call over to Brian, who will provide details on the quarter and year. Thanks, Jon. Core price on total revenue was 7.4% for the fourth quarter. Core price on related revenue was 8.4%, which included open market pricing of 10.4% and restricted pricing of 5.1%. The components of core price on related revenue included small container of 11.8%, large container of 8.6%, and residential of 7.8%. Average yield on total revenue was 5.9%. Average yield on related revenue was 6.7%, an increase of 40 basis points when compared to our third quarter performance. In 2023, we expect average yield on total revenue of approximately 5.5%. We expect average yield on related revenue of approximately 6.5%. This is an increase of 80 basis points over our full- year 2022 results. Fourth quarter volume increased 1.5%. The components of volume included an increase in small container of 1.6%, an increase in large container of 60 basis points, an increase in residential of 1.2%, and an increase in landfill of 3.9%. For 2023, we expect organic volume growth in a range of 50 basis points to 1%. Moving on to recycling. Commodity prices were $88 per ton in the quarter. This compared to $218 per ton in the prior year. Recycling, processing, and commodity sales decreased revenue by 180 basis points during the quarter. 2022 full- year commodity prices were $170 per ton. This compared to $187 per ton in the prior year. Current commodity prices are approximately $95 per ton. We believe that current commodity prices are temporarily depressed due to a global supply- demand imbalance and that prices will recover in the second half of the year. Accordingly, we are assuming average recycled commodity prices of $125 per ton in 2023, with prices starting at $95 per ton in the first quarter and steadily increasing throughout the year. At $125 per ton, this would result in a decrease in full-year 2023 revenue and EBITDA of $45 million when compared to the prior year and a 30 basis point headwind to EBITDA margin. In the first quarter of 2023, this would result in a year-on-year decrease of nearly $30 million in revenue and EBITDA and a 70 basis point headwind to EBITDA margin. Turning to our Environmental Solutions business. Fourth quarter Environmental Solutions revenue increased approximately $320 million over the prior year, which primarily related to the acquisition of US Ecology. On a same-store basis, Environmental Solutions contributed 60 basis points to internal growth during the quarter. Fourth quarter adjusted EBITDA margin was 27.3%. This compares to 28.1% in the prior year. Margin performance during the quarter included a 130 basis point decrease from acquisitions, which included 100 basis points related to US Ecology and an 80 basis point headwind from lower recycled commodity prices. These margin headwinds were partially offset by a 20 basis point increase from net fuel and margin expansion in the underlying business of 110 basis points. Fourth quarter adjusted EBITDA margin in the recycling and solid waste business was 28.7%. This compares to 28.6% margin in the prior year or 10 basis points of margin expansion. Margins improved in the recycling and solid waste business, even with an 80 basis point headwind from lower recycled commodity prices. Fourth quarter SG&A expenses, excluding transaction costs from US Ecology, were 10.9% of revenue. This included 40 basis points from additional incentive compensation expense due to full-year financial outperformance. Full-year SG&A expenses were 10.2% of revenue. This was favorable 20 basis points compared to the prior year and reflects continued cost management as we grow the business. In 2023, we expect EBITDA margin to be approximately 29.2%. The 10 basis points of expected margin expansion include a 40 basis point decline related to acquisitions, primarily related to US Ecology, and a 30 basis point headwind from lower recycled commodity prices. These headwinds are more than offset by margin expansion in the underlying business of 80 basis points. While we expect full-year expansion compared to the prior year, margins are expected to be down in the first half due to the impact of acquisition rollover and recycled commodity prices. This is most notable in the first quarter, where these headwinds impact margin by a combined 210 basis points. Depreciation, amortization, and accretion was 10.7% of revenue in 2022 and is expected to be relatively consistent at 10.8% of revenue in 2023. Full-year 2022 adjusted free cash flow was $1.74 billion, an increase of 15% compared to the prior year. This was driven by EBITDA growth in the business. For 2023, we are projecting adjusted free cash flow in a range of $1.86 billion-$1.9 billion, or approximately 8% growth at the midpoint. We believe this level of performance is very strong given the expected impact from lower recycled commodity prices, higher interest rates, and higher cash taxes as bonus depreciation begins to unwind. Total debt at the end of the year was $11.9 billion, and total liquidity was $1.7 billion. Floating debt interest rates consistently increased throughout 2022, and we now expect net interest expense of approximately $480 million in 2023. This is an increase of approximately $90 million compared to the prior year. As a reminder, a 1% increase in interest rates results in approximately $33 million of additional interest expense. Our leverage ratio at the end of the year was approximately 3.1x. We expect to revert to 3x leverage by mid-2023. With respect to taxes, our combined tax rate and non-cash charges from solar investments resulted in an equivalent tax impact of 26.1% during the fourth quarter and 25.1% for the full-year. This lower- than- anticipated tax rate resulted in a $0.06 benefit to our full-year 2022 EPS. We expect an equivalent tax impact of approximately 26% in 2023, made up of an adjusted effective tax rate of 20% and approximately $170 million of non-cash charges from solar investments. Finally, we expect a majority of the EPS growth in 2023 to be back-end loaded. This results from having the toughest prior year comparisons on recycled commodity prices, interest rates, and taxes during the first half of the year. With that, operator, I would like to open the call to questions. We will now begin the question and answer session. To ask a question, you may press star then one on your touch- tone phone. In the interest of time, we ask that you limit yourself to one question and one follow-up. If your question has been answered and you would like to withdraw your request, you may do so by pressing star then two. Using a speakerphone, please pick up your handset before pressing the keys. Our first question will come from Tyler Brown of Raymond James. Please go ahead. Hey. Hey, guys. Hey, Tyler. Hey, Brian, obviously, you know, pricing really strong here. I think full-year pricing in the open market would say just over 9%, and the restricted piece call it 4.5%. I am curious if we were to kind of decompose that next year, how those numbers would look. Will we kind of see a convergence in those two, or could we actually see the restricted pricing lead with all the CPI look- backs? We would actually expect the restricted pricing to increase from the levels of where it is in the fourth quarter. On related revenue, it was 5.1% restricted in the fourth quarter. We would expect that to improve, you know, 50 to 100 basis points in 2023. We do expect the level of pricing to be driven by the open market, similar to what you've seen in 2022, and for that matter, the prior years as well. Yeah. Okay. Okay, that's helpful. Then on the shape of kinda how the yields will progress, will we have a more, I'm gonna call it historically normal cadence, where pricing, and I'm talking total pricing, say above 5.5%, and then it tapers off below 5.5% as the year finishes up? Yeah, I guess you're talking about on total revenue, I'll give you that piece. Yeah. Yeah, it starts highest. Actually, our high watermark is in the first quarter based on our expectations, and then it sequentially declines from there. We're expecting that pricing remains above 5% in all quarters. Yeah. Okay. All right. That's helpful. Just real quick, how much M&A rollover is in the guide? Just to be crystal clear, the half a billion that you expect to spend, none of that is included in guidance, is that right? I'll answer your second question first. That is correct. We have not included that. What is included are deals that close by the end of the year. It's $440 million worth of revenue or 300 basis points of growth. That's the rollover. Most of that being US Ecology. Right. Right. Okay. Thank you very much. You bet. The next question comes from Noah Kaye of Oppenheimer. Please go ahead. Thanks for taking the question. With the US Ecology outperformance of $50 million, can you give us a breakdown of how much of that outperformance was price versus volume? Maybe you can tell us what you're expecting in terms of ES segment growth, specifically for 2023? It was a mix of both price and volume, you know, more pricing to come, right? We've taken a lot of pricing action, we still have some contracted portion of that business, and fully seen that. You know, you're seeing both the cross-sell that we talked about, and you're seeing the pricing, right, hit with really strong performance. You know, the plans for 2023 are, you know, that business is performing ahead of our plan more broadly, both the US Ecology acquisition and the broader ES space, I think is gonna be a very positive contributor. Yeah. Okay. No, I was just gonna add, you know, a good portion of the growth, right, that you're gonna see year-over-year is coming vis-à-vis the acquisition rollover. If you think about total contribution from an organic perspective, right, we're expecting, you know, 50 basis points on total revenue. That's about, you know, call it $70 million, and that would be just at the point when US Ecology anniversaries forward. That's still kind of a high single digit type organic growth. That's very helpful. Thanks. Since you mentioned the synergies we're tracking ahead of plan, can you quantify that for us? I guess any chance you could give us an updated cost synergies number as to where you think this will get to within the timeframe? Yeah. Just to give you an idea, when we actually provided the guidance when we closed the deal, we said we thought we'd get about $5 million worth of synergies, in 2022, and we actually got closer to $13 million-$14 million. You can see nice outperformance there. A lot of that was just actually getting the integration activities done quicker than we originally anticipated. We said total synergies would be $40 million, cost synergies $40 million. I think that number will end up closer to $50 million. Perfect. I'll give it back. Thanks. The next question comes from Walter Spracklin of RBC Capital Markets. Please go ahead. Yeah, thanks very much. Good afternoon, everyone. I wanna just focus on the M&A there and the $500 million guide. What drives your target for $500 million? Is that on a, on a leverage basis that you'd like to keep yourselves close to? Or is it more just your best guess as to what kind of deals in the target areas that you want to do are available in 2023? Yeah. Well, I'd say it is based on a passionate view about intrinsic value, right, and driving intrinsic value over time, and conservatism, right. We never wanna put out a number that people go out and they have to hit, and therefore, we start chasing deals. I want the team to feel comfortable at any point in time passing on a given deal because it doesn't meet our return criteria, or there's a set of terms or business conditions or practices that we're not gonna wanna be owners of over time. I think, you know, we've always put out a number, and over the last three or four years, I think you've seen a pretty steady beat against that number. My expectations for the team, I think are likely higher than that, but we always want, again, put out a conservative number so the team feels no pressure to reach. Has there been any shift in valuations, you know, be it with higher interest rates, be it with, you know, more deals having been done? Is there more difficulty? Has valuations come off? Has availability changed? In other words, the pipeline that you look at going into 2023, is it very much different than what you saw in 2022, excluding the, obviously, US Ecology? No, pipeline is very strong. We got a mix of small and medium-sized deals across recycling solid waste and ES, right? That's kind of different stages in the process, and feel good about that. You know, the premiums or the multiples are still kind of hanging in the same zip code because we're looking at premium assets. We're not just buying revenue. We're, you know, very particular buyers, and we wanna get something that's quality. One of the first questions we always ask is, why would we do this ourselves? If it's something like a residential subscription business or a temporary roll-off business, we should go get that with our sales team, not pay a premium for that. We're looking for infrastructure. We're looking for, you know, route-based businesses with customer contracts that we know that we will integrate in the business and drive value over time. Okay. Just the last one here. Just on your guidance, I know you had a double- digit in there. You kinda walked it back last quarter. You've kinda brought it back again, you know, confidently here this quarter. Just what's changed your view here that gives you the confidence behind this guide that you perhaps kind of didn't have in the when you had the third quarter report? Well, maybe a slightly different view of the history, right? We never gave an official guidance. We said we had line of sight at one point to double- digit, right? That was in a different commodity price environment. Given the commodity market being depressed for six to nine months, that certainly gave us a different outlook, right, just based on, you know, the math of the commodity prices. I think we've, you know, talked about here a high single- digit number going forward. Now, if we end up doing more, you know, M&A early in the year and that has in-year impact, could we get to double- digits? We certainly could. I think we've been pretty consistent with how we've approached it. The other thing I would just add to that as well is that on the, on the October call, you know, we said that we've got a perspective that we're gonna achieve high single- digit growth. If you look at the midpoint of everything we put out there, it's high single- digit growth. You know, to Jon's point, I would sit there and say it is exactly in line with where we thought we would be in October. Fair enough. Okay. That's all my questions. Thank you very much. The next question comes from Toni Kaplan of Morgan Stanley. Please go ahead. Terrific. Wanted to ask first on capital expenditures. I know 4Q is usually sometimes seasonally high, and this quarter seemed maybe particularly high. I was wondering if that was related to the asset management system and the Polymer Centers or if there was something else in there, and how we should be thinking about CapEx for 2023. Yeah, certainly investing to grow the business, right? We're always disciplined but never afraid to spend that money. One of the bigger drivers of that was the second Polymer Center that we're putting in the Midwest. We've seen so much demand for the offtake of our first one that we just have a lot of confidence that the market is really gonna value and need that product. The returns in our business case, we think, are gonna be, you know, north of what we originally pro forma'd. That gave us the confidence to accelerate that investment move forward. Yeah. The other thing is, you know, we talked that there were some supply chain disruptions throughout the year, impact to things like trucks and some of the heavy equipment. We actually were able to, you know, take receipt, take title of those assets in the fourth quarter. As you think about building the 2023 plan, most likely will be more back-end loaded like you've seen in the last couple of years, but maybe not to the extent that you saw in 2022. Super helpful. Wanted to ask on volumes. I know you gave the 50-100 basis points for 2023 of volume. Wanted to just ask sort of what you're seeing with regard to, you know, commercial and industrial. I know some of your competitors talked about, like, a little bit of a softness in 4Q, but maybe a little bit better in January. Wanted to hear your experience on that. Yeah. There's different moving pieces for sure. Obviously, there's been a little bit of a slowdown in the construction market as you've seen housing starts, you know, kind of pull back in the second half of last year. We've certainly baked in, you know, some softening of that into the 2023 environment. Listen, the industrial market is very, very strong right now, right? You saw the consumer number this morning. I mean, the consumer is engaged. We still see, you know, lots of economic activity. Travel and leisure, right, is, you know, kind of busting at the seams. You know, we remained mindful, right, that there's certainly recession talk on the environment, but we're a pretty broad-based barometer of the economy, and we're seeing a lot of strength right now. Yeah. Even though we're seeing a little bit of softness on some of the construction activity, we're still seeing above average price. You know, if you take a look in the temporary large container business, we're nearly 9% priced during the fourth quarter. Terrific. Thanks for the color. The next question comes from Kevin Chiang of CIBC. Please go ahead. Thank you, operator, and good afternoon, everybody. I was just wondering when you talk about pricing initiatives within ES, just wonder what percentage of your revenue do you think you need to reprice to get to the levels you want? How long do you think it takes to kind of get through all of that? We'll look at every dollar of revenue and every customer and really try to understand. You know, again, we look at pricing for two lenses. One is. From a customer and an insight standpoint, right? What does the market bear? What does our offer have from a value standpoint versus our competitors? Then we also wanna look on the internal side and say, "What is our cost, including a capital charge, and make sure that we're getting a fair return on that." So, you know, we're gonna go systematically through every customer and every $1 of revenue. I think the encouraging thing is we've put out some double-digit price increases, and we're seeing it stick, right? Customers are really valuing the integrated offering. Keep in mind, whatever they spend with us is a very small percentage of their cost structure. So safety and speed and sustainability and our digital tools and all the things that we're investing in, right, those are big differentiators that allow that price to stick. Right. That makes a ton of sense. I apologize if you've given this number before, but, you know, when you look out longer term and, you're through some of the cost synergies and some of the revenue upside opportunities, do you have a targeted ES adjusted EBITDA margin that you're thinking about? You know, you did 17.5% or roughly 17.5% in 2022. Does this get to, you know, the mid-20s when you're kinda through many of these initiatives? Yeah. Listen, over time, long- term, right, I think these businesses converge in terms of returns. I think you'll get free cash flow conversion to get there first because this is a slightly different OpEx, CapEx trade-off in this part of the business, right? Then over time, I think, a longer period of time, I think getting the margin to converge, I don't think is out of sight or out of reach as well. That's not gonna happen overnight. We are gonna kind of ratably, right, systematically take this up. I think a goal, you know, in the next four or five years to get that in the mid-20s is very reachable. Excellent. I'll leave it there. Thank you very much. The next question comes from Michael Hoffman of Stifel. Please go ahead. Hi. Thank you very much, Jon and Brian, Aaron, for taking the questions. Brian, are we at about a $1.6 billion run rate in ES revenues when I roll in the M&A? Then what does that 1.6 grow organically? I was trying to put all the pieces together from your transcript. I think I have myself a little confused. Yeah. We're probably closer, Michael, to in the 1.5 range, a little over 1.5. You know, organically, like I said earlier, you know, we're thinking that's a 7%-8% organic type grower here in the near term, and with opportunities for even some of the additional cross-sell opportunities to be additive to that. Okay. The following that then, in your margin for the whole year, 2022, what do you think the solid waste business and the Environmental Services business do individually? Yeah. -merge together? In the recycling and solid waste business, we're expecting overall about 30 basis points of margin expansion, right? In that business, we have to overcome the 30 basis point headwind from commodity prices. The underlying business is growing kinda 60 to 70 basis points. Now, in the Environmental Solutions business, we're expecting 100 basis points of margin improvement. There is the acquisition roll over US Ecology, which is a, you know, kind of a -70 on that portion when you compare it to what we had in the Gulf. We're expecting margin expansion in the underlying business there of 170 basis points. The reason why that only comes to 10 basis points overall is we just have a greater mix or greater percentage of ES business in 2023 than we did in 2022. Yep. Yep, I get that. Can you bridge for us the $1.724 billion of free cash in 2022 to get to the midpoint of your guide? What is the cash interest, the cash tax, the incentive comp above plan? I'm assuming everything else is made up by organic growth productivity. Yeah, let me give you a couple of pieces of that, certainly. Interest, and I'm gonna give you some pre-tax numbers, and for, you know, argument's sake, you can just sit there and take, you know, call it 70% of it after you do the after-tax. Interest, up $90 million, right? It's a, you know, an increased outflow there. Incentive comp is about a $35 million outflow compared to target levels. Bonus depreciation, you wouldn't tax affect the impact of bonus depreciation, but that's about a $35 million increase in cash taxes. Okay. then. When you take those pieces, that creates a, you know, now I'm gonna kind of flip a little bit to conversion. That creates a, you know, call it about a 300 basis point headwind to conversion, all of which being offset by just the EBITDA growth in the business as well as some benefits in working capital, some of those benefits being unlocked. We talk about finishing the finance and procurement modules during 2022, and we think that there's an opportunity, in particular, on the DPO side to drive improvements in working capital. Okay. I'm squeezing one in, sorry. The $125 per ton, how much of that has to rely on OCC moving, and what would your target be for OCC to make the $125 in your guide? Well, I mean, just to put it in perspective, right? OCC fiber, right, represents about 70% of our basket of goods, right? Most of this we are expecting to come more on the OCC side. Even just to put it into, you know, all of it into perspective, if you take a look at what we're expecting from a guide perspective compared to current prices, it's a relatively modest recovery, right? That's $30 million worth of EBITDA and about 20 basis points to margin, $20 million of free cash flow if things were to stay at current levels. Okay. Thank you very much. The next question comes from Jerry Revich of Goldman Sachs. Please go ahead. Good afternoon and good evening, everyone. Brian, if we just go back to your margin cadence discussion, you know, the headwinds in the first quarter are really the first half. You know, that implies we're gonna be exiting fourth quarter of 2023 with margins up something like 150 basis points year-over-year, heading into 2024. I'm wondering, are we setting up for 2024 to be an outsized margin expansion year because, you know, we're essentially making up for a lost year from the commodity price impact in 2023? Anything that you'd add to that bridge as we think about what the margin progression might look like? Sure. A couple things, Jerry. I mean, you've got two variables, right? When you take a look at that. You have the, what we're expecting in 2023, also what happened in 2022, right? We're expecting commodity prices in 2023 to be at the highest point of the year. They were at the lowest point in 2022. You can't just go to the margin expansion. Yes, exiting the year in 2024, we think it's gonna be, you know, kind of a nice jump- off point heading into 2024. I wouldn't just look at the overall margin expansion 'cause you've got two years in your math there that you gotta take into consideration. Sure. You're gonna have the same comp benefit in the first half of 2024, hopefully. You know, if we think about the profitability of the recycling business in the fourth quarter with these ultra-low recycled cardboard prices, can you just update us on what was the margin profile of the business roughly, just so we can get a feel for where it's troughing in this cycle given all the work you've done there? You're talking about on the recycling side of the business? Yes. Yeah. No, it's still a profitable business at these levels and still in the tract of return. you know, again, we would expect through the cycle, we talked about we expect these depressed prices to be somewhat transitory, and again, return closer in line to a 10-year average, not even back to the levels it was when it was over $200 a ton on our basket of goods. Super. Can I ask around the gas part of the business, you know, nice little bonus we got from the EPA in terms of eRINs. How much gas to electric power do you folks generate in terms of your share of the power that you generate? You know, what's your take on what's a reasonable value capture opportunity for you and your peers? Yeah. Of our existing projects, the vast majority are gas electricity. Where eRINs had gone, all of the new projects in the pipeline were contemplated to be, you know, gas or under methane RNG. The great news with our partnership with BP, we've got option value, right? eRINs coming online, we're both very open-minded to understanding where those markets move and the local geography, and even places where we may power our own fleet to figure out whether we wanna convert some of those opportunities rather than RNG to go to electricity as well. We see it as over time a benefit for us because it'll have two pathways. I'll leave it there. Thank you. You bet. The next question comes from David Manthey of Baird. Please go ahead. Thank you very much. My question is regarding residential volumes that have inched up here the last couple of quarters. Is that a trend you expect to continue this year? When you look at that 1% overall midpoint volume outlook, does that contemplate commercial container volumes being flat or negative at any point in 2023? No. I mean, what you're seeing mostly on the residential is some relatively larger contracts. You're seeing that, you know, in the numbers. That's expected to anniversary in 2023, so we don't expect that to continue throughout the year. Yeah, when you take a look at our volume cadence, we expect that small container will remain positive, right, throughout 2023. When you take a look at overall volumes, we think to have our highest volume performance early in the year, and again, that to step down throughout, but remaining positive in all four quarters. I'd say residential, that's been, I'd say, over the last decade, the most disappointing part of the business in terms of where margin return has gone, and that hasn't expanded at the same rate as the other businesses. There's a lot of reasons for that with commodity prices and inflation, everything else. Listen, we don't do work for free, right? We put upward pressure, right, on all those contracts and look at those contracts just like we would an acquisition, right? We're gonna put capital into it, and what type of return do we get against that? If we can't meet our return thresholds on that, we won't do the work. I appreciate it. Thank you. The next question is from Kyle White of Deutsche Bank. Please go ahead. Hey, good afternoon. Thanks for taking the questions. Just curious what you're seeing on open market pricing heading into 2023, as inflation starts to come down and maybe there's a bit more uncertainty regarding economy and volumes going forward. Are you seeing any change in behavior from maybe some of the smaller competitors in this environment relative to last year? No. Last year, we put out the highest level of pricing we ever have in small container in the open market. We had the highest percentage of retention of that price that we've ever had in our history, which is really a staggering number. I think it speaks to, right, the value of our service that we're providing. It also speaks to the broader context with everything else inflating. Those numbers were quite consistent across the quarters, right, in terms of our ability to retain price, right? We're seeing strength here in the early part of the year on that. We're mindful of the environment. Listen, all of these smaller competitors, right, they have truck costs that are going up. They need to buy new equipment after some supply chain challenges, right? They have labor costs that are going up. They need to price to cover their costs, which I think is supportive of broader pricing environment. Yeah, that makes sense. Then on leverage, how are you thinking about leverage, in this environment? What's the right target for you, before investors should expect meaningful capital returns through buybacks? Yeah, we've talked about kind of that sweet spot for us being right around three times. We're a little bit over that right now. We expect to be there in the next, you know, call it six months. You know, at which point then we would, you know, look to kind of return to that normal level of looking at the, you know, repurchases and so on and so forth. Sounds good. I'll turn it over. The next question comes from Stephanie Moore of Jefferies. Please go ahead. Hi, good afternoon. Thank you. Beth. I certainly appreciate this, the level of detail of your 2023 expectations. I think a lot of puts and takes in this environment. It might be helpful if you could just outline the areas where you kind of see the greatest source of upside, you know, inflation moderating, some tech investments. On the flip side, you know, where you see the greatest risk to maybe hitting these targets as well. Thanks. Yeah. From an upside perspective, I, you know, we mentioned this earlier, is that we are expecting inflation to remain persistent throughout 2023. You know, again, you know, Jon just talked about the fact that we're pricing at higher levels in 2023 and early in 2023 than we did even in 2022 because we expect inflation to remain sticky. If that does come down, that is certainly an opportunity in order to sit there and to, you know, drive, you know, better performance than we anticipated. You do have to remember, some of that inflation are wages, and wages typically go in annually. Once you put that wage out in the marketplace, you're not pulling that back. There is some stickiness to the inflation, but certainly as it relates to some third-party costs and some of the maintenance-related expenses, transportation expenses, if those come in, that would certainly be a source of upside. Great. On the downside? Sorry. We just talked a little bit about, you know, recycled commodity prices. Again, we've expected a recovery, but we've also dimensionalized it for you. You realize it's a relatively, you know, modest recovery that we're expecting. If they stay at current levels, you know, that would be a little bit some downside relative to our expectations. I'd just say the broader macro environment, obviously. We've been through a pandemic and war at the doorstep of Europe and China virtually shutting down and supply chain challenges and inflation. I think we're prepared for uncertainty in a dynamic environment. Again, we're running the business not just for the quarter of the year, we're running it through the cycle and making decisions accordingly. We're mindful that we may have to adjust or, you know, adapt the business if new things emerge. Absolutely. Just on the second Polymer Center going up, starting to go up this year, you know, maybe you could talk a little bit about some of the initial, you know, KPIs or returns you're seeing or expect to see, just given the demand from your first center and kinda what drove you to decide to open up a second here? Yeah. Across, we think we're gonna have at least four centers across the U.S. We think when they all get up and running at scale, it's kind of a $250 million incremental revenue business for us. We think the EBITDA margins are gonna be certainly north of 30%, right? Very attractive IRRs on those investments. I think we're gonna beat that pro forma, right? We know from the conversations we've had and the pricing that we're getting right now, we're starting to take orders, obviously, for the center in Las Vegas. I'm very confident we're gonna beat those numbers in the pro forma. Great. Thank you so much. The next question comes from Michael Feniger of Bank of America. Please go ahead. Yes, thanks for taking my question. I understand that you guys have been pricing ahead of cost, and there's been a lot more discipline in the industry. Is there just like a step function change in terms of how Republic Services is pricing from a few years ago? I mean, you guys went through some years of intentional shedding some business. I'm just wondering if the quality of the business now, you feel that you can have a wider price versus cost spread than maybe the Republic Services a few years ago. Yeah. No, I think it's a good question, Michael. Certainly, you highlighted it, certainly customer mix is a hidden element or hidden factor in being able to get price. We went through some intentional shedding, right, which had some, you know, negative drag on our volume for a few quarters when you look a few years back. The quality of our revenue is much higher than it was historically, and we feel good about that. That's all the way across from national accounts to small container, to getting out the last remaining broker work out of the system, to municipal, and getting a fair escalator into those contracts. I think the overall health of our pricing across the portfolio, while not perfect of course, is much, much better than it was a few years ago. Then you combine that with let's capture and the tools that we have to really start to, you know, grind out a few extra bits here and there across our 13 million customers of understanding willingness to pay. Then on the other side of that, with the right platform, driving productivity and changing our cost position in the business. When you've got a healthier customer mix, right, and, you know, better ability to price with a cost structure that I think is healthy and getting healthier, I think that does create the context for continued margin expansion over time. Great. Brian, you touched on it with a question earlier, but just to dig a little deeper, can you actually talk about the cost inflation, how that kind of trended through the fourth quarter and what you're seeing in early 2023, what you guys are kind of embedding there? I think you're saying you're not really embedding a roll over there. Just curious what you actually saw through the quarter in early 2023, and what we kind of expect or what you guys are at least embedding in the guidance there. Thanks. Yeah. If you think about for the full-year for 2023, we're in that, you know, call it 5% to 5.5% inflation, you know, type range. Again, when you take a look at the 6.5% expected yield on related revenue, that's how we're driving that 80 basis points or so of expansion in the underlying business. That's about the level we saw exiting the fourth quarter. We expect it to remain relatively consistent throughout 2023. Thank you. At this time, there appear to be no further questions. Mr. Vander Ark, I'll turn the call back over to you for closing remarks. Thank you, Andrea. I would like to thank our 40,000 employees for their efforts that enabled our strong 2022 results. The success of our strategic investments is made possible due to their hard work and commitment to serving our customers. Have a good evening and be safe. Ladies and gentlemen, this concludes the conference call. Thank you for attending, and you may now disconnect.