Good afternoon. Welcome to the Republic Services first quarter 2023 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 touch-tone 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, sir. I would like to welcome everyone to Republic Services 1st quarter 2023 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 our 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 rerecording of this conference call, you should be sensitive to the date of the original call, which is April 27th, 2023. 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 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, and thank you for joining us. We started the year strong and are pleased with our first quarter results. Our performance reflects our ability to grow across our business while enhancing profitability. We remain well-positioned to capitalize on additional growth opportunities in the marketplace by providing the most complete set of products and services to customers. During the quarter, we delivered revenue growth of 21%, including 11% from acquisitions, generated adjusted earnings per share of $1.24, and produced $496 million of adjusted free cash flow. We continue to believe that investing acquisitions is the best use of free cash flow to create long-term value. We invested $224 million in acquisitions during the first quarter. All transactions were in the recycling and solid waste space. Our acquisition pipeline remains supportive of outsized levels of activity in both the recycling and solid waste and Environmental Solutions businesses. We continue to see opportunity for well over $500 million of investment in value-creating acquisitions in 2023. We are making great progress on the integration of US Ecology and increasing the profitability of our Environmental Solutions business. We continue to adjust prices to earn an appropriate return on the valuable services we provide. The acceptance of our pricing actions remains high, with very little customer defection. Cross-selling our complete set of products and services continues to run ahead of plan, with more than $60 million in new sales to date. We have now achieved over $40 million of annualized cost synergies. As a result of the actions taken in the Environmental Solutions business, EBITDA margin improved to just over 20% during the first quarter. We continue to generate outsized growth by executing our strategy, supported by our differentiating capabilities, Customer Zeal, digital, and sustainability. Regarding Customer Zeal, we remain laser-focused on providing a world-class customer experience to drive increased loyalty and organic growth. Our customer retention rate remained at 94%. We continue to see positive trends in our net promoter score, supported by improved service delivery. Our frontline colleagues, including drivers, technicians, and the customer experience team, are determined to fulfill our daily commitments to our customers. We delivered robust organic revenue growth during the quarter and simultaneously increased in both price and volume. Core price on related revenue increased to 9.3%, and average yield on related revenue increased to 7.4%. Organic volume growth on related revenue was 1.8%. Volume growth was broad-based across our market verticals and geographies. Turning to digital, we continue to make progress on deploying RISE tablets in our collection business. Over 75% of our residential routes are operating with RISE tablets. The remaining routes are on track to be completed by mid-year. This technology is the foundation that will allow us to further enhance our digital service offerings and improve our customers' experience. Moving on to sustainability. We are investing in differentiated capabilities to leverage sustainability as a platform for profitable growth. In February, we announced our plans to significantly scale our electric fleet through our long-term agreement with Oshkosh. We will begin operating two fully integrated electric recycling and solid waste collection prototypes later this year and expect to start buying at scale in 2025. This announcement supports our industry-leading commitment to fleet electrification through a multi-supplier strategy. Development of our Polymer Centers in Las Vegas and the Midwest remain on track, with the centers becoming operational in late 2023 and late 2024, respectively. The 57 renewable natural gas projects being co-developed with our partners are advancing. We expect at least six of these projects to commence operations this year. Our approach to sustainability includes our aspiration to be the employer of choice in the markets that we serve, and we are seeing positive results. Turnover rates continue to improve, and we are now below 2019 levels. As a result, we are better staffed to capitalize on growth opportunities in the market. We continue to be widely recognized for our comprehensive sustainability performance. For example, we were recently named to Barron's 100 Most Sustainable Companies list, Ethisphere's World's Most Ethical Companies list, and Fortune's list of the World's Most Admired Companies. A positive momentum in our business continues to build as we harness the power of our differentiated capabilities. We will continue to invest for the future profitable growth to deliver the results that create unmistakable value for our stakeholders. I will now turn the call over to Brian, who'll provide financial details for the quarter. Thanks, Jon. Core price on total revenue was 8.2%. Core price on related revenue was 9.3%, which included open market pricing of 11.7% and restricted pricing of 5.4%. The components of core price on related revenue included small container of 12.6%, large container of 9.6%, and residential of 8.4%. Average yield on total revenue was 6.5%. Average yield on related revenue was 7.4%, an increase of 70 basis points when compared to our fourth quarter performance. We continue to price new and existing business ahead of cost inflation to drive margin expansion in the underlying business. Volume on total revenue increased 1.6%, while volume on related revenue increased 1.8%. The components of volume on related revenue included an increase in small container of 1.6%, an increase in large container of 80 basis points, and an increase in landfill of 8.6%. Landfill was primarily driven by a 21.7% increase in special waste revenue. Moving on to recycling. Commodity prices were $105 per ton in the quarter. This compared to $201 per ton in the prior year. Recycling, processing, and commodity sales decreased revenue by 90 basis points during the quarter. Current commodity prices are approximately $115 per ton. We believe that commodity prices will continue to recover in the second half of the year as the global supply-demand imbalance continues to correct. Turning to our environmental solutions business. First quarter environmental solutions revenue increased $309 million over the prior year, which primarily relates to the acquisition of US Ecology. On a same-store basis, environmental solutions contributed 50 basis points to internal growth during the quarter. Adjusted EBITDA margin for the Environmental Solutions business was 20.6%, a sequential increase of 350 basis points. Total company adjusted EBITDA margin for the first quarter was 29%. This compares to 30.4% in the prior year. Margin performance during the quarter included a 130 basis point decrease from acquisitions, which includes 90 basis points related to US Ecology, a 60 basis point decrease from recycled commodity prices, and a 30 basis point decrease from an additional workday, partially offset by a 40 basis point increase from net fuel and margin expansion in the underlying business of 40 basis points. Adjusted free cash flow was $496 million in the first quarter, or approximately 25% of the midpoint of our full- year guidance. Free cash flow conversion was 47.6%. Total debt was $12.1 billion. Total liquidity was two and a half billion dollars. Our leverage ratio at the end of the quarter was approximately 3.1 times. With respect to taxes, our combined tax rate and effects from solar investments resulted in an equivalent tax impact of 26.3% during the first quarter, which was in line with our expectations. With that, operator, I'd like to open the call to questions. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. In the interest of time, we ask that you limit yourselves to 1 question and one follow-up question today. If your question has been addressed and you would like to withdraw your request, you may do so by pressing star then two. If you're using a speakerphone, please pick up your handset before pressing the keys. The first question comes from Toni Kaplan with Morgan Stanley. Please go ahead. Hi there. Thanks so much. Pricing seemed really strong this quarter. I know you talked about it sort of decelerating through the year, but just wanted to get your latest thoughts, where any additional color on pricing and how second quarter looks as well? Thanks. Yeah, certainly a very strong environment still. You know, kind of maintain that momentum for the first half. For lots of reasons, we think that sequentially comes down into the second half, right? As some inflation starts to modulate and in our restricted portion of our business, obviously, right, CPI comes down in terms of where the comps go. We also expect cost inflation to modulate through the year. We think we'll have, you know, pretty good price margin spread throughout the year, which will lead to a positive result for the year. Terrific. Wanted to ask if you could just give us an update on how you're thinking about the specialty waste opportunity, talk about any of the synergies and areas of potential future opportunity there. Thanks. Yeah, really strong quarter for us, obviously, right? Over 20% and broad-based. You know, a portion of that is certainly the cross-sell opportunity that I talked about in my prepared remarks in that we're offering customers a comprehensive and integrated offering. You know, part of that is showing up in our recycling and solid waste business and going from special waste into our landfill. That's the benefit of our offering, right? We can take things into liquid hazardous waste. We can take solid hazardous waste. We can take special waste, so we can provide a range of solutions to customers, and that's put us in a pretty differentiated position in the marketplace, and excited about the momentum that the team has. Yeah. Also what I would add to that is that our pipeline for special waste opportunities remains very strong. You know, about 20% of that pipeline is a direct result of cross-sell opportunities. Terrific. Congrats again. Thank you. Thank you. The next question comes from Tyler Brown with Raymond James. Please go ahead. Hey, good afternoon, guys. Hey, Ty. Hey. Sorry, I just wanna be clear. Are you effectively just reiterating all the pieces of the guidance? Yeah. We're certainly, feel good about the guidance at this point. Okay. Okay. Just wasn't totally 100% clear. You know, kind of going back and following on the previous question, I know pricing was strong out of the gates. Can you talk a little bit about unit cost inflation? I think you guys guided to something like 5%- 5.5% unit cost inflation for 2023, I think, on the last quarter call. Do you kinda still see that? Are you still seeing, you know, maybe inflation starting high and then it kinda easing as the, as the year goes on? Yeah. Start where you ended. Certainly starting higher and modulating throughout the course of the year. You know, I think it's gonna be a little higher than the 5.5%, probably closer to 6%, would be our best look at this point right now. You know, a few different factors on that. You know, certainly truck delivery would be one where. You know, we got about 90% of our trucks last year, and we think we're gonna get probably that 10% from last year and about 90% of this year, and we're growing. That means we're buying some older trucks, or we're operating some older trucks to service those growth opportunities, and they have a higher cost per engine hour. That's elevated maintenance costs. It's higher cost. It's not necessarily unit cost inflation on a part, for example. It's just operating more expensive vehicles. You know, hopefully in 2024, the suppliers catch up, but we can kinda get back on track. That'd be one example why it's just a little bit higher than we predicted. Okay. All right. That's perfect. Just my last one here. Going back to Environmental Solutions services. There's a lot of traction there. It seems like that franchise is maybe run rating $1.5 billion in total revenues, and I don't have the calculation on my fingertips here, but is that kind of like a low 20% margin today? I think you had talked about maybe getting that to 30% longer term. Do you still see that, Jon? Kind of what are the couple of the key drivers to get you there? Is it just we need to go through a couple more cycles of pricing? Just any thoughts on timing and how we go from, call it, 20% to circa 30%. Listen, I think pricing is certainly gonna be a huge lever in terms of how we get there and the primary lever. I think, you know, a little bit of scale benefit obviously, which allows us to, you know, leverage our overhead. We've built this thing for growth, so as we continue to grow, we get some leverage on our overhead spend in that space as well. And just additional, you know, integration opportunities across recycling and solid waste business, right? We haven't really taken advantage of all those things yet. Then the last one will be just cost management, right? Cost discipline and making sure that we are pricing work appropriately and understanding the cost position of all that work so that all of our individual opportunities and projects are profitable. We've made great progress on that, but there's more room in front of us. This was the investment thesis when we did the deal, obviously. We did it based on intrinsic and $40 million of cost synergies. We've just gotten there quicker than we expected, right? We've gotten the $40 million already. I think we're going to end up closer to $50 million when we're said and done. We thought there was upward pressure on pricing. We thought there was cross-sell opportunities, and we said we'd get $75 million-$100 million over three years. We've already gotten 60, which tells you... With a good pipeline, which tells you that we're going to get to that $75 million-$100 million quicker than we expected. We know that when we price or we anticipate there'll be some customer fallout churn, but the net dollars work over time, we've just seen very, very little churn, which speaks to the fact that this is a valuable offering. It's a very small portion of the vast majority of our customers' cost structure, and that we're going to continue to price for the value we deliver. Yeah, perfect. No, lots of momentum there. Appreciate the time, guys. Thanks. The next question comes from Noah Kaye with Oppenheimer. Please go ahead. Good afternoon. Thanks for taking the questions. There's been maybe some mixed messages today in earnings, previous earnings around the macro, the health of the macro. I have a feeling your answer may be not so mixed, maybe a little more unambiguous. Can you talk today about the health of the customer, the sustainability of your pricing? You mentioned that your retention rates are at 94%, so you know they're sticking. Looking at your both the pricing and some of the volume trends you reported, they're very robust. Would just love your perspective on what you're seeing and the staying power of some of these trends. Yeah, let me put a caveat on it first, which is we remain humble and dynamic, right. The last three years have taught a lot of people that there's fundamental uncertainty in the market. I read the same things you do, which is people have been talking about a recession year now for 12 to 18 months. We have our eyes and ears open, and that we'll be nimble should that occur. All that being said, we see a lot of positive signs, right. We're seeing strong growth and pricing. Let me give you a number or a perspective. In our open market, right, we're sending out a higher growth price increase than we ever have before. Our realization rate, which is the% of that pricing that sticks, right, customers don't call back to negotiate, et cetera, is the highest it's ever been, which is somewhat of an astounding number to think about. Hey, we're putting a lot of price. That price is sticking in the marketplace. We're growing. We talked about special waste in that pipeline being strong. We're starting to see a commodity rebound, which, you know, we put a modest rebound in our plan, and I think we feel really good that the outlook there looks strong on that front. You know, we've seen a little decline in temp units year-over-year. We anticipated that in our plan with where residential and commercial construction were going at the end of last year. Our yield number is very, very strong there, so we're doing some of that to ourselves in terms of yielding on those assets. We're pretty confident in the very near term and cautiously optimistic around the demand environment for the remainder of the year. Yep. Then maybe it's a little bit of a follow-on, but also housekeeping. You know, can you comment to what MSW tons did? Did the quarter have any benefit on the cleanup related to the train derailment in Ohio? I don't know if, you know, remediation work ended up being significant. Yeah, let me address the MSW. MSW volume was up 1.2%. I think more importantly, though, MSW yield was up 5.6%. Very strong pricing in that portion of our business. The specific derailment in Ohio, I think is the one you're referring to, a de minimis impact in the quarter. Okay. It was really all just, you know, strong demand in kind of, you know, the environmental services part of the business. Can you give us sort of a sense of how much of that was price? Very strong, very broad-based. Listen, we've gone out with now multiple double-digit price increases, which is sticking. Obviously, that business is more unique and there's a lot of mix elements because you're doing a lot of individual project work and a lot of things like special waste on the hazard side that come in, right? We haven't yet developed our yield metric, which we aspire to do over time for that portion of the business. I'd say the industrial economy from our seat in the park is still very strong. Now, it's not universally strong. Automotive, for example, would be a spot that's a little bit down. We're seeing some of that in the Midwest, which has a lot of manufacturing capacity there. Other parts are very, very strong on the industrial side. Okay, great. Thanks for the color. The next question comes from Walter Spracklin with RBC Capital Markets. Please go ahead. Yeah, thanks very much, operator. Good afternoon, everyone. Hey, Walter. I wanted to go back to the recession question and really talk a bit. I know your resiliency is quite admirable during the cycle. Just curious with, you know, you have a little bit of a different book of business now compared to 2008, 2009, and just wondering what your thoughts are on whether, you know, the resiliency of your earnings profile is as good as it was back then or if the addition of US Ecology has added any volatility there. Particularly on special waste, I don't know if you've answered many questions about your sensitivity to a recessionary environment on your special waste volumes, if you have any color on that. Yeah. Walter, I would say that the first thing to keep in perspective is that Environmental Solutions revenue in total is about 10% of our book. Right? You got to keep that in mind. That being said, a good portion of this revenue stream is, has a consistent and a recurring nature to it, right? Increasingly more, we're trying to get closer to the customer to make that more of an annuity type revenue stream. Is it exactly the same? Maybe not. Is it pretty close? I would say yes. Sensitivity on special waste, any sense there? Yeah, I think you get moving pieces there. Obviously, you know, when the economy goes down, right, people will get cautious, and things that have discretion to them, you're gonna see some delays. The vast majority of our special waste, those are jobs that need to get completed and need to get done. It's not a matter of the job getting canceled, it's a matter of the job getting pushed. I'd say the counterbalance of that right now is just the all of the infrastructure spending and government funding. We see a lot of those opportunities just starting to emerge, but we really haven't taken advantage of a lot of that because that spending hasn't flowed all the way through to jobs being commissioned yet. Okay. Those are my two questions. Thanks very much. Appreciate the time. Thank you. The next question comes from Jerry Revich with Goldman Sachs. Please go ahead. Hi, Jerry. Jerry, you might be on mute. Jerry, is your line muted? Operator, why don't we move on to the next question? Okay. The next question comes from Sean Eastman with KeyBanc Capital Markets. Please go ahead. Hi, team. Nice start to the year. you know, I kind of hate to do this, but just pressing on the guidance, I mean, not much of a mention on kind of where we stand. To me, it kind of feels like we're running ahead of schedule, so I just wanted to run that by you. Is it fair to say that, you know, you know, perhaps with the momentum in Environmental Solutions, clearly price volume looking strong that we're, you know, kind of tracking a little ahead of that, initial outlook for the year? Hey, we feel really good about the start to the business. We said, you know, outlook remains quite positive. As you know, it's a seasonal business. You get a ramp up here in Q2 and Q3. You know, we'll want to see that ramp up fully take hold. We're starting certainly to see some of that already. That gets into full swing here in May and into the summer months in the northern part of the country. We'll come back in July when we talk again and, you know, see our progress there. We'll tell you if we have any update at that point. Okay. Understood. Perhaps the moving parts on the year-on-year margin bridge in the first quarter would be helpful to assess. I mean, did those, you know, kind of commodity inputs come through as expected? That one would be good to jump into. Yeah. From a commodity perspective, we're tracking almost exactly the way that we thought we would, right? We thought we would start the year right around this, call it $100 a ton, you know, sequentially increasing with a full- year average about $125 per ton. Right now we would say with the, you know, with what we saw in the first quarter on average, plus where current prices are at $115 per ton, it's playing out exactly the way we thought it would. When you think about the margin cadence of that, you look, you know, in this quarter it was a 60 basis point headwind. We think it's a relatively consistent headwind in Q2 that drops to a, call it a 20 basis point headwind in Q3 and then flips positive in Q4 at those levels. Okay. Perfect. Perfect. One last quick one for me. I just want to make sure I understand this big special waste print in the quarter. I mean, are you guys saying that is a reflection of the cross-sell opportunity really coming through on the Environmental Solution strategy? Certainly in part, right? That's where you're gonna see it. When you actually sell into the recycling and solid waste business, what you're gonna see is that's where a good portion of it's gonna come in. That's a lot of the volume aspect of it. At the same time, we're seeing that, you know, again, we're talking about total revenue being up about 22%. It's a pretty good split between both price and volume. It's a combination of both, and that's gonna be a reflection again of just, you know, healthy activity, which includes the benefits of that cross-sell. Okay, understood. I appreciate the insights, guys. The next question comes from Stephanie Moore with Jefferies. Please go ahead. Hi. Good afternoon. Thank you. Hi, Stephanie. Hey there. You know, I wanted to touch a little bit on the M&A environment. I think you noted that you expected to execute on, you know, I think, you know, close to $500 million in M&A this year, not included in the guidance. Maybe if you just wanted to touch on, you know, you know, what you've seen, you know, for the first quarter of the year and kind of any changes or expectations there. I know you noted that, you know, a lot of those acquisitions is in the recycling and solid waste business, but what about more so in the specialty waste? Is that an opportunity, this year as well? Yeah, we put out in our initial guidance, we anticipated spending, you know, $500 million. I think we'll exceed that number as we go throughout the year. We have a really attractive pipeline, both in recycling and solid waste and Environmental Solutions. I think you'll see some of those deals come across through the remainder of the year. You know, we again, things are at different stages, right? We're all the way in the front end of conversations to the back end of letters of intent, and we report on things once we, you know, sign and close those deals. You'll hear more in the second quarter. The exact timing of where that flows between Q2, Q3, and Q4, obviously, we don't predict that because things can be pulled forward or they can move out a few months here or there. The pipeline remains strong, I think both for 2023 and all the way into 2024 at this point. We feel really good about the pipeline. Got it. You know, maybe touching back on the pricing and the cost environment as well. You know, you just noted on, you know, 2024 and, you know, obviously a lot of things can happen between here and there, but how would you think about that just general structural spread cost of between price and cost as we move through 2024, given some of the maybe headwinds this year and you know what next year in theory could be a more normalized environment if that exists anymore. How would you view just how that spread has changed over time versus maybe historically? Yeah, listen, we remain committed to pricing ahead of our cost inflation, to allow us to expand margins, across the business. We've talked about, you know, 30 to 50 basis points of margin expansion. That's kind of the pace that we go after, and that would be our initial ingoing assumption in 2024. A lot can change between now and then in terms of, could we get more than that, right? If we can, do that and maintain and improve the health of our overall business, we'll certainly do that. More to come, down the road here on 2024 perspectives. Thank you so much. The next question comes from Tony Bancroft with Gabelli Funds. Please go ahead. Yeah, thanks so much for the opportunity. Very nice quarter. Just a question on PFAS. Could you just sort of review, I know there's a lot of news articles coming out about that right now and some potential rulings and some regulation coming out. Just maybe review what that potentially means for you and landfill cost structure, potential opportunities, maybe a review of that would be helpful. Yeah, very important regulation. Again, we're not, opposed to regulation, right? We happen to, if it's well constructed. We have a seat at that table, and we're involved in those conversations to make sure that we don't, as a company or even an industry, get penalized for something that we catch, right? We didn't create the problem. People should be happy that we've got the modern infrastructure and systems to protect the environment. Net net, we see it as more of an opportunity over time, especially with our Environmental Solutions business and being able to serve customers. Could that have some elevated costs in our landfill? Yes. We've got a really good history of passing those types of costs, regulatory costs onto customers. You know, more to come on that as we move forward. We're very much in the conversation, and we'll be active in shaping the legislation in a way that it enhances the business versus penalizes the business. Thank you for that. I guess my second one, just on electrification. You touched on it in your comments. Just maybe again, an update on that. You've talked about in the past, how is that going? You know, there's been some, I think people talking about infrastructure issues and making it all sort of work. What's your view on it? Is it on track? Is it off track? Just maybe you could give us some thoughts on that. Very much on track, right? We've got, you know, more than 20 trucks riding around the country right now that are electrified through multiple manufacturers. We talked about our Oshkosh Corporation partnership, that's the first kind of bottoms-up zero emission designed vehicle and excited about that. You know, we'll be, you know, that number of 20 will go, you know, north of 50 next year. By 2025, we'll have several hundred vehicles. It is important, it's not just the vehicle, it's the system. You need to have the infrastructure, you need to have understanding of government regulations, you need to understand the incentives. We've been working for years on those things and have, you know, multiple infrastructure projects already going on, anticipating where we're gonna put vehicles in, working closely with customers. We feel we're on track. Listen, innovation is hard. There'll be some bumps and twists and turns, but we're really, really confident that this is a product that the customers want to buy and that this is very viable for, again, for us to operate in a way that enhances our business versus penalizes it. Thanks so much. Congratulations, Jon and team. Thanks, Tony. The next question comes from Tobey Sommer with Truist Securities. Please go ahead. Thank you. When you look at your M&A bogey for this year and you say you have pretty good visibility in the pipeline for next year as well, what does the pipeline look like in terms of distribution across your businesses? Is it? And has that changed as you've engaged in conversations? If you go back from five years ago, it certainly has changed when we were, you know, predominantly vastly recycling and solid waste player, and we've obviously grown the Environmental Solutions business. To Del's point, right, that's still about 10% of the business, broadly. You know, the pipeline is probably an 80-20 mix of 80% recycling and solid waste and 20% Environmental Solutions. That will grow faster just because there's more geographies to fill in, there's new product lines to build out, so there's more kind of inherent growth in that in terms of our starting point. The balance of the business will still be recycling and solid waste and feel, you know, really confident about that. In any given time period, right, that could shift. A single deal could flip it to 80-20 in any given quarter. If you look across a longer time horizon of three to five years, I think that 80-20 mix is a pretty good barometer. Right. Thank you. Year to date, if you look at your employee base, what has the trend been like in, not just employee turnover or, you know, perhaps, improved, turnover and attrition rates, but also the heavy lift that it is to recruit and hire, you know, new ads and train them? Are both of those sides of the equation getting easier? Yes, turnover is down. employee engagement is up from a very high by watermark. People are engaged, right? Turnover is down, just the recruiting situation in the last four to five months has substantially improved, right? Number of applicants per open rec, right, has substantially improved. There's still pockets of tightness around, so it can be very geographically dependent. From a broad-based macro level, I'd say the situation versus six months ago is substantially better. Is there room for continued improvement or are we already at healthy metrics if you make a longer-term comparison more than just sort of the great recession and six-month ago period? We talked about turnover being below 2019 levels, right? We aspire to continue to grind that down, you know, get a 30 to 50 basis points of product reduced turnover long term would be great for us. Turnover is never gonna be zero. People move and have, you know, changes in life circumstances, there's always an opportunity to bring in new talent, we'll look to bring that down. We feel like right now we're at a very healthy level and that we can continue to improve from here. Thank you. The next question comes from Jerry Revich with Goldman Sachs. Please go ahead. Good afternoon. Can you hear me now? Yeah. Welcome back. Thank you. I wonder if we could talk about the performance in the quarter. Your margins were up about two points sequentially, 1Q versus 4Q, which is a good bit better than normal seasonalities. Is it possible to parse how much of that was price cost on the municipal solid waste part of the business? You mentioned the ESPs. I'm wondering if we just flesh out the rest of that bridge in terms of that performance versus normal seasonality. Yeah. You know, Jerry, we mentioned sequentially the, you know, Environmental Solutions business improving 350 basis points. Also in the fourth quarter, remember, as we outperformed the year, we had, you know, heavier incentive compensation expense in the fourth quarter. I would say there were some things that were more unique in Q4 as far as expenses are concerned. Off to a strong start this year, I think that's why you're seeing more of that sequential improvement. This year, we would expect just more normal seasonality and a, and a Q4 that looks like what you've seen in the prior 3 to 4 years as compared to what you saw last year from a margin perspective. Super helpful. Can I ask, it feels like costs are stabilizing. Should we look for the price cost gap sequentially to improve in the second quarter as a result of that dynamic? When we think about some of the cost inflation, we see, you know, some of it anniversarying, which is just a little bit more of when we saw some of those cost increase go into play last year. Yes, we start to anniversary some of those things in the second quarter. We start seeing a lot of that more on the wage side. We also start to see some of that modulate from a comp perspective on transportation costs beginning in the third and fourth quarter. We would expect the inflation levels to decrease as we move sequentially. Again, it's not that we're seeing a significant price decrease in the current period, it's just that we're anniversarying the cost increase that went in in the prior year. Yeah. Got it. Lastly, can I trouble you to share with us the incremental tailwinds to your business from the plastics and landfill gas investments that are scheduled to come online for 2024 versus 2023 and 2025 versus 2024? When do we get the most significant step up relative to the Canons? Let me start with the plastic side on the Polymer Centers. We start to see that in 2024, start to layer in with, you know, call it, $15 million or so of EBITDA, it really ramp up into 2025 and into 2026 until you get to a run rate of, call it somewhere in that, you know, $75 million-plus type EBITDA range. When you take a look at from a gas perspective, most of that you're starting to see the first projects come online towards the end of 2023, most of the contribution coming in in 2024. You know, you could see, you know, $25 million-plus type incremental EBITDA in 2024, then sequentially in a $15 million-$20 million per year until we get to that $100 million worth of total contribution by 2028. Super appreciate it. Thank you very much. Got it. The next question comes from Kevin Chiang with CIBC. Please go ahead. Hi. Thanks for, thanks for taking my question. Maybe just on Environmental Solutions, obviously a good showing in Q1 here. You continue to make good progress. I get the sense early on when you acquired US Ecology, there was a fear that this business was more cyclical. Just wondering, you know, as you cross-sell more and as you kind of fold this under the RSG umbrella, do you think it changes the cyclicality of that business? Like, does the customer look at that service differently if they're also buying other RSG services? I know it's early days, but just wondering how that experience has been, just given the broader economy has been, you know, shaky here. I think two things are true. When you're just a predominantly a post-collections player, everything you see can look variable, and cyclical because it could be a recurring revenue stream, but that provider might, you know, farm that out or source that out to a few different places looking for price. When you get closer to the generator, right, then you have control of that product. Now, could they, you know, take that somewhere else? Of course, they could over time. When you provide excellent service and you have an integrated offering, you become stickier. Huge opportunity that we're seeing right now to take things that might have looked more cyclical or volatile or variable to become more consistent and recurring in the revenue stream. That doesn't mean that'll be 100% of it like we have in our current business, right? We have some event-based work on the landfill side. We'll certainly have some of that, but over time, the profile will migrate closer to the recycling solid waste side. Okay. That's, that's helpful. I apologize if this is somewhere in your, in your release, but if I look at, you know, your organic growth composition, let's call it, you know, 80, 80- 20 split between, you know, yield and volume or price and volume, what would that look like today in your, in your environmental services business if I were to deconstruct the organic growth between volume and price? I apologize if I missed this earlier. Yeah, I would probably say it's probably relatively similar, you know, just from the perspective of some of these are, you know, project related jobs. We have seen. That being said, we've seen really good pricing in that business, but we've also just seen an increase of activity at the same time, which is really a, you know, a function of now offering the, you know, most complete set of products and services in the space, right. Again, we're seeing a combination of both, and that's what's really driving, you know, the outsized revenue growth in that portion of the business. Excellent. That's it for me. Congrats on a great start to the year. Thank you. The next question comes from Michael Feniger with Bank of America. Please go ahead. Hey, everyone. Thanks for squeezing me in. Brian, the growth on the ES side and now layering in the incremental EBITDA from plastic recycling and the landfill gas in 2024 and beyond, does that change how we should be thinking about the free cash flow conversion and the improvement you guys are seeing there and potentially going forward? Well, look, I mean, we said, you know, that we, you know, rewind the clock two, three years ago, and we were a high 30% free cash flow conversion company. We've moved that into the mid-40s, and we said we have line of sight into the high 40% and beyond, right? We're working on these things, and again, those are some of the things that we're gonna do in order to achieve that level of performance, even while we're overcoming, you know, some headwinds in getting into that high 40% interest expense is a headwind to free cash flow conversion. The expiration of bonus depreciation, which is phasing out over the next five years, those are all headwinds. Even in the face of those things, we think we can achieve that level of performance. Everything you just mentioned is the way we're gonna get there. Great. I realize a regional banking crisis, tightening lending standards is likely not an issue for you and your customers. Do you hear of any issues for some of your smaller regional co-competitors' ability to finance and buy new trucks trying to expand? Just curious how that changes the competitive dynamic or even some of the M&A opportunity going forward. I don't think we've seen that show up specifically. There's probably an example somewhere in our M&A pipeline of that being the case. I do think it's becoming more challenging, right? Just given supply chain challenges, right? We got 90% of our trucks. If you were a spot buyer of trucks, right, you're in, you know, a really tough spot, right? You're gonna be driving that truck not as a matter of months, but a matter of years before you can get allocation on that. Digital, we've talked about that a number of times. That being the second moat in the business and our investments in that space and the ability to service customers and connect it to our operations and core systems. I think those are all things that make it attractive time for smaller players to sell. Thank you. If you want to ask a question, please press star then 1 to be joined into the queue. The next question comes from Michael E. Hoffman with Stifel. Please go ahead. Hey, JV, hey, Del. Thanks. On the ES business, there's a bunch of pieces here. One, can you help fill in the gaps on what contributed to the 350 basis points sequentially? The idea of margin improving, I just wanna make sure I understand mix. If I, if I'm wrong, I'm wrong. I thought about a third of this was fixed asset disposal, so high margin, and two-thirds is sort of billable hour services, that are good returns, but lower margin. I'm trying to figure out where that mix goes in order to achieve the target that was suggested earlier in the call. Michael, first of all, I think that, you know, it's a little bit more, I would sit there and say in the 50/50 rather than the 30/70 between those two aspects of the business. I think you have a combination of things. First, let's talk about what happened sequentially. Right? We talked about, you know, price increases that we put in late in 2022 as well as early 2023. Certain aspect of that was certainly time. Also, as you just think about increasing utilization, as we're actually, you know, achieving the cross sell, some of that is that we're utilizing some excess capacity that's in that system. It's the flow through of that incremental revenue is at a very high margin. We're seeing the combination of the both. Jon mentioned it when we were on the call. Some of the way that we're gonna get there is also just by scale. When you take a look at the size of our areas, when you take a look at our four areas, they're managing less revenue than their counterparts on the recycling and solid waste base, which just gives us capacity to grow into that and leverage that SG&A. We built that area structure to look a lot like the recycling and solid waste side, even though they're managing less revenue, which gives them opportunity to grow without any, adding any additional SG&A costs. Michael, on the field services side of the business, some of that would be getting MSAs with large industrial customers who we know are gonna have a set of projects throughout the year. They're gonna be in different spots, but if you look over a 10-year period, right, you've got a relatively consistent demand profile of their level of project spend, cleanup. plant turnarounds, et cetera, that you can, when you have the MSA and the relationship, right, that revenue stream then starts to look very recurring versus it's just an event or a job. Okay. Yeah, that's always been the secret challenge or challenge for the billable hours world, is they, you know, they struggle with utilization of their billable hour resource. What I'm hearing you say is you're striking a balance on how to maximize that. Correct. On the price cadence for the remainder of the year to get to the 5.5%, can you help us with the mix between Open and Restricted through the remainder of the year so we sort of understand how to think about that that gets us to the total of 5.5% for the year? Yeah. If you think about it, we expect sequential increase into Q2 on the restricted portion of the book. That kind of, you know, hits the high water mark, and then it will decrease sequentially or expectation is it'll decrease sequentially into Q3 and Q4. We think the high water mark on the open market is here in Q1, and it decreases sequentially, but modestly. Again, I would sit there, and as we talked about earlier, I guess 60 days ago at this point, that the spread between the high and the low by quarter is not that significant. You know, call it 50, 60 basis points ± from the midpoint, and that's what we would expect for the full year. Okay. Just to be clear, I got these numbers, many numbers coming at us. The high water mark for the beginning of the year, sorry, I'm flipping pages. It was 11.7% in the open and 5.4% for restricted. Yes, that is correct. Right. Okay. That's on core price, Michael. That's core, not yield. What was the yields? Correct. That's core- The yield in total, we don't break the yield up between the two. The yield in total was 7.4% on related revenue. On total revenue, it was 6.5%. Right. Okay. again, if you're building it into a. Oh, go ahead. Yeah. No, no, go ahead, please. That's what I want. I was gonna say, the reason we break the two out is that if you're building it on a, on a model, and you're using the base, the entire base period revenue, I have used the total revenue number. Again, we disclose the related revenue because we don't calculate price on all components of revenue. Again, if you wanna get the true effectiveness of our pricing programs, that's why related revenue is applicable. Okay. Jon, you made a comment earlier to answer a question, you said 6%, and I missed. Is that 6% inflation or you thought yield would maybe land at 6% by the end of the year? We said cost inflation. We think throughout the year. We'll end up around 6%. We originally said going into the year, 5.5%. We're seeing a little elevation there, primarily here in the first and the second quarter. Again, we're pricing ahead of our expectations as well, we're getting the performance that we expected, just a little bit different path to get there. Right. Which would suggest the guide of five and a half probably works its way up to staying on top of that. We'll update you in July. Had to try. See you in New Orleans on the weekend. Thanks. At this time, there appears to be no further questions. Mr. Vander Ark, I'll turn the call back over to you for closing remarks. Thank you, Vaishnavi. I would like to thank our 40,000 employees for their commitment to deliver an essential service in the markets we serve. Our results are a direct reflection of the team's ongoing efforts to deliver best-in-class service to all our customers. Have a good evening and be safe. The conference is now concluded. Thank you for attending today's presentation. You may all now disconnect.