Good day, and thank you for standing by, and welcome to the Waste Management, Inc. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ed Egl, Director of Investor Relations. Please go ahead.

Thank you, Faith. Good morning, everyone, and thank you for joining us for our fourth quarter 2021 earnings conference call. With me this morning are Jim Fish, President and Chief Executive Officer; John Morris, Executive Vice President and Chief Operating Officer; and Devina Rankin, Executive Vice President and Chief Financial Officer. You will hear prepared comments from each of them today. Jim will cover high-level financials and provide a strategic update. John will cover an operating overview, and Devina will cover the details of the financials. Before we get started, please note that we filed a Form 8-K this morning that includes the earnings press release and is available on our website at www.wm.com. The Form 8-K, the press release and the schedules to the press release include important information. During the call, you will hear forward-looking statements, which are based on current expectations, projections or opinions about future periods. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties are discussed in today's press release and our filings with the SEC, including our most recent Form 10-K as updated by our subsequent Form 10-Q filings. John will discuss our results in the areas of yield and volume, which unless otherwise stated, are more specifically references to internal revenue growth or IRG from yield or volume. During the call, Jim, John and Devina will discuss operating EBITDA, which is income from operations before depreciation and amortization. Any comparisons, unless otherwise stated, will be with the fourth quarter of 2020. Net income, EPS, operating EBITDA margin, operating expenses and SG&A expense results have been adjusted to enhance comparability by excluding certain items that management believes do not reflect our fundamental business performance or results of operations. These adjusted measures, in addition to free cash flow, are non-GAAP measures. Please refer to the earnings press release and tables, which can be found on the company's website at www.wm.com for reconciliations to the most comparable GAAP measures and additional information about our use of non-GAAP measures and non-GAAP projections. This call is being recorded and will be available 24 hours a day beginning approximately 1 p.m. Eastern time today until 5:00 p.m. Eastern time on February 16. To hear a replay of the call over the Internet, access the Waste Management website at www.wm.com. To hear a telephonic replay of the call, dial (855) 859-2056 and enter reservation code 4865157. Time-sensitive information provided during today's call, which is occurring on February 2, 2022, may no longer be accurate at the time of a replay. Any redistribution, retransmission or rebroadcast of this call in any form without the express written consent of Waste Management is prohibited. Now I'll turn the call over to Waste Management's President and CEO, Jim Fish.

All right. Thanks, Ed, and thank you all for joining us. 2021 was another very successful year at WM. Our strong operational and financial performance continued throughout 2021, delivering full year results that achieved or exceeded our financial guidance, which we increased from our original expectations twice during the year. We also successfully integrated the Advanced Disposal operations, generating synergies that have already exceeded our initial expectations with further synergies to come. During 2021, we focused on driving disciplined organic revenue growth, advancing technology investments focused on customer retention and growth and cultivating our people-first culture. Execution on these priorities came together to produce record growth in full year adjusted operating EBITDA and cash from operations. It cannot be overstated how impressive it is that we generated more than $5 billion of operating EBITDA in a year like 2021. This robust operating EBITDA translated into all-time high cash from operations of over $4 billion, which allowed us to return a record $2.3 billion to our shareholders. Contributing to our operating EBITDA was our pricing where we finished 2021 on a very strong note as we made steady progress on covering the cost inflation in our business with excellent core price results across all lines of business. John will provide more details here, but we had record core price in both our landfill and residential businesses, two areas we've been particularly focused on over the last couple of years. Strong core pricing translated into the best collection and disposal yield that we've seen in more than a decade. Another great story about our pricing efforts is that we're still seeing strong volume growth and improvements in churn. 2021 churn of 8.4% is an all-time low. As 2022 kicks off, we're fully focused on recovering inflationary cost increases through our pricing programs and through the aggressive management of our cost structure. Our revenue management team is hard at work executing on the 2022 pricing plans so that we can recover the inflationary cost pressures in our business and deliver another successful year. In fact, we've recently seen several large customers who have historically been very price-sensitive, renew at significant increases. On the cost front, a big part of that management of our cost structure will be to materially improve our labor efficiency through the application of the technology investments we made over the last 18 months. Our expectation is to attrit between 5,000 and 7,000 positions over the next 4 years without replacements as these positions have become difficult to source and we expect that will continue to be the case. At the same time, we continue to focus on providing the best workplace for our employees and leveraging our asset network for growth. Regarding our 2022 financial outlook, Devina will provide more details. But at a high level, we expect to deliver total company revenue growth of approximately 6%, driving operating EBITDA growth of approximately 7% in 2022. It's fair to point out that both our revenue and our operating EBITDA guidance are at or above the high end of the ranges we targeted for the long term at our Investor Day in 2019. We expect margin expansion in the second half of the year with full year operating EBITDA margins expected to be flat to up 40 basis points compared to 2021. This sets us up for another year of robust cash generation. The extraordinary cash generation of our business positions us to plan a 13% increase in our 2022 dividend rate, while at the same time, making substantial increased investments in high-return renewable energy and recycling projects. Tara Hemmer was appointed as our Chief Sustainability Officer last summer, and she's charting a path to aggressive long-term growth for our sustainability businesses. In light of our very strong cash generation, we plan to invest approximately $275 million in 2022 to expand our network of renewable natural gas plants with incremental investments in 2023 through 2025 totaling approximately $550 million. We expect to build 17 RNG plants over the next 4 years, which would grow our RNG generation by 6x. With conservative assumptions, these projects are expected to generate annual operating EBITDA run rate of more than $400 million by 2026. And at today's higher prices, that operating EBITDA more than doubles. In the recycling business, we expect to invest $275 million in 2022 in MRF technology with incremental investments in 2023 through 2025 totaling approximately $525 million. These investments accelerate our automation of the recycling process, processing to reduce costs, improve product quality as well as expand our single-stream recycling footprint. Together, these projects are expected to generate annual run rate incremental operating EBITDA of approximately $180 million by 2026, assuming $125 per ton blended commodity price. These growth projects further WM's sustainability leadership by increasing the renewable energy generated from our landfill network, expanding single-stream recycling capacity and automating recycling processing to reduce costs and improve product quality. They also are expected to generate excellent returns that are superior to those of solid waste acquisitions. In closing, we delivered a fantastic year in 2021, overcoming the challenges the year presented. As we look ahead to 2022, we remain committed to advancing technology investments that differentiate us, automating our processes to reduce our cost to serve and leveraging our sustainability platform for growth. Our success would not have been possible without the best employees in the business and I want to thank all 50,000 of our team members for their contributions. I'll now turn the call over to John to discuss in more detail our operational results.

Thanks, Jim. Hey, good morning, everyone. Our team finished 2021 strong with fourth quarter organic revenue growth in the collection and disposal business of 6.5%. Our fourth quarter core price of 6.7% in the commercial line of business and 5.2% in our landfills clearly demonstrate continued discipline and pricing momentum. These strong fourth quarter pricing results were the leading contributors to robust collection and disposal core price of 4.8% for the full year. 2021 yield was also strong at 3.5% and reflects an improvement in rollbacks of almost 500 basis points as well as continued improvement in customer churn. As we move into 2022, our revenue management teams are focused on continuing to recover inflationary cost increases, improving residential profitability and remaining disciplined on disposal pricing. With the strong momentum we have entering 2022, coupled with our team's continued diligence, we expect to deliver core price of more than 5.5% and yield approaching 4%. Shifting to volumes. Fourth quarter collection and disposal volume grew 2.8%. For the full year, our collection and disposal volumes grew 3% and service increases outpaced service decreases nearly twofold. Organic growth trends in the first few weeks of 2022 have been encouraging even as some parts of the U.S. and Canada have seen spikes in Omicron cases during January. Commercial yards are tracking above 2021 levels. And while industrial hauls are modestly below last year, we see that as mostly due to weather disruptions in a few areas across the country. Overall, we expect 2022 collection and disposal volumes to grow about 2%, with commercial collection and MSW landfill volumes as leading contributors. Turning to operating costs. Adjusted operating expenses as a percentage of revenue increased 150 basis points year-over-year to 63% with commodity-driven impacts from recycling brokerage rebates and fuel totaling 100 basis points. The remaining increase was related to higher labor costs as overtime increased due to the highest number of COVID-related absences we have seen as well as some risk management costs. During the fourth quarter, our teams remain focused on controlling operating costs. And while the impacts of inflation and the tight labor market continue to put pressure on our metrics, there are positive trends in the fourth quarter results that position us well to deliver on our 2022 plan. Maintenance expenses improved sequentially as our continued efforts to standardize maintenance processes, particularly in our ADS locations, is reducing downtime and improving fleet availability. We also saw efficiency, net of incremental training hours, improving in all lines of business. We expect these efficiency gains to continue and overtime hours to improve as our teams are taking intentional steps to improve retention, and we see that making an impact as annualized driver turnover has improved every month since August. We estimate that our focus on operating efficiencies and productivity helped to moderate the impact of inflationary cost pressure by about 60 basis points versus the third quarter. So putting it all together, when you combine our pricing efforts with our progress on cost containment, we expect operating expense as a percentage of revenue to improve by the second half of 2022. Our collection and disposal business is well positioned to deliver great results in 2022 and so are our recycling and renewable energy businesses. As Jim discussed, our sustainability businesses are central to our growth strategy, and we're pleased with the strong results we're achieving in both the recycling and renewable energy businesses. In recycling, each quarter of 2021 earned a spot among our five most profitable quarters of all time, and we're anticipating an equally strong year in 2022. Our current outlook for 2022 is based on an average blended commodity price of $125 per ton, which is modestly above current values of $115 per ton. And similarly, renewable energy business delivered very strong 2021 results and is expected to match this earnings contribution in 2022 as two additional renewable natural gas plants come online. We expect our fifth plant to be operational early in the second quarter and the sixth plant to be online by the end of the year. Our 2022 outlook is based on a RINs price of about $3, which is slightly above our 2021 rate but below current RINs pricing. And finally, our integration of Advanced Disposal continues to go smoothly as we marked the first anniversary of the acquisition at the end of October. To date, we have combined virtually all the acquired operations into our billing and operational systems. And with $36 million of synergies captured during the fourth quarter, we exited 2021 on track to exceed our expectations for full run rate cost and capital synergies of $150 million. In closing, I want to thank the entire WM team for their focus on safely and reliably servicing our customers. The team has done an exceptional job managing our operations, and I know that this will continue in the year ahead. I'll now turn the call over to Devina to discuss our 2021 financial results and 2022 financial outlook in further detail.

Thanks, John, and good morning. Our teams worked tirelessly this year to provide essential services to our customers and communities, and we're proud of the results we accomplished together. 2021 operating EBITDA growth of 16.5% was achieved by accelerating collection and disposal core price, capturing robust commercial collection and landfill volume growth, successfully integrating the ADS business and delivering record-high recycling profitability. Controlling our discretionary SG&A spending and leveraging technology investments to reduce the cost of our sales and back office functions also contributed to the strong EBITDA growth in 2021. In the fourth quarter, SG&A was $481 million or 10.3% of revenue. Our fourth quarter SG&A costs came in higher than our run rate due to the timing of some of our technology- and sustainability-oriented investments. 2021 SG&A was 10% of revenue. That's a 20 basis point improvement over 2020. Over the long term, we target SG&A as a percentage of revenue below 10%, so we're pleased to be nearing that target so quickly after the ADS acquisition. In 2021, we captured SG&A synergies from the acquisition ahead of schedule and started to realize the benefits of our technology investments, particularly by optimizing our sales coverage model, growing our digital sales channel and streamlining the customer setup process. We're confident that our technology investments will continue to deliver value as we differentiate WM and reduce our cost to serve, both on the operating cost and SG&A lines. Fourth quarter capital spending was $774 million, which is above the expectations we had last quarter as we were able to opportunistically accelerate investments in recycling and renewable energy at the end of the year. While we continue to see supply chain constraints, slow delivery schedules and some important traditional solid waste asset categories, we worked diligently to close the year with strong momentum on capital investment to support growing volumes, particularly in our landfill line of business. Growth in both cash flow from operations and free cash flow were particularly strong in 2021. At $4.34 billion, cash flow from operations increased 27.5%, and when excluding the one-time benefit from the required divestitures related to the ADS transaction, our free cash flow grew over 28.5% in 2021 to $2.53 billion. Over the course of the last year, we returned a record $2.32 billion to shareholders, a $970 million in dividends and repurchasing $1.35 billion of our stock. We accomplished all of this while achieving our targeted leverage ratio of about 2.75x, demonstrating that we are well positioned for future growth. Moving to our 2022 financial outlook. As John mentioned, we anticipate organic growth in the collection and disposal business of about 6%, which is the high end of our long-term growth target. This revenue growth outlook drives our 2022 operating EBITDA guidance of $5.325 billion to $5.425 billion, and that represents almost a 7% increase in operating EBITDA at the midpoint. As Jim discussed, we are well positioned to allocate our cash both to growing shareholder returns and to increasing growth capital investments in our recycling and renewable energy businesses. Setting aside the planned growth investments and focusing on the capital expenditures we plan to invest in the normal course of business, we expect capital spending to be in the range of $1.95 billion to $2.05 billion in 2022. Free cash flow, excluding these sustainability growth investments, is projected to be in the range of $2.6 billion to $2.7 billion. We expect to make approximately $550 million of growth investments in recycling and renewable natural gas projects in the coming year. While these investments will be reported as a component of our capital expenditures and therefore reduce our traditional measure of free cash flow, we see these investments to be similar to an acquisition dollar as they will produce high-return growth as a strong complement to our existing business. When considering these growth investments, free cash flow is expected to be between $2.05 billion and $2.15 billion in 2022. This free cash flow outlook anticipates an increase in cash interest and taxes of $75 million to $125 million and a modest improvement in working capital. Our long-standing commitment to a strong balance sheet and consistent and disciplined allocation of available cash towards growth and shareholder returns continues. Our 2022 priorities will be to invest in the business, grow the dividend, fund tuck-in acquisitions with strong returns and buy back shares. Given the Board of Directors' approval of a 13% increase in the 2022 dividend rate, we expect dividend payments to total about $1.075 billion in the year ahead. We also expect to continue our share repurchase program in 2022 as the Board recently provided authorization to repurchase up to $1.5 billion of our stock. While our guidance does not specifically include acquisition growth, we will continue to be opportunistic in pursuing the right deals at the right price. In closing, we are proud of what we achieved in 2021, and we're excited about the opportunities that lay ahead for 2022 and future years. Our team is hard at work so that we can deliver on our commitments to our customers, communities, the environment and shareholders. With that, Faith, let's open the line for questions.

Your first question comes from the line of Noah Kaye from Oppenheimer.

Lots of places fruitful for questions, but I guess we should start with the announcement around the increased investments in sustainability. Specifically, I'd like to understand how you're approaching the economics on a long-term basis of these RNG investments. It seems like there is an awful lot of upside and downside in having the economics fairly exposed to the prices of RINs. Given the scale of the investment that you're contemplating and having the exposure through the EBITDA of those RIN prices, how are you thinking about potentially derisking that over time? It does seem like there's a market for long-term contracts in RNG. While that would significantly haircut potentially the RNG EBITDA versus what you projected, you'd be getting more certainty. So at a high level, how should we be thinking about that and how it impacts the predictability of earnings for the company?

So Noah, I'll start with some comments about how we approach the volatility and then I'll turn things over to Jim so that he can cover the strategic overview with regard to how we're thinking about this portfolio. In the renewable energy space, we currently and expect to continue to manage the volatility by looking both at the very short-term market-driven prices and then long term, those attractive long-term contracts that you mentioned. So we participate on both ends of the spectrum and I would say almost anywhere in between, and we'll continue to assess what's best in order to both reduce volatility but then also optimize the returns of the portfolio and what you can see outlined in the press release that we provided. We're really happy with the return profile and the payback period when you see a 3-year payback period at the conservative levels that we've assumed. That indicates that even with the incremental volatility, we know the returns outpaced the solid waste acquisition returns that we've discussed.

Yes. To add to that on the strategic side, I believe we have four critical capabilities that set us apart and give us confidence in our investments. Devina mentioned how we mitigate risk. Our team has been actively involved in this since 2015 and knows how to scale these plants across our entire portfolio. We have a unique asset in the substantial amount of gas we own, which no one else can offer. Additionally, we possess the largest CNG fleet in North America, allowing us to fully close the loop and monetize the RNG effectively. Finally, our strong balance sheet supports our strategy. Considering these four factors, it made sense for us to accelerate investments from 2022 through 2025. We don't anticipate significant downside in RINs pricing or natural gas pricing over the next three years. However, even with conservative estimates, we expect to achieve very strong returns, as Devina mentioned.