This includes the intentional shedding of low-margin business and noncore revenue that do not satisfy our return requirements. The impact of the steps we took are reflected in our exceptional performance for 2023, once again demonstrating the ability of our team to create long-term equity value for our shareholders. Fourth quarter adjusted EBITDA margin grew 200 basis points from the prior year with 245 basis points of underlying Solid Waste margin expansion and 180 basis points of margin expansion from our Environmental Services business. Adjusted EBITDA grew over 21% from the prior year, excluding the impact of the divestitures. The record high voluntary labor turnover rates that we saw in 2021 and 2022 as well as supply chain constraints continue to sequentially improve and we expect to continue to see the positive impact of these trends into 2024.

On acquisitions, in 2023, we deployed approximately $900 million into 39 acquisitions. We expect these acquisitions to generate revenue of approximately $355 million on an annualized basis. We also deployed approximately $275 million in incremental organic initiatives, primarily in RNG and EPR related opportunities. We continue to believe that these opportunities represent some of the best risk-adjusted returns that we have seen and we will provide significant upside to our long-term free cash flow trajectory in the coming years. Turning to our balance sheet. We ended the year with net leverage of about 4.1x, almost a full turn lower than where we ended 2022. On our calls over the last year, we have talked about the ability of the business to naturally delever over time.

We saw this play out in 2023, with the majority of the decrease in net leverage coming from organic growth in the base business. Our market selection, stronger balance sheet and continued execution on the self-help levers in the portfolio position us for a very attractive 2024 and beyond. Luke will walk us through in more detail but high level, we're guiding to another year of strong revenue growth across the board with Solid Waste pricing of 6% to 6.5% and mid-single-digit organic top line revenue growth in Environmental Services. We expect that adjusted EBITDA margins will organically expand another 100 basis points in each of our segments which we expect to be industry-leading and support our adjusted EBITDA guide of $2.215 billion. In Solid Waste outsized price cost spread is expected to be the primary driver of this margin improvement.

We also expect that the cost impact of productivity, cost of risk in repairs and maintenance from labor and turnover trends and supply chain constraints will moderate and potentially provide upside to our guidance. Solid waste volumes are expected to be relatively flat when excluding the drag from intentional shedding of low-margin and noncore volume. Our guidance assumes commodity price consistent with Q4 prices which are lower than current levels. Any sustained price improvement will provide incremental upside to our guide. Included in the guidance is approximately $30 million of incremental adjusted EBITDA from RNG, all from our Arbor Hills facility that was commissioned in late 2023. Our guidance assumes a conservative volume ramp of this facility throughout 2024, meaning that there is potential upside as the operation of the facility matures.

In addition, we expect to commission another 2 to 3 facilities in 2024, none of which are factored into our current guidance. As we set out in our capital allocation framework provided at the end of November, we remain committed to making disciplined capital allocation decisions while continuing to delever the business with a focus on moving toward an investment-grade credit rating in the medium term. The incremental growth investments we plan to make in 2024 are estimated to be in the range of $250 million to $300 million and we'll focus on high ROIC sustainability-related investments around EPR and RNG. We expect to realize adjusted EBITDA from our EPR related CapEx investment starting in Q4 of 2024, ramping to a full EBITDA run rate of $80 million to $100 million in 2026.

Given our first-mover advantage and strong asset position in Canada, including our state-of-the-art MRF network, we have already won a significant number of accretive EPR related contracts. We are optimistic that we'll be able to capitalize on additional contracts that we have yet to be awarded. As a result, we believe that our EPR opportunity will be significantly larger than the $80 million to $100 million that we have already been awarded and we expect to provide updates on new contract awards in the coming months. On RNG, we now expect the first contributions from Arbor Hills in Q1 of 2024 and we remain confident in our ability to achieve our $175 million of EBITDA from RNG investments by 2026. We will provide an update on the EPR and RNG investments and potential EBITDA upside from these initiatives at our Investor Day later this year.

Consistent with our November capital allocation framework, we expect to deploy between $600 million and $650 million into densifying tuck-in M&A in our existing footprint in 2024. Over half of this amount will go towards the medium-sized acquisition that we have already signed. The asset represents a vertically integrated solid waste business within one of our fastest-growing existing markets in the Southeast that will be immediately margin accretive. We have completed the regulatory process and anticipate closing early in the second quarter. The in-year contribution from this acquisition and others we complete during the year will be additive to our 2024 guidance. Taking all of this into account, we expect to end 2024 with net leverage between 3.65x and 3.85x and to generate adjusted free cash flow of $800 million.

I'll now pass the call to Luke to walk through particulars of Q4 and the 2024 guide and then I will share some closing comments before we open it up for Q&A.

Luke Pelosi: Thanks, Patrick. For the following discussion, I will refer to our accompanying investor presentation which provides supplemental analysis to summarize our performance for the year and our guidance for 2024. Fourth quarter revenue was $1.88 billion, representing year-over-year growth, 200 basis points better than we had guided. Solid waste price of 7.9% was realized through ongoing support from both our geographies with better than mid-single-digit pricing, continuing to be realized in the typically lower priced residential collection and post-collection lines of business. Solid waste volume of negative 3.6% represented a 100 basis point deceleration from the third quarter due to intentional shedding, a tougher comp in the prior year and softness in special waste.

Page 4 highlights the 245 basis point expansion of underlying solid waste adjusted EBITDA margins we realized during the fourth quarter, a 120 basis point acceleration over Q4 '22. The impact from commodity prices flipped to a positive contribution, thanks to price appreciation during the last months of the year, an equal and offsetting impact arose tied to insurance proceeds that were received in the prior year period. While the net impact of fuel surcharges and fuel costs was a positive contributor to margin, the benefit of a fuel hedge we had entered into in Q4 '22 did not repeat in '23, resulting in a net 10 basis point drag. For the year as a whole, underlying solid waste margins expanded 290 basis points. We believe this is a strong demonstration of the effectiveness of our pricing and deliberate volume strategies and is consistent with the expected impact of the widening spread between price and cost inflation that we had forecast in the 2023 guide at the beginning of the year.

Our ES segment also had a very strong end to the year. The benefit of our strategic shift towards quality revenue growth initiatives is evident in the 180 basis points of margin expansion we realized in the fourth quarter. This result is even more impressive when considering the disruption from a small fire we had at our Columbus facility in November. The negative impact of which was approximately 165 basis points in the quarter. ES adjusted EBITDA margin was 26.2% for the year, inclusive of the impact of the fire. Consolidated adjusted EBITDA margin was 26.1% for the quarter, representing a 200 basis point increase over the prior year and in line with expectations when considering the 40 basis point consolidated margin impact of the facility fire.

Adjusted free cash flow for the quarter was $472 million which was in line with our guidance. Incremental growth capital in the quarter was $145 million, $25 million less than planned due to timing. $10 million of our planned landfill spend was reported to closure costs instead of CapEx and you can see that reclass between those 2 lines on the cash flow statement. Our underlying free cash flow generation was ahead of plan after factoring in approximately $20 million in RNG related ITCs that we expected to receive in 2023 but in the end, did not. On Page 6, we show the components of the material reduction to our leverage in 2023. The graph is a powerful illustration of the deleveraging capabilities of our business. Going forward, we expect organic growth and significant free cash flow generation to more than offset any leverage impacts from M&A, resulting in sequential annual delevering to which we are absolutely committed over the near term.

On Page 7, we have summarized our current debt structure. Post our highly successful refinancing in November 2023, over 85% of our debt obligations carry fixed rate of interest, providing significant certainty on our future interest costs. With the over 4 years of weighted average term remaining, we remain highly confident in the likelihood of receiving material credit rating upgrades prior to the maturity of most of our existing debt. The November refinancing also provides us with the opportunity in respect of near-term bond maturities. As we have previously communicated, while we do not know where underlying treasury rates will go, we expect the current spread of our borrowing rate over treasuries to materially decline as our credit quality improves.

Looking forward to 2024, we are providing guidance consistent with the preliminary framework we laid out last year. Page 8 outlines the revenue bridge and you can see we've provided a pro forma starting point for 2023 that takes into account solid waste divestitures completed in Q2. On the back of the strong end to 2023, we're expecting over 9% top line growth in 2024 before the impact of any incremental M&A. Driving this robust growth is solid waste pricing of 6% to 6.5% and approximately 4% from acquisitions already completed. Given the strength of Q4 pricing, we have a high degree of visibility in realizing over 7% solid waste price in the first quarter and are confident in the path to achieve a minimum 6% price for the year as a whole. The guide assumes 100 to 125 basis points of negative solid waste volumes, all of which is attributable to our intentional shedding.

Otherwise, underlying volumes are expected to be flat to positive 25 basis points which we see is conservative but prudent given the potential for some macroeconomic uncertainty. Recycled commodity prices are assumed to be at Q4 levels which were 20% higher than the 2023 average but 10% lower than current pricing. If current pricing remains at Q4 levels, there would be upside to our 2024 guidance. Recall that post the divestitures, sensitivity to commodity prices is approximately $5 million of EBITDA for every $10 move in our commodity basket. Environmental Services is guided at mid-single-digit top line growth, underpinned by our continued focus on price-driven quality of revenue initiatives offset by shedding of low-margin work. For the second year in a row, the quality of our anticipated top line growth leads to the expectation of 100 basis points of EBITDA margin expansion in 2024, all of which is organic as rollover M&A is slightly margin decretive.

The guide assumes that cost inflation continues to moderate. A 100 basis points of margin expansion is expected in both segments, with corporate costs remaining flat year-over-year at 3.3% of revenue. The revenue growth, coupled with the margin expansion yields adjusted EBITDA of $2.215 billion, representing over 13% growth from the prior year on a pro forma basis. The guidance assumes an FX rate of 1.35 which is flat with the average rate in 2023 but 2 basis points lower than the 1.37 that was used for our initial 2024 thoughts provided last November. Recall that every penny of FX impacts adjusted EBITDA by approximately $11 million and our guide is therefore equivalent to a $2.24 billion of EBITDA assuming the November FX rate. At the free cash flow line, the walk from the $2.215 billion of adjusted EBITDA includes normal course net CapEx of $850 million to $900 million, cash interest of approximately $475 million and a net $50 million to $75 million outlay for other cash flow items.

The $250 million to $300 million of growth capital that Patrick spoke to is excluded from the guide. Additionally, any RNG tax credits are not included in the guide and would therefore be additive. Page 11 shows the expected 2024 deleveraging path in which organic growth drives net leverage down to mid-3s. As Patrick said, we expect to end the year with net leverage of 3.65x to 3.85x, inclusive of the deployment of incremental growth capital and M&A. In terms of the cadence of deleveraging, recall that based on the seasonality of our business and the timing of our cash flows, Q1 net leverage typically increases over Q4 levels. Q2 is relatively comparable to Q1 and then leverage steps down in Q3 and Q4. Sudden changes to FX rates and the timing of gross capital deployment may modestly impact the quarterly results but won't impact the year-end landing point of 3.65x to 3.85x net leverage.

In terms of operational cadence, consistent with our historical seasonality, we expect to realize approximately 23% of planned annual Solid Waste revenue in Q1 and 20% of the plan for ES which equates to approximately $1.775 billion in revenue or 5% growth pro forma for the divestitures. In terms of margin, the first quarter is expected to be the toughest comp. Consolidated adjusted EBITDA is expected to be $440 million, just under 25% margin. Pro forma for the divestitures, that represents about 6.5% growth. At the segment level, after giving effects to the reclassifications of certain operations between segments as reconciled in the appendix to our investor presentation, solid waste margins expand 80 basis points versus first quarter of 2023 and ES margins contract approximately 70 basis points, largely as a result of the tough comp, the atypical January weather in many of our southern markets and disruption from the facility fire that spilled into the first quarter.

These impacts are not expected to persist into Q2. Corporate costs are expected at 3.7% of revenue in the first quarter as we anniversary the investments made in 2023, mainly around IT against the seasonally lower first quarter revenue. I will now pass the call back to Patrick for some closing comments before Q&A.

Patrick Dovigi: Thanks, Luke. We believe that the results in 2023 confirm that our strategy is working. Over the past 15-plus years, we've assembled a best-in-class asset base across North America and we are now optimizing what we have built. We are pulling the right self-help levers to grow revenue at industry-leading levels, helping drive outsized margin expansion. At the same time, we continue to strengthen our balance sheet and remain committed to further deleveraging. We expect 2024 to deliver another year of significant margin expansion with longer-term upside coming from our disciplined investments and highly accretive return opportunities in RNG, EPR and densifying tuck-in M&A. The contribution from all these initiatives will significantly improve our free cash flow profile over the time and continue the long-term shareholder value.

As always, I am very grateful for the efforts of our more than 20,000 employees who are truly the key to our success. 2023 was another year where Team Green demonstrated their exceptional ability to execute on our growth strategy and I want to thank each and every one of them for their contributions. I will now turn the call over to the operator to open up the line for Q&A.

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