GFL Environmental Inc. (GFL) Earnings Call Transcript

Good morning, everyone, and thanks for attending the GFL Investor Day. Obviously, it's been an interesting journey here over the last number of years. I think we're -- this is almost our 5-year anniversary since actually being in this exact room from the actual IPO of GFL. So for many of you -- most of you know, but we went public with GFL on March 5, 2020. We were the last group to ring the bell here on the exchange before COVID. And as we get into the presentation, it's certainly been an interesting 5 years. I certainly learned a lot over those 5 years from transitioning from a private company to a public company. And just thinking about how that all works and dealing with a multitude investors and a lot of you in this room have been great champions of the GFL brand, so we're thankful for that. And I think as we get into the presentation, you're going to see what's been created here, how the business has evolved. Most importantly, how it's evolved and where it's going. And I think from our perspective, where we sit as a management team and as shareholders and being the sort of largest shareholders of this company, we're extremely excited about where this is going and how it's going to go. And as you've seen from us over the last 5 years, particularly as a public company, and probably 13 or 14 years as a private company, the one thing that's been consistent is that we made a lot of money for our investors. And we don't expect that to change anytime soon. And it's really the hard work and dedication of not only individuals you're going to meet and see today, but it's the 15,000-plus employees that are left with RemainCo that go out and work and do their job every day that make this company as great as it is. In terms of what you're going to see from -- and if you turn to Page 5, from my perspective, handpicked, best-in-class management team, starting with Billy Soffera. Billy joined us, long tenure in the waste industry, came from a public, was at advanced disposal. And as we went through the divestiture package with Waste Management ADS, Billy was an individual that I met through that process that I figured we couldn't live without and we thought would be a huge addition to the team. And interestingly enough, he was one of the only individuals that Waste Management had on their list that was protected that we couldn't take. It took about 6 months for us to get him from Waste Management, but Billy joined us. And Billy has taken on the reins from Greg, who is the former COO. Greg's still in the room, Greg's still working the transition process on special projects, et cetera. But to get someone with Billy's duration and industry experience is sort of second to none. Ben Habets. Ben's been with Waste Industries for a long period of time. His dad was the former COO of Waste Industries. So this is -- Waste is, I would say, ingrained in sort of Ben's nature. He has been with Waste Industries a long time, building the entire U.S. business for us and continues to stay here today. Matt McAra, again, as we expanded our business into Western Canada, 2014, Matt came with one of the acquisitions, 10 years later, again, we saw star in Matt. And Matt has moved up the ranks significantly in the Canadian business. Obviously, now giving exposure to both Ben and Matt in the U.S., in Canada and vice versa. Again, it's what we do, and it's how we train. We like to breathe some of it in versus taking it from the outside. Steve Miranda. Steve Miranda, is again, family was probably the largest recyclers in Canada. Again, Steve has been in a MRF since he was in diapers with his dad. He doesn't know anything else other than running MRFs, has been instrumental in the Extended Producer Responsibility build-out and working through that over the last number of years, and you're going to hear a lot of great things from him. Nicole Willett. Nicole was someone I met at Waste Management when I started early in the business. Again, I identified Nicole as a great leader. Nicole, from a government relations perspective, but not all government relations people actually understand operations. But Nicole actually understood operations and understand how to actually make money, not to become compliant with regulation. And I thought that was a very unique trait that she implored. So you're going to get a chance to meet her. Jen Ahluwalia was in one of the biggest consulting firms in Canada, did a significant amount of work for us as well. And as GFL scaled up and we could afford to have her full time, she was one of the people that we brought on and brought into this business. Julie Boudreau, has sort of been the jack of all trades at GFL for a long period of time, started as a treasurer, went into integration, went into M&A. She sort of handles every sort of job within GFL, has a relationship right through the entire operation, with sort of every level, I would say, and has touched every level. So when she speaks -- and she speaks to the field, she speaks intelligently, and that people know that she knows exactly what she's talking about. And you'll learn sort of a little bit about what she's doing from a transformation perspective. And obviously, Luke, who many of you know. Again, Luke started here in 2014. Luke, I've known since high school. I said you're going to make a better career at GFL than you will at sort of KPMG. And I think this is something you should do. I don't know if you believe me. But I told him to quit his job before I gave him an employment agreement, which probably made him a little nervous as he had his first child come in, but he took the job over a drink sort of at the Four Seasons almost, I don't know, 11 years ago now and he's still here and obviously been a huge addition to GFL team and a massive contributor. Craig -- sorry. Craig Orenstein. Craig was actually my first business partner at GFL. He worked for the private equity firm that gave me my first $10 million back in 2007. Craig was responsible for doing all the diligence on all the assets that we were thinking about acquiring, the first 3, 1 being that the sort of waste transfer station in Pickering as well as 1 in Central Toronto as well as our first Liquid Waste business, which was a company called Direct Line. That was the actual core of actually building GFL, and then we acquired the 3 transportations from Waste Management in the middle of the financial crisis in 2008. Craig worked for a private equity firm. And then it became pretty clear to me that he was going to be a very good addition to GFL and convinced him to come over as well. And he's been here as long -- I mean, as long as I've been here. So again, deep knowledge of the entire organization and a testament to the loyalty of the team that's here. So if we turn to Page 6 -- Oh, I do? Sorry, I thought they would do you back there. Turning to Page 6. We're going to focus basically on RemainCo now. Obviously, with ES carved out, the GIP business carved out, we're really left with a pure-play solid waste business. Today, that Solid Waste business is going to basically be left with 15,000 employees, 7,100 trucks, about -- on the 2024 numbers, about $6.1 billion of revenue and about $1.750 billion of adjusted EBITDA. Now that's spread broadly throughout very sort of well -- the revenue stream is really spread through residential, commercial, industrial. Obviously, our landfill transportation, recycling facilities and MRFs make up the rest. Collection revenue mix is very similar to rest of the peers. Again, 34% coming from the residential line, 38% coming from the commercial line and about 28-ish percent coming from the industrial side. That's really spread now throughout 10 provinces in Canada and roughly 20 states in the U.S. You can see the map of where we're sort of generally focused on. Again, we're focused on all 10 provinces in Canada, and we've built out extensive platforms. And if you look through where we really focus the business now in the U.S. is largely down from Canada right down to the Southeast over to sort of Texas and up to the Midwest. We've divested in the markets where we didn't -- last year, we divested the market where we saw the least amount of opportunity for us, not necessarily the industry. But just given the presence of others in those specific markets, we thought it was prudent to exit them and deploy those dollars into markets where we had a very large presence. And we're going to get higher returns on our invested capital by doing M&A in these specific markets. So if you think about -- since the IPO, what have we done? We've grown revenue at almost 17% CAGR. We've grown EBITDA at over 20% CAGR. Taking free cash flow up by a 23% CAGR over the last 5 years and adjusted EBITDA margin, we've increased 300 basis points. All of these at the time of the IPO were something we've articulated, articulated them clearly. The plan was as people saying, why were you going public? We're going public because we needed the capital to grow. We thought there was a clear path to taking EBITDA from -- we did the IPO of roughly $950 million to $1 billion to north of $2 billion. And I would say we exceeded those goals and even our own internal expectations. Always maybe -- and we'll get into the slide in terms of what the annualized return of GFL was, but this management team knows how to make money. We've done it for a long period of time as a private company. We've done it as a long period of time now as a public company. And we make prudent capital decisions, sometimes maybe not always the most popular because of what's happening in the macro environment in the world. But if you think about what we've done in the macro environment, we lived through COVID, where the world basically shut down. We then went to a hyperinflationary environment from 0 rates to rates that were higher than we've seen really since 2007. Albeit, we've executed the plan. We sort of -- I would say we've numbed the noise in the background, and we've created a significant amount of equity value. Now it always wasn't reflected in the stock price, but at the end of the day, I use the case study of the Environmental Services business. Go back to sort of 2021, when we bought an asset, our largest competitor in Canada, everybody looked at us like we were crazy. We were bringing up leverage 1/4 of a turn in the middle of COVID. And we saw an opportunity with that asset. That asset again, was levered to Canada. Canada was largely shut. We're buying it off of, I would say, COVID adjusted numbers. There was no real private equity firms coming to Canada because they couldn't get across the border, and we just saw a real opportunity. And yes, probably didn't make investors happy that we're bringing up leverage a quarter of a turn and it was unexpected. But if you look at the value that's now created for this shareholder base, I mean, it's remarkable. I mean we just -- again, transacted with that business at an $8 billion value, put $6.2 billion of capital in our pocket and still retain 44% equity interest. And those are the types of things we will do. And if you sort of flip the page -- if you flip the page to Page 8, over the period -- over the last 5 years since being a public company, we were -- annualized total shareholder return has been about 22.5% a year. And in the environment that I just described, I think that's a remarkable outcome. Could we do better? Of course, we're going to do better. Are there more opportunities to do better? Absolutely, we're going to do better. But if you look compared to the sort of what it's done to the other waste peer groups, the S&P as well as the TSX 60, I think it's pretty clear the steps and the decisions that we made as a management team and the Board were the right ones and will continue to be the right ones to be stewards of everyone's capital. If I sort of flip to Page 9, this is really just the building blocks. This is a 3-year outlook. I'll say, when we put a 3-year outlook out, we'd like to err on the side of caution. This is a conservative case, but it gives you all the building blocks as to where we are and how we move from basically $1.760 billion of EBITDA to north of $3 billion sort of over the next 3 years. And again, it's not a complicated story. The story continues to get simpler. This is a very simple story that sort of follows the playbook of many others. But if you just look at sort of where we are, the guidance we've given for 2025, some $1,925 million to $1,950 million and then you sort of just layer in the organic growth piece, coupled together with potential tuck-in acquisitions that we've had significant success over the last 17, 18 years doing, coupled together with sort of EPR and RNG contributions for the capital we've already -- the lion's share of the capital that's already been spent, coupled together with just the solid waste [ self help ] levers which we talked about over and over and over again, pricing, CNG, procurement and sort of labor turnover with a more steady-state labor market spits out what we think is industry-leading growth without -- again, with the focus on maintaining leverage in the low 3s to attract the broadest base of investors. And we move towards that investment-grade credit rating sort of over the next 12 to 18 months. We think it's going to lead to an optimal result and optimal obviously, stock performance and value creation for us as all of our shareholders, which then leads to the -- again, on the back of that, leading to what our key strategic pillars are for the next 3 years. Again, we want to drive industry-leading growth. We want to improve our sort of free cash flow conversion, which is going to be well telegraphed and you'll hear a lot about that today. And again, return focused capital deployment. For the first time ever, we're going to be in a position to have incremental capital to buy back shares and increase dividends. We're going to have the flexibility to do whatever we want from a free cash flow perspective on M&A without again moving leverage significantly. And we're going to be able to maximize shareholder value through all of this. And I think we have the flexibility now to look at the highest sort of returns on invested capital acquisitions that fit within the existing footprint. If you look at the footprint today, I mean we've built out the infrastructure in both Canada and the U.S. We are now going to leverage those capital spends and acquisitions that we've made. We're going to find opportunities that just make those businesses better and more profitable. And that's a simple thing to do now because from a risk perspective, the business is totally derisked. We're tucking in M&A into markets where we already own assets into existing management teams that have been [ GFL-ize ] that have been doing this for a significant amount of time. And I think the model at this point is tried, tested and true. Certainly is, from our perspective, again, from -- if I go back to 2007, we haven't had a private equity investor leave with less than sort of 3x the money. And you, as part of public investors, you know the stock is up 150% since the IPO. I think that day 1, stock opened at $17.80, today, the stock's trading around $45. And again, that's in the face of all the adversity we faced over the last 5 years. And the learnings that we've taken as a management team over the last 5 years. But what you know from me is that I'll always be prudent with our capital. I'm -- being the largest individual shareholder here, I'm doing decisions that I think are right for my own equity, which then in turn is right for your own equity. And I think that's been proven over and over again. So with that, I'll turn it over to Billy. We'll get into the details, and then I'll follow back out of the end, and we'll open it up for Q&A. But again, feel free to ask any question you want. No questions off the table. We're here to be as transparent as you want us to be, and we look forward to a successful next 3 years. So thank you.

Please welcome to the stage, Billy Soffera, Chief Operating Officer.

Good morning, everyone. I am Billy Soffera, and thank you, Patrick, for the introduction. I sincerely appreciate the opportunity to tell part of the GFL story. And it's quite a compelling story. Most importantly, today, I think we'll highlight the path from our previous Investor Day story in 2022 and bring you forward to today, then just as importantly, delineate what we think is a really clear path to 2025 here and beyond. As Patrick mentioned, I've transitioned in the -- to the COO role, since that time, a role previously held by Greg Yorston. And Patrick introduced him, but I want to mention that Greg is primarily responsible for a really firm foundation that I'll reference throughout my presentation. And that Greg remains with the company in a senior strategic and advisory role, which allows us continuity to take great benefit from Greg's experience and guidance. So really happy about that. We'll continue to have Greg as part of our team. The solid foundation that I referenced is one of the promises we made in 2022, that we would coordinate all the strong assets that we assembled through concerted market development activity, that we would evaluate our positioning relative to those assets, that we would integrate those assets and mature the business with a firm base of process and KPI development and focus and very importantly, discipline in regards to our organizational development. So we also promised that we would put significant effort into people and leadership development. You will see the result of that effort in the presentations that follow with the people and with the output, I'm certain that you'll be very, very, very impressed with that result. So we find ourselves with a really solid foundation rooted in process and measurable results. Our focus matures now into using our experience and a clear line of sight to execute on operational opportunities that my colleagues will further illustrate. I do want to emphasize that we are not reinventing the wheel in this phase. We are executing on fundamental levers and opportunities that many of us have executed many times over. Patrick mentioned my background. So 35 years, largely with [ BFI ] and Republic in escalating and senior leadership roles. Greg Yorston, 38 years, and I mentioned he's still around and senior leadership roles in Waste Management, Waste Industries, and now with GFL. The 2 of us and a few of others not only executed on these type of opportunities and levers, we helped develop and perfect them at these other companies. We know how to do this. We know exactly how to do this. We have the experience, the opportunity and the will to execute on things like procurement discipline. We'll talk about that a bit. On routing opportunities, on program management, on organic growth strategies and several other opportunities that will be described shortly. So it's always important for us to signal what's next and what's coming from here. So I wanted to mention that we are developing and utilizing enhanced digital platforms, including AI, to create incremental value and to scale our customer contact and retention efforts. You've heard us describe coming up, ramped up market development activity and participation. Craig Orenstein, I mentioned before, will very ably describe the planning and strategic focus that will inform and direct that activity. I will summarize that point by saying we are building on our platform, the platform we have developed at this point. And the assets we will target from here have demonstrable strategic value and are additive to our platform. And those are identified by the processes that we've developed, including the strategic planning process. Quickly, you see here the footprint of our solid waste and recycling assets. So I would like to point out that we have a firm foundation here with solid opportunity for growth with about 2/3 of our assets concentrated in U.S. markets, but strong representation across the entire Canadian footprint. To further that message of footprint and market selection, you see here that we have a concentration of about 3/4 of our business in secondary markets, particularly those where we can vertically integrate or those that are disposal neutral. And if I can put a point on what we see by vertical integration, that's not only disposal assets. Recycling assets, organics and even cross-selling opportunities with our JV partners. These markets also typically give us really richer opportunities for organic and inorganic growth and margin growth or maintenance of those margins. In the quarter of markets when we were near or in primary urban areas, we tend to have very good vertical integration and/or an opportunity to specialize in certain additional offerings. I'll end by emphasizing that our goals across the enterprise are aligned to promote quality and industry-leading growth to bring shareholder value to free cash flow conversion and to maximize our own investment through a disciplined process. I use that word again, disciplined process focused on manifest returns. We achieve these goals through adherence to core values centered around safety, employee experience, customer engagement, shareholder return and a culture of execution enhanced by the experience we bring to the table. You'll see these values reiterated throughout the presentation. With that, I'd like to turn the stage over to Matt McAra and Ben Habets, Senior Vice Presidents of Operations, to further illuminate our execution on these opportunities that are presented to us. Thank you very much.

Good morning. My name is Ben Habets, and I'm very excited to be here this morning before you. I'll be kicking off with Matt and covering price optimization as well as our journey on reducing employee turnover through better employee experience and better employee engagement. We'll start off touching on price optimization. And GFL continues to execute on our price-led organic growth plan that drives margin expansion. We're heavily focused on durable price/cost spread, and there's a solid foundation in place for this to continue as we expand upon and implement proven price mechanisms already implemented by the industry. The first reason we see this strong pricing continuing is our price mix, as you can see on the left-hand side. You can see our mix is quite similar to others in the industry. It's about 52% open market, 20% tied to CPI and 28% tied to other restricted business. We also benefit from our market selection, which Billy touched on previously with 73% being in secondary markets. You combine that with our primary markets with vertical integration, you can see we have the right mix to allow us to drive price into the future. In addition, through our strategic planning and our rigorous contract and route management, we have a pathway to reduce further our restricted business and expand our open market percentage as we move into the future. On the right, we show that we have effectively priced higher than our peers. You can see in 2022 and 2023, a little bit oversized, and that was benefiting from the implementation of our fuel surcharge program. But really, our ability to price is really driven by 3 key factors: One, the market selection that I mentioned. Two, we're in our early life cycle, and we're really initiating proven strategies that have already been deployed by the industry. Third, we're continually enhancing our pricing tools with contribution of robust monitoring and a dedicated support team that oversees that. That's allowing us to make surgical analysis on an account-by-account basis and identifying and executing on core price, surcharge and ancillary opportunities. Fourth, the optimization of our operating system, which is the development of a data lake composed of multiple databases being linked together for business intelligence purposes. This is increasing the speed that we can make pricing decisions. In addition, it's providing real-time intelligence in our organic volumes, allowing us to continually adjust our price volume equation for each of the individual markets. And last but not least is our municipal contract management focus, where we're focused on improvements in our CPI indices as well as surcharge implementation. Consider that moving away from all items as much as possible to trash water sewer indexes or garbage collection indexes, which is historically a little bit higher. We've got a consistent track record of executing on price over cost inflation and driving underlying margin expansion. Yet we're in the early stages of our price optimization, and we're utilizing industry-proven methodologies to create a runway for additional price growth. I'd now like to touch on our ancillary surcharge program, which we remain heavily focused on, and we're quite excited about. We know there's a lot more water in the [ towel ], so to speak, to bring out. And the graph on the left kind of helps paint the picture of some of our previous success. It's showing the implementation of our fuel surcharge program, which allowed us to fully cover our direct fuel price impact as well as a portion of our indirect fuel price impact over the course of 5 short quarters. This experience really is what provides a well-defined execution playbook for us to capture incremental surcharge and execute on our ancillary surcharge program -- pardon me, ancillary charge program into the future. We've deployed 3,000 tablets, which are connected to tablets and interface with our billing system to capture ancillary charges throughout the business. The installation of these tablets really is reducing the friction it takes in order to capture an overcharge and through the push of a button. We expect the full ancillary charge capture by 2028 and an incremental adjusted EBITDA contribution of $40 million to $80 million by 2028. I'd now like to transition over to our employee experience in Team Green. So at GFL, our decentralized entrepreneurial culture drives higher employee engagement. First and foremost, the foundation of our great employee experience is ensuring that every team member is Safe for Life. Our Safe for Life program is implemented on a management system framework that includes assessing the risk, encouraging our folks to pause before they take on a work task, the precision -- provision of necessary resources. You can consider that suitable trucks, well-maintained vehicles, compliant vehicles, equipment as well as personal protection equipment, the coaching and training of our employees, including morning huddles, monthly safety meetings, learning management systems, just to name a few, the coach adoption of technology through our Sims program, which is our EHS Management System, tracking our compliance performance, safety performance and our Lytx cameras observing driver behavior out in the field and allowing us to coach and improve on those behaviors as time goes on. And last but not least, driving continual improvement through the assessment of performance. At its core, our Safe for Life program empowers employees to make safe choices and empowers them to be comfortable taking a moment to pause before they start a work task or saying something that they see a hazard out in the field. Ultimately, this focus leads to a continuous TRIR improvement that we've successfully achieved over the last 4 years and are poised to continue doing so in the future. Once again, employees and candidates, they gravitate to a culture of safety and protecting employees. But our culture of engagement doesn't stop with just safety. We also seek feedback from our employees, and we're constantly looking to expand and invest in meaningful program for Team Green. This past year was our first completion of our employee opinion survey, and we're very excited about the overall engagement scores reported back from our people. We've also made investments in expanding training, which included the start of a Learning & Development team, which is currently providing supervisor training to enhance communication skills, collaboration and understanding of the workforce. This is complemented with the launch of our GFL Learning Hub, which is an online management system for employees to gain skills and training for personal growth, but also growth within the organization. And last but not least, the launch of our Green Futures Employee Scholarship program, which supports ambitious employees who have overcome significant obstacles and allows them to have a path for growth and success. Next, I'd like to take a moment just to share a quick case study with you on the screen before you is one of our recent past 7 quarters experience and performance. What you can see here is a 55% plus improvement on voluntary turnover over that period. Quite significant, but really the power of this is showing how powerful it is to reduce employee turnover over time. You can see here a strong improvement in safety of over 40% TRIR reduction over that period, improved service with a 40% reduction in incoming service calls, an improved margin of 180 basis points. This takes place because of high employee engagement, high employee empowerment, the execution of best managed practices and really consistency, which on the collection side of business, we often say same driver, same truck, same route as consistently as possible. So employee experience, really, it's the driver of us retaining our folks. At GFL, we're committed to hiring and retaining the best and the brightest. We aim to provide our team members a career with personal growth, not just a job. That's going to be seen on the upper left graph, we've made significant strides in the last 3 years reducing voluntary turnover, an 800 basis point improvement to 22% in 2024, and we've demonstrated a 1% to 4% improvement in voluntary turnover on an annual basis during that period. Given that track record, and as you look ahead, we believe 100 basis point plus improvement on an annual basis of voluntary turnover is a very realistic target. And as you see, it will ultimately lead us to a mid-teens voluntary turnover rate by 2028. The lower graph makes it clear that retaining our new hires until their third year is really the key to success in driving employee retention. I talked about some of the programs in the employee engagement side that we've launched to help on that front. And that's what initiated those, the Learning & Development team, the Learning Hub, our Green Futures Employee Scholarship. But I'd also point out and reference our fleet automation program and the expansion of our in-CAM technology in our vehicles. Our fleet automation, we're helping our folks in the workforce reduce some manual labor that we do out in the field on collection routes. And secondly, we're empowering our drivers to identify route challenges or safety hazards and blocked containers and numerous other things, which gives them empowerment to bring those things forward. But maybe more importantly, it drives timely response by our supervisors to not only address those issues, but bring the resolution back to the driver, improving the overall employee experience. Driving down voluntary turnover is extremely impactful to the business. As you can see on the right-hand side of the screen, significant reduction in labor costs as we've been less resilient on over time and reduce our reliance on subcontractors. It reduces our R&M expense, primarily by allowing us to avoid third-party shop repairs, which is typically double the cost and double the time line versus an in-house repair. And ultimately, that also reduces the downtime our fleet experiences on a regular basis. Certainly reduces the cost of risk with improved safety performance and reduction of incidents and improved productivity. The more our folks are more comfortable with their equipment and their route and the familiarity they have, we drive efficiency in the business. And last but not least, improvement in customer experience, faster response times to our customers, in addition to a reduced number of service calls coming into our customer service teams. But maybe more importantly, it's the retention of our customers and the retention of the price that I talked about early on. So with our track record and a realistic outlook of 100 basis point plus improvement in voluntary turnover, our expansion of our employee engagement programs and the follow-on benefits of lower labor, R&M and risk costs, combined with an improved customer experience, we foresee our adjusted EBITDA contribution of these efforts of being $20 million to $30 million by 2028, all as a result of a reduced reduction in employee turnover. I'd now like to turn it off the presentation to Matthew McAra, and he's going discuss customer experience. Thank you.

Thanks, Ben. Good morning, everybody. My name is Matthew McAra, Senior Vice President of Operations. Ben discussed how employee experience drives lower turnover, which is a perfect segue into what I want to discuss, which is continuously improve customer experience. I'd like to first highlight how exceptional customer service as measured by missed pickups, drives price retention and increases -- drives price retention and increases customer loyalty. On the right, you'll see a key study highlighting a GFL business unit that was experiencing abnormally high missed pickups in Q1. Subsequently, this led to customer churn and greater price rollbacks. Once the issue was identified, we were able to decrease missed pickups by 75%, leading to dramatically lower customer churn and better price retention as the year went on. Granted, most of the price execution was in Q1, but that doesn't take away from the directional movement. This case study is an isolated example of the correlation between service levels, customer churn and price rollbacks. It illustrates very clearly that good customer service equates to greater price retention and increased customer loyalty, ultimately driving revenue growth and profitability. Obviously, we would like to have -- had this issue corrected much earlier in the year. With the commenced rollout of our AI-driven customer service platform, we can now better measure customer satisfaction and respond in real time. This all leads to quicker resolution and an enhanced customer experience. Let me walk you through our real-time AI customer service dashboard, which just gives us the ability to measure our customers' satisfaction on every interaction. So first, on the left, we've got AI sentiment. Every call that a customer service rep has with our customers, AI immediately starts to analyze the overall sentiment of the call. It tracks inflections and keywords to determine their state of mind. This is something we simply couldn't do before. We now get a live view of whether a customer interaction was positive, negative or neutral. This allows our managers to see in real time how customer service representatives handle different interactions. For example, if a call starts off with negative sentiment, we want our CSRs to gauge this emotional state and use soft skills and customer-centric approach to make sure they are satisfied by the end of the call. Based on data and real customer conversations, we can now better adapt and improve our training, leading to a better overall customer experience. Next, we have AI issue status. So the AI sentiment is one piece of data, but we need to know if the customer issues are resolved. Issue status is when AI interprets the interaction and determines the future was resolved, not resolved or unknown. There are currently 7 dimensions of service that we're presently monitoring through AI: service, billing, customer issues, cancellations, price disputes, repeat service issues and repeat sales issues. Collectively, this is called our 360-degree service surveillance. Lastly, on the right-hand side, you'll have -- you see our CSAT score. The CSAT score is a composite of the AI sentiment and AI issue status I just discussed. This score measures overall customer satisfaction with every single interaction, allowing us to understand our success at the individual BU and CSR level. We are doubling down on communication and training surrounding the provision of exceptional service. This will create higher customer satisfaction, which ultimately results in increased loyalty and better retention of price, while driving profitability. So next up, operations optimization. So within operations optimization, there are a few initiatives we're focused on to drive margin expansion in the coming years. First is to continue converting a high percentage of our fleet from CNG -- to CNG from diesel collection vehicles. As many of you are aware, this is an industry-proven strategy. CNG vehicles continue to be the most economically viable alternative fuel path, have lower incremental costs versus other alternative fuel sources, lower average fuel cost per vehicle versus diesel-powered units and there's an opportunity to utilize internally produced RNG. CNG vehicles also provide a few nonfinancial benefits versus their diesel peers, most notably a quieter operating platform and have a lower carbon footprint. These benefits are viewed favorably by both our customers and the communities we serve. Supply chain issues during and post pandemic resulted in initial lower conversion rates. But thankfully, that's since improved. We remain committed to purchasing more than 50% of our annual fleet replacements with CNG-powered vehicles. And as we look ahead, the future for CNG expansion is promising. Smaller secondary markets are becoming more viable through fueling services via hub-and-spoke fueling models and the opening of public fill stations. Historically, we haven't been able to convert in smaller markets because building our own fueling stations didn't make sense. But with hub-and-spoke fueling models and public fill stations, these markets will gradually open up. Additionally, the majority of new contracts we pursue are CNG deployments. At the end of the day, we are confident that we will have 45-plus-percent of our fleet converted by 2028, which translates into an incremental adjusted EBITDA contribution of $20 million to $30 million by 2028. So next up, within operations optimization, we have further opportunities within procurement and fleet largely tied to us taking advantage of our greater scale. First, procurement optimization. Our overall business growth has doubled our cost base, creating meaningful procurement opportunities. Since our last Investor Day, we have focused our national and managed programs on identifying and prioritizing high-impact areas and large spend categories. The focus has been on categories with straightforward implementations that drive cost savings and efficiency in short order. Key category expansions were telecom, IT, software and hardware, liner and liner installations and contingent labors. Running parallel to this, more opportunities exist within our managed programs in large spend categories, such as parts, shop supplies, site services and post-collection operations. We've begun extracting further value within these categories through a reorganization of our existing procurement team structure, recruiting leading talent to manage key categories and building out our PMO to drive project level accountability. All this leads to greater in-house capabilities, unlocking further value and positioning us well for the future. At the field level, we aligned incentives to increase program -- procurement program compliance, expand reach and unlock value in existing and new categories. This ensures that our business functions are aligned to improve procurement across business units. From a systems perspective, our newly deployed ERP will help further drive compliance, improve data analysis and reduce administrative processes. Lastly, if you combine this bench strength and process figure, we would capture M&A synergy opportunities related to procurement much earlier in the process. Next up, fleet optimization. So to increase fleet savings and drive incremental EBITDA, there are 2 opportunities I'd like to highlight: automated silos conversions and warranty recovery. Automated silos conversions. These conversions are an industry-proven strategy to provide material productivity gains, margin expense and labor benefits. With ASLs, there's less manual labor. This means much more efficient operating platform, plus a larger labor pool of applicants to hire from. Incremental tailwinds from automation include materially lower -- fewer workplace injuries, resulting in a reduction of both employee turnover and the overall cost of insurance. By simply executing the industry playbook, we will realize margin expansion. We continue to see conversion opportunities across the platform where it's economically feasible. So given our rapid growth, warranty recovery presents an opportunity to standardize and scale our warranty claims program for our fleet across the platform. We've made steady progress and laid the groundwork to capture claims and reduce our overall parts spend. Most of these claims are captured through our parts getting certified to do basic level repairs. This allows us to perform the work in-house and receive direct reimbursement from the OEMs. Dealership repairs are often met with delays. So this ultimately increases fleet utilization. While most of our shops have been certified, we are working to have the balance certified in the near term to fully realize the value. The next phase will be for our shops to attain a more comprehensive certification, which will bring more complex warranty repairs in-house. Additionally, increasing in-house capabilities has a considerable impact related to uptime on new truck deliveries. A recent study verified that new units have an average of over 30 manufacturing defects upon delivery. Most are minor in nature, but there are several that are claimable for warranty. Claiming these repairs and performing the work in-house will greatly eliminate future repairs and reduce truck time, allowing our trucks to hit the road sooner than before. When combining warranty recovery efforts for their procurement, we are better positioned to lower our total parts spend. In all, we expect these procurement fleet optimization initiatives to realize incremental adjusted EBITDA of $30 million to $50 million by 2028. We have recently built momentum with procurement savings, fleet automation and warranty recovery programs, which will help accelerate during forecast horizon. Thank you for your time this morning. And next up, I'd like to welcome Stephen Miranda and Nicole Willett.

Good morning, everyone. It's a privilege and great to be back here again speaking with everyone. It's been 3 years since our last Investor Day conference. So I just want to start off by reintroducing myself, Steve Miranda, the Vice President, Recycling. It's been a great 3 years with a lot of growth. So first, I want to provide some context by reflecting where we were in 2022 versus where we are today. In 2022, we were really laying the foundation to amp up and grow our Recycling business. At the last Investor Day, we talked about some of the new MRFs we're building as well as several upgrades we were in the middle of completing and planning. Happy to say that all are now complete and everything is running successfully. We also, just last month commissioned our brand new state-of-the-art facility in Montreal, Canada. It can process up to 150,000 tonnes. And at 60 days kind of into the operation, it's meeting and even exceeding all expectations. We also started to tease out some internalization opportunities, and we were just starting to execute on emerging trend of EPR. And of course, the Recycling business was there to aid and assist in any other work we're doing in terms of vertical integration with our customers. Fast forward to today, and we've evolved and grown significantly through embracing changing landscapes. We find ourselves on track to meet our 2030 sustainability goal of increasing our recovered materials at our facilities by 40%. Internalizing our tonnes, organic growth and executing on emerging trends such as EPR are just some of the ways that we're going to accomplish this goal. A key component of our growth has also been the development of large-scale MRFs that incorporates state-of-the-art technologies strategically designed to optimize operational efficiencies while remaining flexible. By integrating advanced technologies, we have achieved significantly higher recovery rates and material quality, driving improved revenue from the material that we process and reducing our disposal costs on the back end as a result. Additionally, by running more efficiently, we're ultimately able to increase our uptime and throughput at the MRFs, allowing us to increase overall capacity at the site. Improved facilities also reduce the need for manual labor, meaning we're able to achieve similar outputs with fewer resources and lower costs. Importantly, as we're building these facilities and integrating our data, our enterprise transformation team, who you'll hear from later, is helping to digitalize the platform to help us optimize recycling shed networks and MRF efficiencies at a much more granular level and in real time. Integrating and improving our data capture with the help from AI will also help us understand the detailed dynamics of our performance and operations. And it will also give us insights into our material compositions, which can produce very important information while we manage our contracts and explore new revenue emerging trends. As we continue to scale and grow, one of our key priorities has been to derisk the business and create a more stable revenue base. In 2022, there was approximately 50-50 split in our revenue base from fixed fee processing and commodity sales. Since that time, as we can see, we're projected to have our fixed fee -- a revenue base of fixed fee, around 63% and a pathway to increase that percentage even more as we continue to execute on our EPR contracts and our other recycling initiatives. By increasing the portion of revenue from processing fees with annual price adjustments, we've effectively reduced volatility and improved the predictability of our business, helping us to mitigate volatilities tied to fluctuating commodity prices. We also recognize though the commodity sales are still an important source of income, and we made partnership agreements that allow us to keep some of the upside of our material sales, something that our centralized commodity team was very hard on selling and making sure we're getting our premiums. This is particularly important as we see shifts in inbound commodity composition. We're seeing a natural decrease in the amount of fiber come through the facilities and an increase in the amount of plastics and metals. With our state-of-the-art facilities, we're able to capture these plastics and metals at a higher level, which produce increased value as they're generally price a lot higher than fiber recovery. We've made significant progress, as I've outlined, and have successfully executed on our vision, a vision we're going to continue to expand upon. There are 3 main recycling priorities that help GFL drive industry-leading growth and improve free cash flow conversion and ensure appropriate returns on our capital deployment. We are going to be pursuing internalization opportunities. As part of our ongoing strategy to strengthen our recycling business, we are actively pursuing opportunities to internalize a greater portion of our volumes, taking greater control of the materials that we handle and leveraging our collection contracts. By internalizing volumes, we reduce our reliance on third parties and can improve our asset utilization, ultimately allowing us to better manage operational efficiencies and cost structures. Rather than relying on external partners, we can keep a greater portion of the value chain in-house from collecting the materials to receiving materials out of transfer stations, to long hauling those materials out of our transfer stations in the processing facilities, the processing the materials and to selling the commodities, all maximizing revenue potential and decreasing costs along the way while remaining flexible. In order to successfully build out internalization strategy, we work closely with our GIS team to ensure we have the right model in place, such as the hub-and-spoke model I'll speak to on the next slide. Internalization also fosters opportunities for our sales effort in the collection business supporting competitive bids for new business as they will have post-collection cost certainty and a facility they can rely on. Where internalization opportunities don't make sense, two of the key strategies we're focusing on is building strong partnerships that could be local partnerships or North American partnerships as well as leveraging material swaps, bringing our knowledge and expertise into these markets and seeing how to be prosperous for all parties involved. Another recycling priority is enhancing our revenues. Our MRFs not only serves as a core part of our operations, but also act as magnet or catalysts to assist in pulling through revenue from other upstream sources. MRFs also provide our customers with another point where we can collect and recover their materials. We can use these facilities to unlock new opportunities, drive innovation and create synergies that strengthen our market position. This includes providing customers with sustainability reports, educating them on best practices, providing audit services and creating new recycling programs for them, could even involve bringing them into our facilities and discussing their design and packaging changes and finding ways that we can recover alternate materials for them. There is an opportunity to seize incremental business by being a first mover, by going to our customers who are some of the largest retailers and manufacturers and offering them more services, not just on the printed paper and packaging, but also in the other materials that get discarded from their internal commercial facilities. By creating a further recycling service, we can thicken our revenue stream with customers and continue to use our vertical integration to create true long-term partnerships. And we will continue to position for emerging trends. EPR was an emerging trend we have been following for well over a decade. A lot of work went to this opportunity that we're now executing on. You'll hear from Nicole Willett about this. As demand for new emerging technologies continues with evolving policy and regulation being introduced, there will be opportunities in some of our key markets for implementation of new material management programs, such as organic management, construction and demolition management, municipal solid waste management and plastic management. Some of the key factors driving our strategy is ensuring that we're well positioned to capitalize on these emerging trends. However, we need to ensure market conditions are appropriate through examination of key factors such as local landfill bands or landfill barriers, legislation or pending legislation, community engagement and involvement, and of course, understanding the material that we're being asked to process and recover and making sure we can do the job as well as after we do the job that there's a home for this recovered material. By staying ahead of the curve while embracing legislative changes, we're not just reacting to changes in the market, we can be an active participant in its future. We can utilize templates which have worked for us in previous strategic pursuits while tailoring solutions to the specific needs of the market to develop localized models. Education plays a critical role. We're working to proactively inform our stakeholders about the environmental, financial and sustainability benefits of these new trends. By doing so, we hope to position ourselves as trusted experts in these areas, much like we've done with EPR. Related to internalization, just take a brief moment here to share one of our success stories. This is our Mayville, Wisconsin MRF that was commissioned last year that we briefly touched upon in 2022. Having this facility to internalize tonnes already in our box in the region has allowed for cost collection savings, post collection revenue and cost certainty as well as stability in our post-collection processing. It has allowed our team to pursue incremental volume, know what we have available capacity, ultimately reducing our reliance on third-party competitors. Further, efficiencies at the MRFs are increased as it utilizes best technology from multiple manufacturers, ensuring that we have the best equipment available. We've successfully been able to take 2 of the leading manufacturers for recycling equipment and integrate them into 1 system. I mean that's a true testament to our partnerships with these manufacturers as well as their expertise in the field. One of the key elements also contributing to our success in the Wisconsin facilities has been the adoption of the hub-and-spoke model. This structure allows for streamlined transportation, reducing the number of inefficient trips, maximizing load capacity, reducing windshield time and overall logistic expenses. Further, the hub-and-spoke model enables us to strategically expand into adjacent markets, allowing for faster market penetration and higher scalability. Some of the key takeaways before I hand this off to Nicole is that we're going to continue to employ rigor and discipline into our capital deployment activities through a commitment to continuously advancing our technology to achieve all efficiencies I've touched upon. We're going to use MRFs as magnets to thicken our revenue stream and create stickiness with our customers, really embracing our relationships and providing value-added services. We're able to use our facilities to drive growth in other lines of business such as expanding our collection business into adjacent markets. And we're going to continue to maintain our first-mover advantage in Canada and target markets in U.S., positioning ourselves as one of the leading innovators in recycling and recovery while expanding our footprint in key areas. Nicole is going to highlight some of the successes in EPR. But again, I'd just like to emphasize that this is an emerging trend we've been following for quite some time. And we will take the same discipline and specialized approach while monitoring and embracing emerging trends to ensure we're always putting ourselves in the right position at the right time. Thank you.

Tough act to follow. Hi, My name is Nicole Willett. I'm Vice President of EPR at GFL. As Stephen mentioned, our recycling line of business has many strategic thrusts, one of which is EPR, or Extended Producer Responsibility. And before we go into what this means to GFL from a performance perspective, I'd like to ensure that we're all aligned on what EPR is. EPR is a legal change in financial and operational responsibility of recycling collection, processing, marketing, long haul and transfer from an individual homeowner, municipality or city to a producer. And by a producer, I mean, a consumer packaged good company or a beverage manufacturer. EPR legislation varies from state to state or province to province and also varies in terms of time line, covered entities and covered commodities. So sometimes -- sometimes, we will see in some legislation that only a residential home is covered, or in others, we'll see that it also includes commercial business, multi-res, schools, public spaces and long-term care homes. And of course, we're likely going to see in the legislation, commodities such as plastics, aluminum and cardboard, where in others, we see harder to recycle materials like flexible packaging and glass. So when a jurisdiction passes EPR, they set something called a recovery rate or the amount of a certain material that needs to be recovered out of the system or they face potential consequences from the regulator. So an example of this is in Ontario, Canada, by 2030, 80% of the beverage containers have to be recovered, or those manufacturers face potential consequences. This is extremely favorable for GFL's highly robust and advanced recycling technologies. And because every beverage manufacturer is not going to send a truck to homes to collect their individual basket of goods, they hire something called a PRO, or a Producer Responsibility Organization, who is a consortium and helps manage the logistics for every producer. So now that we're all experts on EPR, let's talk about where EPR is. EPR is not a new concept. It has been fully implemented across Europe and parts of the world for decades. As you can see, North America is a late adopter of the initiative, and Canada has passed legislation in almost all provinces and is in the process of transitioning between now and 2027. And then you'll see that 5 U.S. states have passed legislation. However, they haven't started the transition yet. And you'll see that there are a number of others that have EPR legislation tables. So as we can see, we are in the early stages of EPR. Let's not talk about what an EPR contract looks like. These awarded EPR contracts are highly, highly -- we use our first-mover advantage given our market expertise, strategically located vertically integrated asset base to secure these 10- to 20-year contracts with fee for processing models at highly -- including annual price increases at high margins. As you can see, GFL continues to be well positioned for EPR growth. And the contracts that we're speaking about will have an incremental adjusted EBITDA contribution but ramps into 2027. So you may be wondering how we took a really advanced highly complex concept and legislation and translate it into real dollars for GFL. As momentum grew around EPR legislation, GFL leveraged our experience as the only operator of a fully implemented EPR program in North America through our contract in British Columbia, where we process their recyclables for the entire province. We took our expertise and playbook and engaged directly with producers, policymakers and elected officials. We knew what worked and what didn't work at the curve, and we collaborated with the policymakers to ensure successful legislation. Through these discussions, we listen to what the needs of the producers and lawmakers were, and we explored creative solutions leveraging existing assets and infrastructure. Since municipalities are no longer typically part of EPR legislation, we partnered with PROs and understood what their complex needs were and how we could seize our first-mover advantage to help them. We price contracts to reflect capital investment and return thresholds required and ensure that contracts also include performance-based financial upside. And as hard-to-recycle goods found their way through EPR legislation, we developed innovative solutions to hard-to-recycle packaging, demonstrating our commitment to meeting producers' obligations in creative ways. And what was a bit unexpected, but is now starting to develop is that we're starting to see adjacent opportunities that are presenting themselves in jurisdictions where GFL is the EPR service provider. I'd like to walk you through a quick case study in the city of Toronto, where GFL successfully expanded our recycling operations through EPR. This case study depicts a clear example of how EPR can create opportunities for GFL and enhance our business performance. As you may know, the city of Toronto was one of the base contracts for GFL when Patrick started the business and that we are -- it's pretty near and dear to all of our hearts. We are already the service provider to part of the city for collection, and we process most of the recycling in the city. Through our intricate knowledge of the city of Toronto collection contracts in operations and experienced operating performance-based contracts, we were able to leverage this knowledge and expand our footprint in the city of Toronto across collection, transfer, long-haul and processing lines of business. Furthermore, because of the specific EPR legislation in that jurisdiction, we expanded collection to schools, multiresidential buildings, public spaces, long-term care homes and retirement homes. And also because of that legislation, which includes expanded list of commodities, the amount of recyclables that are in the containers once EPR legislation passed has increased. So there's more materials now in the entire recycling system in the city of Toronto. And finally, we're not done, further opportunities remain today in the city of Toronto. So as you can see with this case study, EPR can expand the portfolio of service and the work that we currently do in communities. As EPR legislation continues to roll out in North America, we can utilize this model through over 600 municipal contracts we currently service. So what does this all mean for GFL? We estimate that our overall recycling opportunities will contribute an estimated $130 million in adjusted EBITDA by 2027. This estimated $130 million in adjusted EBITDA by 2027 does not include the potential upside in our recycling contracts nor the robust pipeline of additional opportunities and internalization. As you can see from the timeline at the top, we continue to ensure that our infrastructure is well positioned for EPR and internalization of recycling tonnes. This EPR journey started in 2019, and we have a refined strategic playbook that we continuously shape. As EPR legislation worked its way through Canada, we ensured that our technology was ready to support the legislation. So as you leave GFL Investor Day today, I'd like you to remember four quick things about EPR. One, we are in the early innings. Further opportunities remain in North America. Two, recycling opportunities are contributing highly accretive margins to our business. Three, EPR is complex. Our experience and proven track record shows that we can continue the path forward. And four, EPR legislation can expand the recycling services in the jurisdiction more than what we do today. So as we said, we're in the early innings of EPR, and I believe we're just getting started. With that, I'd like to introduce Jen Ahluwalia, our Senior Vice President of Renewables, Environmental Responsibility and Sustainability.

Thank you. Good morning. So my name is Jennifer Ahluwalia, I'm Senior Vice President, Environmental Responsibility -- sorry, Renewables, Environmental Responsibility and Sustainability at GFL. So today, I'm going to talk about our sustainability program. And I'm also going to provide a brief update on our RNG portfolio. The sustainability at GFL has always been about prioritizing initiatives that are relevant to the business and that are also capable of driving positive environmental, employee and community outcomes and then most importantly, positive business outcomes. The most impactful initiatives that we've identified for our business are the ones that we talk about in our sustainability action plan. Also, what's important to know about our approach to sustainability is that it's embedded in all parts of the business. The presentations from earlier today illustrate this well. So Ben talked about employee turnover. And clearly, that there's a positive ROI from continuously improving our safety performance and pursuing higher employee engagement. So this is why these two metrics are goals and targets in our sustainability action plan and of course, why safety is one of our core values. Equally, from the solid waste fleet conversion initiatives that Ben and Matt both discussed, shifting our fleet to CNG engines not only provides an opportunity for meaningful margin expansion for us, it also contributes to lowering our direct greenhouse gas emissions. Another example of our incremental growth opportunity -- another example is our incremental growth opportunities. So this really connects to the strong, stable organic growth aspect of our overall business strategy. Nicole and Stephen just walked through how important recycling services are to our customers and their efforts to meet their environmental responsibility and sustainability goals. RNG has the same benefits and also helps us reduce our own GHG emissions and both produce strong adjusted EBITDA returns. So we have a full suite of sustainability-related goals, which are available in our latest sustainability report, which is posted on our Investor page late last year. This report also highlights the progress that we've made in achieving these goals and targets. What you see on the slide behind me, though, is our sustainability -- or our climate-related sustainability targets. So our climate strategy really has two aspects to it. First, what we do to help our customers reduce their emissions; and then second, what we're going to do to reduce our own emissions. The last two targets on the page are tied to our strong, stable organic growth opportunities, so [ RNG ] recycling. And then everything in the middle underpins our overall greenhouse gas reduction target. So this includes the beneficial use of biogas and the projects we're developing to capture more gas at landfills, which will ultimately reduce our emissions. So the last thing that I wanted to draw your attention to on this page is the 30% in our overall greenhouse gas reduction target. So in December, we increased that greenhouse gas emissions reduction target to a 30% absolute reduction in total Scope 1 and 2 emissions by 2030 from a 2021 basis. That's a doubling of the target that we originally set in late 2022. The approach that we use to identify our increased target is derived from separate science-aligned pathways for different types of emissions that are generated in our operations. We're the first in our industry to adopt this type of hybrid approach to setting targets that's aligned with multiple key science-based assessments. While all that's on this slide is a bit technical, I thought I'd share with you how we developed this approach that we're using. So rewinding to 2021, we doubled our landfill portfolio through several acquisitions that we've made in the U.S. Given that growth and that we're in the early stages of putting our landfill gas capture and beneficial use initiatives in place, we decided to set an initial target to reduce our combined Scope 1 and 2 emissions by 15%. So something -- so at the same time, we shared how we wanted to set a target that was science aligned, and there was a lot happening on that front at the time. So through our active engagement with our waste industry peers, NWRA and [ ERF ], which are two major industry associations, we were already working on updating emissions monitoring and modeling methodologies. So we decided to really dig in on these topics. And not only did we contribute in a meaningful way to our industry understanding as a whole of understanding landfill emissions modeling and monitoring, that deep dive also gave us the confidence to set an updated target. Also occurring between 2021 and 2023 was the release of the Global Methane Assessment. This ultimately led to what's called the Global Methane Pledge. This body of work provided much more relevant information about landfill emission reduction pathways than any other research that had been released that to date. This gave us the confidence in the integrity of the 30% mapping reduction target, which ultimately makes up our overall 30% reduction target. So something that we've said many times is that we're relatively new in our sustainability journey and our approach of steady and thoughtful progress has resulted in an industry-leading approach to target setting, which we're really quite excited about. We believe that this target is science aligned and [ attends ] with a third party to confirm our alignment in the coming months. So something else we wanted to highlight, which is on this slide, is our progress to date in our overall -- in achieving our overall reduction target. So when we first set our target, we also shared our anticipated pathway. So what it would look like or how -- what the trajectory from getting from 2021 to 2030 would look like. And so what we expected in 2023 was that we were going to be at around 1% to 2% of that 2021 base year. So accounting for acquisitions and divestitures as well as some other adjustments, in 2023, we're really pleased to report that we're 5% below our 2021 target. And that really puts us ahead of our anticipated pathway. So how did we get there? Purchasing renewable energy certificates made up a small portion of that overall reduction. So we did that to offset our total electricity consumption in the U.S. We met our goal, like Matt talked about, of 50% the replacement of our fleet being CNG vehicles, and we used 60% in our U.S. fleet of RNG in those CNG vehicles. And lastly and most significantly that contributed to that overall reduction is that we reduced fugitive emission from our landfills. And we did this through improvements in our gas capture systems at our landfills and investments in the related development of RNG facilities. So our RNG portfolio update. I'm not going to go into a lot of detail on this. Patrick and Luke have really spoken about this a lot on investor calls over the last few years. So to reiterate the scope of the opportunity, at the end of the last year, we had 4 RNG facilities flowing gas into the pipeline, and this includes our latest RNG facility, which is our largest, at the Arbor Hills landfill. We expect these 4 projects to contribute $50 million of adjusted EBITDA in 2025, ramping up to $75 million of adjusted EBITDA contribution in fiscal 2028 as additional wellfield improvements are implemented at these sites. At the moment, our first 4 projects are selling into the transportation markets. And longer term, our strategy is to move 60% to 70% of our portfolio to fixed contacts as production stabilizes. We're in various stages of developing another 15 projects, and our latest view on the overall RNG opportunities is that we expect to see contributions of another $100 million of adjusted EBITDA from these projects for a total run rate in fiscal 2028 of $175 million. And this will be from a platform of 11.5 million MMBtus. So I think that's it for this sort of pre-morning session. Now there's a bit of a break. Okay. Thank you very much.

And now we will take a 15-minute break. [Break]

Please welcome to the stage, Craig Orenstein, Vice President, Corporate Development.

Thank you. Welcome back after the break. Hopefully, everyone is caffeinated for this next stage. I thought it would be useful to start the second part with a quote by Jack Welch. "An organization's ability to learn and translate that learning into action rapidly is the ultimate competitive advantage." And with that in mind, let's explore our history of M&A and how strategic acquisitions can drive sustainable success. Execution of the illustrated track record has generated exceptional results, as M&A fits well within a clearly articulated and demonstrated strategy of organic growth, margin expansion, leverage reduction and long-term sustainability. As a company, we have employed a deliberate and continued investment in technology, creating a solid foundation and one which can absorb and interpret data. Having now built our digital foundation with scalable systems, together with significant investment in corporate development and integrations, we are uniquely positioned to build and execute on a deep pipeline. We now boast an established M&A platform with a proven acquisition track record as an acquirer of choice with significant momentum. The velocity of acquisitions has steadily increased within the framework of a disciplined execution approach, with capacity and capability to execute on 30 to 50 transactions annually and spend capital between $700 million and $900 million. 2024 was a year of portfolio optimization. Within a higher interest rate environment, the business was focused on deleveraging our balance sheet, balancing our capital allocation between M&A and other high-return growth initiatives, including EPR and RNG. While acquisition deal flow was lower, we were highly successful in our divestment of our Environmental Services business, which the corporate development team was intimately a part of. Notwithstanding, we continue to build a pipeline as we head into 2025. And as we return to higher activity levels, we do so in an environment within GFL with lower execution risk across the platforms, led -- spread across U.S. and Canada, and without the burden of actively being concentrated in any one market at any one time. From a market perspective, the North American solid waste market is estimated to represent USD 80 billion of revenue, with just over half controlled by the public company set. We estimate the addressable market to GFL within our existing footprint to represent approximately USD 10 billion, split 75% in the U.S. and 25% in Canada. We are well situated to capitalize on an industry experiencing continued consolidation. Owners do not have a good succession plan or an exit strategy. We have shaped and defined a reputation in the market as an acquirer of choice and believe that positions us extremely well. M&A is one of the activities that we do best within a returns-focused capital deployment strategy with mid-teens-plus ROIC returns. We are positioned for success with a corporate development team that is multidisciplinary and has expanded alongside our partners and integration. Together, our capacity for dealmaking has increased with experience and [ tenor ], while simultaneously lowering the risk from execution of an M&A strategy. Further, the importance of alignment and collaboration with the broader GFL executive team cannot be understated and brings together multiple disciplines. With a shared vision and a deliberate purpose from an initial term sheet through diligence to final documentation, functional areas across the business contribute and collaborate to ensure a process that is disciplined and results oriented. Over the past 24 months, I've been intimately involved in a regional strategic planning process, helping to shepherd strategic development. Across each region with area vice presidents, regional vice presidents, sales teams, financial partners and others; we've created about -- we've created an environment to evaluate strategic themes with three objectives: directing resources to markets that can deliver the highest return on capital, developing strategies within each local market to best position GFL to compete, grow and defend; and to ensure alignment among key functional groups within GFL, with regional strategies, including M&A. We have experienced unwavering efforts to reach full strategic and financial potential. Understanding the strategic position of each local market helps to inform our continuing evaluation of opportunities. With the passage of time, we now have a framework to continuing reviews to revisit strategic positioning, strategies and initiatives and to align on priority strategic acquisition targets. Importantly, we have established a connective tissue between market development and operational execution. Our footprint in Wisconsin highlights the continued execution of these strategies and the combination of asset quality, densification, vertical integration and execution. In 2020, we acquired a portfolio of assets through the divestitures of Waste Management and ADS, which have now evolved through more than 10 acquisitions into a fully integrated platform, complementary upstream and downstream lines of business, providing strategic advantage. The platform now supports additional capital investments in initiatives such as RNG and recycling. As Stephen demonstrated, the size and scale of the market that we have built supported the investment in a new material recycling facility, which allowed for the internalization of tonnes that we previously directed to third-party processing facilities. Our growth within the market aligns with the pie chart on the slide. The theme of executing against the pipeline, primarily representative of tuck-in acquisitions, is evidenced therein, which shows that 84% of our deals completed in the last several years were categorized as having an enterprise value of less than $30 million. Within our footprint, there's significant strategic value to be captured through the pursuit of transactions without regard for size, which often includes small family-run operations. Finally, to note, the execution of our M&A strategy has benefited from an advanced repeatable due diligence process. The quantum of deals that we've completed have allowed us -- have allowed our business to evolve a due diligence process to be best-in-class and includes the development and now consistent application of controls, processes and procedures, including stocks audit and compliance controls. We have consistently demonstrated a track record of value creation. Strategic accretive acquisitions can drive significant growth and strengthen our market presence. Results are overwhelmingly positive. Our historical activities have benefited from meaningful densification opportunities, building out our collections to feed the transfers, to feed the processing facilities and landfills in a vertically integrated manner. Excluding platform acquisitions, we have historically completed acquisitions at an average adjusted EBITDA multiple of 7x. The illustration on the left walks through the value-creation path, beginning with acquired EBITDA. Numerous levers are available to the business to reduce costs almost immediately following an acquisition, ranging from optimization efforts to cost rationalization and disposal internalization. Our confidence to underwrite against these synergies is high and translates into high-margin, accretive, post synergy adjusted EBITDA multiples that are reduced by 25% to 30%. This multiple reduction is further supplemented by often meaningful opportunities from pricing and cross-selling opportunities, offering additional services across the value chain. The illustrative example of ROIC over a 5-year period assumes that GFL deploys $750 million of capital on tuck-in acquisitions per annum. Acquiring $100 million of annualized EBITDA and $400 million of annualized revenue assumes a 25% margin and capital intensity of 7.5%. As we just discussed, a proven framework for synergy realization and full integration will improve adjusted EBITDA margin significantly and grow free cash flow through the first year by -- in excess of 60%. Assuming a 7.5x acquisition multiple and the referenced acquired free cash flow profile, tuck-ins are executed at 7.5% unsynergized, 12.3% synergized yield, increasing to 15% in year 5, representing a conservative and desirable result accretive to GFL. Julie Boudreau is next to present. Julie has been with GFL for 11 years and is the Chief Transformation Officer. Julie has played a critical role in shaping our success and has demonstrated leadership, vision and an ability to manage complex challenges and has been instrumental as a partner to my success as well. So Julie?

Thanks, Craig, for that wonderful introduction. I'm going to talk to you today a little bit about the transformation group, what we're all about and our road map over the next couple of years. It's important to mention first that the teams within the transformation group have existed for some time in GFL. We've just recently pulled them in under one umbrella to make sure that we're all working in lockstep to deliver the enterprise initiatives for the business. So we're going to start with the integrations team. I spoke a couple of years ago to you about the integrations team and what we do. We still have our M&A [ SWOT ] team doing the integrations, applying our integration formula to every single acquisition that we do. Their goals are to integrate as quickly and as seamlessly as possible so that we can capture that return on invested capital as quickly as possible. Next, we have our business process transformation team. That's a group of individuals that are Lean Six Sigma certified individuals. They work with the business, both operations in the back office to identify those business processes that are basically right for optimization. They're very much focused on getting to a seamless and GFL1Way of operating. The optimization includes either reengineering, retraining or automation in many cases. We also have our enterprise transformation team. So this team leads all the enterprise initiatives at GFL. They plan, they resource, they change, manage, so create a movement, make me care and help me learn, they train and then they execute. Think of this team as the go-to-market team for the enterprise initiatives for the business. All the leaders in this team have a lot of knowledge of the business, and they also have a lot of experience running enterprise progress. So transformation, talk a little bit more about that. The GFL transformation is really part of our fabric. It's part of our DNA. You've seen before, we've done 270 acquisitions to date, 240 of which I've been lucky enough to be here for. We've executed successfully on large separations. At the same time, over the last several years, our IT team has been working to modernize our system. So we're now in cloud. We utilize data lake technology. We're well down in the past in our AI technologies, which you've heard about in the prior presentation, and we'll talk a little bit more about that in the next slide. We've also implemented scalable ERP systems very smoothly at GFL. So we have the team, we have the digital foundation, and now we're going to be harnessing that value out of those systems. So a little bit more specifically, what do our initiatives look like? So we have a multiyear road map. It's very much front-end loaded in the first 24 months. One of the major initiatives that we're working on is the rollout of our consolidated operating system and the integration of that into our data lake. What is that going to do? That is going to provide us with real-time visibility on our customer and operating trends, and it's going to provide visibility to our ops leaders to make up-to-the-minute decisions for their business. It's also going to support our price increase strategies and our ancillary charges strategies. AI, again, you've heard about AI in our customer experience and in our recycling initiatives. We're also implementing AI for our recruiting efforts. It's going to save a lot of time as we're capturing that potential employee interest very quickly as they visit our career site. We're also going to be rolling out a program for our office workers. AI is the great simplification tool and acceleration tool. We're going to systematically teach our system users how to effectively use AI to accelerate those tasks. Finally, the LMS, which you heard about from Ben earlier, we're continuing to migrate our training programs onto our LMS, doing great stuff, employees that feel that they're invested in, our employees that feel valued, let's say, at GFL. So with that being said, I'm going to leave you with a couple of thoughts. Think of transformation as the bridge connecting the islands at GFL for all enterprise initiatives. And also, just the last thing you'll see is every single one of our initiatives that we're working on are directly connected with the pillars that you saw in the prior slides. We're working to perfect the platform to create that value for the operations. Thank you very much. And next up is Luke Pelosi.

Hearing from everyone, all of my colleagues, I realize I'm woefully unprepared. I had very nice, articulate speaking notes, and I have a couple of bullets on the stage. But prior to us starting today, I was catching up with Tyler Brown from Raymond James. And what he said he was like, "I hate coming to these things and all of this, just the CEO and the CFO up there talking. Who wants to hear that?" And I think he's right because I mean part of this, like we have an extremely compelling easy to understand sort of growth opportunity here that I'll go through some of the pages on. But I think even more exciting is the people that are going to execute that. And I get a lot of time to talk with all of you folks, but I'm really just summarizing all of the great efforts and accomplishments of all the people that you're hearing from. And so part of our key focus and desire for this is for folks to walk away and understand the quality and depth of the bench of the folks that actually do all of the stuff that I come in and explain to you the financial results thereof. I want to put together a deck that show these opportunities and then summarize it, and this is the financial outlook section I am going to walk through. As you can imagine, a deck like this getting put together, there's all these back and forth and reviews and comments, et cetera. And one point I asked Hamza on like, "Hey, Hamza, send me the latest sort of review where people are having this e-mail forwarded over to me," and I'm reading and I was talking to the number here. And then there was a bullet that said we're going to update Luke's picture, right? And then I was caught off guard a little bit, and I'm looking at this picture. And I don't know if it's because I have one button too many undone on my shirt or if it's because that picture, I have none of the gray hair that I have today, and they just thought it was sort of misrepresented. The gray hair that is here, that picture was right before the IPO. So I can conclude one or two things. Either one, for the last 5 years, dealing with you all has done this to me; or two, it's trying to keep up with Patrick, Mr. Dovigi and all of his plans. Patrick is a force. The irony when he told the story we met and we sat down and I joined to do M&A. And I asked him at that time, the business was $80 million of EBITDA with a 5-year plan to go to $116 million. And I said there's going to be enough M&A to keep me busy. I got a good thing going over here, and he sort of laughed and he said, "Don't worry, sir." And sure enough, he was right with the opportunity. So one way or the other, I've ended out sort of old and gray, but I get to summarize really bringing together everything that the team just described today, and it goes back again to the simple key strategic pillars, right? This is what we think is the sort of outlook in terms of equity value creation opportunities in front of us. They've been touched on, so I won't read the words on the page, but I hope the idea was to illustrate how everything that we do is tied back to these key tenets of what we believe to be a long-term sort of successful equity value-creation strategy. The starting point, let's look at the guidance. In our earnings press release this week, we put out our fiscal 2025 guidance. We've lined this up against the '24 pro forma, if you will, so the RemainCo that we have today. I'm pretty sure when I do the math and I compare to the industry average versus industry leading across the board, and you can see a top line growth of mid-single digit or better. That then translates to 20%-plus free cash flow growth down at sort bottom. One of the things that we have come to realize in the public markets is people would much rather have you sort of beat and raise than put out a really lofty expectation at the beginning of the year and then come and achieve that by the end of the year. It doesn't seem to get the same outcome. So as Patrick said, we've learned a lot over the past 5 years. And I think that's one of the things that we've learned as well. So we think this is a good guide that again demonstrates industry-leading results, but we do see multiple avenues with potential upside, as we articulated on the conference call. Additionally, this guide has no M&A. And you heard from Craig and from Patrick, we have a robust pipeline of opportunities, and all of that will be additive. There will be M&A, and that will add to the sort of numbers that are on the page. But we don't really want to talk about just the 2025 today, we're really here for this sort of multiyear outlook. And so when you think about that, we had this page or similar to in our prior Investor Day, but we believe it's sort of really accurately or concisely summarizes what we view to be the sort of GFL opportunity. And it starts with a great industry. And I think the industry has never been in a better place in terms of sort of opportunity as it goes forward. And with a waste asset of scale, there's a very predictable sort of growth algorithm that comes out of that. And it's shown on the left-hand side of the page here with a mid-single-digit top line growth. With a little bit of modest EBITDA margin expansion, you get mid-single digit or better at the EBITDA line. And then that translates to a high single-digit free cash flow CAGR. I mean I think that's the industry pretty tried, tested and true and demonstrated from the large peers, the sort of consistent ability to deliver in and around those ranges organically. So we take a very compelling industry algorithm. Then we look at the GFL assets, which I would say we've been able to assemble an asset-base that's sort of the best-in-class, really predicated on market selection, as well as then the sort of team that we have to utilize those. And we add to that, the incremental opportunities. Now as you can imagine, we sort of highlighted 4 or 5 sort of buckets of opportunity here today. There's numerous other initiatives that are obviously being worked on constantly that we believe will drive incremental additive return in addition to what we said here. But the idea was let's just summarize 4 or 5 very easy-to-understand tangible levers that are actively being worked on by the folks that have done these exercises at other shops and have demonstrated very predictable outcomes. So just summarize what those, and if you take that and add that to that industry growth algorithm, you can see this GFL organic growth in the middle column, and we just think we have this unique idiosyncratic right to do better than our peers by virtue of the realization of those opportunities. And so you end up with this organic that's a little bit better than an already very compelling industry growth algorithm. And to that, you add M&A. And through all the reasons Craig and Julie sort of discussed, I think it's an area where we demonstrated our expertise, capabilities and one where we see a lot of opportunity to continue on a significantly lower sort of risk profile than we had before. So if you take that and add that to our organic growth algorithm, we get the far right column, which we feel a high degree of conviction on this ability to execute growth rates at this that I think it tends to be significantly higher than what the sort of industry average otherwise is. Taking that page and summarize, I'll go back to Tyler Brown. He love to tell me the bridges that we sometimes do in our decks are a great way to articulate the story. And again, the idea was to set up some collateral that folks, either existing followers of GFL or net new names, can pick up and understand the growth story, and we thought that this page very well sort of summarizes it. And you're just taking a handful of very simple building blocks. Patrick summarized the EBITDA page. This is the revenue version thereof. And it just simply says, take the $6.5 billion of revenue we've guided for in 2025, and to that, add on to some of the things we've talked today. So talking about organic growth, 5% to 6% top line growth, industry average type numbers. you could assume in there a pricing number of sort of mid-4s to mid-5s and a volume number of 0 to 50 bps. Each year will be something different, but we feel sort of a high degree of conviction that over this frame of reference period, you could achieve growth rates organically on the top line in and around that range. To be honest, if '25 to '26 is not greater than that, we would be disappointed, but just for sort of conservatism, that's what we put out on an organic growth perspective. Add in tuck-in M&A. You could go -- I think on this page, we're saying you buy $300 million to $400 million of revenue a year. And I think it's a very sort of achievable level that the team is capable of executing on and the sort of market opportunity more than supports. If you go and buy that and assume you buy that revenue and then that grows at that same organic growth rate, you would add on that roughly $1.3 billion, $1.4 billion incremental revenue. You take EPR and RNG, between Steve and Nicole and Jen, they laid out what that looks like, high degree of conviction of those dollars coming into the system over the next couple of years, and that adds another $300 million. And then the self-help levers. It's a relatively small number in this space, but it's more an EBITDA driver, which we'll get to in the next. But this is really that ancillary pricing opportunity. And again, if you think within context, I mean, our commercial book of revenue of $1.7 billion, $1.8 billion to think that you're going to be able to yield a sort of 2.5%, 3.5% incremental lift by implementing the same pricing program that all of our peers do. Again, I think there's a sort of conservatism baked into that estimate and an opportunity for upside above and beyond that. So that shows a path of revenue, $9.2 billion, $9.5 billion. We like to focus on the profitability lines more. And so this page just then translates how those amounts will flow through to the EBIT line. And again, same building blocks, what we would characterize as conservative assumptions. I look at the EBITDA line and think about that organic revenue of 5% to 6% that we talked about. This assumes you're realizing 40 basis points of margin expansion in a year. For everyone who follows the industry, there's a lot of conversation about price/cost spread, right? So you figure out your cost inflation, you price something above that, and that generates EBITDA margin spread. 40 basis points of adjusted EBITDA, that assumes a 60 basis point price/cost spread. That's sort of effectively the math. I think we've anticipated the 2025 number being north of 100 basis points of spread. So again, I think this is providing a lot of opportunity in the out years to solve or whatever sort of macro inflationary backdrop may be there. And there's probably a good opportunity to do something better than this. The tuck-in M&A. I mean, Craig just walked you through what we believe to be a very compelling illustration of how the synergy value gets captured through years 1 through 5 of acquisitions. And if you bought something at mid-20s margin through those synergy capture so you can take that up to EBITDA accretive margins of sort of low to mid-30s. For simplicity, this doesn't assume any of that, which just says, "Hey, I bought $100 million, $115 million of in-year EBITDA through acquisitions." And just keep it at a margin and then have that grow at the same 40 basis points that you're saying the regular business does. Again, think conservatism, I think our experience, I suggest that there's something much greater than that. But even if you take that very sort of simplifying conservative assumption, you can see $420 million of incremental EBITDA to be realized through that level of M&A. EPR and RNG, again, $175 million incremental doesn't give consideration any margin expansion that will come out of that or any improvement of [ RIN ] prices or outperformance of 11.5 million MMBtu that Jen spoke to. So once again, we feel very confident in the ability to deliver those numbers. And then the self-help levers. Between Billy, Ben and Matt, walked through sort of about $100 million to $200 million of opportunity. And again, each of those items, I mean, if you pick employee turnover, one of the examples. So in there, we're saying, "Hey, employee turnover today is 22%, you're going to improve it 500 basis points to 18% over the next sort of 3 or 4 years." You have roughly 14,000, 15,000 employees, you improved the sort of 5 basis points on that at 700, 750 employees that you're not turning over every year. I mean, I think it was Ben or Matt that walked through the cost savings associated with an employee. I mean this onboarding, there's the wage, the productivity, all the things that we articulated. And this is using a pretty conservative $30,000 number, a $35,000 number. I think once you layer in cost of risk and productivity, et cetera, you could attack a much larger number to what that actual cost of that employee turnover is. And so once again, I think there's an inherent degree of conservatism in that number that we're putting. And you could say the same for all of the pieces, the CNG truck conversion, the procurement. But nonetheless, when you put those together, it's $150 million of EBITDA. And I guess where I'm going with all of this is our hope is for folks to be able to understand very tangible levers available at our disposal that don't require us to hit a home run per se, which is rather singles and doubles execution once again led by teams of folks that have done this at our peers and learned from their mistakes and have the opportunity to do it a little bit better here. And I think that act would support doing something better than what the historical experience has been. And yet I think what we're articulating here is something at a discount to what historical has been. You put that together, you get a 17% plus EBITDA CAGR over this time period, and you're going to add sort of low to mid-30s margins. Now one of the things we were having a conversation before is the GFL since we've gone public, there's been a lot of sort of boxes to tick. And the first, it was just too complicated. A lot of notes I saw this week after we put out our earnings described it, used the word boring. So I guess we've ticked that box. It's no longer sort of too complicated. Then we had a sort of leverage component. Well, as of Monday morning, we're actually going to receive a sort of $6.2 billion of proceeds that are going to want to throw sort of deal with the sort of leverage and sort of tick that box. Last 1 that anticipates what it is coming is it's kind of the free cash flow conversion, right, because it's still an area where we have lagged our peers and I think folks want to understand what that path to free cash flow conversion and what gives us the conviction in being able to drive improvement there. Give credit to Hamza and Murray and the guys for putting together the slides, I think it very accurately sums up what we see to be the path to doing so and breaks it down into, I think, very sort of straightforward understandable components. Along the left-hand side is really just the guide, and it shows how from adjusted EBIT of high 29s even walk to an 11.5% free cash flow margin or sort of 38.7% conversion. And highlighted the components that drive that, right? Really against that, you have CapEx, you have cash interest and then cash taxes and other. And today, by virtue of the sort of leverage profile that GFL has operated with, we have operated with a cash interest burden significantly higher than our peer group. And with the delevering, we are now going to embark on a path whereby our cash interest intensity is going to gravitate towards that of our peers. And I think it's really that line item and that line item alone, once you get your head around some EBITDA margin expansion opportunities, which again, we're saying go from almost 30 to low to mid-30s. I think there's a real opportunity to sort of do better than the implied sort of 32 or 33 that the sum of all those opportunities suggest. But once you get your head around some EBITDA margin expansion, the free cash flow conversion is really sort of coming down to those sort of 2 cash interest and cash tax lines. Because the capital intensity in these businesses is pretty well documented and understood. And we're going to operate at 11% capital intensity just like our peers. We're going to have our cash interest materially moderate as a percentage of revenue as we go forward in the deleveraging trajectory and the one-off that is going to be we're going to become a larger cash taxpayer. Right? We've afforded by virtue of all the leverage historically, we've had significant tax shield that has avoided us having a full cash tax burden. That's going to start to ramp and not at the same pace at which the EBITDA margin is going to expand and the cash interest intensity is going to reduce. And it's as simple as that, and you put these things together, you can see a clear path to what will be a sort of mid-teens free cash flow margin or a mid-40s free cash flow conversion. What I'd say is that fiscal 2020 column there, that doesn't even represent the sort of end state. I mean if you think about the interest intensity, we will eventually look just like the peers. It's not going to be fully achieved by 2028 despite virtue of how some of that sort of debt will roll off. But that will continue to be a tailwind for the improvement of GFL's cash flow conversion that is afforded to us and us alone as our peers are already enjoying up so the lower intensity. The 1 other item I'd say is this contemplates a significant step-up in cash taxes as we're now sort of full cash tax payer in the U.S. This does not contemplate any extension of bonus depreciation or other sort of tax incentives that have existed over the last couple of years. To the extent that gets reinstated, the capital-intensive nature of our business, bonus depreciation will be -- significantly temper this otherwise sort of ramp in sort of cash tax payable. And the free cash margin and the free cash flow conversion would be significantly better than what's shown on the page if that is to sort of transpire. The other item that I would say of all this, when you put it together, yields a sort of free cash flow $1.3 billion, $1.4 billion or better, low to mid-20s free cash flow CAGR from now until 2028. What's not said on this page is what's happening to leverage with this. And as much as there's been a big focus on leverage, if you execute on this plan, the strategy that's laid out included buying the $700 million to $900 million of M&A, a year deploying that much capital. Leverage at the end of 2028 on this plan would be 2x. Now that's not a real outcome. Patrick has maybe agreed to join the sort of public equity world in terms of where leverage is supposed to be, but I assure you it won't be 2x. And so what does that really mean? There's incremental capital available above and beyond this for share buybacks and other incremental sort of returns to sort of shareholders. That's not factored into here because it starts getting hard to estimate where the share price is going to be. But if you're able to sort of grow free cash flow at a 20%, 25% sort of CAGR and then simultaneously be reducing the share count outstanding by virtue of share buybacks, well, there's obviously a better sort of growth rate at the per share level available. And then again, just reiterating the sort of deleveraging that has occurred and the commitment to staying there and highlighting that the commitment becomes easier today because of the inflection point that's been reached on both an organic EBITDA growth and free cash flow generation. You're able to deploy $500 million to $1 billion a year into an M&A program and still sort of maintain leverage in the near term in the next couple of years. And thereafter, we'll actually have to start deploying incremental capital through dividends or shareholder order to maintain leverage at this level. So hopefully, and I know we still need a couple of quarters, but we can stop having this conversation and we can start focusing on this incredible growth opportunity that exists within GFL. Capital allocation priorities, which I've been touching on, we'll continue to do what we have done, focusing on high-return organic initiatives, augmenting that with sort of M&A. And as I said, now this third bucket that hasn't really been available to us before of incremental sort of returns to shareholders. The one last piece that I'll clarify or articulate, we put out this morning in line with the sort of capital return to shareholders. Normal course issuer bid this morning was launched. It gives us the sort of opportunity to buy up to 28 million shares in the public market. We have said that with the proceeds of ES, $2.25 billion is earmarked for the repurchase of shares. It'd be roughly 36 million shares at yesterday's share price. The intention and expectation is the vast majority of that will be repurchased from our financial sponsors and the NCIB will be there for a sort of a small degree of those full $2.25 billion to be purchased in the open market. Last item I'll touch on before I'm going to bring Patrick back up for closing remarks is just the concept of index inclusion, not so much as much as what GFL is doing, but just in terms of what else is happening sort of macro from the GFL stock that could have a material impact on GFL. Today, we are not included in any of the large indices, really being the TSX 60 in Canada or the S&P 400 in the U.S. The TSX 60 in Canada, there's less movements that happen in that than, say, the S&P 400 to 500, and therefore, changes to index constituents are less frequent. However, there could be a path over the next sort of 3, 6 months where there actually is some changes happening in that index. And GFL, this is based on CIBC's index team and stack ranks their expected most likely contender to enter the TSX should 1 or 2 of the current members be removed. And what it shows up is Fairfax Financial, an insurance company based in Canada, by far the largest from a sort of market cap or float cap size, but happens to be in a sector that our index is already very overweight. And they do have a mandate to try and have a bit more balance in terms of their sort of sector allocations. If they were to prefer an industrial, which is one of the larger underweight sectors, you can see based on CIBC at least, GFL is the highest ranked likely sort of name to be included. There could be a rebalance or a change of constituents as early as March 7. There could potentially be another one on June 7. So there could be potential for 2 opportunities for new names to be introduced. And I think the idea is just to show that GFL is positioned very favorably to be sort of part of those potential sort of changes. Why is this relevant? I think index inclusion in any drives more specific index demand. I think there's a perspective that in Canada, not only does it drive specific index demand, but there's a whole host of incremental shadow demand that comes from not necessarily pure index funds, but maybe those who very closely hug those indices. And to the extent TSX 60 index inclusion is not there, you've heard a lot of sort of noise as of lately of Canadians that are contemplating sort of redomiciling or other things to make themselves able to be U.S. index included. I mean, GFL, we have a significant sort of base of operations in the U.S. that eventually could sort of be a plan sometime down the road if TSX 60 was never a viable option. But where we sit today, we think there's a very obviously very quite all of a sudden compelling opportunity that could see GFL get included in Canada sooner rather than later. That's all I have. I'm going to bring Patrick back up for some closing remarks, and I think we're going to open it up to some Q&A.

So yes, just in summary, again, keep it brief, keep it quick, and we'll open up for questions. But I think story from here is pretty simple. Again, 5 really key messages from my perspective, again, what you're going to see from us over the next 3 years is obviously industry-leading adjusted EBITDA growth. Again, clear path from our perspective to move free cash flow conversion towards the mid 40s again, as you've seen from Luke and what the budget presented was [ 38.7 ]. Obviously, our expectation is on the promise and over deliver. Our internal targets that we want to hit 40 this year. Again, balance sheet leverage, as we talked about, again, we've taken all the necessary steps. We've taken all the pain over the last 5 years in the market. We get it. We understand it, leverage in the low 3s, moving to investment grade, again, top of mind for us. Post Monday, leverage won't be a thing for GFL again. Obviously, the reignition of what we've done best for the last 17 years, again, looking at sort of very strategic M&A with high returns on invested capital. And again, just a stronger free cash flow profile that we're now going to have with the delevered balance sheet. Again, for the first time, we're going to be able to look at increasing dividend and doing share buybacks, which will be beneficial to us as shareholders. So with that, open it up for any Q&A that anybody has and moving forward.

I'll let the record know, I love CEOs and CFOs. Tyler Brown, Raymond James. But hey, a couple of clarifications first. So on the $40 million to $80 million of pricing opportunities, is that just fuel surcharge capture? Or does that include other ancillary pricing like [ then overages ], for example?

It's mostly ancillary charges. Our fuel surcharge program has been articulated. We are very successful in ramping that up. It's not fully there. Some of it was contractual that we had to wait for that to turn. So we still see a small amount of incremental fuel surcharge as we're not fully there, but the majority of that would be the next leg of surcharge being ancillary. And this is really focusing on one aspect of ancillary. And as you know, every month, there appears to be new ones. So we see a lot of opportunities there as we're in the nascent stages of that.

Okay. And then I think Ben mentioned that 28% of the book is on a non-CPI-restricted mechanism. Can you talk about and unpack what's in there? Is that water sewer trash? Is that just regulated returns? Is that increases? Just a little more there.

It's mostly going to be just fixed annual increases, Tyler. More and more, you have people -- back up. Sewer water trash does not seem as prevalent in many of our markets as it is in some of the others. I think it's a Southwest coming across the country. We're a big supporter of it. We think it makes sense. We just haven't seen a lot of those opportunities in our markets.

And it doesn't exist in Canada at all.

But we do have a lot of, hey, we want to be CPI, well, we're not -- can't do CPI, but we can do 3.5%, 4% fixed. Right? So now you have that type of sort of restricted book. So I think there'll be more of that than an alternative index.

Okay. And my last one, so I love the conversion chart, extremely helpful. But just to be clear on the cash interest leverage, does that assume that you move to 700 to 900? And what drives it? Is it coupon rates on investment grade? Is it just leveraging the overall debt stack? I mean can you talk a little bit more about that and just clarify that?

Yes. So that cash interest and free cash flow conversion nears up with the growth waterfalls we've had so includes all that incremental M&A and that annual $800 million spend on M&A. And in there, it's not assuming you're getting a better coupon rate, it's taking your current debt stack, but it really is there's the leveraging the fact that the interest expense doesn't grow at the same rate as what the EBITDA is doing by virtue of this inflection point that's largely self-financing that M&A spend from your own sort of free cash flow. Now as we go forward and you get better borrowing rates by virtue of improved credit quality, that would all be accretive to what's in there? And that's why you can see in there that end state that already demonstrates what we believe to be extremely compelling mid-40s free cash flow conversion is being achieved even with a cash interest intensity 100 to 150 basis points higher than our peers. Ultimately, there's no reason why we don't achieve that same cash interest intensity as our peers, meaning incremental upside above and beyond what's on that page.

Jerry Revich, Goldman Sachs. Patrick, Luke, can you just talk about the M&A pipeline over next year? Luke, as you pointed out, you probably do nearly double the M&A target that you laid out and leverage still be at around 3. So I'm just trying to put your comments into perspective on how you're thinking about M&A versus buyback going forward. Versus previously because the economics for tuck-ins are really attractive. So I'm wondering, is that a comment on, say, maybe in 5 years, there won't be 1 way to do over $1 billion a year of acquisitions? Or how would you counsel us to think about that allocation decision?

Yes, I still think we have a good 10 years in front of us on M&A. I mean, from everything we're seeing, the needle really hasn't moved that much on M&A. There's a significant amount of opportunity within the existing market. Our addressable market in the U.S. is still probably $5 billion to $7 billion of M&A that we can do over top of the existing markets in the U.S. So I think there's a long way to go, particularly in the U.S. And in Canada, you look at Canada, I mean, 1/3 of the market is consolidated today. We're the only operator in 10 provinces. Sort of white space we have in Canada is significant, although the deal sizes are smaller, the number of deals are a lot more. But I don't think, from our perspective, spending, as we said, somewhere between $800 million and $1 billion a year on M&A is a tall order. I think that's down the middle of the fairway and we think we can do that pretty conservatively year in and year out for the next sort of number of years. Obviously, on share buyback, you want to be opportunistic where the price is. Today, we see some very compelling value and where the share price is, given the opportunities that we see in front of us, '26, '27 and '28 and sort of the -- the plan we have in the next 3 years. So our anticipation is we're going to get those share buybacks at least with the initial capital from the sale of ES to get those done relatively quickly. So you'll see us an active buyer in the market starting next week as well, once we get sort of always the approval to buy back the large state from the inside block, that will happen relatively quickly as well. So back in form, we tick off when we get the proceeds on Monday, but we expect that to happen relatively quickly and buy back that large swap of stock from them quickly.

And Jerry, on M&A, as Craig articulated, and you reference, there's a lot of value creation in the tuck-in M&A, right? And so you buy at 7x, 8x small business and for the reasons we articulated, start to mid-20s margin ends up low to mid-30s, highly accretive, you sell the return profile. Those small deals, the perfunctory capacity today as to how many transactions you're going to do in sort of given here, I mean, Julie and Craig are here. I mean we'd like to close a month end, 3 per month end is comfortable, 4 start saying a little less. So I gave you a sort of 36, 48 deals a year. Obviously, we could ramp up the sort of teens there. But if you're buying the 35, 40 deals a year at that sort of $2 million to $3 million EBITDA, that's really what's putting the cap on the deployment, less so than the opportunities that Patrick said, right? And you do want to part -- sure, you can start buying bigger businesses and deploy more capital. But where we sit today, over this reference period, we think the highest and best return is the small densifying tuck-ins that are going to feed a relatively underutilized post-collection assets. And you're going to have a bit of a perfunctory cap just by virtue of that.

Historically, we've done 1 to 2 larger ones a year and then 35 to 40 smaller tuck-ins a year. That's been the normal cadence. And again, I don't think that's going to change materially moving forward.

Super. And can I ask just on your comment on post collection assets that are underutilized. Is there any significant part of your footprint that could benefit from declining reserve life? We've seen a number of relatively large landfills actually close. I'm wondering, as you look at the reserve life issues for the industry, is there a big pricing opportunity or potential rail opportunity for you folks as you look at your footprint?

I mean Craig was talking on the sort of strategic market development initiatives that sort of big and he team are doing an it's exactly that, looking at areas with what the changing landscape is over the sort of coming years and how our asset positioning may afford us an opportunity to have outsized sort of wins. I mean, Patrick, I think about -- we highlighted in our prepared remarks, Florida and how successful we were with that 1 asset in Florida and putting the network. But Miami yields an interesting sort of example for the real-time of opportunities such as that.

I think Florida, the Carolinas, obviously, various parts of Canada. We see, again, a push to remove a lot of smaller landfills, regional landfills to move to more supersite sites that are managed properly managing leachate, particularly around the TFOS related issues. I think over time, you're going to see the EPA sort of want to sort of move away from the smaller landfills and move to more supersite sites that all volumes are controlled properly and managed properly. And you can put in proper infrastructure based on material volumes, right? So I think that wave continues to come. I think it will continue to come. Again, Florida has been a great market for us. Obviously, with the incinerator in South Florida, burning to the ground in Miami, sell Miami, Broward et cetera, looking for places to put a lot of volume. We're in process of permitting new facilities there, et cetera. So I know I think there's a whole swath of opportunity across all of our markets. And I think we really concentrated our bets on the markets where we think we can drive the highest returns. We've exited the markets where we don't -- for us, particularly, we didn't think there was a great opportunity, and we're now just doubling down in the markets where we think have the best opportunity.

This is Brian Butler from Stifel. Just to stay on the topic of M&A. When you talk about that $700 million to $900 million annual deployment, that's a little bit down from in the past where you talked more around $1 billion. So is that just more of you guys underpromising and overdelivering scenario? Or has something changed that kind of stepped that down?

I just think we're being conservative. Just -- underpromise and overdeliver, I mean I don't think anybody in this room would say that we don't have a very good track record of getting more M&A done versus less. So I would -- if you want to see $1 billion, say $1 billion, I'm fine with it. But the deck's $700 million to $900 million, but model as you wish.

I just wanted to clarify. And then I guess on a capital deployment when you talked about CNG on the deck and going more aggressive on that, where are CNG -- like vehicle prices compared to diesel? And how does that compare to maybe what your experience has been with like electric vehicles and where they make it in somewhere down the road?

Yes. I mean we've been down the path with the electrical vehicles. I mean there's a couple of markets -- there's a couple of municipal contracts we're looking at today. Complicated, not simple for sure. Power continues to be an issue. So now looking at separating the bodies of the carbon chassis. So I think -- I still think we're a little bit away from having a perfect solution at an economical price. I mean the -- I mean we're still looking at prices north of $600,000 per truck for the -- on the electrical side. And we're still finding challenges with utilities that can supply as much electricity as we need to actually power those trucks. We're then implementing natural gas generators to produce the power to basically put electricity in the trucks, which, again, I think is defeating the purpose to a certain extent. So that's evolving. Obviously, on the CNG side, CNG trucks are still $60,000 to $65,000 U.S. more for truck. That's where it's sort of settled. But at the end of the day, there's a lot of markets we like doing it around. Again, we are -- when we're sort of looking at where we're deploying capital, we're deploying it in and around EPR and all these new municipal contracts that we've recently won, where we have 60, 70, 80 trucks in a facility, that's where you get the biggest payback, the quickest, right? And I think in 2026 will be a big turning point because we have a lot of municipal contracts that are coming on. We have a lot of EPR contracts that are coming on, the required CNG fleet. I mean you look at City of Toronto, City of Toronto, we just renewed the District 2 contracts that we had that we're currently doing for $17 million for $37 million. That requires $37 million a year. So we've got basically a $20 million a year price increase on that contract versus what we're doing it for today. We're converting that to CNG. We're doing the entire City of Toronto for recycling now. So all 4 districts in the city of Toronto under EPR. That's going to convert to CNG. The region appeal in Toronto, which is again is another 50, 60 truck. Again, that's all converting to CNG. So I think you'll see a big turning point next year in terms of CNG truck conversion from diesel starting in '26, right, through '27 and '28.

Brian, on your M&A comment capital deployment, the $1 billion, just for what its worth, I was talking about versions before and reviewing just the version. I'll tell you there's still I'm saying my data that $800 million to $1.2 billion annual deployment. And since yesterday for and today, it's not as if the market or the opportunity has changed dramatically. So it's just for what that's worth.

Chris Murray from ATB Capital. Just -- Billy talked a little bit about the mix between primary markets and secondary markets. So I wanted to ask a couple of questions. So the primary market, I guess, they're better than they used to be, but -- what are the opportunities that in terms of being able to improve those? But then I also kind of questioned we'll go back to last Investor Day and part of it was we're going to focus on tuck-ins, but there was also the talk about divestitures. When you think about the portfolio more broadly, are there other opportunities to shape it? And is there some white space maybe that helps take those primary markets and improve them in the near term?

Yes. I think from a shaping perspective, I think you've seen all you're going to get from -- at least from us. I mean, there could be some small swaps that we do with some of the larger competitors. I mean, we're always having conversations with people to exit markets and enter. But again, that's immaterial, and to be honest, it wouldn't even probably disclosed. So if you look at the primary markets, I mean, I always break up Canada and the U.S. differently because they are different. They operate differently. Again, if I look at Canada, I mean, Canada there's really 8 primary markets in Canada. The rest of it is a large secondary market. We tend to play in the secondary markets where landfills, on landfills is less relevant, really just having significant market density and being one of the only player in those markets because they're not generally room for more than 1 or 2 in those specific markets and we love those markets. And they've done that for a long period of time. In the U.S., we're really focused around the post-collection operations that we operate. I think vertical integration in the U.S. is really important. Having those post-collection operations is going to drive ultimate productivity and incremental dollars and the highest return on invested capital. So we're focused on markets where we could vertically integrate both on the recycling side, transportation side, whether we're getting in the organic side or on the landfill side. We feel very comfortable with the post-collection assets we have in the U.S. now. And now it's just about, again, driving just incrementally more volume into those facilities, which is going to yield the best return for all of us.

Okay. Maybe just a totally different question, and this is one maybe more for Luke, but let's assume that sometime in the next few months, you're probably going to get an investment-grade credit rating. With the debt stack that's left, do you have any other opportunities that you can look at, be that a refinancing or any other triggers that maybe you could reshape the debt profile?

Yes, Chris, a great question. Just to clarify, I mean, what we expect is to have significant credit rating upgrades sooner than the next couple of months. But just think their investment grade will still be some time there off, right? If you think about sort of S&P, we still have sort of, we're BB- so there's 2 levels before hitting BBB. You think you get something next week upon the closing of the deal. Fast forward and execute for another couple of sort of quarters, the next 1 up, but it to some time before investment grade. But you'll get -- start getting meaningful credit rating upgrades along the way. Your comment on the sort of pricing, GFL -- for what it's worth in the debt markets and some of our debt meters are here as well -- already punches significantly above their weight like if you look at what our credit rating is. And then in addition to that, we were smart or fortunate enough to refile of our balance sheet during the lows of COVID. Right? And so we today enjoy certain bonds that obviously...

That have been more of a -- and longer.