Good morning. My name is Melissa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Progressive Waste Solutions Limited Fourth Quarter 2012 Earnings Conference Call. [Operator Instructions] Thank you. Ms. Chaya Cooperberg, Vice President of Investor Relations, you may begin your conference.

Thank you, Melissa, and thank you, everyone, for joining us today. With me on the call are Joe Quarin, Vice Chairman and Chief Executive Officer; and Ian Kidson, Vice President and Chief Financial Officer. They'll be providing comments on our results for the 3 and 12 months ended December 31, 2012, and then we will open the call up for Q&A. [Operator Instructions] Supplemental slides to accompany this call are available on our website at www.progressivewaste.com. Please note that we expect our MD&A and financial statements to be filed on Tuesday, February 19. Before we get started, I will read our Safe Harbor statement. Our remarks and answers to your questions today may contain forward-looking information about future events or the company's future performance. Although forward-looking statements are based on what management believes to be reasonable assumptions, the company cannot assure shareholders that actual results will be consistent with these forward-looking statements. The company disclaims any intention or obligation to update or revise any forward-looking statements resulting from new information, future events or otherwise. We also do not commit to continue reporting on items or issues that either arise during our presentation or in the discussion that will follow, except as required by applicable securities laws. This information, by its nature, is subject to risks and uncertainties that may cause actual events or results to differ materially. We ask you to refer to the bottom of our news release this morning for further information and to our previous filings for a more complete description of the risks affecting our business and our industry. On this call, we will discuss non-GAAP measures such as adjusted operating income, adjusted EBITDA, adjusted net income and free cash flow. Please refer to our news release for our definitions of these non-GAAP measures. We use these non-GAAP measures to evaluate and monitor the ongoing performance of the company's operations, and other companies may calculate these non-GAAP measures differently. We do have a telephone replay of this call available until midnight on February 28, and all of the details for the replay are available in our press release. And with that, I will now turn the call over to Joe.

Thank you, and good morning, everyone. I appreciate you joining us today for a discussion of our fourth quarter and full year results as well as our outlook for 2013. 1 year ago, when I started as CEO of Progressive Waste Solutions, I set out 2 priorities: one, focus on execution within our operations; and two, invest our free cash flow with the goal of improving our return on invested capital. On both fronts, we had made progress. But we also have a long way to go. Based on our achievements in 2012, I see even greater opportunity for continued improvement ahead of us. I will begin by reviewing our progress in the year as well as the most recent quarter. And then Ian will review our results and our outlook for 2013 in detail. I have 3 high-level observations in our performance in the year, which demonstrate our progress and our top priorities. First, throughout 2012, our core business of solid waste collection, transfer and disposal demonstrated resilience led by strength in our Canadian segment and areas of our U.S. segment. The largely recurring revenue in our core business, combined with contributions from acquisitions, softened the year-over-year impact of a nearly $30 million decline in revenues from lower recycled commodity prices. We increased our total revenues by 3.1% to nearly $1.9 billion despite the commodities headwind. On a consolidated basis, we delivered core price growth of 1.4%, reflecting price improvements in every collection service line, transfer stations and stable pricing at our landfills. Consolidated volumes decreased [ph] 1.2%, as we expected, reflecting the challenging waste volume environment that existed in the U.S. Northeast and in Central Canada throughout the year. And for the year, adjusted EBITDA was $519.7 million, which is at the high end of the range we…

Thank you, Joe, and good morning, everyone. I'll start today with a review of the key variances on our income statement and other items of note in the quarter and move on then to provide our outlook for 2013. As Joe noted, our consolidated revenues increased 8.4% to $495.8 million in the fourth quarter. Reported revenues in all 3 of our regional segments increased as a result of acquisitions as well as improvements in core pricing. In the U.S., our South segment revenues grew 8.8%, and our Northeast region revenues grew 10.3% quarter-over-quarter. Reported revenues in Canada increased 7.2%, which included a foreign exchange contribution of $6.3 million or 3.1%. Total operating expenses in the quarter increased about $32 million to $305.2 million due primarily to acquisition growth. As a percentage of revenues, operating expenses increased to 61.6% or about 180 basis points. Approximately 50 of the 180-basis-point increase is due to lower recycled commodity pricing. The balance is due to acquisitions along with higher fuel costs in the U.S. Northeast that we were unable to fully pass through to our customers and higher labor and operating costs from Superstorm Sandy cleanup volumes. I will also note that in 2013, operating costs will reflect approximately $3.5 million of additional expense related to the re-branding of 3 markets to the Progressive Waste Solutions identity. Although most of our re-branding to the Progressive name is occurring through the normal course replacement cycle, we are fast-tracking 3 markets that we have grown into by way of acquisition and at which it makes the most sense to immediately establish a unified brand identity. Consolidated SG&A expense increased 2.8% to $59.8 million but declined about 60 basis points as a percentage of revenue to 12.1%. SG&A increased quarter-over-quarter largely due to acquisitions but also benefited…

Thank you, Ian. We have a great degree of confidence in our outlook for 2013 given the predictability and visibility of our core business. With our exposure to markets that are highly populated and our strong position within those markets, we are levered to benefit from any broader economic recovery as well. We are excited at both the opportunities we believe we have to deploy our growing free cash flow levels to improve our return on invested capital over time. And that remains top of mind, all of us, as we enter 2013. Operator, you can now open the call for questions.

[Operator Instructions] Your first question comes from the line of Derek Spronck from Royal Bank of Canada.

Internal projects, is the spend and the revenue list back-end or front-end weighted in 2013? And in aggregate, will they be a lift to current EBITDA margins?

Yes, they will be a lift to overall margins, in particular going into '14, which is when we will complete the gas project. In terms of the spend, it's going to be more back-end loaded, but there will be spending in the first couple of quarters as well. But just the ramp-up of the project, I think, is going to be probably more of a 40-60 in terms of first half, second half.

And do you expect some more spend on internal projects in '14? Or should they be largely complete by then, by 2013?

Yes, the -- most of the existing will be complete. There could be a little bit of a shift between Q4 and Q1 just due to timing of the equipment delivery. But we're not expecting anything significant. And as we get closer to the end of the year, we'll try and provide that visibility. And a lot of it is contingent on the actual delivery of the capital on these projects. So by the end of the year, we should be down to just having one significant project outstanding.

Okay. And on the U.S. Northeast, if -- so taking your current asset base and macro expectations, where do you see your U.S. Northeast internalization rates headed by the end of the year here?

Great question. So as you know, we've -- we laid out a plan for our U.S. Northeast at the beginning of last year. We identified the opportunities to improve our asset balance in the area. And clearly, the better your assets, the more options you have to run different strategies. So we're quite happy with the acquisitions we have and the management team we have in place. And our target is to get over 50% internalization once we get all of the integration completed. And then also, we're looking to improved margins throughout the year towards the end of -- so by the end of the year, we hope to get to a year-over-year at least equal to, if not better, margin performance and then continuous improvement after that.

[Operator Instructions] Your next question comes from the line of Hamzah Mazari from Crédit Suisse. Hamzah Mazari - Crédit Suisse AG, Research Division: The first question is just on your Canadian business, it seems like pricing is a bit lower there. You've had some loss contracts. Could you talk about at a high level the competitive dynamic within the Canadian business and how that may be shifting from earlier in the year when you had some momentum? Any color there would be helpful.

Sure, thanks. On a high level, there's really nothing changing in the Canadian business. It's really just a mix that's affecting the overall price. Our pricing programs remain intact. In fact, we've improved execution of our pricing discipline in Canada. We are putting through pricing. We talked about the economy or the economic headwinds, if you want to call them that, in Central Canada. That is providing a little more competitive environment. But aside from that, nothing really has changed up here. It remains a strong market. The economy overall is doing quite well, and we remain confident in the outlook for continued pricing growth in 2013. Hamzah Mazari - Crédit Suisse AG, Research Division: Great. And just a follow-up question on the U.S. Northeast. Could you give us a sense again at a high level of what inning are we in, in your strategy to build critical mass? Are we halfway there? Are we in the fourth inning here? And then how much capital do you have to invest to essentially fix the business?

Yes, thanks, Hamzah. As I had mentioned, we do believe that having the right asset gives you the options to run different strategies. And that really became amplified when we lost the Department of Sanitation contract in late 2011. So I'd say we're definitely halfway through the game here. A lot of it has come down to execution. Once you have the asset, it gives you more and more options to efficiently direct your volumes. So you try to minimize the cost structure. And with the new management team in place, we need to allow some time to kind of ferret all that out. So we feel very confident that we're not out there looking for a bunch of new acquisitions in the Northeast. We are working to get the integration done on all of these. With Superstorm Sandy, it was a little disruptive in terms of availability of the long-haul trailers, ones that can carry the heavier payloads, et cetera. But that's all going to shake out here, and we're very confident that by the end of the first quarter, we'll have a pretty good hand on the integration of all of these assets.

Your next question comes from the line of Joe Box from KeyBanc.

Can you just talk to the timing of rerouting some of those volumes in the Northeast? And maybe just give us a sense of where Seneca utilization is currently at and then maybe where it can go once you reroute all of the acquired waste you're expecting to move.

Sure. Our plan is to have everything done by the end of the first quarter and have all the rerouting completed by then. So, I mean, that's a plan we're working on. In terms of Seneca, they were -- there were some opportunity for some volume lift, but we're not going to blow [ph] it and aggressively change the volume. And we're going to remain disciplined on the pricing. And as we -- we believe that's going to be more accretive and a better return on capital. So I think there is some, but it's not going to be a material lift to overall. It's really all going to be about operational execution.

Got you, got you. And just a clarification for Ian. I think you said the EBITDA impact from the Calgary shutdown is expected to be about $18 million. Is that just from shutting down the facility? Or does that also incorporate the headwind from additional third-party hauling costs? Just any other impacts on the collection business.

It's -- $18 million is an annualized number. Ian said it was a little over $11 million for '13. And that's an all-in cost of the transportation to redirect coupled with the decline in the volume. And the reason it's more back-end loaded is we do get more special waste volumes historically at that site in the first half of the year.

Your next question comes from the line of Kevin Chiang from CIBC.

Just a quick clarification point. Given where recycled pricing is today, and you said it was $95 in January, but given the average price you've provided in guidance of $106, can you just provide some, I guess, color on your certainty or your confidence that it looks like you expect pricing to move up call it 10% to 15% as the year progresses? Is that all on the back on an improving outlook for the commodity? Or are there things that you can do specifically to drive that average pricing higher?

The outlook that we provided is all tied to the research that we have done in terms of the board market prices. And when we did our plans for the year, so far, between Q4 and Q1, everything has acted as we expect it to act. So that gives us the confidence that commodity prices will continue to increase gradually throughout the year. That is the expectation out there, and that's really the basis for our optimism. So far, we are on plan with where we thought we would be when we developed our 2013 plan. So it's really just, I think, industry -- it's consistent with what the industry outlook is.

Kevin, just one last final comment is projecting commodity pricing is a bit of a muds game. But if you look at what the industry, we see and other outlooks are showing, we're actually significantly below their forecasts. And as Joe said, what we've seen year-to-date is consistent with where we thought we'd be.

Okay. And so it sounds like -- if I read through it, it sounds like more recently then. It sounds like pricing, worse, has kind of flat-lined here. So you haven't really seen any downward trend in pricing through Q4 and into Q1. Is that the read-through as well?

Well, no. I mean, it's been -- it certainly hasn't bounced tremendously. But in Q3 last year, we were at $91, Q4 at $94 and year-to-date, we're in the $95, $96 range.

Okay. And just my second question. Given the outlook for U.S. housing seems to be decidedly more positive looking on to 2013, 2014, can you, I guess, speak at a high level in terms of the opportunities for Progressive if that -- if those volumes do materialize as well as the construction spending and industrial volumes that do materialize from that? Can you speak to maybe opportunities for Progressive and if you've built any of that into your forecast over the near to medium term here?

Sure, I'll take the last question first. And we have not factored in an uptick in housing. We're not that good at forecasting that. But I can tell you that we believe we're well positioned in the markets that we're in. These are all markets that should do well once housing does rebound. Regionally, especially in the U.S., I guess you can really separate it into 3 distinct areas. You're South region, excluding Florida. So Texas, Louisiana in that area is performing well. Economically, again, the energy industry is continuing to influence that, and I think that we are seeing positive movement in terms of housing. It's not at the level where it's going to be a big needle mover, but it will be a positive contributor. If you get to Florida, Florida is still pretty flat year-over-year. We saw a little higher performance in the third quarter. Fourth quarter has really been pretty static. So I think it's going to be more of a which market will improve, but we fundamentally believe long term in Florida and the outlook for that improvement. I know prices are up quite significantly in the State of Florida, and I think that's probably a leading indicator. And then in the Northeast, unfortunately because of Sandy, I think there's going to be reconstruction activity that will take place. And again, we are a lag to all of that activity. So right now, a lot of our increase is tied to -- for moving the debris, but I think there's going to be several years of work to try and reconstruct some of those communities. And so we feel quite good about where we're positioned, but it's been -- a lot of people really believe that you need to get well in excess of 1 million housing starts to really start to move the needle significantly out for the industry.

Your next question comes from the line of Brian Butler from Wunderlich Securities.

First question. On impact of Sandy, you got a little -- you got a nice bump on the revenue side. Can you give a little color on what that impact was on the EBITDA margins in the fourth quarter?

Sure. So the contribution from Sandy was a little over a couple of million dollars on the EBITDA side of things. And offsetting that, we had a couple of others or onetime items or the softness of the special waste in Western Canada. So we had a bit of an offset there. But it was a couple of million dollars. The biggest driver behind that was just all the overtime, all of the people that we had to bring in. It was higher cost just to get it out to the landfills. The -- if you understand or you're familiar with cleanups of this type, it's harder to get high payloads. So consequently, when you start looking at just the transportation cost per tonne and everything else, it does tend to be a little bit higher. But it was about $8 million of revenue, a little over a couple of million dollars of contribution to EBITDA.

Okay, great. And then when you think about looking at -- on your return on invested capital trends and the investments you've made in the Northeast, so looking into 2013, how do you see those trends? Is that picking up quickly? Or is there going to be a bit of a delay before we start to see that on the return on invested capital side?

I think it's going to be a slight delay. And I say slight delay, a quarter or so. But we're already starting to see some improvements. And as we get these integrations done, the ROIC that we expect will start to come through. And then it's really the rebalancing. Again, having the right assets gives you a lot more options on how you can optimize your cost structure and then run various strategies, and our team is very focused up there, doing a great job. Our volumes are up year-over-year even x Sandy. Our pricing is up in all lines of business. It's flat on the post-collection side. So we're executing on our plans the way we want to, and we just had to make sure that we had the right assets so that we could also control our own destiny.

Okay. So going forward, though, the trend should be positive. There's no slight dip, I mean, any...

Yes, well, Q1, yes, the -- there is an asset mix change, right? You got -- we have some more transfer stations we added late in the year. So we expect the first quarter, as I indicated in my comments, to be below 20%. But for the year, we expect to at least average out consistent with this year with a positive bias.

Okay. And I'll sneak one last one in. Do you guys have a debt leverage target you're looking at for paying down debt?

Well, we have consistently communicated 2.3 to 2.7 turns. We're just over 3 now. There is no specific target, but we absolutely are cognizant of what we've communicated to people and to the rating agencies and our lenders. So yes, that's a...

[Operator Instructions] Your next question comes from the line of Neil Forster from Deutsche Bank.

Actually from Scotiabank, but -- I just wanted to follow up on Hamzah's question on mix impacting pricing in Canada. I'm wondering if you can elaborate a little bit on that.

It -- like I said, it's the mix of business. And we had some contracts, new contracts, that came online. There were some national accounts. They typically be -- are slightly lower price. Also, some of the contracts that we lost. You got the impact of the special waste. So it's really a blend of all of that mixed together. Our actual pricing out of the customer remains quite strong, well in excess of 3% pricing -- price increases that we've put out there. So it's just the overall mix. And then your transfer station pricing was not as high, a part of it impacted by the Toronto facility. So it's just the overall mix of the business.

That's helpful. And then I'm just wondering what you're seeing on the special waste side right now and what your expectations for that or that you have baked in your guidance. I see that New York has once again postponed a decision on frac-ing. So I'm just wondering if you're baking in anything for that into your outlook.

No, we've had no -- none of that baked into our 2013 outlook, anything related to New York state frac-ing. The special waste that we are seeing is really just normal year-over-year. It is -- as we said, out in Western Canada, a lot of it is influenced just by the weather. And then as you move everywhere else, there's really no change. No Sandy impact has been factored into our outlook. And as we've said, the Calgary guys typically get more of their special waste late in the year. So it's really just a normal year-over-year environment. We remain confident that the jobs will continue to come out. But the Northeast right now, you -- as we've talked in previous quarters, we do some government-funded jobs that are a little more sporadic, but it is being offset right now through some of this cleanup. And now, you go down South, the projects are pretty sporadic. When there are industrial cleanups, it really comes down to when someone's willing to spend the money. And it feels like there's a little more optimism out there in terms of the economy. We got the election behind us, you got the fiscal cliff, or at least one of them, behind us. So people are feeling a little bit better, and we are seeing -- we are in discussions about some of these projects getting on the board.

Again, you're not like you were baking into your outlook in 2012 for your U.S. Northeast special waste? You're not doing that this year on some of your projects?

No, we're baking in basically right now just what the -- we're just baking in what's on the board. We're pretty consistent with what we've had in the past. We talk with our people, and they give us guidance in terms of what their visibility is, and that's what we bake into our forecast. We -- beyond that, we're not that good at predicting.

And if I could sneak just a quick housekeeping question in here. You mentioned the revenue contribution of acquisitions completed in 2012 at $200 million. Can you give us the number for what the acquisitions that were completed just in Q4 are expected to contribute?

Yes. I don't have an exact number right now. But essentially, we have the $200 million annualized. $138 million is the rollover, all in. Here we have it. It is...

Just over $100 million.

Your next question comes from the line of Rupert Merer from National Bank Financial.

Can you remind me? What's your plan for the Calgary market and how you might recover the operations going forward?

Sure. We -- as part of our 2012 development, we actually have built a new facility in Calgary. That was opened in December, well attended by lots of the local politicians and we're quite proud of it actually. It is a new hauling company transfer station and recycling facility. It is open and ready to be able to allow us to internalize the volume and take it to our Coronation Landfill. So the impact will be some higher costs just in transportation to be able to get it there. And longer term, we are still working on alternate disposal options.

Okay. And in terms of longer term, how long might it be before you could come up with another option?

I don't want to get into too many details. But typically, projects like this will take anywhere from 2 to 4 years.

Great. And then just one final one. You talked a little about efficiency improvement already. Now it sounds like it's mostly a 2014 story. When you look at your expectations for EBITDA in 2013, what sort of efficiency improvements are you baking in?

Well, our model very much remains the same in terms of driving local market strategy, always looking to move price and then volume, make sure that we improve our productivity in order to be more efficient. So we've got all of that factored into this year. We've also got the synergies on the acquisitions that are well under way in terms of the integrations moving ahead. And so there's actually quite a bit of improvement that we're factoring in. We're going to aggressively work on making sure our local execution is topnotch, any opportunity we can use such as there are tools out there that allows you to try to recalibrate your routing that gives you more productivity improvement. Our whole focus going forward in terms of operations is make sure that we're as efficient as possible with our capital and that's driving the return on capital.

Your next question comes from the line of Adam Thalhimer from BB&T Capital Markets. Adam R. Thalhimer - BB&T Capital Markets, Research Division: I did just want to ask, though, about the -- can you talk a little bit about your acquisition outlook for 2013? You're very active in 2012, but you did mention that leverage is a little higher than you would like it. So what can we expect for '13 acquisitions?

So in our guidance, we have not factored in any acquisitions. And right now, given we're integrating all the acquisitions that we completed late in the year, we are working to -- given that we're -- so a lot of acquisitions closed late in the year, especially with all the tax changes that happened. So we feel that in the first half of the year, there's probably not going to be a lot of opportunities. People that actually wanted to get the deals done worked very quickly to try and get them done at the end of last year. That's what we're seeing. We've got a pipeline that we continue to actively speak with some of these targets. And once they're interested, we'll work efficiently, but it's going to be a very disciplined approach, making sure that they are accretive. And so if you want to think through anything, probably somewhere between $50 million and $100 million this year. It will definitely be less than last year. Last year, we guided $100 million to $150 million. And if you take out Choice, we're probably a little bit ahead of that. I think a lot of it was driven by the changes to the tax laws. So this year, I would expect it to be lower.

Your next question comes from the line of Chris Bowes from Canaccord Genuity.

Just one question. It's fairly high level because everyone's talking about it. I wonder if you could talk about maybe sequestration and what it does to your expectations, particularly for special waste volumes and maybe what you've baked into your guidance.

Chris, you're the first to ask me that question on sequestration. Really for us, we have baked none of that into our guidance. We are -- we're not heavily active in taking a lot of that drilling waste. A lot of our special waste is industrial cleanup jobs. So we don't expect to be heavily impacted at this juncture. We've got one small landfill that's in Western Canada that does take drilling waste, but we're not expecting it to be a significant impact on us either way.

Your next question comes from the line of Damir Gunja from TD Securities.

Just a high-level question on margins, I guess EBITDA margins. You're obviously working hard to glean some efficiency and integrate your assets. Maybe looking out a couple of years and maybe a more normal economic environment with a little bit of operating leverage, just wondering if you can comment on what sort of EBITDA margin range the sort of the assets you have now could be capable of producing.

Sure. Thanks, Damir. So our execution is all anchored around our local market strategies. We're always looking to drive more revenue into our existing assets, drive our revenue per hour. Obviously, you got to be very cost efficient when you do that. And we're going to continue to execute on that basis. The levers, moving price, that means you're riding volume, which will be easier if the economy starts to pick up certainly. So looking out, you're looking at our Canadian margins, they're north of 35%. We're not expecting any significant change on the Canadian side. Our U.S. South is just under 30%. In fact, if you looked at the year-over-year margins, excluding commodities for the company, it would have been about 28%. So our goal is to get back over 30%, and I think a lot of it will be tied to our continued improvement in the Northeast, integrating these assets. And then that's going to be the most significant contributor while we continue to execute in all of our other areas and perform the way we know we can perform.

If there are no more questions, we'll hand back over to Joe Quarin for closing remarks.

Thank you, everyone, for joining us on the call today. And we will look forward to reporting back to you in April when our first quarter results will be available. Have a good day.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.