WCN.TO - Earnings call transcript Q4 2024

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Operator

Good morning, everyone, and welcome to the Waste Connections Inc. Q4 2024 Earnings Conference Call. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Ron Mittelstaedt, President and CEO. Sir, please go ahead.

Ronald Mittelstaedt

good and operator, you, morning. Thank full to I call both to and conference everyone discuss would the fourth quarter for like to outlook quarter this our welcome results XXXX. year first and other morning by Whitney, and senior I'm joined members Mary our this of our Anne CFO; several management.

solid employee EBITDA engagement of in in in retention, for noted both along Waste a private QX financially in operationally and both acquisitions, year integration improvements with a with approximately revenue release, and earnings with the in to As record company growth revenue Connections, adjusted accelerating and XXXX. of our double-digit annualized provided finish extraordinary of levels $XXX which totaled accomplishments million

resulted ongoing now improving with with providing normalized Price-led organic end employee XXXX. lows Most $X.XX outcomes importantly, range outsized in potential operational solid improvements cash year our multiyear and the of above at of of down from waste should expansion XXXX X,XXX with margin continued billion. turnover, basis the our high adjusted growth points commodities associated for another execution, in us or position in capital, in acquisition for momentum focus over human of excess flow along free activity on

much other items. housekeeping Before turn the let disclaimer and for into detail, we call get Anne me more forward-looking over to our Mary

Mary Whitney

made regulatory February pursuant forward-looking statements Securities risks Canadian with of results within could Securities Exchange both Waste and such information Ron, the Private Laws. earnings XXXX, of Commission made forward-looking the you, results filings uncertainties. Commissions in Connections and good harbor similar from Thank XX and differ our differ to release meaning materially in the applicable forward-looking statement includes cautionary provisions cause during Canada. due and morning. the including discussion Act those authorities U.S. could discussed actual the included in and Actual call in safe detail The Reform statements or Litigation U.S. Securities that in various of greater to in the to Factors Securities today's

on that You an there believe not or We adverse currently our change on no or additional circumstances forward-looking which are statements should or are to risks undue business. events have presently statements to any impact immaterial, place in which of commitment forward-looking after revise be we make aware today's we not may reflect may that reliance as could date. update order

comparable On basis the of EBITDA, companies performance to reconciliation the non-GAAP call, both Waste diluted earnings attributable Other cash a to measures. such adjusted share financial to refer on free Management calculate we to may will evaluate our flow. uses adjusted adjusted measures discuss non-GAAP ongoing Please the releases GAAP net non-GAAP such operations. certain as and Connections income dollar a measures measures and per monitor non-GAAP our of these for most differently. measures and

now to the will call over I back Ron. turn

Ronald Mittelstaedt

you, Thank Mary Anne.

performance, safety was including by value activity, number ultimately results engagement retention, financial year employee and XXXX Connections noted, Waste of extraordinary an at any As and measures, acquisition creation.

significant that XXX pricing basis to waste in FX Solid integration for year-over-year declines drive operational commodity, acquisition QX. industry-leading core levels record solid and waste of whole the X.X% XX.X%, up by execution of RINs was supported and of company, margins not strong points is despite just

years less we than leading by that X XX% performance As the to has in we now. indicator voluntary maintain indicated, of XX% below which turnover, have is declined best

employee levels Over at X.X%. with to positions, XX% or the reduction same over we targeted region period, below from X%, have seen of a X% open of also down every in

on base continuous XXXX an scores employee engagement record our improvement from high participation. already employee levels showed Additionally, of

frontline expanded from and improved levels existing staffing higher engagement and and that from the through sending retention academies in-house in training. traction more statistics. driver realizing new employees safety benefits commercial and We're seeing both our are We

We're our The services, benefits during levels, at as achieved and X.X% service with volume to price Canyon retention well we FX morale point trends sequential XX the satisfaction combined maximizing from -- activity decline also rates during employee relative in second points than balance result these over the the QX to ramp This service when for also QX the of decision In evident down the accounted overcame and short, and integration past along we've reliance acquisition integration headwinds we've XX more landfill. an improving reducing delivered a towards Chiquita improving pricing, the the for guidance. been the of while were as FX quality, that customer and on new in overtime more providing in third-party of negative from as working commodities, acquisitions of basis our months. core additional X.X a margin quarter reduction, growth. benefits and impact RINs avenues

to already ] is good lows. bounced RINs The that and about from commodities XXX news recent have [ back have firmed up

flow, year we cash CapEx and adjusted better-than-expected our of California, billion $X.X in normalized $XXX Chiquita. outlays reflecting for delivered over For Canyon in adjusted free XX% the flow XXXX, over flow business, site-specific landfill with of adjusted at EBITDA impacts base Chiquita adjusted free converting in to billion, cash free over RNG the associated full excluding of the $X.XXX cash project Southern million

Chiquita XXXX. of close active decision of subject we to the waste made the at the On operations year-end disposal as Canyon, site

final imposition available airspace limits feasible operations taking continue January longer we incremental requirements. While the the to we needed do approval on of to otherwise airspace, no site, X, along capital XXXX, permit effect to Chiquita constructed and due remaining permitted tonnage determined was at with and the for it have access

back not in to financial throughput landfills outcomes portion sense. redirected XXXX was the for October. the simply, of within another contemplated term, Central successfully longer economics Chiquita when the significant of of preliminary we our operating of choice preferred long a in provided have made And California, put our waste Although framework no range we closing a potential

the of course, will, our or post-closure impacts, appropriate. to nonrecurring are honoring our and and cover including noted addressing temperature post-closure ETLF when Anne and with the liabilities before, in impacts as closure XXXX manage as financial site, as event the address results the event and to we've landfill will respect nature. site-specific closure We in and Mary to QX commitments ETLF as and mitigate which, to elevated well continue

entries and of and solid in we in a be plus into existing competitive internalized including million closed of acquisitions Looking waste our $XXX and next that revenue acquisitions, our E&P from across markets, XXXX, footprint franchises tuck-ins operations. new Waste number acquisitions. annualized XX approximately at network, with In to can disposal market deals

We continue a to have robust pipeline.

in closed fact, to bringing In QX. or early to expected signed revenue, from sit here XXXX million February. over as we the We either we $XXX we $XX and close expected have over annualized already acquisitions million in have -- during contribution revenue

we Our we disciplined the relationship-driven and risk appropriate. approach always market the to acquisitions and as remains profiles focus to valuations be determined on with accept unchanged selection, our

maintain delivering and and what growth. in continued say, to low deals we to leverage integrating matters but value provide for results is As closing creation

sustainability-related the the debt virtually end, during unaffected acquired leverage of to year to that outlays of reflection ability X.XXx and investment leverage of a spite tremendous outsized in funding continued XXXX, plus acquisition To approaching $X.X at an provides return of ending low EBITDA, and quality our of of more liquidity billion delever same. in activity That billion, shareholders. $X was dynamically. increasing revenue the our of with projects, to the for optionality That capital is along

Mary into like I'd up and review of in I financial then provide the fourth now head detailed XXXX. for and the Anne more full the highlights call depth will And to wrap a outlook before Q&A. to we year pass QX to quarter

Mary Whitney

period in $XXX In XX.X% you, our about about to Ron. quarter, mostly exclusive revenue million $X.XX above ago competitive year year-over-year, contributed XXXX markets. the revenues of XX% X% since or about up Thank our in to region of to $XXX net QX, $X.XX Core contribution QX pricing of in year divestitures, full and X% $XXX million. market billion, Western was expectations in the of billion our up completed from range full Acquisitions year year-over-year. net million revenue bringing bringing acquisition fourth X.X%

Fuel and the material points in basis were negative surcharges fuel lower XX quarter costs. on

in in advance QX were ramped impact the X.X%, volumes site. closing waste negative of Solid at activity point XX where basis Chiquita, volume down down we excluding

QX. which, Elsewhere, to reflect price the activity, volumes some and as shedding of quarter, a as volume, purposeful well revenue last through on as timing waste of focus in between our trade-off completed noted was of special and quality continue

pulls Looking the up MSW And X% about Florida, were quarter landfill day MSW basis. our activity special year-over-year into the or at internalization X%. adjusted waste were our to Over was Northeast half weights up tonnes year-over-year X%. the rail-served up and of tonnes in increase flat. of in on results operations down C&D storm cleanup attributable a arrowhead Chiquita Alabama. about total pounds in from were X%, landfill on down X% Adjusting fourth same-store for Roll-off

earnings $XXX Adjusted to reconciled up or EBITDA revenue. for release, QX, XX.X% our was of in as year-over-year million XX.X%

during adjusted revenues the and EBITDA was in in quarter, excluding reduction XX%. commodity-driven tonnes at margin and noted, Ron Chiquita over As the rates drop-off FX the

seasonally year full year-over-year, EBITDA reminder, adjusted XXX XX.X% billion And XXXX to XX% a a margin with as of the $X.XXX QX, of our XX.X%. basis up EBITDA Looking adjusted included points at up margin was during quarter. strongest that

XXXX Chiquita $XXX.X Canyon outlays a million to million our the plus of million and reflect for of scheduled $XXX 'XX liabilities. in step to for and down amount to adjustment our This an $XXX event, projections includes Given in obligations year-end, post-closure about which landfill and a period. an site forward closure costs The occur full our QX reflects million our of as down what outlays to would in impacts. also customary describe of as write-down It close over address to and increase we totaled the to decision XX-year expected in subsequent closure accounting $XXX are XXXX. with to $XX ETLF associated $XXX.X related about million closure the in to to update periods million landfill post results

of leachate requirements result other expectations, and costs XXXX direct related a driving costs of the as regulatory, outlays well as primarily original up associated consulting outside with scope, as indirect outpaced legal, that original treatment. permitting, were the Total incremental

expectations. incremental in We ordinary line strategies continue XXXX these those related $XX spend, of with $X.XXX the In adjusted costs. to of reflect billion expenditures CapEx our project flow our exceeded course spite outlays, totaling slower-than-expected RNG free about expectations of million. cash $X.XXX mitigate Capital to pursue and impacts billion and

sustainability-related R&D our calls, prior projects include on dozen discussed a structures. variety about with of As ownership a facilities

continue tax expect benefit to to before XXXX capital be by $XXX from outlays We projects credits. aggregate investment any to online approach million expect and

our million values have factored will R&D us our I outlook, on the RIN for ownership about drive our the to capital payback review million expenditures, $XXX outlook period, hybrid from QX will economics $XXX XXXX. along approach volatility While of projects. XXXX now which with these half been into insulates

actual regulatory Before that may uncertainties in again similar and I filings safe harbor do, commissions we'd risks outlined and on and significantly with the or like made in our to we've the vary based SEC Canada. remind statement once everyone authorities securities results

investors encourage carefully. factors to these We review

the no economic assumes current outlook change Our environment. in

may any also that impact Beyond expensing the during the of the from the close items additional period. remainder during deals, noted excludes transaction-related acquisitions signed and of outlook year our

Looking $X.X of to billion in Revenue range XXXX. billion. year in the estimated is first the at $X.XX full XXXX

about revenue range Chiquita, X% waste, during solid is price signed of growth the about XXXX. X.X% from contribution about X.X close communicate way, includes of expected organic and impact we'll closing to we in Acquisition excluding pricing by X%, On up QX. point For volume the expect to volume in how deals plus which, X%.

the of and outcomes As levels. recovery rates includes range FX values from some recent in commodity the for potential

$X.X and range of to basis, in XXXX EBITDA release, range expected to billion earnings to in XX is up us billion in of in margin $X.XX the that basis XX% periods, or the reconciled of we've excess Incremental values, and year-over-year. in in FX This adjusted EBITDA points upside provide activity discussed commodity spite RINs XXXX rates. commodity-driven lower of outlook. prior acquisition and in margin to quarterly what further improvements peak our would with consistent revenues in On XX.X%, is our XX% adjusted positions XX for

million ETLF. billion million in of flow our flow XXXX includes RNG to $X.X billion in associated of conversion going is reflects Adjusting to for to Chiquita Canyon cash adjusted 'XX to these free $XXX off outlook our to more discrete million expect cash or with projects. the adjusted items, the XX% reconciled earnings $XXX free is CapEx Estimated normalized free also also for $X.XX is of Adjusted of to growth range outlays $X.XX million indicative $XXX when jumping rate billion. we for point over our $X.X And XX% billion expected in $XXX revert $X.XXX EBITDA billion adjusted cash release, of for into of flow more. XXXX to the

QX to Depreciation $X.XX now our the adjusted for million or amortization estimated is amortization diluted QX XX.X% expense at revenue. $X.XXX XX%. or outlook of and first to net billion, about the to share Turning range approximately taxes. of QX the interest $XXX for of billion revenue, and tax income million of to of EBITDA quarter in $XX $XX of Revenue and to in $X.X million for at quarter XXXX. about estimated of is about XX.X% rate the net estimated is is first XX.X% per about is million, at estimated estimated interest be intangibles including $XXX

me for let back now Q&A. turn remarks some before over final to And the Ron call

Ronald Mittelstaedt

growth Thank relationships employee both statistics of Mary and we Coming improvement notable XXXX, acquisition into financial emphasized importance of operational importantly, positioned and with record continued interconnectivity Anne. they by in excellence reflects more results, Even XXXX. for performance you, our us and Okay. supported engagement. the activity the in outsized and

served In on excellence focused delivering XXXX, we're years benefits believe for of XX ideas new ensure guides billion has well a sticking innovation We're we and the In we're future. grow us ever. fact, as to positioned $XX to the with the that humility. positioned for than us well acknowledging better and revenue of to more, company which over and that while is model we

treatment Along generation City, working customer experience excited through partners expand as closer landfills. and market, New we're and further natural to franchise electric these introducing digitizing be employee York PFAS lines, renewable our out technology. to to the together bring build gas provide we're our trucks with We're we solutions for in people newest and

along and benefits the sales few output robotics opportunities with of of and augment from facilities, to applications. We recycling the efficiencies are just fleet to already the safety seeing quality our productivity improved drive revenue in and use outcomes of AI, higher routing a our across quality, name

with embody truly communities for to Connections grateful the XX,XXX we sellers of focus the human a We'll center inform from and have always opportunities to their to of stakeholders many direct of the We're dedication to of legacy, values technology, our maximize humbled to approach the privilege enduring the entrusting and of who use us design us most employees maintain apart. we're private our the serve the but the efforts whose our on utility and and Waste trust also resources. we'll leverage also by set

turn time We lines to Operator? operator over open appreciate the up for today. this questions. your your I to the will call now

Operator

first question today from Raymond Tyler [Operator comes Our Brown Instructions] from James.

Tyler Brown

detail the usual. with cash of I've pieces we go green as Lots can CapEx? back over moving we I of just to But start on it. can want flow? make Maybe sure got that good some

and up 'XX. 'XX? in in know, sunset at think basically then to be million. done we And That's Is shouldn't less you step midpoint going million more spent like basically will or the to $XX you $XX based It I sounds that So million. that on in 'XX, maybe 'XX, right? that $XXX spent what in about all

Mary Whitney

the we'd done in spending Everything bulk agree you're correct. Yes, get said of the with 'XX. will you

all 'XX. done had ready outlays credits. by those we've from What's be the would As basically unknown will and be incremental you tax benefits said,

And so that there's just to would the news make extent any smaller. the there good impact net

Tyler Brown

contribution, EBITDA in ramps the 'XX. then of And kind 'XX really Okay. that and

Mary Whitney

That's right.

will incremental 'XX, million it there's said around of bulk full said the we for during online. the nominal we've $XXX 'XX. point, during have and this online in so EBITDA. see As The ramp from been that's come to them that 'XX you'll just in year And increases facilities be

north conversion cash course, but So to the revenue and, EBITDA flow. of high is free it's flow-through of high very very of that,

Tyler Brown

Right.

Chiquita of Okay. got just kind again, this. Perfect. make And then sure to all on I've

we think, that 'XX. out. you about by 'XX. time you to And I the that it in steps million large it sounds spent and in be really get should again had $XX spend again, 'XX million. like call of at So That in Is 'XX, down number It and a zeroed to right? $XXX, $XXX steps then kind down then

Ronald Mittelstaedt

be will $XX range be X, million. I just to don't I most. million what then should to it by $XX that say it would at but is level but maintenance if a be Tyler, It X, we sort Yes, believe X $XX could to X in million of know

Tyler Brown

$XX what Okay. said that's we this -- decade, cash reported I normalized to a including conversion maybe the is but benefits of end And step said that in even basis But basis, million, not on big build XX I picture, high million the of as up. will the a I I mean, you materially think, free think mean through flow-through 'XX, RNG. the on you

I [indiscernible]. know it pretty as 'XX. good get to could So I mean we be

Ronald Mittelstaedt

didn't for if why we've That's year, free billion be be $X.XX take that would and EBITDA RNG at it cash XX% just before about assume guided I -- contribution, Chiquita, or this right understand, can't we do. Yes. you outlined. would or do have flow you XX% we which what said is as the and RNG you you

Tyler Brown

Right.

about of like maybe XX%, just the sounds in positive going Ron, down here. on backdrop questions get questions that that. kind thoughts think there Is Okay. into away to Can even volume. you just year there? a we if to continue of some of Could on Last row fourth get help volume. get I of or backdrop better be a us, it's a shedding? a kind need Do of I Chiquita, It big a take around still that? one lot housing to 'XX? go picture any industrial better that. intentional I Just lot

Ronald Mittelstaedt

off, report for all have doesn't would that way -- volumes investors, to right report They're out companies And them that and similarly. core you analysts We point Tyler, compare each only lines our any the significant, don't mean really We can't in wrong. we reported. other. business that view and other is report what to that waste not recycling changes don't solid understand influence Sure. volume. first just but or I or you in as volume

So just ours is waste. solid

number good Number with So would plan again to a thing. have and in to a record strong We 'XX. good we that's love one. that, a Again, a very think had let's two, thing. have that's of M&A start year 'XX. in We year

But X- come XX% look have to you revenue are we said, shed over acquire, M&A up as of unprofitable. to maybe up that you period to X-year as contracts to XX% the a

So into volume capital shedding we again, volume profitable more and are redeploying margin, we can follow purposely not the like say, because contracts bid. we

for to or to we dramatically. view don't stop, we're would do looking M&A see happening. So something as have And to decelerate shedding that

maybe okay? to somewhere -- we very achieving price. a So probably along to difference have our which look, others some pricing And today achieved. X% X.X% said guided material The talking trade-off. are have is the price. X%, other in yield, and That That's achieving comes really plus we're about thing with there's Again, yield, between volume. that X% price up X.X conscious trade-off between is and

very and trade-off 'XX think as environment that it that, in 'XX. this in We is was necessary

seen, certainly as down yet. it's recently down fully While inflation not is coming we've

necessarily but a we XXX XXX to our having so doing. CPI, not spread, on always basis what And to to point see cost structure we the focus

price. And on so that's where we focus

we then shedding. it's solid price the also a between calc. It's the it's that purposeful of around So report way barn volume say just to long in our ways trade-off volume. conscious it's between of And conscious

our now, that, we been X.X for a almost the in so environment And to flat full beginning numbers. basically years of really have economic 'XX since in in negative

and MSW bounce or between X% You X% around X growth.

XX% in I and that any tied quarter. are positive around special reflects XX% and think -- activity in waste, between bounce C&D construction which and to negative event given

a course, Of things. of piece are they smaller

bit which activity, but little So yes, not a seen improved economic there coming, need that. optimistic is we of have we a yet for are is

Operator

from comes from question CIBC. next Chiang Our Kevin

Kevin Chiang

businesses, off supply. lot the what start I'll from the of an any a of on years perspective and or given the -- year over and the with you, retention or few record I on on the turnover past Maybe efforts guess of back guess record last flow acquired amount on of seeing just past deal even some M&A, you the congrats I turnover employee you've in seen here you're numbers the here? color posting

Ronald Mittelstaedt

hard it active Kevin, X question, as Yes, are. something that higher Look, very mean that's to achieve pleased have with think understand you is I very we're think I we under a with, particularly -- we've significantly good as uncommon that's behaviorally in to who's line, voluntary I acquired turnover someone and rigorous number, not to -- the And many first a that front adjustment companies in XX% XX% our make. private It be the really is that that's coming very year on level them in for M&A through tenured to companies. to of employees standard. safety because for

that. So captured that's in even

our So even is core it number lower. you tells company

company So we on frontline Xx months. private drop along some with to very but and is not that -- come level It acquired changes to XX in for uncommon does the make safety. by focus an on rate supervision stand-alone companies. incident us acquired first at heavily doesn't that safety having But the

Kevin Chiang

there. XX basis about that to think way expansion. of RXXX turning you're year think there And That's a sorry, margin some great points you color. opening be to contributing because Maybe I have what, I Is your evaluating outlook, might to guess, full facilities just a to margin up XX secure. Canada

outsized Just foundational XXXX? to the, one pieces is that in of driving expansion guess, that margin I

Mary Whitney

outsized is are the the enjoying Secure. the months year. terrific it's expansion last it acquisition really, of XX you'll driving of But the strength Kevin, a benefits business of we of what's as recall, margin had underlying So

we've So year to X And late the extent the contribute, the mothballed opening said, nominal. in resulted month. looking performance has were be as and to there that the rollover activity and contribution facilities. in But yes, is it very incremental would just at

really back going that implies drag XX underlying to XX XX of the which of in the XXX to so to FX, commodities points, expansion of basis So points basis much is down it margin as and XX as basis RINs from spite think margins up as points.

really E&P all business. huge that that very underlying 'XX. solid not again, the the speaks incremental in for waste margins benefits we're a things us working enjoying business, are to of yes, driver but of Ron outlined a And that in And the

Kevin Chiang

Okay. That's one last me. maybe for very just And helpful.

next your M&A your roll seems I buybacks, ratio in it could the going the to I cash a the probably if cash wondering flow next start kind XX just as or of something does much. play to move free there, to guess leverage to growth your the years. XX change -- which free you fact and free how balance especially role to cash of where been aggressive incremental just by that forward, leverage and on how your you is more back couple CapEx, year the I'm look I months. flow record of noted record and given that off your You really guess, like have despite more in step you've you when flow generation sheet your starts that up contemplate, can that to even allocation? just in be mean a add that's

Mary Whitney

billion seen our a that seen you've have the continue double every cost us XX year, we the Kevin. and CAGR we beauty tremendous with, sitting XX% XXX you've of liquidity agree, we're it as us renew I as last normal we absolutely have is all put digits approaching context, said, NCIB, optionality. years. mean $X the bid. over And to we dividend issuer at But -- our to grow in in And

So doesn't to we to to and point, to to your and use point, opportunistically, say down, even I need back at. is We we arrow have buy agree to you X% with other slows optionality. us in the preserve look the flexibility that that down. some M&A think up that at quiver, M&A we'll but slow something sort of always

Operator

next from Stanley. question Our from Morgan comes Toni Kaplan

Toni Kaplan

seen moderate over to holding how where continue into do ask XXXX Wanted what price out? for on to up thinking of price. still few the but you are terms quarters, like very that first looks? trajectory We've past price you core nicely, see in bottoming And

Mary Whitney

Sure.

to way think to about we way is the X% said the think about price. So price, about

have pieces CPI you how in step markets, course, XXXX, And X%. of we're that X Of course, about going got And those what the you've where the CPI-linked does which will to about were down proceeds X%. inform that forward.

for So whatever 'XX, placeholder. good that. your a But is of view that's

in markets X% of it. and And that to that X%, competitive then deliver X.X% or the implies so north

course of is pretty move on And us, of the as in sort In competitive basis, math and than also for that just terms a higher the early of the in expect year. down we price reported would year, markets it typical the of you it. start the of our should cadence, where our majority the the typical cadence increases over

it full And by for able so because time year really speak the we to we is now, be year a QX, visibility this couple unlike any about really we'll XX%, the have the the a have contractually -- implement either know or what they're we're sense and we'll we the of are because where months price provided from report have numbers of rollback. known other, of increases XX%

And full of and about and price employment, raised the the strong as pricing things again, retention of that will, the strength Ron I if as are you turnover lower reads to underlying Early help with usual. referenced that business is the retention. benefits

Toni Kaplan

treatment. for on Ron, solutions you PFAS And partners working Great. mentioned with

topic Just latest what wanted to and on hear you're the doing there. the

Ronald Mittelstaedt

and Well, a solutions. that would solidifying Toni. that that disposed a Most of separately. real less of PFAS number it no fractionation a And then things, and gathering basically we're treats of I probably the half is it. by then providers doing than foam There dozen is have there's are tell you process

And that portable site. landfill the facilities of moved or leachate permanent are a so built on treatment these both generates, that. amount And and depending running that through it are on are we

determine we at we sites performs different different have using We best. are think -- to which technologies

in other in have and places. them in performing New Minnesota, examples Pennsylvania, as York, We

good, very costs And the gallon capital very a early results cost are the per benefit allocation for treatment very, and reasonable low a overall.

are going for many if the they're may nation accept to looking POTWs the PFAS in you of of require leachate. continue pretreatment landfill form know, As to to some

where we into issues So of POTW. not treating any we it, are having are getting

planned. So it as is working

I would very and I will economical tell you think which solutions reasonably believe improve to time. today, available continue real over So there's we that a

Operator

Our comes from Bryan next Citi. from question Burgmeier

Bryan Burgmeier

Mary this this maybe for spot guidance? expect much if missed the XXXX using then in contribute And I opportunity RNG did to to year? XXXX? Tyler's we prices? be in EBITDA assume an question. market then in How Anne, be is And going lock do Or there what you to sorry do RIN to

Mary Whitney

Sure.

around way $XXX point We're at the this hybrid that own gas didn't we online that million. point sales real contribution the The million, came of that's given is was 'XX. facilities really the in of 'XX. online for about that it the contribution $XXX incremental And one facilities still come structure. basically, think that to some have we landfill running in should you fact and us or in X.X pickup nominal incremental million or So There there, revenue $XXX from change dramatically.

a So second -- and I'm had piece. sorry, you

asked Yes. could you And we lock.

our had the Sorry look look can. opportunities that lock of when themselves, when and locked continue aspect about We you look, most to we opportunistically we we'll those And at around that a we expect of as present for $X. to should to XXXX that. will as derisk RINs portion business have. of

Bryan Burgmeier

Got Waste it. Got Ron, kind been you've M&A, time. it. target the spending, XXXX business And just pass a maybe in this normalized of obviously, Connections long Blue and on provides then, the that

Just players? deferring Do in and greater for the what years? of I'm your last just versus think maybe on if curious rates interest So outsized selling sellers high maybe curious there's you or the 'XX? thoughts X now. the XX are drove 'XX think you maybe smaller some persistently urgency right

Ronald Mittelstaedt

at always or the out we've every by are driven XX happened as the ownership planning are run companies. Well, our family in deals least Bryan. course of matters sort estate said, linear X of natural private model, of that there of certainly Thanks, Sure. -- in transition, X

that regard, move things so And in too external catalysts don't much.

last Now public rate years having the have rate floating rising lease certainly, debt impacted said who of a certainly interest or the over rates lot few interest that, of rates companies. have are private with of trajectory sort more than helped companies the

affects that them. so And

been period the rising certainly least had it of time, think for outcomes the of at election, than a is tax the I on things. least election and a are stable rates probably now what at little of to maybe depending run-up in fear threat That the outcome. affects I right think more the

their strong, So business that, sellers activity. Certainly, want private I economy is economic is would and believe when to -- their business they neutral. is valued. Sellers fully say, the want sell

say, neutral that I'd again, so of has sort negative. to been And

So hyperinflation I want economy, of sellers a continues living risks an for do going just if bit forward. group the a a thought when and to of sort then is M&A. are see. improve, as pandemic think economy I'd I to I And never through don't that of after yes, said, you that accelerant and who, anymore the have Those

is in, that would would a very tell a little again, harder I to So predict. we you, good market. But one remain consider I M&A

franchises, all transactions, types Of I different full. some very stand-alone competitive is say. tuck-ins, imaging E&P pipeline of some should Our markets,

We're very we're and I at $XXX year here think are sit million. we going we saying sit not we part as last ever, the above-average February. expect say, year to hey, of here repeat which So sitting very our in early comfortable here going But bullish. was best an remain year to we

Operator

next comes Goldman our Sachs. question Jerry from from Revich And

Jerry Revich

to making could versus were the I'm shipping get expand Ron, just and of expect are the volumes the in exiting progress seeing you are that wondering costs folks up on where you 'XX the ramp? and rail you what shipments to beginning you actual what terms of do if in ramping folks modeling you the at

Ronald Mittelstaedt

Sure, Jerry. Yes.

Arrowhead did August that which those you our transaction, let's for of take -- are familiar, we let's back, So 'XX. not

set assets, into a XX about that maybe about owned XX, day When that doing of we thereabouts. now set was we've X,XXX up the of So landfill. tonnes to tonnes acquired months assets X,XXX

a We are day now pretty at X,XXX tonnes consistently.

but So landfills, it, gone parties. market Coast up amount have coming freed which one of is that externally to Northeast go our tripled on largest to markets of we're not or to quite East airspace The the we closer. used have getting third from internalized that may we to

X,XXX as we range. XXXX, will come tonne into Now get we a believe we that X,XXX to day through

achieve will of And on Coast relative day what through said. when acquired period. we amount more will predominantly. we the over the multiyear or ownership, it, through volumes achieve this And term, months East a after a of so Again, that came that will I tonnes come network believe which very we site think, a is, we a internalizing high XX,XXX tripling we long to our

cost Jerry, the As far structure, stable. as very has remained

came largest One Coast of of contract And assets very the structure because was with with cost the look be lot a volumes what is Norfolk a long-term great to transport from Southeast this the of we something volatility the things. was in could time of with that cost at East obviously to spent the the the that along Southern.

And we indexing about it effectively to feel very national good CPI. that a

along a So the structure Eastern on very our good Seaboard. good facilities there, cost intermodal

than or as is expected, asset say. that better performing would I So

Jerry Revich

Ron, seeing a in significant you at you network M&A you in the where opportunity M&A and opportunity we're are more How folks logistics to 'XX? lot terms that add optimistic the and now have Northeast? more your that about closures via Northeast look you have of of pipeline rail the landfill for the as and in value runway,

Ronald Mittelstaedt

I more signed are closed, that all very optimistic. we in being I tell hear a you York as I there 'XX, would are in had year York the very, that had we're Jerry, QX transactions say, definitive and you haven't in will those we big yet New in year mean, through come New that can we big about are 'XX. very transactions internalized. a obviously, agreements that we And and of have in done,

the providing relative doing out So it to of us potentially that revenue I dollar before multiple what transaction. we bites say, is had would

the are has greater 'XX seaboard certainly continue and of speak, to Eastern created looking and do of so parts on space, at markets So and we that white yes, to in will beyond. it have in entered

that. time particularly along the happen, no permitting So get which as time things that volatility protect frames. you eastern also question the be remove as and of Coast as seaboard, frames helps can or against West about and It challenging permitting

So us a it does provide lot optionality. of

Jerry Revich

recycled business to that earnings in the you that baseline offset at Super. are a look folks lack headwind stream? down, conceptually, stabilization, we were plastic they thinking cardboard about volatility the you would part take pushing were to see but just And to think prices to and a the of in that this pricing given pricing year, the waste of as happen, lastly, conceptually, the if to just about on good if how leg and control

Ronald Mittelstaedt

Yes.

offset look recycled would to decline subsidize look to or or I I'm cost point push tonne necessarily -- say, your see we waste per our I the do solid recycling, question. way, raise same we we that what know we by the think facilities. processing to other I the customers to -- the about of is get what necessarily what that in to But don't our you would know don't through

it you that, recover, do you to internally. it third also do a when Now you have on obviously, party,

-- you So processing there's and itself you, has -- structure factor that to or ton model per if returns customer an volatility. in being recycling to I on to use its but a they're really much float certain what going a said, word for third-party reliance upside something that levels or the being the to rebate is industry live on based I'm customers think willing more of moved to get effect, the in entire cost a a above and the with commodities a for

Operator

Our next & from Oppenheimer question comes Kaye Company. from Noah

Noah Kaye

for Quick housekeeping models. one to start our

from think I to X% but implies Chiquita. volumes, bps it actually, XX X%, there's down So another

that that so you're we all right? understand, just is reported X.X%, accurate is expecting So it to X.X% down volumes

Mary Whitney

correct. That's

Yes. Chiquita. including saying, You're

Noah Kaye

it Obviously, there Okay. sounds All then clearly been was from right. of ITC, clarified not -- baking a did you're has around guidance treasury And eligible. in, what's the any like that kind benefits. pure that

kind So of the for rough give that to timing of based to estimates, benefits you I a least at guess, start-up be CapEx construction? is to portion possible able running? on sure least And making for of range it is expect qualify at first, you're facilities do ITC for of then

Mary Whitney

we year. to to yes, that point qualify. tax from is, that say And benefited we'd we last million first we What point, the $XX credit believe a

excluding through content. so And be the of we and look the about anything qualifying let certainly and we the to and upside our view outlays it But keep labor, be process we'll that communicate the in the and decisions not maximize making equipment we the dynamics. understand benefit you. is we've premature, those what equipment It'd knowing to you certainly the told any precisely benefits posted. But is

Noah Kaye

of facilities understand there's a really with that to So much be I point, online, not year. presumably, add coinciding just this come when Yes. claiming the And would this right? for

get improvement? apples-to-apples, how 'XX, where margin will really waste that is but underscore of commodities or impact and I'd partly M&A drives solid I understand pace to you love of Okay. one, FX, trying last into the pace expect it question, be you margin So is expansion improvements bridge, But the really, And modeling the operating and then factors to what here was margin the to right? what in what a of of bridge. and underlying in would kind it's gave understand love think, the us to 'XX

Ronald Mittelstaedt

Yes.

So to Noah, you XX was contribution-wise, of sort basis points. maybe M&A would was sort we tell flat flat of that margin down about to

based is of tell to better that generally We also doing basis we're about headwind of if will a you given on that, the deals. normal, deals. tell that year, you you any would deals, and was from point margin XX amount above-average probably XX I an Now got than in

some and We in we you you're decline, year. if to RINs, point XX XXX. up the between accept fourth So improvement said, Mathematically, took as Chiquita. right basis FX, at there, quarter XX we points, the reported points commodities basis basis for XXX know the you

you base the probably expansion underlying we the you was business. to plus basis points tell XXX So were would in -- of margin about

the items. those guidance impacts the of to we've given other If you $XX look 'XX at $XX of you million million,

that. I number a think obviously than you'll get little of lower just a to

So of by part led driven growth. this by organic -- is price-led being

actually to have always cost and it, we But said, the you part effectively that improvement the would cost has our insurance which but cost, basis that's achieved we that structure. and in we've tell As we area, operating to of all a headwind, we've some. on been again, closing clearly, structure focus overcome on spread the why of sort of XXX point in is one target

So I that. to look to more on Mary detail put Anne

Mary Whitney

Yes.

the little Just what the described, year. had a the and on really the interplay, Ron the clarify how sort of we've recycling towards that the to in and bit benefit RINs early end was year, of

it's as earlier, down think year, XXX. about that that solid about I in say the to benefit to, basis point, this for points. is primarily to Ron's to full have guided get waste XX attributed And did I that said XX what it recycling says to we a XX we're flips headwind, what would a recycling And remainder if RINs to So you XXXX. benefit from right? and points in if there, talking RINs then you year basis you underlying So about we've

million of to So right? sometimes down the Because it's good FX, XX% piece almost to what up XX% it's revenue, a just every of being with that's and in think to is FX, a does flow-through, XX% guy translation I underappreciated $XX high margin along business. XX%, it penny which --

was underlying really expansion Ron XXX is it to basis speaks talked points margin points that business describing. reasons -- the those the guiding as up XXX for again, about, of to think we're strength we've that And in So as of what 'XX. to all basis

Noah Kaye

Yes.

very consistent the of all So improvement detail. for you a really pace here. Thank

Operator

comes from Scotiabank. Our Gupta Konark question next from

Konark Gupta

question on follow recently. just up margin to wanted I this

XX the bps for expansion it's least. X.X and you are to for think the So at XX expecting point QX, full guys I year,

commodities the parts in you a So more expect between usual biggest your the sort from particular? quarter terms expansion above where cetera, But quarter. in be margin to is of sort guidance, of and there QX Chiquita, perspective average moving know is I the et just of

Mary Whitney

about the think it. to here's Well, way

we guided to So XX basis XX to points.

And so arguably at and end QX you giving we're then the low of -- range. that

and was got that It of would dynamics recycled that. of -- If $X.XX higher improvement things $X.XX end not of us they comp. And move last to are in now what you the course, assuming range, the like the at FX think would include RINs, commodities, you've QX the toughest for instance, we're were year, look FX, where, now. on

Tough So that's also on RINs. just comps item. one commodities, recycled

And of of over that which higher so comps to the comparison, the those year as those course the in a time, drag is of over improvement ease would, metrics in from you any the can to much there range. to you how opportunity together end understand see, QX you get the the any there's and put pieces the for of can

Konark Gupta

X.X%, comps? of the the And full I some makes X.X% guess, half is then decline volume thanks side, first That to just half those for sense. point skewed volume more versus skewed understanding from let's say, the the but on Chiquita, the for decline, but year, start is X.X of the providing Okay. to the lap pricing, it is side, kind -- you on second the more as shedding to

Mary Whitney

right right, away [indiscernible] shedding. working about because mean doesn't that Chiquita go Yes, that it. you speed QX, you're immediately that's in so to through the exit way think the think I about

I And of price take I would I the low sort goes would modeling low, say inverse starts volume that so to -- and high say it, I do to high. were goes if

Konark Gupta

turn I one And over. Okay. last Great. for me before

think well. in know business On it's strong assets the But contributed like obviously pretty E&P there. we your were like growth seems I business pretty year? doing the side, secure least this I this should at underlying about even from revenue think a How standpoint. recently

Mary Whitney

Sure.

follow-on secure right, is done and Canada, additional which But contributions U.S. the So quarter then did the rollover the not to acquisition some we've in continue see in you'll rollover. only a second X-month from we deal, the activity in

like a And in reported to think quarter. rate in approaches of you I probably per continues more total XXX a so $XXX saw and million that revenue grow and QX, run number

rollover so place again, contribution really And put from facilities it's we last year. primarily in

Operator

from next Our question Butler comes Stifel. from Brian

Brian Butler

X%. one, Just talk kind inflation, when running about on pricing have of mean, the first maybe I you you internal at

estimates internal about the you to points where if for your you're in expansion at, XXXX? of basis margin is think XX looking So inflation

Mary Whitney

Yes.

in think X.X% really labor spread basis doing right because what not that a you'll been to this way past about So years about for as led which think X% would rates. ago. think, business, price. we've our And about X about primarily good years, of the and by XXX to way of in we're ties by the X% inflation to nicely step seeing from couple the abating point XXXX. talking just to We QX the we it, But about where the it down in is came recall, down for we the right X.X%, really is

price/cost And and margin to helps the to 'XX. so mover spread in what's that that that's contributing primary is that drive there, expansion the

Brian Butler

it actually but anything could there how compare last we get the were Okay. thought is a just X touched maybe I the on competitive ago? then under we the M&A, When And now maybe revisit to it. years not? I'd could does compare? already Great. done year does how administration at deals look for pipeline, over that you where And that environment And current the

Ronald Mittelstaedt

first. of second that take part Let's the

had second of HSR. part And on We I've have request never focus. model an a fortunately, gone our through that's

have prior the So flow -- administration. of an deal not we I issue under would had

Secure you not is we think you pipeline don't would have. us for very others I So incremental tell I acquisition as first that would restriction. should to of quarter, have improvement in think their that, no good, revenue. is I dollars million because having may footprint the of be the closing at a and improve of would any that the difference December into based whatsoever. I've only hundred announced know the that last had remember on we early I is said. want tell The that came that year, was end that we couple of I

in But not sitting do that today of tell first -- there's the that I quarter. and will are that LOIs, pipeline there here in we're telling you, secure with pipeline. you within deals approaching So size to our discussions a

only and delta would as between here that we So today year ago. sit be the X

Operator

question from from Tobey And Sommer our Truist. comes next

Tobey Sommer

up on the in Going to follow change administration.

the You change M&A touched in to elements whether and comment targets. regime on eye it And now do Are acquisition your on for administration what taxes there you business? on on for could maybe have that commented the any you your you. other regulatory your matters of

Ronald Mittelstaedt

there's at think pieces, it's obviously that I is early there's of -- And least are you lot a least moving hearing acquisition activity. a know. Look, nothing I we think at days, I as or that negative Tobey.

implemented or moves forward. it's positive everything if most have think would we and heard I be seen a

negative. an tariffs accelerant, interest a is tax a would If an If necessarily sellers, private is be M&A. decrease improving If that's really a there would that affect for that nothing rates, I private But speak can't if economy, is there accelerant. a tell I improvement that's rates, an in there benefit. there's that's in CapEx benefit. that So for is if for is sellers. there an you

So would maybe say to benefit I neutral. not a a if environment, there's nothing or probably regulatory enforcement overall. probably there's really I'd that sellers, say -- decrease that's really again, private is for us I'm

the form, if of us there's in does, because reform there work if a well people know through ability some you ends So no and but the despite to if is benefit really a -- if They happen, company, to amount large will don't know, don't as coming and border the there as Southern up been people. path hire legally. us that's immigration, it those a public being U.S. really of I as can't immigration to we that have

legally through be to if the the sector. there that ability an to whole for immigration U.S. a reform, think, was work I benefit, would in them So

So service general. in sectors and --

that at So would again, point of a anything this we're negative at least. not aware be

Operator

closing that, ending question-and-answer ladies today's And I'd gentlemen, floor be over to turn back Ron with to any remarks. session. we'll Mittelstaedt for like and the

Ronald Mittelstaedt

Well, conferences not are to forward direct our Thank on Canada. your and Mary answer if in did to appreciate to the Okay. our securities that of available are questions, Regulation listening entire you, further no call Regulation management applicable operator. there or Anne interest and and Thank today Box questions you call. Joe behalf allowed next G upcoming to we again, are we we team, today. we that seeing cover look and in investor earnings under answer on laws at FD, any you

Operator

And thank It now everyone, you, joining. conference Have has Once for for day. you call we today's presentation. joining again, do pleasant a concluded. and thank

Waste Connections (WCN) 13 Feb 252024 Q4 Earnings call transcript