Waste Management (WM) 13 Feb 202019 Q4 Earnings call transcript

Company Profile

Participants

Ed Egl	Senior Director, IR
James Fish	President & CEO
John Morris	EVP & COO
Devina Rankin	SVP & CFO
Brian Maguire	Goldman Sachs
Hamzah Mazari	Macquarie Research
Mark Neville	Scotiabank
Michael Hoffman	Stifel Nicolaus
Patrick Brown	Raymond James & Associates Inc.
Sean Eastman	KeyBanc Capital Markets Inc.

Call transcript

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Operator

Ladies and gentlemen thank you for standing by and welcome to the Waste Management Fourth Quarter Full Year 2019 Earnings Release Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

It is now my pleasure to turn today's program over to Mr. Ed Egl, Director of Investor Relations. ahead. go please Sir

Ed Egl

Chief Good Rankin our and conference fourth morning Financial Operating President me Jay. Vice Morris joining and Officer. Vice President call. you President us this Chief and Fish Jim for quarter and are Officer; morning you John thank Executive Devina everyone Officer; for With Executive Senior Thank XXXX Chief earnings and

will will cover prepared from operating of strategic each cover Jim high-level comments today. a details financials hear Devina You'll update; and them John an overview; the will provide and of cover financials. the

started note available press press the schedules earnings get press we The our have release Before the this release and include and as www.wm.com. please the on filed X-K a X-K the Form release includes of website we information. that important morning at that Form

XXXX. statements During are our about periods. the We'll which also or acquisition include of our based Advanced planned on ADS. for outlook Inc. hear you as providing also opinions will are updated All expectations to projections cause could the statements impact future This call be of does not forward-looking current outlook which may uncertainties complete actual plan and we provide that refer risks we materially. outlook. such acquisition to to results an differ subject Services to this Disposal we Once

recent release risks Some most discussed our XX-K. in and press with uncertainties filings of SEC today's and our Form these in the including are

yield are and revenue specifically internal John or which and references Jim discuss stated from in or of our will more volume. IRG growth volume areas results unless otherwise the yield to

With transactional in calculation quarter of which of us customer-level technology impact improved pricing of the we in core we XXXX beginning activities. additional our fourth updated of addition the provides clarity data collect our advancements price. In

year-over-year we provided press in refer of the tables two results revenue quarterly where core reflects more measure a of using change the not have the evaluation release Please to precise performance core the methodology. calculation price price data new does our this While change. years new

and which our Devina and Jim is earnings otherwise comparisons and fourth quarter refer During operating share per will of before the to per stated diluted address operations will earnings Any from also depreciation may which discuss EBITDA it'll call unless be with amortization. income as EPS share or XXXX. they the

been Net do excluding EBITDA results or measures including by costs of with income anticipated expense EPS adjusted operating incurred projected operating be acquisition SG&A adjusted our management that XXXX have ADS. results not and operations performance pending items business expense to and enhance margin in believes to connection fundamental reflect are comparability certain of the

In stock prior repurchases the the levels. included common for of adjustment reduction planned ADS from quarters

measures can are to at which measures www.wm.com press for projections. Please adjusted of longer use reconciliations information earnings adjusting to addition non-GAAP our to We on for company's the no in are refer flow and most found measures additional be non-GAAP measures. and about These comparable cash non-GAAP GAAP tables and release the free this. the website

call in this of form today's is Waste or no time the call code be accurate XXXX February reservation Management rebroadcast a at hear February longer one Time and the p.m. access XXXXXXX. hear be being consent Time the replay. Internet until information Any XX which on Management hours is XXX-XXX dial the of a Eastern www.wm.com. Eastern may express and any written occurring without call p.m. is available beginning approximately over Waste of Time-sensitive call This redistribution call XX. of of at (XXX) XX replay today will the telephone on provided recorded during a prohibited. retransmission website five day at a replay the To To a

Jim Fish. over turn I'll CEO call Waste Management's to Now President and the

James Fish

We're Waste proud morning. Thanks Ed Management us in XXXX. performed and thank of you joining how this all for

our serve long-term our developing to we're to customers people continued investing and company. the confident on and our in growth better We for technology points business right optimizing our deliver focus waste solid these traditional focus are the

have full the million Waste spots The and focus. growth what top also of a a despite Landfill X.X% evident Management business which our commodity sale results when credits. example line million of organization negative of is line was a of renewable can in from $XX negative one drag the year and from recycling a was swing pricing in great are our bright prices energy the XXXX achieve in we shared $XXX

pricing XXXX of best X.X%. full quarter MSW one landfill X% ever the quarter yield exceeded we surpassing quarter Together year in fourth yield every each previous in culminating the our as MSW achieved in MSW team with

expect just focus on to MSW the MSW pace costs future price improved for as keep foreseeable to won't landfills, pricing the increases increasing our We drive our continue but at with we pricing.

invested We're that including business. of lines strong plans share capital business EBITDA. John pricing generated in about and The recycling our ensure we all lines that those appropriate more translated our to XXXX our operating growth on revenue robust generate for we XXXX returns areas. residential will two of into

than disposal saw X.X% gave guidance EBITDA beginning basis we the expected of operating and grow XX business by year. and points both which by expanded of margin were at when collection operating Our EBITDA the better we

market credits. prices overall energy despite renewable lower-than-expected by commodities for XXXX our and recycled operating In X% EBITDA grew

We another with of range. $X.XX EPS at produced XXXX EBITDA guidance midpoint X.X% also record the operating growth XXXX. in of our in year of forecasting in We're

controls. continued achieve and to our a performance and through growth expect price volume We this strong of business disposal in from collection cost combination

and lack strong clean of first managing closure well-positioned I industrial seeing and work. quarter aspects report we we're customers concerns quarter far we economy been the some pleased coal in to With I'm abated. expertise commit network as from in so projects event companies spoke of recession that a developed hesitation in visibility spring. industrial to committing were the pipeline a these the asset waste seeing large special a event to remediation projects. of combustion mostly this all more We've awarded have around have residual starting our work Last reputation in our of

service offerings expect will throughout that our year. We in additional this jobs result differentiated

to XXXX of free cash free year. operating dividend the reflection that EBITDA business no robust our allocated provides for $X.X our to generating was flow. free translated shareholder and is the cash of We operating health of said EBITDA cash We've once returns XXth the into cash exception exceptional flow. foundation Turning the our billion best flow flow. again more growing than consecutive for as free

complete shareholders discuss the capital an to returns. targeted say to in we that but year shareholders. allocating at suffice will allocation of we're M&A We active it by indicator free back expect the also and substantial Devina ahead XXXX million spent in reward on environment our cash in of acquisitions a ability $XXX continue portion to our our flow to to transactions

front be Advanced expected is to Disposal highlight On closing the the the acquisition for M&A the year. obviously

and expected potential great anticipate the by are we thereafter. antitrust in and March we We of as soon approval combined close we regulatory the this of organization. obtain excited we are the of We have near close confidence end transaction the that will

required level acquiring to any sale ADS. required of We've purchase of in divestitures interest be businesses companies after other might of the we potential closure received complete expect from of shortly any to the divest a and we our high

the integrate has Our working move this close hard synergies. to to operations targeted positioned quickly team our and and preparing for ADS to is been integration team achieve

for excellent Overall story to flows the past our consistency to shareholders. years. consistency see cash a as continue of we detail Waste seen to Management within a and four and expect of engine employee-centric and into returns lead we've in a earnings is we industry in resulting continuation and at core XXXX efficient that three of customer will highly one the but through where driving Devina go what whole predictability guidance the

now parts financial communicated we've you business to at the X% about cash range our in the see for from results X% years. operations past range you'll growth cash in When and churn XXXX pace. the at XX% and earnings to the and amazing strong renewable a and have is part all over revenue from core recycling our energy X.XX% less to look in range three growth results to guidance in continues through CapEx yet X% our like XXXX to that within X% annual EBITDA bands challenges The out of sales the we had the some that our XXXX business

what This recovering continue. appears we strong industry to in and a this and trend a of been of the a this rock-solid model company have in year With strong be particular so economy confident consumer new are the that will far segment industrial segment results. predictable very

fantastic a Waste make team Lastly long-term who a shareholders. to great our place all our for to I work want hard-working to and members thank Management both investment of continue

our and With discuss call XXXX and results over our more that in Devina to I'll guidance the turn detail. John to

John Morris

everyone. XXXX strong pleased with We a our performance. Thanks year finish Jim had and good to and morning full are

disciplined by Our great XXX which point basis improvement results yield which XXXX is are XXXX. demonstrated programs over is our best delivering pricing of X.X% MSW

XXXX We a generate disposal well-positioned we return will continue collection More that yield we've to an a invested highest in seen capital and appropriate the achieved to yield in environment. X.X% rising our price business in landfills broadly on decade. of the cost

pricing broader on volume in and ahead outpaced see invested focus cost appropriate What's our compromising on in generating volume pricing we about XXXX results. which X.X% our achieved growth to we without these to will the continued to able results We is to were achieve that headwinds As XXXX you returns overcome impressive capital. look economy. keep this growth

in the volume to of However of of be as solid a news in year another the is jobs. all growth for good waste as XXXX volume. fourth expected shaping and some quarter we fourth not the special timing The but to quarter difficult XXXX moderated comparisons up result both

as Jim have The are benefit good XXXX service in be positive increases already exceeding in with start another in residuals As April waste XXXX. in there the combined been and coal jobs that service decreases a in combustion strong pipeline. special to consumer trend the pipeline confidence us for we've job mentioned additional should us and [indiscernible] gives a economy awarded we'll

to upon on differentiation focused year plan residential maintenance team opportunities business operating success overall on line execute The in We on is our in focused to to and maintenance our service improvement plan to focused with to continuing build labor on and ahead. of ROIC disposal costs. improve improve continuous our routing and delivery We collection focused continue helping in costs to our our improve strategies M XXXX repair optimize the technology and businesses. XXX optimization improve and and

even taking profitability. greater as with Management to Waste contracts. in We're this invested it each up the of return has business In at led our improving that residential This we service industry our for comes line underway prices on on attention way terms keeping and recycling initiatives renewal have over municipal metric and aimed the in bid several with residential on XXXX. sure contract of hard a pace are begins cost time and we're inflation at capital we bid making look changing dynamics. and bringing

leveraging costs. the our We're drivers the results via also improve continue routing to service to with onboard technology of our data reduce in and improved we efficiency aggregate and

similar and that the improving several the capturing business see results broadly line efforts. efficiency in we tools. achieved to commercial expect We these with in through the of business residential collection More savings business in we're

a Day from and XXXX. $XX collection enhanced that in At XXX% day an million profitability. in view year real-time coach yields we that for us visibility of managing savings or MXXX First drivers' routes efficiency increase into drivers' XXX million $XX of in said expect savings customer efficiency M Investor labor by improved our our total last to we allows our and of X%

expect M the $XX of We to capture savings million XXXX. from in next XXX

will is The maintenance optimization line or delivery benefit our business other MSDO. effort our collection service of that

our did processes. lower the few half great our a maintenance collection of we in This the These underway operational second further fleet We to with expect the of just as XXXX. bringing standardization as technology. improved continue to operations increased improved are leads to as work of optimize to help performance maintenance to examples by well cost

to recycling. Turning

to light lower well $X.XX. fourth our in price performed contribution recycling in a further in $XX was prices. commodity EPS our about decline of erosion from business commodity only quarter recycled blended Despite XX% by fourth recycling year-over-year Our quarter average

the year declined full revenue comparable to impact generated as we $XXX yet of able virtually with business EBITDA operating recycling commodity offset For decline XXXX in were increase an to the all fees. million the of commodity

restructuring performance we having model. recycling the Our to demonstrates a contracts success are and in fee-for-service recycling

more end be technology for operational second the positive through make technology. to by This our is material high-quality our designed At business plan the We to we customers generate future fully will also our to sorting the product to capable of with on intelligent and continue be use improving quarter. strides generating the Chicago of require. through expect

XXXX with all headwinds current on for give given environment And the lower in doing of a from recycling to impact want minimal levels first update Advanced Disposal. year. we commodity of towards Looking prepare finally half we're I price expect an the results the expected on in work the the integration to overall the

Jim we close of start mentioned the transaction the integration. As approaching the of are the and

to We as developed we integration start have soon prepared close. plans detailed and as are

to we are in forward we the be the With WM quarter the excess welcome third additional we to we ADS out into We the have million when work acquisition. confident that we of $XXX officially look done team that since synergies achieve family. the the announced will able laid

call further discuss I'll financial and to that with Devina results And to turn outlook. over our XXXX the

Devina Rankin

good John morning. and Thanks

almost XXXX our full X%. In year operations of than businesses exceeded representing cash strong EBITDA operations and Our fourth and cash flow billion quarter working flow performance to and billion more cash the conversion managing almost of growth from grew our $X the execution collection operating on capital. was XX% showcased and our from from disciplined disposal also $X.X

we and that plan I the well flow still With to cash capital operations deliver plan mentioned year to growth of billion. knew on our XXXX robust we and expenditures proactively flow in guidance $X.XX our we initial positioned our increase cash increase disposal were with exceeded As free above our collection our growth earlier from also expenditures capital objective. for volume

year and most $XXXXXXXXXX. million the free cash free was our Free flow to cash in During capital was spent significant quarter strong XXXX full year growth we the fourth spent million on full fourth $XXX the $XXXXXXXXXX. $XXX EBITDA. we flow and quarter expenditures; the flow for In cash contributor was operating

working reverse pay and fourth $XXX to from benefits the realized capital in that taxes. to lower-than-expected also we free our expect In used flow we we So cash in million XXXX quarter dividends. cash

For in and the $XXX $XXX XXXX million totaled our full $XXX repurchases. shareholders million in to $X.XX In returned billion dividends of share we acquisitions year comprised million.

litigation revenue is SG&A were We This target about full and than costs compensation largely due of to Our as a of a the SG&A were percentage of XX.X% higher incentive committed was year higher as what long-term for basis costs XX difference percentage points remain which planned. expected. of we to a revenue that XX%. than about

were we managing human number this serve objectives while a make investing our not we determined our of in almost prudent and XXXX and have XX John to technology that XXXX systems our finance everything effective improvements make in upgraded people. as platform support years. Late we intentionally in discussed. platform as XXXX we and it operational do costs our foundational in to a and systems. investments an XXXX These as for continue almost was we will investment in in very in customer growth and The In baseline the made well resources

started In the fourth this quarter our multiyear team effort.

we that release our notice this will to in in associated for these investment continue adjusted You press will we the the for year costs costs ahead. adjust with and

Our XX.X% adjusted the was rate for and year. for full fourth tax quarter of the effective XX.X% XXXX

prior value from because low Our the some in the recognize we XXXX and we our returns we an effective housing when credits incremental made investment tax tax favorable than realized tax lower year. in adjustments finalized expected we we was rate fuel for income

measured based was of year. X.Xx ratio the about our bank end covenants Our on the debt-to-EBITDA at

we positions long-term well is us to our our to continue our within upon ADS growing trending allocation of targeted approach it execute the and returning closing higher shareholders. While priorities business to levels is the as capital this measure and cash

to our outlook. XXXX Moving

flow As the guidance a not of anticipated ADS. reminder our revenue cash acquiring earnings and include does impact

and following interest incur to of important initial to remaining our the will We flow including plan of However estimate to the an outlook for guidance of we the our the raised it the fund is acquisition. cash taxes that incremental include EPS transaction. debt note update close the does free components costs

to fueled at operating On the To to we that a collection greater billion growing and basis increase revenue volume XXXX to billion by growth. disposal company total X% midpoint we $X.XX X.X% of standalone of or continued core expect X.X%. strong yield end expect $X.XX price EBITDA organic by about in X.X% of and approximately growth

$X.XX drive to $X.XX We of between strong cash billion expect free earnings and our growth billion. flow

or expenditures at total $X.X XXXX capital in is a We be our year capital revenue project to from long-term billion the billion target. which decrease so spend above $X.X spending as of between and a ahead percentage in

seen on have plan investments in so above to continue ahead average upgrades. off focuses strong the with pay volume in capital expected our year facility our remain growth and where our invest landfills is long-term we We XXXX to to and

long-term to growth committed that acquisition-related repurchases. capital remain prioritizing We dividends plan share a value allocation and total by and shareholder organic return and maximizes

on XXXX focus seen to $XXX of acquisition what integration last million we in have years be our expect the we ADS in of in the $XXX few and target more than our spending Given million line tuck-in historical with annually. lower to

in increasing planned December in for dividend payments consecutive be and as expect are about dividend XXth year pleased our We XXXX. quarterly be to announced the $XXX rate million to our

Given currently XXXX. least at flow in excess this billion we that free project $X be cash will

acquisition. well We is our share steps growth of our we restart program. activity our slowed sheet buyback share balance are positioned have those to repurchase robust our With anticipation in Advanced Disposal prudently the in and strong

hard course to billion a repurchasing successful summary Waste to can't allocate We the least our the for and stock first in we begin and repurchasing year quarter shares was In the Management $X year. over plan of at to XXXX all Management expect ADS is of be on the on set XXXX enough both team growth and their work. the an for as thank on the we focus integration. strength outstanding our business year fundamental up and to execution Waste

the Jay that for open With questions. line let's

Operator

[Operator line Maguire Instructions] Our Sachs. the comes of first of Brian Goldman question from

Brian Maguire

transaction. the the since a just taking be enthusiasm question updated on on sooner longer. just might ADS And a it's First bit maybe like bit done color was just some little some little there initially that

for you are the or if going package a wondering package on divestment multiple the of where about that? be in go getting could to and and person that comment whether maybe we're now Just or remedy one you're market conversations the might how what kind talking situation you reception going think to buyers for that in we're

John Morris

what I is would we Brian on So that the you April tell announced XX. deal

as from just And in we're obviously comments end DOJ clearance at we're not So trajectory his prepared on that. to close think quarter. year a the quickly move towards market. get going Jim of the even we're And a mentioned right we to we're after to

package what lineup divestiture interested folks In around robust it's I terms the block can who kind of that these you like of in suitors of tell of we've line a of the had are assets. really kind a said is I

Department our Justice we with obviously continued at with as progressed that the we've conversations So along the to process pace. same move

Brian Maguire

business. area about about both residential for I you ask to line Okay. focus of the and your I John talked wanted Jim think And a that's just XXXX. how on comments guys

in today those that in actions about margins improve taking see you of part a business. try where XXXX little I'm larger of you're the and could in renewal come wondering versus and been on light some where been comment have historically of guess longer-term As margins. they've the that if just up these you business to I kind thinking bit volumes contracts for what

James Fish

Sure Brian.

residential. models that has the I about we're knock-on obviously a of sure comments inflation the that business collection in that I cost And the seeing talk business we're in of foremost making here the effect that think we had pricing of that you and the up would three and what returns we're our it's on lowest getting keep first my And with residential appropriate the kind recycling the tell line there. capital lines. for deploying obviously

move to direct the those look years. we we're next to margins here we're where handful our at going when up going investments look So over to of

Brian Maguire

from XQ last guidance for And missed fuel it credit EBITDA? for CNG Okay. impact apologize I embedded or in one just what's quantify the if to and the me. I you kind but the EBITDA in XXXX of just the tax

Devina Rankin

and flow Sure. both the impact. cash I'll cover impact the EBITDA

below recognized that. no with million expenses to perspective $XX fuel operating a From $XX the we benefits in flow were in ahead. a the there cash that year the flow cash So was as was project credit be it'll which tax and little reduction year associated million about a

we the cash one that headwind the a we working recognize headwinds benefits in for P&L year of in year benefits ahead about earnings next created flow That's and in year capital mentioned the both recognized recognize actually we'll $XX those we expect free I P&L this the XXXX this because us to what that are for the are capital year for working of the flow it free recognize and cash million. total in a

Brian Maguire

all in it million $XX the the right? was year that occurred just in late XQ right Just because

Devina Rankin

right. That's

Brian Maguire

Yes.

James Fish

Brian Jim here. So

set little here. Just level bit a to EBITDA on

XXXX But puts not your QX would and some in into been. way and rolled quite puts the and the the takes of for would For takes we uncommon And estimates QX fourth have quarter. those several that a that not and by number. in been that's few have final had for

been So on the all And cash have estimates. your your a the have side total material been for LTI was clearing of stronger-than-expected true-up our obviously we on would about of million just of and But legal almost a flow credits somewhat free return of $XX the that positive about numbers quarter tax the had and we've XXXX you in the of that shareholder recycling from would pricing we two had talked talked those fuel that total of decks in a settlements. plan that. not also RINs of lot the

EBITDA. was You about wouldn't known have adjusted in included our It that.

So we included those.

are tend there in that level have things wouldn't QX not in of but QXs them that parts those were just have been that moving you many set approaching would some have and amount to your was we some about million. in $XX not So to estimates wanted in known

So is the going remarks strong was in super It about my underlying that business solid. news year though really last be underlying which didn't it's to strong the in It and I XXXX. is good the talked business waiver.

Operator

Next question comes of from from [indiscernible] the line Bank. Deutsche

Unidentified Corporate Participant

Just well points down on It you bit XX I a expected above focusing trending lighter for the guys basis in this X% are volumes was quarter. considering little than year.

Just curious what kind performed into the going of causes inflection this and quarter and your how then if expectations quarter? to there's anything it notable relative

James Fish

Sure.

me on of and as early a Let little give some bit for whole. then a volumes XXXX you color QX into and insight QX for

indicative First our was of things. of couple figure in all of a QX volume

we Northern that through of in we tough will fire and knew had California year-over-year first half comps First to due continue XXXX. the the the

at there contract volume Secondly settlement numbers comparability that the on or in impacted City impacted the basis. with a had it a we of onetime and XXXX in of least QX Los year-over-year Angeles our

been commercial our the saw a volume XXXX that hits would instead million of for mentioning that's third QX Services businesses in decline we X.X% and that line. in energy and is positive that $XX Without worth renewable Energy then the have thing And X.X%.

So that insight you into some gives QX.

January out nicely. January positive gates has of X. Here's the on the come

to was X.X%. are down business. that. of contract mean anniversary teams talked a from X.X% about comps John's and New X.X% tough So resi looking the ops roll even fix commercial the was healthy with York volume he City was off the largely that in margins I positive the

tons So And bit. X% surprising it's were it's X.X% a transfers that not down up and then and landfill little respectively.

we have a So remediation past large will we start combustion national those of QX. residual big that early we've but about we that's will got and January. as January looking then it And both talked project account in coal

with with So contract for what tough comfortable City New Northern appears California comps with pretty way the of of even to by darn the in half we're backdrop be year the X.X% from and growth XXXX fires growth overall first organic the with the some volume and the the York economy. resilient a very

Unidentified Corporate Participant

That's it. helpful. Got very

recycled also in really and in of year? then for the for are RINs terms assumptions values full and you making terms just Next question on guidance the of values pricing what commodity the

John Morris

per recycling bit quarter part we of There's of been early Kyle $XX Yes. fourth on And OCC. uptick we of for around in the about little for average right there's ton of I full baked and $XX uplift. anything the some the talk year it number finished commodity the in don't terms was on a listen think frankly year. have

What impact was million my though though we're full for I even will is revenue over the total tell is in important prepared remarks essentially more flat. for that the $XXX what's organization you the year

we're $X down about in million EBITDA. think I

we the returns going So moving direction. that and commodity what fee-for-service do we're to it's really to right the can to on what focused where still is we're make to but a on in going evolve the model is model generate price do we're working to margins sure continue we

Devina Rankin

that our guidance XXXX the into on RINs terms we and where of but that saw back the half we in flat our to of on some potential value kind that side we in we take eye can there's have do upswing did January be significant finished for And We the not of account think XXXX. created were there. effectively that setting

On revenue plan see the we and commodity to mentioned in incremental year about that forward from I model. it's be as to continue executing ahead. expect fee-for-service move think do the on while model We John important the that prices with projected some to to talk And do fee-for-service recycling front flat.

Unidentified Corporate Participant

you an on of annualized follow-up. that quickly benefit RINs EBITDA what we would at the do basis? a pricing kind think If Just of assume January have increase levels the sort to

James Fish

at fourth think the looked quarter we've number. range. Kyle it's know per one be So an fourth been has to are a XX been those as $X.XX range that XX plant full we could RNG you we political folks open to football. the stays one unit that There where And the $XX of XX it could hang RINs that our But upside if in in XX it right million XXXX all for in we in $XX and saw now I million mean to number going one the about a one probably over it But in board if be year. bit year. range of this to

Operator

comes Eastman KeyBanc. line Sean Next from the of question of

Sean Eastman

I I revenues wanted low you level to assume outlined guidance the some just and kind to the year. out end Obviously about of to high-margin lower I EBITDA maybe target comments the X% end that but thinking high in wildfire guess we're go longer-term that get to part the XXXX the tough last a X% on just came of of of just why XXXX. at how target that Analyst and just toward from is Day back the California growth comp kind hoping at on maybe you're guys

James Fish

Yes.

nailed of I I Those wildfires. much year think it turned off is have pretty mean tougher do July. it. you've those at last end there we the think I comps very with

we've comps year. up can't there. that seven something got the comes So months whether of else tough Obviously there's predict throughout you

X.X% that feel you feel think support X% of that I a for as provides previously X% of number a a X% we like we'll else within got X% hitting anticipate get whether And happen we did that. it's natural an economy big was lower good help don't offset project disaster end still would we felt the to within the that that then do now we've communicated or for reasonable range but like something we to at pretty a say But If range. that confident that to there. that's

headwinds a pricing I get RIN you're in see the kind percent we've starting you'll waste That shows means recover X% for see the when It exceeding even in when X% fully X-plus waste think about to strong us with is you'll see to really two consistency X%. years double overall then just But is. means up that's economy. these you that couple talked of start solid now and probably towards probably about some you that of possibly recycling. solid how us a number talking

Sean Eastman

price I inherently is time kind accurate volume XXXX interesting more of terms be backdrop. for me. me two should of that that price a the targeted a we And X.X% to That's that if helpful. what the just at that which we in now two time as it's seeing that valuable WM guess X.X% other look X% I Yes. built X.X% frame. thing X.X% by frame outlook to for is X% wondered seems volume And three-year over more target

James Fish

I might expect think going in your comps. the tough you here the X.X% reflective what probably bit reflects X.X% forward. we earlier question more of as The said is a

I the words we've not that with the being big we'd tough would closer all in number things as historically fires. normally X% we have expect kind of economy this headwind given. comp any So that be equal the that to year then said being other a But we

Devina Rankin

tough comp also There's New a with the City contract. York

XX contract York are in And fires together New the the basis City about so differential. that point

it's comparison. we've the X.X% outlook. so important And that the know volume tough that long-term backed X% reflective to not It's of off is of

James Fish

a issue be than to that our that I you we're Yes. want guidance. mean be surprising better It we we and conservative probably little when to opposite. the bit over-deliver under-promise it's shouldn't to

we believe XXXX. very for guidance set we've is So what got achievable I think

Sean Eastman

the pretty And understand at outlook I guys SG&A Last for guess that a on we're trying line. of is notable. running X% you me just longer-term a think the is I here probably whereas key had just price takeaway which question to X.X%

around and there's have just target. continue if just margin to I a SG&A think to investments XX% this to savings in these starting wondered I offset opportunity those you more than hit benefits more down move technology the investments. from we XXXX and number that's be whether by that

Devina Rankin

Jim's you adjust items items up expect Those if XXXX when planning two that think revenue to delivered we recur. mentioned the two a look and items for are in I SG&A not those certainly year. not of we as for about XX% would that earlier percentage we we're at those have

mention we enterprise planning efforts adjust then started planning resource over we addition work impact those in remain those ADS you fourth for adjust integration doing quarter. we're and to that the committed And term. the we those in items so did to And are of target long for what of that we'll year the see my to continue the in ahead that the and our two

call able absolutely technology customer center them our on call having above But over into drive focus level about SG&A our reported long call serve from their two to the and we the technology than where in reduction term. the So information will investments will service should call elevate be really those rather online to things get XX%. investment center or accounts right those you're a we their out perspective in a our of SG&A when like items fundamental the in organization

as dollar investment what that tick allow position is incremental percent to we great maintain continue it to us because value right to the worthwhile are and than at down revenue But see think those is incremental want SG&A our that now and to the we going investments long into for to technology rather of XX% people term. of a

Operator

the Next Tyler of line of Raymond question comes from Brown James.

Patrick Brown

I collection but collection one not big of at quarter call pricing we on positive wouldn't MSW real it the it would come landfill was pricing But this that collection believe curve run outlook long back from emanates the should the this for new is pricing or really we prolonged a why John expect want X.X% And Jim side post I post pricing X.X% if the biggest that landfill felt core to the pricing XXXX. stage out? feels of a picture to yield the the question to like over of set that collection paradigm and which I really equal if there presume core biggest the for that momentum. print stories year

James Fish

as establish been talked one get pricing probably does really never think there. other. I of right. I to we've the you're And a able think But about absolutely for kind consistency Tyler any that's we've look decade Well landfill

pinpointed and structure cost that strong us to quarter years. you that last we for that we've is get it's XXXX that remarks approximate able the it number think price I in that my of for as to were said every I MSW stories a starting is the big that one for two also talked about

getting talking we're the we there. where going mean up keep structure close to about X% a is going is by cost finally point gap X% MSW to starting we're up by our I and and how

a on it to And deal us. for do that's And big starting basis. so a we're consistent

been years customers that costs permanent topic understand basis they're a which going a go of here up. up up continue like labor have on leachate that discussion our for leachate two I things costs to really and that think costs going are

a but really story ultimately we've here really say very to about to this a time never like finally a stay. story. big And is been able So talked we for that it's feel pricing down. a we're is to long It's now nail able landfill

John Morris

that. to add would I Tyler

We network. are of transfer equally part focused on station the well the collection as pricing as post as

on You've about talk whatnot. pressure heard and us costs subcontracting

So look what on team the particular when it I in at working the you we're at doing are transfer side. hard

look better you We better talked and when about through and deliver the residential. if talked It's we pressure walk the I there think mean yield returns our up. residential it's going you margins I there. core network. volume volume some way be at But And progressing. would price all about it could

that. I think we're comfortable with

James Fish

mean so there tell your John gosh little is mean But bit to might I say you thing margin landfill. than with increase you you a excited think are Look better one I that add-on X.X% you improvement What about you're "Well about?" said we cost covering talk Tyler. I here not an of there. talk even what would X%. Well your I about it's when When last

a resi covering a don't in X% margin of seen is years time. start almost we that's of business we to the for of I though XX cost affect over similarly we five John may landfills of business it still get which really is the years were some collection while also that going to years XX not the line falling margins of that one even is quite overall margins our on period line of kind will pushing to XX which increase line back half So be add of where that degradation not ago will know business period to to over

cost the doing in a lot while past. is just cost So recovery this of recovery while weren't recovery we that really we're it's cost

I get to got that. we've we're and now. And think there to So starting consistently show

Patrick Brown

just maybe X posted But you about nitpick I accelerating talked Again XXXX So a disposal touch. post and hate X. collection. we yield to of in collection

why collection yield conservatism? are deceleration in for and a disposal XXXX? you So of Is looking guys just that

James Fish

that we've of baseline. the we little a I X% mean I is mean that would X% I think of be bit kind was Yes. conservatism. volume. it's all price along said X%

way question almost of tell we yield about previous eight said it's is call would I you you and X% I is on yet. X.X% So the two call it for a which of to want baseline maybe the X.X%. ready not it it We're that kind just if instead to it think new

Patrick Brown

for my But implied was in a Devina out the maybe is XX then I little think hoping there. if improvement you XXXX parse correct. in drivers EBITDA could you're of that looking And margins math just a maybe your some bit I in point guidance basis

RINs maybe basis is to all that messed the up? the margin implying Or are maybe actually and recycling tax kind wouldn't mean I XX expansion math more So of is CNG points? say margin So XX you credit be dilutive? core my

Devina Rankin

do is to there's you that those we No that On dilution mentioned think I items margin. think your math certainly good. some

that meaningful RINs some from margin kind Although a we're year of or flattens in at growth the not any recycling because point in out perspective projecting ahead.

tax be dilutive XX collection impact to point your points. the to the fuel in basis should and be definitely continues be disposal ahead. to that flat. So The margin XXX year that to will But margin outlook relatively on credit for

turnover. the a repair from on mentioned margin items that in yet is then to we've for your MXXX driving our one is today productivity MSDO the really of some think Jim range. mentioned and that mentioned you XX that is but John's So and focus maintenance right XX perspective I not of

about the for we during improved forward focus on to march and on can goals year objectives Management. think basis XXX continue people turnover Waste and points Our with we those the that

Patrick Brown

super then questions. and quick Was SG&A? in And Okay. LTI legal modeling the true-up

Devina Rankin

That was was and yes million. about $XX in SG&A it

Patrick Brown

Okay. Right.

book of a in percentage that expect cash as this tax taxes. some you Okay. And XXXX? on then there's What movement I going would think cash

Devina Rankin

Yes.

So We decision credit. was because our payment fuel that tax year made the cash lower. this of tax

we knew of While that something in was perspective the it up on a from benefit it see doesn't a we line show XXXX. same cash would

on QX tax our that cash payment So return. by our federal we normalized reducing

cash And so ahead. about projecting in goes up that the XX.X% our of taxes XXXX. book We're XX% to were about in year

Operator

Next Michael question of line comes Stifel. from Hoffman of the

Michael Hoffman

X Negative get of couple so A positive X.X? to positive in X slightly housekeeping. in XQ in Can in that's follow volumes just correctly. we are trend the the directional this a and flat incrementally on or you about incrementally thinking we positive how X

John Morris

I sure sure I'm I'm not they were seen we've been that QX. went January for Yes. January negative in I've through to the date say and numbers I I'd mean on not based encouraging. pretty

continues as you think I probably in be to up particularly look happens three positive But on for commercial line the see slightly end strong. February what could QX. of March the at business and we it volume based So with years in and has strong We'll been obviously.

representation We the best about economy. the at I that QX. think strength probably of is talked of consumer the of the end that

well. and has tough So been is has carrying those comps. Landfill think certainly strong today landfill reasonably I commercial I as you would tell

Devina Rankin

are QX and fire comps CapEx on volume. your that QX

QX doesn't as regard. burden from necessarily necessarily heavy that a have So

to that have year-over-year so in QX as expect why think to And that's January. comment earlier about that hill didn't with significant the regard QX I comparison as don't will. to strength climb we've a seen We

James Fish

between lull and fires a more February. California of to of had us there the started so QX Northern California Michael think had gap that then XXXX in kind you of really because big really I last in a bit Then there little XXXX. tough a there think comps coming had was a QX a little bit fires I impacted of and year was of we that Southern you

turned in completely all at California So Northern of fire at January volume. much very the the the coming sites off volume pretty impacted into July. fires much by really end our wasn't But

Michael Hoffman

right. All

better So X zig-zag and you how bit flattish better X a negative that's in to is little the in I'm maybe in X a what XQ then a of get and one slightly X. hearing XQ positive

James Fish

probably I think right. that's

Michael Hoffman

helps make think so important point just modeling It remarks Okay. saying All Jim there's are listened operating an and you reported. of a is EBITDA. right. metric I things the your no I carefully to opening when noise

EBITDA. So operating presuming I'm hearing than adjusted is that's different correctly? I'm EBITDA that

James Fish

but way I'm mean we the call about. I it's it I EBITDA. just out is I adjusted what talking just it it's That's No. I'm

Michael Hoffman

It's adjusted the number.

Okay.

you're can the actually XXXX? dollar of So help Devina approximate in us with in you XXXX number amount assuming versus then adjustments what's the what you produced

Devina Rankin

The up ahead. think We prepared be ERP don't year. the is that to remarks year my during will could that we $XX item mentioned be our one adjustments in what about specifically predict the adjustment that in system upgrade that do the we and know I think million we

Michael Hoffman

Okay.

tend So that typically be long was to a question. things. ERP planning

So this feels abrupt. Is it?

Devina Rankin

or to a a to had to more us transformational viewed It's she for and change. systems finance the bit investments certainly wanted or right HR as time. a that time us whether make our not And in was been and Tamla's abrupt. in make do wanted with It's upgrade make some not we partnerships we it I decision transformational systems. we the road to There of to for for we've the that fork maintenance-oriented about a more kind a of talking technical something

And so we're that's the path that starting work down. to

Directors. And through energy can all processes organization and and our of you of process As about lot a to those made the including determination quarter. launch this from started that in process appreciate midyear takes final time a fourth support worked our is a and of and the Board levels we

James Fish

organization I appear abrupt not people a reporting abrupt an year I a at within we've and It's planning process. for oversee to from this certainly X.X it. Yes probably RFP going add from that. a years least to like We've this might planning standpoint. more standpoint. It said dedicated run want spent as just mean Michael she the through to really

of approach. see looked exclusion side a has which a but the we have that we've reporting companies treatment bit diligence through is and to first this both on why where kind And but out that then really is the comes the little we process when other at we what called to been went of done for aspects opted what the probably more time it

Michael Hoffman

XXXX. me planning it's of [indiscernible] just the not cash the about CNG I'm I is do? good. guidance? Free midpoint And that makes you I say. better understood Is out you're that that what for that feel million saying so what of to I'm I'm do about credit Is the sure the not $XX saying? heard what supposed take clear you're

Devina Rankin

midpoint in about from headwind tax flow So expect we've our mentioned guide XX XX a year fuel billion going is to million. be I million be out $XXX to debt. XX taken the Interest EBITDA XX the ahead from includes because as $X.X growth XXXX At we free the of incremental perspective credits. a of to cash $XX

headwind $XXX million a ahead. of about that's the year so in And

taxes drawing another on still we million $XXX we be million will strength honing on Cash for operating expectation you have EBITDA an million a guidance. of And and a $XX then capital EBITDA. working back will year-over-year about $XXX headwind think is from round basis. that the operating to in that out the But really growth

Michael Hoffman

that Help talk I'm core and us between that. how can X.X isn't what what's hopeful over reported a to you get and appreciate time X.X% But that of gap that a I And we change about improve So X% permanent structural that? closes? can understand that.

Devina Rankin

reducing our churn. Both X.X% XXXX things technology difference fundamental we're was advancing as regard X% we we in improve of churn of customer really offering and is and we differentiated do continued positive service. in to opportunity related And service price drive but The between with core our flat yield see a churn think to with really essentially Yes. ways.

think our can that in we and and basis the X.X%. of X% as points XXX room So figure we the we the reduce close churn gap between can probably there's

John Morris

that or that is a about that actually friction national we I we're the is little that half news focus in day our making national of on business. the and good here really accounts either that some reason best QX with first year. adding up spoke sure the day is bring accounts year. to trying The some couple that also three in we first of churn last a are shared bit aside the would of in what say with And large I we

We've mechanism rate got we've built the books. going and got the into right right in setting those revenue margins

and at C&I was up end net you the so we bit we're C&I of will customer tell net that. looked that I the also the base And our pleased number good pretty at and year. with churn a

James Fish

last And reference of your pricing question to thing Michael. X.X%. in about Yes kind baseline

we're by we years and up at in the we mean was said to baseline X% we we X% hit our can't XXXX but I doesn't to we lagging obviously certainly move as the us feel it's think able and like we've residential many move mean pricing I some to that Tyler starting to I As landfills that ability exceed give for in is basis baseline where I baseline think up confidence that been about XX we mean exceeded it. can we particularly points think so to achievable.

Michael Hoffman

just thought wanted I out. it what but I then That's to to draw Advanced Disposal Okay. And quickly. back

You close it.

what You've had you I'm are I'm some some of to would are and what your this of XX milestones them and But plan. calling out tangible come yellow can to that assuming we green about planning? you've and result that expect what looks a see like can months teams. planning that talk

John Morris

fence side company you still So at is Advanced close. since a probably work separate the plans I mind has we hard been our would that the Michael June building integration. really out in our until Keep group of tell on for

been the on fence. planning our of side So our activities really have

mean And we year or just hang really our of service. really publicly employees and goal is I I've I them first the our take we provide to privately XX on day day probably will tell and you said XX right customers that one making I through care think sure the that and as the

we game as So to going customers people is a we're quickly it but priority. going and can do us. move a as achieve to synergies to long this with for We're as in

James Fish

that not whatever. to going why range is it indicative to in we're strict script it's that XXX is year robust to M&A talked and of about about is is it we've the a because pretty it Devina be XXX her within not down or this lack market why range lowering that of But

point I distracted somehow think and do them to who But want even is distract on John's that's don't to what acquisition. to there. hard going are be mildly by if get folks just still as working integration I another ADS

we're to going for to really So that we XXX to the XXX going are be year. in

integration most caveat get work only wow something to of have let's really up say the that Now that synergy get we up. be and to accelerated pops the we done feel work can't on our pass and that and QX we and we radar would the just like we

at attention about Okay. it We'll will that that small with point. we the be tuck-ins But talk to be our we're setting on ADS. the and expectation we're now throughout focus work to it's for just going an going integration year

Michael Hoffman

of Well tuck-ins five in you're doing one ADS anyway. with year years

James Fish

Exactly.

Michael Hoffman

ought deals that there out none wakes freaks up so you get social are and to I focus want miss of and level decides everybody on... going accelerated than a into is and just an selected be other XXXX the of they it presence to you might I So of up don't taxes mean why But me there some that. by I pull because all

James Fish

won't I anything you the comment hopefully freaks nothing say out. won't on But politics I now.

Michael Hoffman

sellers into got and think tax out into environment they selling what be they they're figure are to going I if they've Well just their coming 'XX proceeds mean a changing after-tax 'XX. have move to

James Fish

Yes.

Operator

of comes Mazari Jefferies. the question of from line Next Hamzah

Hamzah Mazari

about of framework question ADSW. think the to synergy sort million is costs achieve Any thoughts on first My to the in as $XXX achieve time synergies? to and to just us? plus Any for line those

John Morris

achieve you not been Well we've I that a Hamzah I balance that and think for in think benefit costs XXXX the XXXX. ton integration pretty clear tell would of to of between we

bit up lot We organization. of you'll course see benefit expect to ground the of we're make going and of the that to a a net the XXXX through start good for

Devina Rankin

cost perspective That to equal exclusive from planning synergy achieve things worth like achieve of for one are costs realization. full we're And to customary a payments that. the to of transaction that is to year's cost like bank and of some

Hamzah Mazari

And helpful. could how from other Got a [indiscernible] then frame businesses Very focus us for solid aside waste? med today is for and you waste big of post it. recycling that growth ADSW you integration? are waste And

James Fish

then at for I'll a We shot could quite Yes. it small And us probably take quickly. really.

a have we think I Coast. locations on and couple West in of the in maybe Nevada maybe

XXXX focal point the us. business was So small with of acquisition [indiscernible]. has us for been in The a Services for Energy

doubled. business essentially So that

But very has its That the $XXX maybe neighborhood when to been kind XXXX in million-ish in we business bought the in of doubled it still of waste big we course And very of was And to million peak at relatively other? that's that then [indiscernible] in have. size what and then overall is small [indiscernible]. been basically. somewhere it in $XXX the back solid back it revenue has comparison revenue. the of had fallen

John Morris

our I would tell you waste corridor Hamzah we've seen in good growth really hazardous along the M&I business.

Gulf make Northwest Pacific around in facilities et investments our Coast both to continue the cetera. We strategic

were important would M&I customer terms material for well trying to of our billion wouldn't say part and an line business. of at run but our it got plus continue differentiated it call of a to our I you folks to services in base necessarily of that we've important an revenue business it's if part us. team It's that part is I So our scale business great of very who look $XX for

James Fish

potential whether business has kind what that us. for have Services you look that ends or I traditional cuttings there of all to a but certainly growth mean Energy if probably us. growth think but the drill you have I down. I I business engines that or I for highlight it's be is up mean Whether a growth think the and think it waters they would being I potential it's growth Yes at

And remediation then business as won. think could the in of XXXX. mentioned that win think contract sure We have couple I that contracts coal said we John I for residuals that we the the M&I others with big combustion a we

like a for can handling the that we not small strong solution really coal looks pipeline and combustion there's the do what on we residuals. there got company do if we've full really feel one So group

So that's us. certainly a growth opportunity for

Hamzah Mazari

up Does last landfill time quarters a about but from step X%. raise inflation. can't the to just Great. And of talked few aside We've landfill a it it question. long obviously cost a Why time last system? you for your pricing you take quarters. lot sort few low cost the On last long pricing through more? a inflation roll seen sort of it's pretty referenced You of had been

you give price just reason sort just is us a of structure? a to So sense the uplift cost gradual a for cover this push or through of higher can

James Fish

looked X% quadrupling in QX MSW I felt when of historical I at I at don't pricing me. a to somewhat mean and good there pretty know. X.X% at

fully I that go But So up X% on to X%. sure obviously a It's happy if get Look could we structure. we're higher? at to is would not cover cost I'm it. making the can't get with our like to to minimum structure it progress cost say that

I'm wanted make in going XXXX I and We've we could And so bit do this. forward. in to we'll really wanted number foremost landfill then sure with the first that a consistency far any and XXXX had of I with happy show consistency that address pricing starting to consistently it. now to and never But

Operator

the of comes question of Mark Neville from Scotiabank. line Next

Mark Neville

Maybe just first on transaction. the Advanced

the divestiture clear so the program. of just I'm package on Just

clear period to of of divest need you'll then need be and to just of whatever it does time so a closes finite Or to have deal sold sell? the So closes? you I'm sort before

John Morris

assets. are I and to to closing of the still Well historically of down allowed package time been to be regulators. details mean But the being for narrow worked obviously Mark some has post period industry with divestiture the the able those those out suitors a

Mark Neville

you're sort there's Okay. disadvantage interest a there not that sounds enough of seller? like And it

John Morris

about that by are though the are from they list demand of grew it. think obviously I the they of high mean lines very listen Advanced up that number history assets on the I lined how as evidenced mean I knows think we now everybody are. folks and to in the And who've where right chat the

James Fish

day. assets we've Well been not light acquisition for it had there I the never have are this seen that of think John

John Morris

Yes. Agree.

Mark Neville

Fair.

guess I a again incremental that up I margin landfill incremental pretty presume is Again Maybe the follow the on is volume the Okay. margin there high. pricing. just on the is the

doing again I much some limit guess And if raise is upper if you're there how sort could place of a So is X.X% dispose. of risk alternative higher. you're X% losing volume an again again the feels to pricing to you at there sort sort of some But can like quite there I it but is it be lot not assume to right?

John Morris

in think confidence seeing how terms I we're those what do to covering revenue degree team confidence side and we're to making some degree of Mark team of happy and the are higher is risk you pressure recovering doing the volume. that's has our how think I've much costs that losing transportation always like to particularly our sure And et using that with field make our I will analytical all positioned and decisions. decisions operating what been what of tools is make their a what you're alternatives assets look much do with and data of a I our is there's align tell have we we analytics and Certainly management using cetera. folks have the tools better part higher of we're the

Devina Rankin

Well Yes. ability one understanding fundamental our customer best think because for conversation the and the alternative ease network the next this asset execute. insight inputs placed I of the is to to

James Fish

talked That's really Day price right. center protection question Investor about right. at that It's price really, elasticity. close landfill you exactly talk Devina I when positioned mean to about city your about really well some provides that that's and network is the really elasticity something against is having we

Mark Neville

Right.

guess there on maybe why that. no again you doing based be is reason I So can't

helpful. Maybe Okay. one That's just one then. last

kind ERP be again can typically undertakings. on Just the these upgrade again pretty of big I

number? XXXX Or I'm sort think the that quoted life that is million of you a that of line that number? project $XX and time around a of is curious So sort is I just

Devina Rankin

Sure.

HR exactly taken and So finance there planned execution We've are and this for right path haven't significant very ensure it forward. you're teams in why the our that's coordinated well and are we of slightly. the that undertakings well

that's this to that in $XX current to new XXXX expect XXXX processes do to definitions software. terms the estimate implement on positions our us of business and standardize our time projections million we based into project In the of go the specifically and a way

Mark Neville

And I last then. then ask the maybe can one if Okay.

price. Just there's guess comps. the the in ran on tough I commodity

X You EBITDA the RIN you that to again there's done is is a of I'm a year-over-year? sort little Or a the fee-for-service just sort of in still mentioned assumption from pricing neutral has XXXX? sort net think it the upside year-to-date. the guide better headwind model. The for of

John Morris

would net Yes. you tell neutral. Mark I

but little a we're out you in demonstrated remarks We prepared we confident And overnight. It kind kind can on that'll been the change not we're up the my quarter. year the I fluctuation rates feel of bit closed tailwind that pricing. are of commodity today on net of to those elevated heard softest they think mean where staying a there. little from I has its RIN that pricing that in obviously neutral same a was because neutral. banking ability there's could thing. bit QX make obviously but be a and be

Operator

back Thank to you remarks. closing the turning our speakers I'll your questions. call for be for

James Fish

All you. right. Thank

a really hard-working in they times are to day that whole just produce numbers honestly truly I've at repeat industry want have every people is this and we that possible. this I that to day said and closing blessed something and the make that in We're really here So just many to have great the in all reporting as the doing that company day. out jobs their we

thank We're the to for you say week. to want just grateful. I of you rest so extremely Thank joining enjoy all again us your them. and And

Operator

conference for and call. this you Ladies concludes gentlemen today's participating. Thank

disconnect. Have a now great may day. You

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