Waste Management (WM) 13 Feb 242023 Q4 Earnings call transcript

Company Profile

Participants

Edward Egl	executive
James Fish	executive
John Morris	executive
Devina Rankin	executive
Noah Kaye	analyst
Bryan Burgmeier	analyst
Jerry Revich	analyst
Tara Hemmer	executive
Patrick Brown	analyst
Michael Hoffman	analyst
Stephanie Benjamin Moore	analyst
John Peter Mazzoni	analyst
Tobey Sommer	analyst
Kevin Chiang	analyst
James Schumm	analyst
Walter Spracklin	analyst
Hilary Lee	analyst

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the WM Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Ed Egl, Senior Director of Investor Relations.

Edward Egl

Thank you, Josh. thank full joining Call. year and fourth for everyone, and quarter XXXX morning, you us for our Good Earnings Conference

me Vice Jim Officer; are Executive Vice Officer; this and Chief Rankin, With Executive Financial and Chief Officer. and Fish, Devina John and President President Executive President Chief Operating Morris, morning

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

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

which that you on differ actual periods. All materially. During will based projections opinions to statements, subject could uncertainties are forward-looking hear risks about are or call, and cause forward-looking future expectations, current to the results statements

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

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

prior During period. which amortization. operations the discuss before will Jim, Any stated, and depreciation comparisons, operating the year call, is Devina with will be and John EBITDA, income from unless otherwise

to business flow, SG&A results expense that to measures. reflect period cash operations. EPS, income, performance fundamental prior enhance margin, items excluding income operating in Net adjusted and by measures, of do management non-GAAP certain from margin, operations expense or not addition These and been comparability free results EBITDA our are operating believes have adjusted and

p.m. approximately at to found a of earnings To Eastern about most the tables, XX Please access use and website and the our information www.wm.com press on recorded will available comparable replay be non-GAAP of beginning non-GAAP reconciliations for release be projections. measures and refer day company's measures GAAP www.investors.wm.com. hear This additional website a to and call X:XX at the can hours call, Time WM which is being the today. our

provided time prohibited. accurate replay. is retransmission this on a may occurring Any call, the consent or be form is at no written XXXX, call during information longer of rebroadcast without Time-sensitive redistribution, February any today's of in the express which WM of XX,

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

James Fish

All WM XXXX, high midpoint full growth EBITDA year This higher. most our exceeded million the right. accelerated thank quarter finish XX% operating The a and of to year. and team EBITDA Thanks, remarkably $XX led guidance that earnings all driving by of Ed, achieved the for to you strong recent us. the from the joining beginning fourth delivered of operating expectations end range original of our nearly

quarter to both and the to continue And we costs, in our with a Our of cost you of increased managing performance strong help This the in organic in year the business. expectations. and of automation. saw make teams as our widening improvement operating technology spread revenue progress our our results, our the with combine price profitability. and optimizing performance When structure again, cost disposal in our our stands were revenue financial for starts out the disciplined really that results exceeded powered and growth success P&L middle by the our once collection with

Operating XX expanded year quarter XX.X%. and EBITDA in to basis margin the full reached fourth a points XX.X% margin record

investments. directly the translates of on of $XXX from cost us guidance, for we're of off, focus projects EBITDA $XXX million million, than kicks X.X% comes growth midpoint another sustainability to operating and We anticipate our of optimizing up sets XXXX growth on executing continued which year structure our As which outsized our that growth confident sustainability at our more growth.

the benefits platforms. about expanding of excited our and environmental gas economic remain recycling -- our renewable We expanded natural of and

expect is natural automation execution by gas the We're gas renewable also on volume new upgrades to in reaching growth. recycling X end and facilities renewable in tracking of track our natural we to XXXX. XX% at commission recycling well, complete facilities rate facilities add of and new XX markets run Our X the year,

to Turning allocation. capital

our You'll of to continue growth to to high-return hear detail, confidence returning acquiring our accretive businesses, projects, more investing Devina and on and want priorities. repurchases. capital cash our our to from I This this allocate share through all ability topic but in to includes stress in in shareholders dividends sustainability

heightened some pursue there yield indications Our are opportunities. our have pipeline this given to any approach appropriate robust, high acquiring acquisition companies, regard. to a that we could that particularly in in returns, disciplined sustainability returns XXXX is the activity deals tuck-in and ensuring committed We're

a zero our this with to largest automation the technology, as I running. the smoothly continue hard In out run been working for bigger another the making representation focus to at this and Phoenix sustainability just operations year. closing, sustainability. in I the team the by the with for we thank want growth environment. investments work to create title WM we world WM as been demonstrating waste event and operating now, leadership waste recognized and well. drive team look XX central and before, tournament last event of great XXXX company It in entire the were people a for has see We me progressing and for to years week, and We've said great plans forward WM makes I've the proud sponsor executing diversion our in sporting team years the on there XX Open so our to

the discuss results. to our now I'll over John operational turn call to

John Morris

the more XXXX, Thanks, in than good the with with fourth morning. our performance standout achieved team pleased We're quarter. Jim, year the showing strong throughout and operational continuous improvement in results

performance ever. expenses the from by and leverage year-over-year, robust This quarterly business operating best period, landing strategic improvement revenue fueled cost of collection improved disposal of at basis was our this percentage operating marking primarily XXX and benefiting a second our During optimization. XX.X% as our points

optimizing measures digits and a repair maintenance to cost proactive WM's leveraging improvement to costs, bringing improve labor, the fourth cost substantial cost in to by manage serve inflation managing efficiency cost These low to to estimated and our single led Our structure. metrics, accelerate overall initiatives and unit include technology quarter.

When solid margins. we combined with results pricing our greatly overall enhanced initiatives, from

Our strong some weather XX areas XXXX in carried as even is second expenses full our has half we performance year of and an momentum improvement serve. results revenue operating of points. into evident in face percentage translated XX.X%, That into severe January of basis we as a

operating repair and the maintenance. and Two labor of improvements driving key cost our are categories

begins XX.X%, reducing on a the its In front, progressed. quarter, improvement On the year this our driver with point at fourth noteworthy the as focus persistent lowest as showing reached labor milestone turnover turnover. achieved we

to automation the strategic improving are compared fourth business quarter positive meaningfully of year. our Additionally, results yielding in initiatives lines in efficiency, X collection all last with

investments significant The the strides labor our and technology latter in in results of XXXX, cost gained leading automation traction management. to part of

this XXXX of sites. as to the our deployment into continue We we tools broaden expect across additional

repair truck successfully of the over since to operation, XX% lot assets maintenance. removed our of from the rental we received in of beginning XXXX, and routed trucks Turning age full excess reduce our X,XXX XXXX. fleet by improve and utilization a nearly With

We're productivity, remained repair the paid reliance enhanced dollars services. repair on forward our overtime reduced XXXX, costs our percentage as the maintenance in fleet. XXXX. and and progress. safety compared and in processes, strides both which quality form off made unwavering external emphasis Throughout enhancing of to with sustained lower a of expenses to maintenance has an all this look has revenue This we streamlining on diminished throughout the proud and resulted by accomplished and We to technician XXXX commitment of in of

financial is outpaced from that price business for disciplined year, organic of fueled volume our our expectations. X.X% Another the revenue the and Growth results collection the core totaled which and strong element equation in disposal growth.

be striking Our recover the right continue lifetime value focused pricing balance on maximizing customer price to and between costs. to increasing higher programs

remain consistent our at year-over-year and Our service customers. end range about historical of underscores quality to lower at of churn rates full delivery our X%, the the improvement year

sustained remain XXXX, pricing to customer programs inflation. result and cost lifetime our we exceeds X.X% that securing Looking disciplined while value in ahead core in momentum X% committed to and our yield maximizing anticipate We X%. price between to pricing approaching

we ahead. year that seen XXXX that improve have spread successful to as and confident our are teams progressed, We another are deliver poised

volumes. to Turning

in fourth MSW quarter by Hurricane disposal a by and elevated on collection and landfill was bellwethers to growth the volumes volumes muted driven for grew the somewhat Our X in landfill workday-adjusted volume our XXXX. X.X% cleanup Overall from Ian was primarily services. collection, basis. demand of due commercial Growth

all we that parts of work declined residential due modestly we to acceptable Similar our returns achieve for quarters, contracts to recent low-margin business. volumes ensure to as our intentional of shedding collection

both our declined, You earnings this and see the to winning This because execute total revenue this we'll can ahead. in of equation, of volumes year focus benefits strategy while business is continue collection improved. and a this the on in residential line

differentiation. continues Organic remain revenue the fourth positive of positive, focused services lines grow. net of firmly EBITDA and in to grew growth quality business new operating reflecting all and In and remains quarter, collection service business our increases

disposal ahead collection XXXX. anticipates guidance in mirroring approaching to and performance our volume achieved XXXX, X%, Looking the

successful It's and and I convey daily want and to communities safe their finally, frontline in delivering customers reliable our the their service our to laid the to that a And groundwork made growth commitment years for efforts teams appreciation basis. ahead. XXXX unwavering my to for on

to now discuss detail. XXXX outlook and our in financial will Devina results call I the greater turn financial to over XXXX

Devina Rankin

significant XXXX. optimization theme throughout John, good quarter Thanks, the a and Cost fourth was and morning. in

measure, our customer-facing through full was focus X.X%. of leveraging enhanced the The engagement spend. time, basis a team point of our and investments collective in become Our on made to realized with that capabilities. technology SG&A from at delivered best-ever and to systems year optimizing investing our a percentage more the prior improve channels talent, improvement back pleased customer pleased revenue as was in XX efficient technology, while WM's year We're focus this continuous progress office same

XX our operating operating result point the and continue from and full efficiency disposal of of ahead traction optimizing year costs The positions the the which EBITDA adjusted business and maintenance expansion end XX and price in lifting from the XX in us fuel year, delivered SG&A labor margin margin collection of points basis margin of our repair XX.X%. collection efficiencies. benefited to impacts a our gained year the in XX points to is was optimization of basis and EBITDA basis our to business meaningful back deliver high This in XXXX. in expectations combination We adjusted and expansion in half disposal points operating remaining basis ahead.

performance XXXX. into Our operating translated flow robust in cash

these near of our the cash flow grew growth from investments cash billion, capital operations and before nearly flow growth, billion. $X.XX and management the full This end to result demonstrates sustainability flow cash year of initial strong our Our our our taxes and Each guidance expenditure of processes. finished and disciplined interest was range. measures free high management year $X.X cash conversion earnings effective optimizing

in of our During billion XXXX, paying shareholders, and stock. we returned billion $X.X $X.XX dividends $X.XX to repurchasing billion

we spent and In waste addition, grow on our traditional to recycling acquisitions $XXX business. million solid

all target our leverage future accomplished our while accelerating We sustainability ratio development, leverage investments growth our for growth maintaining about targeted of ratio X.XXx. and -- of this and

commitment Our flow growth long-term balance continue positioning remains growth. and our cash shareholder earnings and us returns to strong are and our sheet to robust,

approaching outlook. our company expected business by outlook. X%. organic by million growth is and $XXX financial of at midpoint between XXXX our in grow the collection to the X%, X% driven to anticipating EBITDA Operating total growth and disposal revenue Moving We're

half we be cadence year to growth course the given the over the from the the of weighted new growth our we've expecting strong more year year, of gas operating to When growth and collection the XXXX. recycling renewable online. about gained the to efficiencies our we're back front of the disposal think momentum sustainability more in expecting back half And significantly natural and we're to be projects of come of half weighted business as the

EBITDA of balanced Altogether, the we course result operating a relatively over year. in the growth to this expect

the X% at the to high-return capital almost spending year these sustainability on to our we and to midpoint, sustainability is Free investments total $X.XX to projects. expect the for support grow expect the We flow invest before million $X.XX another cash midpoint at $XXX billion billion. anticipated business growth to

in We including automation and recycling network recovery. committed industry-leading natural energy projects, investing resource renewable in and recycling, renewable advancements remain an of gas markets in assets, new to

growth investment progressing sustainability Our strategy well. is

exceed a the projects to delivering inception. been completed the to have sometimes its there and expect, We've would you as we So inflation, our of the refinements environmental objectives number meet that worked project and through way while planned. impacts customary since and schedules from plan all changes economic

In X energy billion the positioned across now pipeline. WM our and $X.X have recycling that between to our successes grow outlook awarded competitive has platforms in These us a recycling from refreshed Canada, investments expect XXXX. billion process. project through We projects new includes and particular, XXXX $X.X growth to total sustainability through renewable

contribute projects we've for utilizes to per of about $XXX and the XXXX. assumptions expect renewable ton recycled these This commodities used rate run end operating We per $XXX $XX adjusted million of pricing the same natural gas. consistently, outlook MMBtu for by EBITDA

We projects we're strong to enthusiastic great that the they deal about in have value a complement business. the of the confidence and are our underway, provide of existing

accomplishments We we in our A driving look our investing illustrated XXXX what that in heartfelt you dedicated members achieve are who we business, pride in our and and in focus our sustainability. automation our thank leadership our together success. conclusion, clearly team can has to through and on been In growth to technology have instrumental take optimizing forward diligent to growing XXXX.

let's Josh, that, the line With for open questions.

Operator

[Operator Noah Instructions] question from Our Kaye with first Oppenheimer. comes

Noah Kaye

First one, for maybe John.

some we for in remind us, and gains at in kind the we good they and some XXXX? got some KPIs about of perhaps Jim step where in key towards productivity are and should and optimization cost automation talked Can investments, terms year. and march and of you as that the of progress the details back efforts the of this about thinking be broader productivity well, You

John Morris

dependency pretty through broad little terms started of of And Noah, our range. handful SG&A. group, on then frontline of good areas. across one to of elimination it experience would talking in this and kind question. our job One Yes. labor was the customer a Originally, labor the we X,XXX recycling, the some obviously, it's on about in dependency was reduce driver bit X,XXX routing, a was which a

for, would do with think experience of XX% what we deliveries, there. the customer through resi And XXXX. about is, side the this on it had did as We're if for you tell to what this improve has way way, you planned I XX% about much about we're And automation. truck in through the which

got the On his we've going automated a mentioned side, be way Jim through can the are in of on Tara XX% as to remarks, recycling this comment more that, number that year. of plans about there. we're

making progress. we're you, tell would I So great

progressed, in we're our obviously labor in a it think as and pace. I of got we still up, We board out showed but across the in on QX margins and plenty year there. the specifically opportunity like feel good

Noah Kaye

Very helpful.

first about have the really think the the and it Just like sounds you to trying the and half I we story year, EBITDA side. growth us on the the about margins a of know any of year. disposal collection seasonality, for front is of the give typical of half? terms for in can But cadence the of are guidepost cadence Devina, thinking margin for kind there quarter sort or first

Devina Rankin

it's similar dollar the of similar. what margin And talked growth, pretty think we terms a story the I Yes, EBITDA is to for great about in cadence Noah. question,

be year, We margin collection the in toward expect be expansion over fairly margin more expansion business. heavily front The particularly the even to SG&A the XXXX. half and disposal weighted of will

year-over-year in basis. But on They're capital aren't of a sustainability But on benefits a the that return to brokerage price our then line of really right? see have pretty margin commodity we significant, reminder, businesses, because a of compression the business with regard XXXX commodity part invested quite high the in muted price expect as business. some can expansion to recycling

we but because will expansion those gas great too, there, toward natural be weighted those half. of renewable back the the projects, such the margin on margin heavily expect are business, part And

definitely a first the thing the half margin that disposal will from perspective, and the year and expect we while the So business QX, of that do in collection margin is toward the the that weighted be significantly in that thing year. most delivered ahead, be lifts to

Operator

from Our question comes Citi. with Bryan next Burgmeier

Bryan Burgmeier

collection XQ 'XX saw be growth around Guidance 'XX, disposal imply of essentially and kind that yield you flat seems in X%. to throughout will

of just Or Is pricing market. underlying maybe It that the help kind understand strength it you forecasting. us pricing bit to we restricted flow strength. do attribute you than was So about a through? were mix, to that what better better starting in can

Just sticky call you on anything really that pricing of out we're can kind in it looks 'XX? like that to see going

James Fish

the Those Yes. to unexpected. collection Bryan, but disposal that and increases really wasn't standouts surprisingly, pricing. a year-over-year. pricing actually residential of Not couple of were business continue were -- lines be other showed down,

is we for then that pricing through. strength. number focus beginning to target year As said good 'XX, at yield John be we the into the continues the of that for think kind We us. pricing of went would and a controls a our cost areas 'XX, X.X% be X% move And to that

So at of combat kind margin as like where 'XX, hand-to-hand opposed felt we bit little times, we said we we pricing to with is least of were going structure. to several -- for to continue I've think, cost us, add a our in

Bryan Burgmeier

Yes, it. and that event-driven the would turn was just of I over. does anything it in know prompted in then there's that, flag to me, back? else then XXXX, I'm I you'd kind a guidance a last Got event-driven for guidance comes And like revision small business decline 'XX be question can the on if helpful. that book, assume that midyear. there wondering,

Devina Rankin

fourth great in outlook the quarter, to in revision And we some saw ahead, later which the a regard of a the of were in the is volumes part of revenue but strong over, year we necessarily outsized. in waste our outlook nothing are expecting is special of rebound a in We're of recovery some seeing the your special -- year. of business. saw saw with to not our it's that on expecting expectations one the momentum question. we And midyear Yes, we your that spot that recollection we of this exceed waste but QX carry the reasons softness

The work Ian of quarter. is XXXX with one I a out some first did a reminder regard as particularly to the benefit thing call project-type would the in volumes, special Hurricane have that from

QX impact XXXX. will an And comparisons the certainly that on so have in

Operator

question Goldman Jerry next Sachs. with comes Our from Revich

Jerry Revich

just could the folks run If wonder over full outstanding annual year really fourth adjusted performance X equivalent if quarter. up guidance the seasonally margin is than much just to quarter, put we you talk by 'XX XX% I the sounds about good that. the It for lower still Devina, in were a yield that's the team that rate, in very about margins, at about place. point fourth you is like

So that to in I'm make just view year, we versus, just trying fourth items sure would to have the sure you no it's execute." "Hey, make to in are quarter one-off room that early and the there want as we

Devina Rankin

summarized of I in that is can way quarter the shows technology margin that the part an we automation we definitely trucks have this, that organization from the cost ahead. think benefits so on were momentum fourth work we've we delivery setting tremendous expectations see of as to confidence the year on and something -- in that is having importantly, ahead. thinking in the about in we focused continue our improvement the year your the way it when that had particular, last for comment The we're you the there that been through

inflation stubborn inflation more when January; that outlook last around seasonally we weather for one, to that we would margin may being adjusted predicted. you've really the It's relates saw have of sticking caution in had of gave than below that things. done see couple we year, say impacts was some outlook, that we tended us, two, The us to a I that and

pressures more did taking we're view in we inflationary than the cautious year year so ago. a And on a ahead

efforts in spread are and is But the all highlight that price/cost SG&A accelerated tremendous discipline strong and the results. showing really, what has deliveries I is in confidence want to there our fundamentals, the truck improved, optimization the

that look revenue that months to is as the a revenue for was at best maintenance through the percentage measure to trended and below at over the X.X%, of XXXX, category. QX. of expense down had line think And And were and our X% actually us. operating we line the I in term, X.X% long X first repair of

full you momentum XXXX, it's side So we got those in some quarter will into that ahead year on we just the continue fourth think produce into benefits that strong us saw the the really conservative know prudent that coming to margin. we've predicting cost be that year when

James Fish

anticipate questions real Jerry, we will of there quickly, kind So on some be margin. did that

a couple so of here. And things just

First expected in month it was obviously, strong QX we has January look we as the be. as margin, as strong of the to January. for came all, at could And for of that have continued us. quite

pleased with we're So that.

on and questions of you're some The of would really did 'XX asking that. for second point the good around a be around margin Devina explaining that conservatism job

us guess there argue that point. I think don't the in we exactly an it's But 'XX this uncertain what to going of could really is come it's I from just basis points to economy front you 'XX. know -- do. We to XX on time improvement seems of to conservative based every year be

so about days, not feel I days, other Some great. the economy, great

bit you off such 'XX, also say, bit in forecasting year far going that the and finished coming So conservatism strong through you a so the forward started January. do conservatism argue we're to a going want of can the we way a do there's we try economic honestly, same into and about and we've little of good little year way there to feel thing the year really but the

Jerry Revich

It's MMBtu. the you assets And your separate bring on transactions MMBtu really online. I color. to was $XX are just costing Enbridge ask at transaction levels. a per gas Landfill $XXX appreciate topic. Jim, attractive Really coming in folks you can per

the assets, of bring those can landfill take Has owned monetizing opportunity? assets you're thinking the about thinking market the attractive what some would for the you it consider given fairly impacted deep how you sale type us when just So versus on you're update them just you how about price market gas for online? how is of to

James Fish

one us. we going give But it Hemmer these color. multiple -- Tara to I'll on progress and the always more turn that, going it's point, bit to I'm at then multiple an So say option little that's to have over be a to word I'm But you this to a making place we're And have we're building good plants. for on with where in and options. options, pleased maybe

have plants We are various of number of at stages a that construction.

anything to to add Tara, that?

Tara Hemmer

I say are well this with we're exiting something our going contribution would just we're we're progress this aligns business, strong to that great X be we XXXX. grow. from building on XXXX, and continue making going really online to to out these going in The to plants. bring them is have to going And

Operator

Our Tyler next Raymond with question comes James. from Brown

Patrick Brown

actually, I billion back updated come the want of billion. to figures CapEx $X.X Tara, to $X.X to sustainability

not may if to I the $X.X missed have number Analyst So was mistaken, that billion I'm it. closer But at Day. back

up I $XXX call that was that recycling what the but difference, it, inflation? makes there that incremental are $XXX Now opportunities, in million, million just get

Tara Hemmer

inflation, is and bit on really related our increases renewable inflation, chain, to related related interconnect. and little primarily a Yes. also in difference construction The supply builds to to gas natural

difference. the is that So

Patrick Brown

Okay. it for But reporting. sure I the Perfect. just thank WM -- then, make That's very much I so all. want That's And renewables that understand you segment Devina, that do to I've helpful. helpful.

revenue But you the line change if impact the that in versus the at the from in the renewables that look recycling get So net line. I the WM for commodities those, are price the impacting line change of up. change in and they exactly don't in that revenues

me So component it volume there's some tells that in likely there.

would show just like does be basically with can in that IRG Or So clear, you this a help be But the just work? Does volume Eco-Vista, how up where show helpful. will us you your facility up? calc? bring to maybe that accounting when on as

Devina Rankin

I will happy But through Ed to I'm Sure. beneficial. is that one, any here. clarity and additional details And walk glad, don't cover you Heather be the

price see that do, revenue which other IRG do, I that commodity renewable measures processes the say the single and internal we The measures growth line, that you'll the impact that would in is energy. is on recycling we

then the incremental automation volume projects And be or volume plant, new price. more Eco-Vista line. in be have whether will plant at new throughput all that's the So see that you'll projects it the the from that

the business, as reporting little thing renewable you business In disposal a paying associated renewable disposal for between line, with it's collection helpful. effectively business show can is the think line Hopefully, the That cost royalty the internal the that because landfill up the revenue be collection terms it business. a to gas the revenue only the factor the of business and might of bit production. of and a segment renewable the complicating in and that's just the doesn't

Patrick Brown

But million of probably, Yes, revenue I back could disposal X%. kind total $XXX number mentioned $XXX renewables I assume with there's at up of think But parse be million again, incremental I and so. definitely you with of Does that. We'll it would could maybe that think out. Because that closer associated EBITDA, that collection that sense? to volume actually see going that to X%? we table, make IRG least,

Devina Rankin

have, that the collection commodity and is and renewable combination So range increases disposal just basis, when The the the way to XX to that's volume XX of year a in and think that basis ahead, a we being business gave volume. price volume. we impacts the energy on outlook, that points was about of this in combined

Patrick Brown

Excellent.

Devina. here, one Last Okay.

super were that. talked We've So margins about strong.

days, fuel there QX, think basis think fewer commodities that a was XXX I bridge maybe basis helped. they're points? in help a but maybe up year-over-year you was points help, us can I of kind XXX

color would appreciated. Just any there be

Devina Rankin

Yes.

XX was specifically, lion's of was Fuel basis the XXX For that the QX we again, at the share another collection that and efficiency and disposal improvement basis points. points. business drove

almost John's those line, then that entirety a are expansion. earlier But labor So few that are of places and that would that the and say about about and comments the repair points the There maintenance, margin my are other really of I does X comments basis puts explain takes. driving it. XXX

James Fish

I of been bit ourselves is here an back don't that on enough. I've we little add on think, have Tyler, told the a

little a back here. bit the on ourselves [indiscernible] So

stone's as a SG&A of that. When metrics, technology horizon. for margin, literally Those away we percent about that, right the us. close OpEx very margin, labor now couple you to reduce percent started to in of our using numbers X%. far EBITDA and case, We're SG&A numbers ago talking as about talking EBITDA margin, talk every a revenue, dependence. on to there meaning about at very Whether the quarter, XX%, of are fourth we're and close years for revenue aspirational some attrition a then out And were a OpEx pretty throw and XX% at those

close I'm far satisfied. we've them. I'm But really to being been that mean up on team to those for and quarter stand get continue this, the with to We'll set able horizon getting set don't goals this higher those So out of in we those, pleased we we're goals there, pretty proud on well as last able the we're say, that call so that that well put out those initially executing set, the and we to things on achieving goals. were fact today to and the --

Operator

with question comes Next from Stifel. Hoffman Michael E.

Michael Hoffman

for of some more perfectly on points because this question, sort time X X-year John, to basis looking the years sort year. but strong that your stack when helps a is get it accounts of you self-help little 'XX, at XX seems stack a you and of margin Back can't 'XX, the like a muted really

basket. that the maybe low got relative GDP, estimate you than that. finished stronger because year recycling underlying trend there think it's is the is the you've I'm assuming, you So where incremental X.X% an pretty to X%, how a question the tailwind is and on

X.X%, then closer that's there's on that cost. wage price growth your looking tailwind. Am So Therefore, I running probably at X%. clear correctly? to spread And is a think I

John Morris

I we've Devina and some we out [indiscernible], of yield some and pricing. repair. of we've that's that on numbers. start the And or example of at That's dependency really think a and you look been quarters, the bucket spread efficiencies Michael, for price progress. talking Devina couple of last last quarters a that, -- disciplined cost about drive we've over couple of approach great drive We've been where whether another about think in way -- the you able operating being I'll labor core time, the maintenance talking and made drive the I our lot out to commented on comment are been what the

year-over-year flat QX, of dollars. in down whole were slightly think in to I terms we

So helping us that's of what part QX. in was

Devina Rankin

add And actually on then you that just I'll a pressure recycling of business the a color brokerage commodity points little bit that Michael. of couple brought with higher margin. some the One, can put up, clarity provide prices, downward on

for outlook one we built things XXXX. that's into our so And of that the have

terms we wage And then folks. our of inflation, X% start at with in

to to And X% markets responsive be inflation we north certain of that provide to is to have take so changes. wage expected account be still when in into increases spot you various

top So you baseline, then and X% add our is on of kind of that.

Michael Hoffman

is your pretty muted. And GDP assumption

Devina Rankin

Yes. Basically, what XX% our we've that that always said from we is flow-through believe is a volume GDP. about

ball plan. is cautious hope so I for fairly side be we we so you to the would continue be with your built muted on mine, things crystal that I GDP need but left we our uncertainty. did because that just have economic better in of to tell there's outlook expectations than much a And outlook our when to regard

an on which CPI that as with today's saw expectations. print You exceeded example,

Michael Hoffman

Yes, I that. get

the ahead. seems gears consumer little Tara. a Switching to plowing bit, Just keep

of to XXQ or get army the wake the do When natural you If gas credits much knife fuel. back how in proper credits? to second And for what you in the Swiss happens of a -- get What's the do spend, R&D is billion ITC goes? up out are eRINs. landfill interpretation of gas, so piece of years back then your or or a assuming that Z renewable $X.X come and federal where renewable the your that this is agencies kind you we view of your

Tara Hemmer

So is federal RVO starting a did in a X-year XXXX so real and one for The you've that clear positive. that with and through the set XXXX, thing the seen that's positive. government program, the been stability having

cautiously don't when Treasury their there what Reduction do us And guidance this that think in the in we issued view with ITC, others that Act. was over just was misinterpretation the landfill with With we come guidance we're out further there. Treasury optimistic are share a biogas Inflation on generate We've -- gas that and and anticipating gas. renewable the so later that, and will some community year from the commented energy landfill

be ITC host with to Obviously, our looking that. stacked. the XXXX credit related in of of that remain to and there's could course, credits too. was a plan, optimistic So we tax whole production And the

Devina Rankin

cash On million in year. outlook the benefit our that the implications our ITC point, the for free terms Michael, just so on of guidance, XXXX ITC that $XXX of contemplated we're crystal flow of clear we in

Michael Hoffman

do a as some I of get can so out, the tons could. kind love on and if bottoms-up growth we segment thing the able how about forecast Okay. the segment? processing tons And actually going to sales on then and housekeeping, for MMBtus And be in, do reporting any same Are sales we well. renewables? to the we megawatts to for renewable then

Devina Rankin

because work breath transparency want We're we've team isn't, the the we of of to easy, lot it celebrate and incremental provided. whole went there's of So while proud all that take really work did a the a into that it. it looks

years With would I of reporting But we continue right additions to accomplish. operational providing we'll the or because And to now, going think would of visibility a is been in measures beneficial. evaluate continue consider additional the the that more, the follow that it's to to actually strong terms we've to to and we complement in any suit not on like execute regard industry ahead. strong whether say, the we're anything reporting, able elements driver there's financial see to this

Michael Hoffman

rebuild 'XX in data So can forecast, we all Will of K, it to? in when then quarterly of 'XX all of X years so for get models and be format? our this we the and one, will recent

Devina Rankin

be good today, So the for K will we're that. early shape and in released

to team. you the thank So

With regard the have year to year. full The the quarterly course quarter-by-quarter. data, will you'll recast quarterly data. come will the of over get that It the

Operator

Stephanie next Jefferies. Moore Our comes from question with

Stephanie Benjamin Moore

guidance to makes talk about which at you're into -- $X, like the assuming RINs of digging you a in kind terms maybe But can are more, XXXX bit what little of it locked today. have looking going think lock able in, prices at Day given said and you the that in you about kind that at looks XX-month assumption, have Sustainability just into just So looking sense those you're given signed period. of RINs where in to where I you contracts year, XX% XX% were to any already

XXXX any for to update So stands that RINs? $X where to on get that

Tara Hemmer

Sure.

and that think about in of RINs $X. really at sold a XXXX, rate purchased is we long-term we the what's -- have side we forward of So than would when also into have it mix locked offtake our And for X/X XXXX. in, been higher about contracts on which locked a

what's of a in on we get that's sort that And there. average blended basis, the So selling the would guide. RIN $X lower you XXXX, third then be a at

contracts from just The want in I thing other to place. anywhere we is have that mix, mention those XX There to is years. longer-term X a

trying really take locked we approach we're that we're at. tenors where So have to an different in

Stephanie Benjamin Moore

Got that's then it. sustainability the on No, And very sticking helpful. front. maybe

EPR just in I'm little to that, involves that projects are change EPR to business? how changes Canada. and you maybe what bit in compared the your about the is you're talk more might talked related or outlook, maybe recycling assumption, correct -- assuming how incremental Can investments X incremental if updated those margin about So thinking opportunities? those that the opportunity traditional noted that opportunity? your growth some You you a U.S. Canada, included about probably in

Tara Hemmer

projects we that Canadian the where really investments have Extended Producer we of our some taking is are, X great really and showcase the think I a Responsibility to were able related example across are and how United automation to to differentiated our The assets pro facilities the this States.

on able a those we're investments. to example win where that's so great And based more business

really and structure manufacturing have Responsibility we it a that Canada using the fee-for-service in as there, those around us really is assets model. and Producer plants, Extended

a we this example the more of how can great technology differentiation it's business in So leverage for future.

Operator

question with Wells John Our Mazzoni comes from Fargo. next

John Peter Mazzoni

Maybe this rate a of just EBITDA kind we really change XXXX? the a kind think sustainability, would just quick some one delays? timing. impact of versus to Any I noticed of the a Is appreciated. XXXX color of of project be run in terms knock-on in

Tara Hemmer

everyone as to that would key want you things X bear think mind in I there's our about So trajectory.

going have to XX The roughly is, any in construction at time. first given under XXXX, we're projects

So gives of that we how have momentum of ramp. sense a a you the and we're building lot in really

on that rate XXXX, is going we're be second to EBITDA, run piece you sense where ramp million. headed the million in The to a which approaching really $XXX of key exiting gives roughly $XXX we're

build really on true $XXX we're momentum is XXXX what that million a So target. of seeing in reaching

James Fish

from Morris constraints good see seen our the The you to news it, those side John, not business started talk a bit. what free of that John up different we've about supply as either. chain on fleet that, that we've heard are is

thing some half but to 'XX. And and slowdown so the side, had of a seeing particular, a in RNG front this, that on constraints is same recycling also we Tara the the but supply contributed definitely over 'XX, of bit

Operator

comes Sommer next Securities. Tobey Our Truist from with question

Tobey Sommer

get for wanted acquisition I to expectations. your sense

is et production, investment which smaller with are favorable have dialogue players different the than your how long cetera, trends a whom in at a acquisitions? price So business, the new pretty yield, list for those cost of you

James Fish

was look, pipeline said we So that our robust. acquisition

is speaking this of a -- kind what I'm -- for of think and of of seeing somewhat you're some acquired folks of don't have speaking some we that face. which face is those to there's just and some and of them, those we from I challenges multitude is which some we that anecdotal that

in So one they rather run They'd have face business. the take to lack Their don't the Italy. succession not want is of and that decided folks. might kids of we go a some these money plan a live for just

But with not some able they're as something not you've we through heard they're And that. as that's In fortunately. some they challenges also automation. cases, labor. face, well. so do in are We're that, addressing having And to cases, today,

and in there's of why reasons invest a We're at But of different take growth want time, returns willing in these of we have sure make to we've number list before that. that advantage organic sellers. a similar there's we growing tuck-ins. to heavily same heavily invested the So projects, go we going

Tobey Sommer

to chase glad going [indiscernible]. Good you're hear. the go not to I'm

at last you have where are normal fleet, might what Do terms some the to in a you respect able With full still to renew after a the are that. being cadence? just -- to appreciate you So considered of be do? year, catch-up fleet allotment

John Morris

-- but about we would about which we've for, units we had X,XXX of And that XXX be top on deliver. units lot. probably this wide got we that considered planned little year a a Tobey, of full delivered what to another really have Yes. was

by end caught of that So we're I the fully say 'XX, would up.

job we up not good What service, in show our to is, some into tell up you terms we the and year of I the fleet. that really continuing compromising done and certainly, it's our showing has a operating our of vehicles. of starting in really in performance, team get It's And additional as of would back 'XX. the see half quality the benefit of

Operator

Our next Chiang Kevin question from with CIBC. comes

Kevin Chiang

on clarification just look a profile EBITDA and XXXX. updated we the out as investments Maybe sustainability to

conversion terms XX% cash Day, the Investor about flow of serves from flow. XXXX be think on I million free about in the rule free XXXX Is correct, should memory you flow if cash from think the potential had if investments? I me $XXX of EBITDA you Sustainability free a EBITDA thinking -- I we when in the cash had in these still of that thumb into

Devina Rankin

for of the We can XX% is should thinking the we number flow because cash didn't free these capital us specifically about, think that and be maintenance that We that's is the takeaway key confirm kind refresh whether XX%, stronger ZIP or code for in you. it's I But the there, lower. conversion that. businesses

to right this strong about yield fundamental factor that long-term think contributing being And it so business. a is of to really the

Kevin Chiang

Ontario just investing sense. to of, EPR. EPR these more just facilities provinces think in Canada recycling as as a an coast-to-coast I and to the X of Canada? EPR implement guess, you and And I just I in related that facilities, guess, multiple throughout on in from what look the in of Are opportunity -- like makes pipeline perspective country ton -- the That guess, on looks this,

Tara Hemmer

is is the of obviously making is legislation front are the as tracking at example, where this there Canada positioned pros States when Those and we're to on eventually we're as in X exactly right. something to throughout respond and then, There's Ontario, well. Colorado actively You're well implement. pending core and course, United they in sure that an that looking which the

Operator

Schumm James Our TD from next Cowen. with comes question

James Schumm

as the meaningful me selling of Can fleet your but I your just to benefit you and emissions a in fuel fuel transportation a price RNG as RNG, if it help someone cost internalize a internalize understand DX you own credits? well? else? RINs if And difference there monetization the you'll if versus you or know the in reduce curious Is the monetization there's use

Tara Hemmer

think natural We gas really about to natural natural allocate our WM way gas. gas close and is because fleet have the can that about unique RIN. own produce to in are renewable our the to We of vehicles, able is where renewable we very spot what to we compressed generate fleet loop. it The we're a unique

else's to create So someone others we and space. most the versus That's in compared tie RIN And really up others WM it our fleet. ourselves that's give as to we having probably monetize have advantage the to RINs significant value. any how with to of don't

James Schumm

that. just to Tara, So clarify

guys case price some well lower the is maybe the we screen, for a the DX think actual the So RINs no? than I mean, I when talked the see monetization that is I as on have prices, little well, people or bit that about, you see

Tara Hemmer

No...

James Schumm

Do value? you full get that

Tara Hemmer

market, get is at actively we X at months out, we really the sell very also do mind how the a year you're have looking thing and we forward play to spot prices. look And full in been bear we the at can selling I looking other think And out. in spot RINs, value. our while

So there's a balance there.

James Schumm

help but then And now. hazardous the business maybe The I small us be industry your know market hoping a Great. outlook? just what's I guys profitable quantify waste Okay. that And was business substantial just the relatively And hazardous could have seems a here? for you more you, lastly is landfills. you to share I me. of for think

John Morris

Coast obviously, Coast our coverage in portfolio, on we grow and the East well. hazardous would nationally. been I and to we've of for to to and to We've time, assets the mean continues got some be as West you, it business. the I got tell a on continue And that quite component Yes. and waste space valuable then, we've for Southeast look opportunities

I Gulf is think think our us Coast hazardous is have got prominent in benefits Southeast, well that are of waste positioned very markets, a network one very, a the of tremendous the of the one terms presence. to we've I assets where we we transportation allows access of the lot

Operator

Walter from Our Capital next Markets. question Spracklin with RBC comes

Walter Spracklin

let's spread kind alluded your it kind moderated contracted on cost So costs in as and XXXX in, And dramatically to it's of you when or somewhat that then in pricing spread costs start you it the in I certainly, price held improved. just your guess presumably, opening of that that and widening been in XXXX, remarks, back rising were indicated here XXXX.

bringing that's My higher forward at question level to than that on a of 'XX where for going was Is it's your you is is, you what historically, that it's go where it likely and going to that view been maintain it back is forward? be you something just believe the historically? spread? can Or

James Fish

at back point 'XX. a in right because, starts focal a really to but you've inflation in just to Well, 'XX, is was, the were we looking 'XX cost spread higher, price high where price on was as widen bit. for to said, real price hit point I us, I you that this obviously, combating which cost the think spread as said, just price as opposed

mark. a goes. the widens market. exactly inflation where a bit much We is so little that don't were numbers know And to maybe of little how disappointing a morning's question This

good that the control over have had whereas of wage feel we is inflation, But something kind ago, of we control really we about X feel now, years we less much more like it.

you'll see it's pretty standpoint. been XXXX, the won't change price that be cost from big close XXXX spread to in think where stay I a

Walter Spracklin

EBITDA you guidance and growth. Okay. you for it that, value the midpoint X/X about little of commodity Perfect. your growth And of your when of think, with a in there. the 'XX -- dollar at that, that initiatives, the I look variability sustainability When introduce sustainability in I price of of at is know look does initiatives from bit

those, are as back-end mentioned, And some of weighted. you

do first, asks Can lock a risk you prices about to price And there? related then you completion us of to relates risk in? of you you, is much contribution investor brings second -- what it feel X, of and the might the commodity remind you its an the through How Can profile, talk projects us standpoint XXXX? some risk year? about give component the of how in get to the when the that volatility to part permitting assurances it that from how or that course construction in us about as delayed

Tara Hemmer

price ahead first speak take I and it then commodity line to and parts, in go X piece time second. I'll the and can the

the we fee-for-service a of us that model, be have our commodity is on and So XX% really which piece our think the really price those contracts the well And commodity of that, done that, I a is labor of significant changed really for that to bit things has independent recycling, then insulated price we've model piece really also on through one improvements cost benefit. to premiums and prices, some on top coming a that get the the side. benefit commodity of related of we recall automation

been we've -- in working we the X that locked XX-XX towards On would be be we're towards framework, going that something XX% up is on our of that within the to year. of XXXX. volume work things renewable And clear energy that an side, XX-XX-XX one where would would be

locked me roughly is mention heard already our You up. X/X offtake of

some the So us commodity that gives price confidence side. on

at this for range we've we're looking a really our confident Related sure making strong and kicking lines that to projects, within project and been around XXXX. time

coming X online large have projects We are QX. in that

renewable time so And the ability to we our side. recycling feel energy the both project confident in lines and hit on

Operator

question Kaplan with from next Morgan Our Stanley. Toni comes

Hilary Lee

This is part. Kaplan. EBITDA just ask Lee to wanted on for sustainability Hilary Toni on I the

including the recall So Day, $XXX around from Sustainability RNG, we during XXXX. expecting third-party by eRINs correctly, were million Analyst if the I

between versus the what just of now million delta $XXX So $XXX million? kind wondering is the that

Tara Hemmer

$XXX million and I million think was the without eRINs RNG compare the number the the because you $XXX the $XXX million have projects. to to third-party

the natural is our for So to we've business. best about million target way the $XX increased it by think gas renewable

Hilary Lee

for X Got that. the just in for Canada? essentially Appreciate And the recycling, -- that the it. on projects new increases, is

Tara Hemmer

and -- X is other mix portion Canada a It's a the projects. from of projects portfolio our then new of from of it in benefits

Operator

to Fish would now closing over any the to turn I Jim remarks. back like for call

James Fish

for XXXX had, all very us. proud to holds Okay. what Well, of we you forward you we very much. And Excited us. joining you of thank the look the for very next proud year. We're about talking quarter. quarter to Thank

Operator

your participation. you Thank for

disconnect. now may You

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