Q3 2023 Waste Connections Inc Earnings Call

October 26, 2023

Ronald Mittelstaedt: Operating expenses at one of our landfills in California. The expected Q4 and ongoing impact of this evolving landfill situation are currently being evaluated, along with a recent shorter-term development at a landfill in Texas, and as such, weren't anticipated in the full-year outlook we provided in August. We expect to get more clarity going forward, but currently estimate the range of outcomes in Q4 to include impacts of up to $20 million to revenue, adjusted EBITDA, and adjusted free cash flow. We remain encouraged by the pace of improvement in employee retention, which, along with our differentiated strategy and execution, should provide for above-average underlying margin expansion in solid waste collection, transfer, and disposal in 2024.

Ronald Mittelstaedt: Operating expenses at one of our landfills in California. The expected Q4 and ongoing impact of this evolving landfill situation are currently being evaluated, along with a recent shorter-term development at a landfill in Texas, and as such, weren't anticipated in the full-year outlook we provided in August. We expect to get more clarity going forward, but currently estimate the range of outcomes in Q4 to include impacts of up to $20 million to revenue, Adjusted EBITDA, and adjusted free cash flow. We remain encouraged by the pace of improvement in employee retention, which, along with our differentiated strategy and execution, should provide for above-average underlying margin expansion in solid waste collection, transfer, and disposal in 2024.

Speaker 1: transcript

Speaker 1: expenses at one of our landfills in California.

String expenses at one of our landfills in California.

In California.

Ron Mittelstaedt: The expected Q4 and ongoing impact of this evolving landfills situation are currently being evaluated along with a recent shorter term development at a landfill in Texas, and as such, weren't anticipated in the full year outlook we provided in August. We expect to get more clarity going forward, but currently estimate the range of outcomes in Q4 to include impacts of up to $20 million to revenue, adjusted EBITDA, and adjusted free cash flow. We remain encouraged by the pace of improvement in employee retention, which along with our differentiated strategy and execution should provide for above average underlying margin expansion and solid waste collection, transfer in disposal in 2024.

Speaker 1: transcript

Speaker 1: The expected Q4 and ongoing impact of this evolving landfill situation are currently being evaluated, along with the recent shorter-term development at a landfill in Texas, and as such weren't anticipated in the full-year outlook we provided in August .

The expected Q4 and ongoing impact of this evolving landfill situation are currently being evaluated along with the recent shorter term development at a landfill in Texas and as such weren't anticipated in the full year outlook, we provided in August.

Speaker 1: transcript

Speaker 1: We expect to get more clarity going forward, but currently estimate the range of outcomes in Q4 to include impacts of up to $20 million to revenue, adjustity of a DAW, and adjusted free cash flow.

We expect to get more clarity going forward, but currently estimate the range of outcomes in Q4 to include impacts of up to $20 million to revenue adjusted EBITDA and adjusted free cash flow.

Speaker 1: transcript

Speaker 1: We remain encouraged by the pace of improvement in employee retention, which, along with our differentiated strategy and execution, should provide for above-average underlying margin expansion in solid waste collection, transfer, and disposal in 2024.

We remain encouraged by the pace of improvement in employee retention, which along with our differentiated strategy and execution should provide for above average underlying margin expansion in solid waste collection transfer and disposal in 2024.

Ronald Mittelstaedt: On that basis, we should be positioned for high single-digit adjusted EBITDA growth in 2024 on mid to high single-digit revenue growth, including approximately $150 million of revenue carryover from acquisitions signed or closed year to date, with upside potential from additional acquisition activity and any further improvement in commodity-related activities. Before we get into much more detail, let me turn the call over to Mary Anne for our forward-looking disclaimer and other housekeeping items.

Speaker 1: transcript

Speaker 1: On that basis, we should be positioned for high single digit Adjusted E-Midog growth in 2024 on mid to high single digit revenue growth, including approximately 150 million of revenue carry over from acquisition signed or closed year today.

Ron Mittelstaedt: On that basis we should be positioned for high single digit, adjusted EBITDA growth in 2024, on mid to high single digit revenue growth, including approximately 150 million of revenue carryover from acquisition signed or closed year to date, with upside potential from additional acquisition activity, and any further improvement in commodity related activities.

On that basis, we should be positioned for high single digit adjusted EBITDA growth in 2024 on mid to high single digit revenue growth, including approximately $150 million of revenue carryover from acquisitions signed or closed year to date with upside potential from additional acquisition activity and any further improve.

Speaker 1: transcript

Speaker 1: with upside potential from additional acquisition activity and any further improvement in commodity-related activity.

<unk> and commodity related activity.

Mary Ann: Before we get into much more detail, let me turn the call over to Mary Ann for a forward-looking disclaimer and other housekeeping items. Thank you, Ron, and good morning. The discussion during today's call includes forward-looking statements made pursuant to the safe-carper provisions of the U.S, private securities litigation reform act of 1995, including forward-looking information within the meaning of applicable Canadian securities law. Actual results could differ materially from those made in such forward-looking statements due to various risks and uncertainties.

Speaker 1: transcript

Speaker 1: Before we get into much more detail, let me turn the call over to Mary Ann for our forward-looking disclaimer and other housekeeping items.

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

Mary Anne Whitney: Thank you, Ron, and good morning. The discussion during today's call includes forward-looking statements made pursuant to the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995, including forward-looking information within the meaning of applicable Canadian securities laws. Actual results could differ materially from those made in such forward-looking statements due to various risks and uncertainties. Factors that could cause actual results to differ are discussed both in the cautionary statement included in our October 25 earnings release and in greater detail in Waste Connections' filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. You should not place undue reliance on forward-looking statements as there may be additional risks of which we are not presently aware or that we currently believe are immaterial, which could have an adverse impact on our business.

Speaker 2: transcript

Speaker 2: Thank you, Ron, and good morning. The discussion during today's call includes forward-looking statements made pursuant to the safe harbor provisions of the US private securities litigation reform act of 1995, including forward-looking information within the meaning of applicable Canadian security law. Actual results could differ materially from those made in such forward-looking statements due to various risks and uncertainties.

Thank you Ron and good morning.

Discussion during today's call includes forward looking statements made pursuant to the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1095, including forward looking information within the meaning of applicable Canadian Securities laws actual results could differ materially from those made in such forward looking statements due to various risks and.

Speaker 2: transcript

Speaker 2: Factors that could cause actual results to differ are discussed both in the Cautionary Statement included in our October 25th earnings release and in greater detail in Waste Connections filings with the U.S. Securities and Exchange Commission and the Securities Commission's or similar regulatory authorities in Canada.

Ts.

Mary Ann: Factors that could cause actual results to differ discussed both in the cautionary statement included in our October 25 earnings release, and in greater detail in waste connections filing to the U.S. Securities and Exchange Commission and the Securities Commission or similar regulatory authorities in Canada. You should not place undue reliance on forward-looking statements as there may be additional risks of which we are not presently aware, or that we currently believe are immaterial, which could have an adverse impact on our business.

Factors that could cause actual results to differ are discussed both in the cautionary statement included in our October 25th earnings release and in greater detail in waste connections filings with the U S Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada you.

Speaker 2: transcript

Speaker 2: You should not place undue reliance on forward-looking statements as there may be additional risks of which we are not presently aware, or that we currently believe are immaterial, which could have an adverse impact on our

You should not place undue reliance on forward looking statements as there may be additional risks of which we are not presently aware.

Or that we currently believe are immaterial, which could have an adverse impact on our business we.

Mary Anne Whitney: We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change after today's date. On the call, we will discuss non-GAAP measures such as adjusted EBITDA, adjusted net income attributable to Waste Connections on both a dollar basis and per diluted share, and adjusted free cash flow. Please refer to our earnings releases for a reconciliation of such non-GAAP measures to the most comparable GAAP measures. Management uses certain non-GAAP measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate these non-GAAP measures differently. I will now turn the call back over to Ron.

Mary Anne Whitney: We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change after today's date. On the call, we will discuss non-GAAP measures such as Adjusted EBITDA, adjusted net income attributable to Waste Connections on both a dollar basis and per diluted share, and adjusted free cash flow. Please refer to our earnings releases for a reconciliation of such non-GAAP measures to the most comparable GAAP measures. Management uses certain non-GAAP measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate these non-GAAP measures differently. I will now turn the call back over to Ron.

Speaker 2: transcript

Speaker 2: We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change after today's date. On the call, we will discuss non- GAAP measures such as adjusted even doubt, adjusted net income attributable to waste connections on both a dollar basis and per diluted share, and adjusted free cash flow. Please refer to our earnings releases for a reconciliation of such non- GAAP measures to the most comparable gap.

Mary Ann: We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change after today's date. On the call, we will discuss non-gap measures such as adjusted EBITDA, adjusted net income attributable to waste connections on both a dollar basis and per diluted share, and adjusted free cash flow. Please refer to our earnings releases for a reconciliation of such non-gap measures to the most comparable gap measures. Management uses certain non-gap measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate these non-gap measures differently.

We make no commitment to revise or update any forward looking statements in order to reflect events or circumstances that may change after today's date on.

On the call, we will discuss non-GAAP measures such as adjusted EBITDA adjusted net income attributable to waste connections on both a dollar basis and per diluted share and adjusted free cash flow.

These refer to our earnings releases for a reconciliation of such non-GAAP measures to the most comparable GAAP measure management uses certain non-GAAP measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate these non-GAAP measures differently.

Speaker 2: transcript

Speaker 2: Management uses certain non-GAAP measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate these non-GAAP measures differently. I will now turn the call back over.

Ron Mittelstaedt: I will now turn the call back over to Rob. Thank you, Marianne. We are extremely pleased by our operational execution in Q3, driving results largely as expected, in spite of the incremental headwinds described earlier, with adjusted EBITDA margin accelerating to 32.5 percent on continued price-led organic growth in solid ways, reflecting a price cost spread of 250 basis points.

I will now turn the call back over to Rob.

Ronald Mittelstaedt: Thank you, Mary Anne. We are extremely pleased by our operational execution in Q3, driving results largely as expected in spite of the incremental headwinds described earlier with an adjusted EBITDA margin accelerating to 32.5% on continued price-led organic growth in solid waste, reflecting a price-cost spread of 250 basis points. As mentioned earlier, underlying adjusted EBITDA margin eclipsed 33% in the quarter at commodity values of just over a year ago. As noted additionally, we overcame over $15 million in unforeseen headwinds during the quarter, primarily in two areas. First, an increase of approximately $9 million to already inflated risk-related expenses. This development was associated with prior period activity and reflects the higher safety incident rates that accompanied the increased employee turnover in recent years. A reminder that risk is a lagging indicator as claims develop, while turnover is a leading indicator.

Ronald Mittelstaedt: Thank you, Mary Anne. We are extremely pleased by our operational execution in Q3, driving results largely as expected in spite of the incremental headwinds described earlier with an Adjusted EBITDA margin accelerating to 32.5% on continued price-led organic growth in solid waste, reflecting a price-cost spread of 250 basis points. As mentioned earlier, underlying adjusted EBITDA margin eclipsed 33% in the quarter at commodity values of just over a year ago. As noted additionally, we overcame over $15 million in unforeseen headwinds during the quarter, primarily in two areas. First, an increase of approximately $9 million to already inflated risk-related expenses. This development was associated with prior period activity and reflects the higher safety incident rates that accompanied the increased employee turnover in recent years. A reminder that risk is a lagging indicator as claims develop, while turnover is a leading indicator.

Thank you Marianne.

Speaker 1: transcript

Speaker 1: We are extremely pleased by our operational execution in Q3, driving results largely as expected, in spite of the incremental headwinds described earlier, with an adjusted EBITDA margin accelerating to 32.5% on continued price-led organic growth in solid waste, reflecting a price-cost spread of 250 basis points.

We are extremely pleased by our operational execution in Q3 driving results largely as expected in spite of the incremental headwinds described earlier with an adjusted EBITDA margin accelerating to 32, 5% on continued price led organic growth and solid ways, reflecting our price cost spread of 250 basis points.

Ron Mittelstaedt: As mentioned earlier, underlying adjusted EBITDA margin eclipse 33 percent in the quarter at commodity values just over a year ago. As noted additionally, we overcame over 15 million in unforeseen headwinds during the quarter.

Speaker 1: transcript

Speaker 1: As mentioned earlier, underlying adjusted EBITDA margin eclipsed 33% in the quarter at commodity values of just over a year ago.

As mentioned earlier underlying adjusted EBITDA margin eclipsed 33% in the quarter, our commodity values of just over a year ago.

Speaker 1: transcript

Speaker 1: As noted additionally, we overcame over 15 million in unforeseen headwinds during the quarter. Primarily in two areas, first an increase of approximately nine million to already inflated risk-related expenses. This development was associated with prior period activity and reflects the higher safety incident rates that accompanied the increased employee turnover in recent years.

As noted additionally, we overcame over $15 million and unforeseen headwinds during the quarter, primarily in two areas first an increase of approximately $9 million to already inflated risk related expenses. This development was associated with prior period activity and reflects the higher safety incident rates that accompanied.

Ron Mittelstaedt: Primarily in two areas. First, an increase of approximately 9 million to already inflated risk-related expenses. This development was associated with prior period activity and reflects the higher safety incident rates that accompanied the increased employee turnover in recent years. A reminder that risk is a lagging indicator as claims develop while turnover is a leading indicator. As we drive down turnover, risk expense will improve along with claim frequency and severity.

The increased employee turnover in recent years.

Speaker 1: transcript

Speaker 1: A reminder that risk is a lagging indicator as claims develop while turnover is a leading indicator. As we drive down turnover, risk expense will improve along with claim frequency and severity.

A reminder, that risk is a lagging indicator as claims develop while turnover as a leading indicator as we drive down turnover risk expense will improve along with claims frequency and severity.

Ronald Mittelstaedt: As we drive down turnover, risk expense will improve along with claim frequency and severity. Next, we absorbed over $6 million in additional operating expenses at our Chiquita Canyon Landfill in Southern California, where we are managing and working to resolve what is characterized as an elevated temperature landfill or ETLS event. This refers to a reaction resulting in the rapid breakdown of waste at elevated temperatures, in this case, occurring deep underground in an older portion of the landfill involving non-hazardous waste that was accepted and handled prior to our ownership of the site. While there are currently no impacts to ongoing waste acceptance at the site, the reaction has led to escalating amounts of leachate generation accompanied by odor impacts.

Ron Mittelstaedt: Next, we absorbed over $6 million in additional operating expenses at our Chiquita Canyon landfill in Southern California, where we are managing and working to resolve what is characterized as an elevated temperature landfill or ETLS event. This refers to a reaction resulting in the rapid breakdown of waste at elevated temperatures. In this case, occurring deep underground in an older portion of the landfill involving nonhazardous waste that was accepted and handled prior to our ownership of the site.

Next we absorbed over $6 million and additional operating expenses at our Chiquita Canyon landfill in southern California.

Speaker 1: transcript

Speaker 1: Next, we absorbed over $6 million in additional operating expenses at our Chiquita Canyon Landfill in Southern California, where we are managing and working to resolve what is characterized as an elevated temperature landfill or ETLF event.

We are managing and working to resolve what is characterized as an elevated temperature landfill or etfs avert.

Speaker 1: transcript

Speaker 1: This refers to a reaction resulting in the rapid breakdown of waste at elevated temperature.

This refers to our reaction, resulting in the rapid breakdown of waste at elevated temperatures and this case occurring deep underground and an older portion of landfill involving non hazardous waste that was accepted and handled prior to our ownership of the site.

Speaker 1: transcript

Speaker 1: In this case, occurring deep underground in an older portion of the landfill involving non-hazardous waste that was accepted and handled prior to our ownership of the site.

Speaker 1: transcript

Speaker 1: While there are currently no impacts to ongoing waste acceptance at the site, the reaction has led to escalating amounts of leachate generation accompanied by odor impact.

Ron Mittelstaedt: While there are currently no impacts to ongoing waste acceptance at the site, the reaction has led to escalating amounts of leachate generation accompanied by odor impacts. Since communicating the occurrence to the appropriate governing and regulatory bodies, we have been coordinating our efforts to address the odors, handle the leachate, and satisfy the concerns of various constituents. The incremental costs in Q3 primarily included leachate treatment and disposal along with engineering and monitoring costs. We expect these expenses to expand in Q4 to over $10 million, primarily as a result of increased leachate generation.

While there are currently no impacts to ongoing waste acceptance at the site. The reaction has led to escalating amounts of leachate generation accompanied by odor impacts since.

Ronald Mittelstaedt: Since communicating this occurrence to the appropriate governing and regulatory bodies, we have been coordinating our efforts to address the odors, handle the leachate, and satisfy the concerns of various constituents. The incremental costs in Q3 primarily included leachate treatment and disposal, along with engineering and monitoring costs. We expect these expenses to expand in Q4 to over $10 million, primarily as a result of increased leachate generation. Beyond that, we have determined that we are not yet currently in a position to estimate the ultimate impact or timing of resolution. We expect to have good clarity of timing and resolution by our February call. The second landfill issue noted earlier is more clearly defined and more limited, but nonetheless expected to impact Q4.

Speaker 1: transcript

Speaker 1: Since communicating the securrence to the appropriate governing and regulatory bodies, we have been coordinating our efforts to address the odors, handle the leachate, and satisfy the concerns of various constituents.

Since communicating this occurrence to the appropriate governing and regulatory bodies, we have been coordinating our efforts to address the odors handle the leachate and satisfy the concerns of various constituents the.

Speaker 1: transcript

Speaker 1: The incremental costs in Q3 primarily included leachate treatment and disposal, along with engineering and monitoring costs. We expect these expenses to expand in Q4 to over 10 million, primarily as a result of increased leachate generation. Beyond that, we have determined that we are not yet currently in a position to estimate the ultimate impact or timing of resolution. We expect to have good clarity of timing and resolution by our February call.

The incremental costs in Q3, primarily included leachate treatment and disposal, along with engineering and monitoring costs. We expect these expenses to expand in Q4 to over $10 million, primarily as a result of increased leachate generation beyond that we have determined that we are not yet currently in a position.

Ron Mittelstaedt: Beyond that, we have determined that we are not yet currently in a position to estimate the ultimate impact or timing of resolution. We expect to have good clarity of timing and resolution by our February call.

To estimate the ultimate impact or timing of resolution, we expect to have good clarity of timing and resolution by our February call.

Speaker 1: transcript

Speaker 1: The second landfill issue noted earlier is more clearly defined and more limited, but nonetheless expected to impact Q4. At our sea breeze landfill in Texas, we experienced a slope failure at the end of the third quarter that has resulted in our shutting down the landfill and redirecting tons to alternative disposal sites while we complete repairs and site work.

Ron Mittelstaedt: The second landfill issue noted earlier is more clearly defined and more limited but nonetheless expected to impact Q4. At our sea breeze landfill in Texas, we experience the slope failure at the end of the third quarter that is resulted in our shutting down the landfill and redirecting tons to alternative disposal sites while we complete repairs and site work. The impact of loss revenue and increased expenses at this site in Q4 are expected to be in the range of $5 to $10 million depending on how quickly we are able to reopen the site. We currently expect to reopen the site in mid-December.

The second landfill issue noted earlier, its more clearly defined and more limited, but nonetheless expected to impact Q4, and our <unk> landfill in Texas, we experienced a slope failure at the end of the third quarter that has resulted in our shutting down the landfill and redirecting tonnes to alternative disposal sites, while we complete repair.

Ronald Mittelstaedt: At our Seabreeze Landfill in Texas, we experienced a slope failure at the end of Q3 that has resulted in our shutting down the landfill and redirecting tons to alternative disposal sites while we complete repairs and site work. The impact of lost revenue and increased expenses at this site in Q4 are expected to be in the range of $5 to 10 million, depending on how quickly we're able to reopen the site. We currently expect to reopen the site in mid-December. We consider both of these landfill issues to be unusual, site-specific, and non-recurring in nature, although differing in duration. While historically, many analysts and investors may have adjusted for similar types of non-recurring events by adding back the impacts, these are developing in real time, and we are not currently in a position to make a final determination.

Ron Mittelstaedt: We consider both of these landfill issues to be unusual, site-specific, and non-recurring in nature, although differing in duration. While historically many analysts and investors may have adjusted for similar types of non-recurring events by adding back the impacts, these are developing in real time and we are not currently in a position to make a final determination. We have not included them in our outlook for Q4 or our preliminary thoughts for 2024 but in the interest of transparency are providing the estimated range of potential outcomes in Q4 to include impacts of up to $20 million to revenue, adjusted EBITDA and adjusted free cashflow.

Ours and site work the impact of lost revenue and increased expenses at this site in Q4 are expected to be in the range of $5 million to $10 million, depending on how quickly we're able to reopen the site. We currently expect to reopen the site in mid December.

Speaker 1: transcript

Speaker 1: The impact of lost revenue and increased expenses at this site in Q4 are expected to be in the range of $5 to $10 million, depending on how quickly we're able to reopen the site. We currently expect to reopen the site in mid-December.

Speaker 1: transcript

Speaker 1: We consider both of these land fill issues to be unusual, site-specific, and non-recurring in nature, although differing in different iterations.

We consider both of these landfill issues to be unusual site specific and nonrecurring in nature, although deferring and differ in duration.

Speaker 1: transcript

Speaker 1: While historically many analysts and investors may have adjusted for similar types of non-recuring events by adding back the impacts, these are developing in real time and we are not currently in a position to make a final determination.

While historically, many analysts and investors may have adjusted for similar types of nonrecurring events by adding back the impact. These are developing in real time, and we are not currently in a position to make a final determination.

Ronald Mittelstaedt: We have not included them in our outlook for Q4 or our preliminary thoughts for 2024, but in the interest of transparency, are providing the estimated range of potential outcomes in Q4 to include impacts of up to $20 million to revenue, adjusted EBITDA, and adjusted free cash flow. Returning to the strength of our operating and financial performance in Q3, we delivered core price of 8.8% and total price of 7.7%, including a 110 basis point decline in fuel and material surcharges, primarily related to the decline in diesel prices. Reported volume growth of -1.9% on a day-adjusted basis reflected the continued impact from intentional shedding, as expected with recent acquisitions.

We have not we have not included them in our outlook for Q4 or our preliminary thoughts for 2024, but in the interest of transparency are providing the estimated range of potential outcomes. In Q4 to include impacts of up to $20 million to revenue adjusted EBITDA and adjusted free cash flow.

Speaker 1: transcript

Speaker 1: We have not included them in our outlook for Q4 or our preliminary thoughts for 2024, but in the interest of transparency, are providing the estimated range of potential outcomes in Q4 to include impacts of up to $20 million to revenue, adjusted EBITDA, and adjusted free cash flow.

Ron Mittelstaedt: Returning to the strength of our operating and financial performance in Q3, we delivered core price of 8.8% and total price of 7.7, including 110 basis point decline in fuel and material surcharges primarily related to the decline in diesel prices reported volume growth of negative 1.9% on a day adjusted basis reflected the continued impact from intentional shedding as expected with resources to prevent acquisitions. As described last quarter, right sizing markets and improving revenue quality should be considered integral to a disulfined approach to acquisitions and therefore expected, especially given the magnitude of acquisition activity we have enjoyed over the past few years.

Speaker 1: transcript

Speaker 1: Returning to the strength of our operating and financial performance in Q3, we delivered core price of 8.8% and total price of 7.7, including 110 basis point decline, infuel and material surcharges, primarily related to the decline in diesel prices.

Returning to the strength of our operating and financial performance in Q3, we delivered core price of eight 8% and total price of seven 7%, including a 110 basis point decline in fuel and material surcharges, primarily related to the decline in diesel prices.

Speaker 1: transcript

Speaker 1: reported volume growth of negative 1.9% on a day adjusted basis reflected the continued impact from intentional shedding as expected with recent acquisitions. As described last quarter, right sizing markets and improving revenue quality should be considered integral to a discipline approach to acquisitions and therefore expected, especially given the magnitude of acquisition activity we have enjoyed over the past few years.

Reported volume growth of negative one 9% on a day adjusted basis reflected the continued impact from intentional shedding as expected with recent acquisitions as described last quarter right sizing markets and improving revenue quality should be considered integral to a disciplined approach to acquisitions and then.

Ronald Mittelstaedt: As described last quarter, rightsizing markets and improving revenue quality should be considered integral to a disciplined approach to acquisitions and therefore expected, especially given the magnitude of acquisition activity we have enjoyed over the past few years. Moving on to the topic of acquisitions. We continue to see above average levels of seller interest and as typical, some activity getting pushed to year-end. To date, we have about $170 million in annualized revenue closed, with an additional $80 million already signed, and in some cases, awaiting regulatory consents, which are expected to close by year-end or very early in 2024. As such, we have visibility for almost 2% in acquisition rollover contribution in 2024, with the potential for that amount to grow from additional transactions anticipated to sign or close by early next year.

Before expected, especially given the magnitude of acquisition activity, we have enjoyed over the past few years.

Ron Mittelstaedt: Moving on to the topic of acquisitions, we continue to see above average levels of seller interest and is typical some activity getting pushed to your end. Today, we have about 170 million in annualized revenue closed with an additional 80 million already signed and in some cases awaiting regulatory concerns which are expected to close by year end or very early in 2024. As such, we have visibility for almost 2% in acquisition roll over contribution into 124 with the potential for that amount to grow from additional transactions anticipated to sign or closed by early next year.

Speaker 1: transcript

Speaker 1: Moving on to the topic of acquisitions, we continue to see above average levels of seller interest and as typical, some activity getting pushed to year end. Today, we have about 170 million in annualized revenue closed with an additional 80 million already signed and in some cases awaiting regulatory consents, which are expected to close by year end or very early in 2024.

Moving on to the topic of acquisitions, we continue to see above average levels of seller interest and as typical some activity getting pushed to year and today, we have about $170 million in annualized revenue closed with an additional $80 million already signed and in some cases awaiting regulatory concern.

Which are expected to close by year end or very early in 2024.

Speaker 1: transcript

Speaker 1: As such, we have visibility for almost 2% in acquisition rollover contribution in 2024, with the potential for that amount to grow from additional transactions anticipated to sign or close by early next year. Our pipeline remains quite robust across our footprint, including some opportunities to further expand our portfolio of West Coast exclusive markets.

As such we have visibility for almost 2% in acquisition rollover contribution in 2024 with the potential for that amount to grow from additional transactions anticipated to sign or close by early next year.

Ronald Mittelstaedt: Our pipeline remains quite robust across our footprint, including some opportunities to further expand our portfolio of West Coast exclusive markets. We continue to have capacity for outsized acquisition activity while we fund our differentiated growth strategy, including our sustainability-related projects and expand our return to capital to shareholders. To that end, our board of directors authorized an 11% increase to our regular quarterly cash dividend, our 13th consecutive annual increase since the initiation of the dividend in 2010, excuse me. While executing our growth strategy, we also demonstrated the ability to drive down emissions and show significant progress towards achievement of our sustainability-related targets, as highlighted in our recently released 2023 sustainability report.

Ron Mittelstaedt: Our pipeline remains quite robust across our footprint, including some opportunities to further expand our portfolio of West Coast exclusive markets. We continue to have capacity for outside acquisition activity while we fund our differentiated growth strategy, including our sustainability related projects and expand our return to capital to shareholders.

Our pipeline remains quite robust across our footprint, including some opportunities to further expand our portfolio of west coast exclusive markets.

Speaker 1: transcript

Speaker 1: We continue to have capacity for outsized acquisition activity while we fund our differentiated growth strategy, including our sustainability related projects and expand our return to capital to shareholders. To that end, our board of directors authorized an 11.8% increase to our regular quarterly cash dividend, our 13th consecutive annual increase since the initiation of the dividend in 2012, 2010, excuse me.

We continue to have capacity for outsized acquisition activity, while we fund our differentiated growth strategy.

<unk>, our sustainability related projects and expand our return to capital to shareholders to that end our board of directors authorized an 11 point.

Ron Mittelstaedt: To that end, our Board of Directors authorized an 11.1% increase to our regular quarterly cash dividend, our 13th consecutive annual increase since the initiation of the dividend in 2012, 2010, excuse me. While executing our growth strategy, we also demonstrated the ability to drive down emissions and show significant progress towards achievement of our sustainability related targets. As highlighted in our recently released 2023 sustainability report, in fact, as further outlined in that update, we saw 14% reduction in scope 1 and 2 emissions in 22 in spite of outside revenue growth resulting in a 27% reduction in emissions intensity.

Percent increase to our regular quarterly cash dividend, our 13th consecutive annual increase since the initiation of the dividend in 2012 2010 excuse me.

Speaker 1: transcript

Speaker 1: While executing our growth strategy, we also demonstrated the ability to drive down emissions and show significant progress towards achievement of our sustainability-related targets.

While executing our growth strategy. We also demonstrated the ability to drive down emissions and show significant progress towards achievement of our sustainability related targets as highlighted in our recently released 2023 sustainability report.

Speaker 1: transcript

Speaker 1: as highlighted in our recently released 2023 Sustainability Report.

Ronald Mittelstaedt: In fact, as further outlined in that update, we saw a 14% reduction in Scope 1 and 2 emissions in 2022 in spite of outsized revenue growth, resulting in a 27% reduction in emissions intensity. Moreover, we backed up that progress by doubling our targeted emissions reduction to 30% and have initiated the process of aligning our emissions reduction targets with the Science Based Targets initiative or SBTi. Our updated sustainability report also highlights our progress on the development of incremental capacity for recycling and renewable gas or RNG generation. We increased our operational offsets by 8% in 2022, driven primarily by an 18% increase in recycling tons, bringing our annual total to over 2 million recycled tons.

Ronald Mittelstaedt: In fact, as further outlined in that update, we saw a 14% reduction in Scope one and two emissions in 2022 in spite of outsized revenue growth, resulting in a 27% reduction in emissions intensity. Moreover, we backed up that progress by doubling our targeted emissions reduction to 30% and have initiated the process of aligning our emissions reduction targets with the Science Based Targets initiative or SBTi. Our updated sustainability report also highlights our progress on the development of incremental capacity for recycling and renewable gas or RNG generation. We increased our operational offsets by 8% in 2022, driven primarily by an 18% increase in recycling tons, bringing our annual total to over 2 million recycled tons.

Speaker 1: transcript

Speaker 1: In fact, as further outlined in that update, we saw 14% reduction in scope one and two emissions in 22 in spite of outside revenue growth, resulting in a 27% reduction in emissions intensity.

In fact as further outlined in that update we saw a 14% reduction in scope, one and two emissions in 'twenty. Two in spite of outsized revenue growth, resulting in a 27% reduction in emissions intensity.

Ron Mittelstaedt: Moreover, we backed up that progress by doubling our targeted emissions reduction to 30% and have initiated the process of aligning our emissions reduction targets with the Science-Based Target Initiative or SBTI. Our updated sustainability report also highlights our progress on the development of incremental capacity for recycling and renewable gas or RNG generation. We increased our operational offsets by 8% in 2022 driven primarily by an 18% increase in recycling tons, bring our annual total to over 2 million recycled tons.

Speaker 1: transcript

Speaker 1: Moreover, we backed up that progress by doubling our targeted emissions reduction to 30% and have initiated the process of aligning our emissions reduction targets with the Science-Based Target Initiative or SBTI.

Moreover, we backed up that progress by doubling our targeted emissions reduction to 30% and have initiated the process of aligning our emissions reduction targets with the science based target initiative or SP Ti.

Speaker 1: transcript

Speaker 1: Our updated sustainability report also highlights our progress on the development of incremental capacity for recycling and renewable gas or RNG generation. We increased our operational offsets by 8% in 2022, driven primarily by an 18% increase in recycling tons, bring our annual total to over 2 million recycled tons.

Our updated sustainability report also highlights our progress on the development of incremental capacity for recycling and renewable gas or oil.

LNG generation.

We increased our operational offsets by 8% in 2022, driven primarily by an 18% increase in recycling tons, bringing our annual total to over $2 million recycled tons.

Ronald Mittelstaedt: Looking ahead, we are positioned to significantly expand our biogas recovery through development of additional RNG facilities, including three new facilities expected to open in 2024. Moreover, we continue to expect incremental annual EBITDA contribution of $200 million by 2026 from a comparable level of investment to that end, including approximately $125 to 150 million of capital outlays on RNG facilities anticipated in 2024. We continue to pursue the development of other RNG projects, including at our most recent acquisitions, which we believe will be additive to these amounts as we look to 2026 and beyond. Continued investment in sustainability-related projects is consistent with our objective of value creation for our stakeholders, and along with enhanced disclosure and demonstrated progress, indicative of our commitment to the environment and the communities we are truly privileged to serve.

Ron Mittelstaedt: And looking ahead, we are positioned to significantly expand our biogas recovery through development of additional RNG facilities, including three new facilities expected to open in 2024. Moreover, we continue to expect incremental annually of a dock contribution of 200 million by 2026 from a comparable level of investment to that end, including approximately 125 to 150 million of capital outlays on RNG facilities anticipated in 2024. We continue to pursue the development of other RNG projects, including at our most recent acquisitions, which will believe will be additive to these amounts as we look to 2026 and beyond.

Speaker 1: transcript

Speaker 1: And looking ahead, we are positioned to significantly expand our biogas recovery through development additional R&G facilities, including three new facilities expected to open in 2024.

And looking ahead, we are positioned to significantly expand our biogas recovery through the development of additional R&D facilities, including three new facilities is expected to open in 2024.

Speaker 1: transcript

Speaker 1: Moreover, we continue to expect incremental annual EBITDA contribution of $200 million by 2026 from a comparable level of investment to that end, including approximately $125 to $150 million of capital outlays on R&G facilities anticipated in 2024.

Moreover, we continue to expect incremental annual EBITDA contribution of $200 million by 2026 from a comparable level of investment to that and including approximately $125 million to $150 million of capital outlays on R&D facilities anticipated in 2024.

Speaker 1: transcript

Speaker 1: We continue to pursue the development of other R&D projects, including at our most recent acquisitions, which we believe will be additive to these amounts as we look to 2026 and beyond.

We continue to pursue the development of other R&D projects, including at our most recent acquisitions, which we believe will be additive to these amounts as we look to 2026 and beyond.

Ron Mittelstaedt: Continued investment in sustainability related projects is consistent with our objective of value creation for our stakeholders and along with enhanced disclosure and demonstrated progress indicative of our commitment to the environment and the communities we are truly privileged to serve. And additionally, we continue to invest in our most important asset, our people and anticipate additional margin expansion opportunities for innovative approaches to further improve employed retention and engagement, where encouraged by the progress we have made in employed retention efforts in Q3 with voluntary turnover stepping down sequentially for the fourth consecutive quarter.

Speaker 1: transcript

Speaker 1: Continued investment in sustainability-related projects is consistent with our objective of value creation for our stakeholders and along with enhanced disclosure and demonstrated progress, indicative of our commitment to the environment and the communities we are truly privileged to serve.

Continued investment in sustainability related projects, it's consistent with our objective of value creation for our stakeholders and along with enhanced disclosure and demonstrated progress indicative of our commitment to the environment and the communities we are truly privileged to serve.

Ronald Mittelstaedt: Additionally, we continue to invest in our most important asset, our people, and anticipate additional margin expansion opportunities from innovative approaches to further improve employee retention and engagement. We are encouraged by the progress we have made in employee retention efforts in Q3, with voluntary turnover stepping down sequentially for the fourth consecutive quarter. As compared to the peaks we saw in 2022, voluntary turnover is now down over 20% and open position requisitions are down over 30%. We look forward to seeing these trends continue and supporting the efforts of our local leaders with resources to facilitate that progress. We characterize our efforts as doubling down on human capital as we renew our focus on empowering leaders for success in our decentralized operating model.

Speaker 1: transcript

Speaker 1: And additionally, we continue to invest in our most important asset, our people, and anticipate additional margin expansion opportunities from innovative approaches to further improve employee retention and engagement.

And Additionally, we continue to invest in our most important asset our people and.

And anticipate additional margin expansion opportunities from innovative approaches to further improve employee retention and engagement we.

Speaker 1: transcript

Speaker 1: We're encouraged by the progress we have made in employer retention efforts in Q3, with voluntary turnover stepping down sequentially for the fourth consecutive quarter. As compared to the peaks we saw in 2022, voluntary turnover is now down over 20% and open position requisitions are down over 30%. We look forward to seeing these trends continue and supporting the efforts of our local leaders with resources to facilitate that progress.

We're encouraged by the progress we have made in employee retention efforts in Q3 with voluntary turnover stepping down sequentially for the fourth consecutive quarter as compared to the peaks. We saw in 2022 voluntary turnover is now down over 20% and open position requisitions are down over 30%.

Ron Mittelstaedt: As compared to the peaks we saw in 2022, voluntary turnover is now down over 20% and open position requisitions are down over 30%. We look forward to seeing these trends continue and supporting the efforts of our local leaders with resources to facilitate that progress. We characterize our efforts as doubling down on human capital as we renew our focus on empowering leaders for success in our decentralized operating model. Changes include revamping recruiting through upgraded technology offerings and more than doubling training focused on frontline employees. We've initiated a pilot program for our own training academy for drivers and our coordinating efforts for a diesel technician school offering.

Forward to seeing these trends continue and supporting the efforts of our local leaders with resources to facilitate that progress.

Speaker 1: transcript

Speaker 1: We characterize our efforts as doubling down on human capital as we renew our focus on empowering leaders for success in our decentralized operating model.

We characterize our efforts as doubling down on human capital as we renew our focus on empowering leaders for success and our decentralized operating model.

Ronald Mittelstaedt: Changes include revamping recruiting through upgraded technology offerings and more than doubling training focused on frontline employees. We've initiated a pilot program for our own training academy for drivers and are coordinating efforts for a diesel technician school offering. We're excited about our progress today, and we look forward to seeing continued improvement as we enter 2024, when we should realize the lagging effects from improving retention rates during 2023 and into 2024. As noted earlier, while we deliver industry-leading margins, we are still absorbing the residual effects of higher turnover in previous periods, which include elevated reliance on third-party services as well as the increased overtime and associated equipment wear and tear, which ultimately have an impact on safety incident rates and the associated costs of risks.

Speaker 1: transcript

Speaker 1: Changes include revamping recruiting through upgraded technology offerings and more than doubling training focused on frontline employees We've initiated a pilot program for our own training academy for drivers and our coordinating efforts for a diesel technician school offering

Changes include revamping recruiting through upgraded technology offerings and more than doubling training focused on frontline employees. We've initiated a pilot program for our own training Kadhum for drivers and are coordinating efforts for a diesel technician school offering.

Ron Mittelstaedt: We're excited about our progress today and we look forward to seeing continued improvement as we enter 2024 when we should realize the lagging effects from improving retention rights during 2023 and into 24. As noted earlier, while we deliver industry leading margins, we are still absorbing the residual effects of higher turnover in previous periods, which include elevated reliance on third party services, as well as the increased overtime and associated equipment. We're in terror, which ultimately have an impact on safety incident rates and the associated costs of risks.

Speaker 1: transcript

Speaker 1: We're excited about our progress today and we look forward to seeing continued improvement as we enter 2024 when we should realize the lagging effects from improving retention rates during 2023 and then to 24.

We're excited about our progress to date and we look forward to seeing continued improvement as we enter 2020 for when we should realize the lagging effects from improving retention rates during 2023, and then to 24.

Speaker 1: transcript

Speaker 1: As noted earlier, while we deliver industry leading margins, we are still absorbing the residual effects of higher turnover in previous periods, which include elevated reliance on third party services, as well as the increased overtime and associated equipment wear and tear, which ultimately have an impact on safety incident rates, and the associated costs of risk.

Ron Mittelstaedt: The good news is that the progress and retention we're seeing today sets us up for future benefits from improving costs and risks, labor and maintenance, as the same cycles should play out in reverse when incident rates and severity decline along with turnover.

As noted earlier, while we deliver industry, leading margins, we are still absorbing the residual effects of higher turnover in previous periods, which include elevated reliance on third party services as well as the increased overtime and associated equipment wear and tear which ultimately have an impact on safety incident rates and the associated.

Ronald Mittelstaedt: The good news is that the progress in retention we're seeing today sets us up for future benefits from improving costs and risk, labor, and maintenance, as the same cycle should play out in reverse when incident rates and severity decline along with turnover. Now I'd like to pass the call to Mary Anne to review more in depth the financial highlights of Q3 and to provide a detailed outlook for Q4. I will then wrap up with some thoughts about 2024 before we head into Q&A.

Cost of risk. The good news is that the progress on retention, we're seeing today sets us up for future benefits from improving costs and risk labor and maintenance as the same cycle should play out and reverse one incident rates and severity decline along with turnover.

Speaker 1: transcript

Speaker 1: The good news is that the progress and retention we're seeing today sets us up for future benefits from improving costs and risk, labor and maintenance, as the same cycles should play out in reverse when incident rates and severity decline along with turn-off.

Mary Ann: And now we'd like to pass the call to Maryanne to review more in depth, the financial highlights of the third quarter and to provide a detailed outlook for Q4. I will then wrap up with some thoughts about 2024 before we head into Q&A. Thank you, Ron. In the third quarter, revenue of 2.065 billion was above our outlook and up 185 million or 9.8% year over year. Acquisitions completed since the year ago period contributed about 103 million of revenue in the quarter, net of development.

Speaker 1: transcript

Speaker 1: And now I'd like to pass the call to Mary Ann to review more in-depth the financial highlights of the third quarter and to provide a detailed outlook for Q4. I will then wrap up with some thoughts about 2024 before we head into Q&A.

And now I'd like to pass the call to Mary Anne to review more in depth the financial highlights of the third quarter and to provide a detailed outlook for Q4.

I will then wrap up with some thoughts about 2024 before we head into Q&A.

Mary Anne Whitney: Thank you, Ron. In Q3, revenue of $2.065 billion was above our outlook and up $185 million or 9.8% year over year. Acquisitions completed since the year-ago period contributed about $103 million of revenue in the quarter, net of divestitures. Core pricing of 8.8% ranged from about 6.5% in our primarily exclusive market Western region to a range of approximately 8% to 10% in our competitive regions. As expected, core pricing stepped down sequentially from Q2 as a result of both the typical cadence of seasonality on reported price and the waning impact of outsized pricing activity from 2022 as compared to previous quarters.

Speaker 2: transcript

Speaker 2: Thank you, Ron. In the third quarter, revenue of $2.065 billion was above our outlook and up $185 million, or 9.8% year-over-year. Acquisitions completed since the year-ago period contributed about $103 million of revenue in the quarter, net of development.

Thank you Ron in the third quarter revenue of <unk>, six 5 billion was above our outlook and up $185 million or nine 8% year over year acquisitions.

<unk> completed since the year ago period contributed about $103 million of revenue in the quarter net of divestitures.

Mary Ann: Court pricing of 8.8% range from about 6.5% in our primarily exclusive market western region to a range of approximately 8% to 10% in our competitive regions. As expected, the line of 1.9% on a day-adjusted basis was in line with Q2 and similarly spread across residential collection with the non-renewal of certain municipal contracts, commercial collection from opportunistic shedding of lower quality accounts, and in post collection, in reduced transfer volumes directed to third party disposal outlets.

Speaker 2: transcript

Speaker 2: Core pricing of 8.8% range from about 6.5% in our primarily exclusive market Western region to a range of approximately 8% to 10% in our competitive

Core pricing of eight 8% range from about six 5% in our primarily exclusive market Western region to a range of approximately 8% to 10% in our competitive regions ASIC.

Speaker 2: transcript

Speaker 2: As expected, core pricing stepped down sequentially from Q2 as a result of both the typical cadence of seasonality on reported price and the waning impact about size pricing activity from 2022 as compared to previous quarter.

As expected core pricing step down sequentially from Q2 as a result of both the typical cadence from seasonality and reported price and the waning impact of outsized pricing activity from 2022 as compared to previous quarters.

Mary Anne Whitney: The Q3 volume decline of 1.9% on a day-adjusted basis was in line with Q2 and similarly spread across residential collection with the non-renewal of certain municipal contracts, commercial collection from opportunistic shedding of lower quality accounts, and in post-collection in reduced transfer volumes directed to third-party disposal outlets. Our most impacted markets were in our eastern region, where we have had outsized acquisition activity over the past few years. Looking year over year at other lines of business, roll-off pulls per day were up about 1% on revenue per pull up about 6%, and landfill tons were up 5% year over year, largely driven by higher special waste tons up 17%, with C&D tons up 2%, and MSW tons up 1%.

Speaker 2: transcript

Speaker 2: The Q3 volume decline of 1.9% on a day adjusted basis within line with Q2 and similarly spread across residential collection with the non-renewal of certain municipal contracts. Commercial collection from opportunistic shedding of lower quality accounts and in post collection in reduced transfer volumes directed to third party disposal out.

The Q3 volume decline of one 9% on a day adjusted basis was in line with Q2, and similarly spread across residential collection with the non renewal of certain municipal contract commercial collection from opportunistic shedding of lower quality accounts and in post collection and reduce trans.

For volumes directed to third party disposal outlets.

Mary Ann: Our most impacted markets were in our eastern region, where we have had outsized acquisition activity over the past few years. Looking year over year at other lines of business, roll off polls per day were up about 1% on revenue per poll of about 6%. And landfill tons were up 5% year over year, largely driven by higher special waste tons, up 17% with CND tons up 2% and MSW tons up 1%. The increase in special waste activity in Q3 followed two down quarters and was the result of a few jobs either getting delayed from Q2 or likely pulled forward from Q4, a reminder of the event driven nature and inherent lumpiness of these projects.

Speaker 2: transcript

Speaker 2: Our most impacted markets were in our Eastern region, where we have had outside acquisition activity over the past few years. Looking your-

Our most impacted markets were in our eastern region, where we have had outsized acquisition activity over the past few years.

Looking year over year at other lines of business roll off pulls per day were up about 1% on revenue per call at about 6%.

Speaker 2: transcript

Speaker 2: Roll-off polls per day were up about 1% on revenue per poll of about six-

Speaker 2: transcript

Speaker 2: and land siltons were up 5% year over year, largely driven by higher special waste tons, up 17%, with ZND tons up 2%, and MSW tons up 1%.

Landfill tons were up 5% year over year, largely driven by higher special waste patents up 17% with CND tons up 2% and MSW tons up 1%.

Mary Anne Whitney: The increase in special waste activity in Q3 followed two down quarters and was the result of a few jobs either getting delayed from Q2 or likely pulled forward from Q4, a reminder of the event-driven nature and inherent lumpiness of these projects. Through nine months, special waste tons are up 1% year over year. Moving next to revenues from recovered commodities. Excluding acquisitions, recycled commodity revenues were down 27% year over year in Q3 and down 6% sequentially, about as expected, due to a sharp decline in the value of plastics during the quarter, partially offset by improvements in old corrugated containers or OCC, which averaged $88 per ton. Landfill gas sales were up 7% year over year in Q3 due primarily to higher renewable energy credits or RECs, which averaged about $3. Finally, E&P waste activity.

Speaker 2: transcript

Speaker 2: The increase in special waste activity in Q3 followed two down quarters. And with the result of a few jobs, either getting delayed from Q2 or likely pulled forward from Q4, a reminder of the event-driven nature and inherent lumpiness of these projects.

The increase in special waste activity in Q3, followed two down quarters and was the result of a few jobs either getting delayed from Q2 or likely pulled forward from Q4, a reminder of the event driven nature and inherent lumpiness of these projects through nine months special waste tons are up 1% year over.

Mary Ann: Through nine months, special waste tons are up 1% year over year. Moving next to revenues from recovered commodities, excluding acquisitions, recycled commodity revenues were down 27% year over year in Q3 and down 6% sequentially, about as expected due to a sharp decline in the value of plastic during the quarter, partially offset by improvements in old cargated containers or OCC, which averaged $88 per ton. Landfill gas sales were up 7% year over year in Q3 due primarily to higher renewable energy credits or rims, which averaged about $3.

Speaker 2: transcript

Speaker 2: Through nine months, special waist pounds are up 1% hereover you.

A year.

Speaker 2: transcript

Speaker 2: Moving next to revenues from recovered commodities, excluding acquisitions, recycled commodity revenues were down 27% year over year in Q3 and down 6% sequentially about as expected, due to a sharp decline in the value of plastic during the quarter.

Moving next to revenues from recovered commodities, excluding acquisitions recycled commodity revenues were down 27% year over year in Q3, and down 6% sequentially about as expected due to a sharp decline in the value plastics during the quarter par.

Speaker 2: transcript

Speaker 2: partially offset by improvements in old cargated containers or OCC, with average $88 per ton.

Partially offset by improvements in all targeted containers or OCC, which averaged $88 per ton.

Speaker 2: transcript

Speaker 2: Landfill gas sales were up 7% year over year in Q3 due primarily to higher renewable energy credits or rims, which averaged about $3.

Landfill gas sales were up 7% year over year in Q3, due primarily to higher renewable energy credits or rins, which averaged about $3.

Mary Ann: And finally, E&P waste activity. We reported another increase in E&P waste revenue to $59 million in the third quarter, up 6% sequentially from Q2 and up 10% year over year. Adjusted EBITDA for Q3 as reconciled in our earnings release increased by 14.1% year over year to 671.2 million again above our outlook. At 32.5% of revenue, our adjusted EBITDA margin was up 140 basis points sequentially from Q2 and up 120 basis points year over year, all from solid waste.

Speaker 2: transcript

Speaker 2: And finally, E&P waste activity. We reported another increase in E&P waste revenue to $59 million in the third quarter, up 6% sequentially from Q2, and up 10% year over year.

And finally E&P waste activity, we reported another increase in E&P waste revenue to $59 million in the third quarter up 6% sequentially from Q2 and up 10% year over year.

Mary Anne Whitney: We reported another increase in E&P waste revenue to $59 million in Q3, up 6% sequentially from Q2 and up 10% year-over-year. Adjusted EBITDA for Q3, as reconciled in our earnings release, increased by 14.1% year-over-year to $671.2 million, again above our outlook. At 32.5% of revenue, our adjusted EBITDA margin was up 140 basis points sequentially from Q2 and up 120 basis points year-over-year, all from solid waste, as we delivered the outsized margin expansion that we projected in our updated outlook provided in August. As Ron noted, that achievement was in spite of the $15 million in unforeseen cost headwinds overcome in Q3.

Speaker 2: transcript

Speaker 2: Adjusted EBITDA for Q3, as reconciled in our earnings release, increased by 14.1% year over year to $671.2 million, again, above our outlook.

Adjusted EBITDA for Q3 as reconciled in our earnings release increased by 14, 1% year over year to $671 2 million again above our outlook at.

Speaker 2: transcript

Speaker 2: At 32.5% of revenue, our adjusted EVA-DOM margin was up 140 basis points sequentially from Q2 and up 120 basis points a year over a year, all from solid waste. As we delivered the outside margin expansion that we projected in our updated outlook provided in August . And as Ron noted, that achievement was in spite of the $15 million in unforeseen cost headwinds overcome in Q3.

At 32, 5% of revenue our adjusted EBITDA margin was up 140 basis points sequentially from Q2, and up 120 basis points year over year, all from solid waste as we delivered the outsize margin expansion that we projected in our updated outlook provided in August and.

Mary Ann: As we delivered the outside margin expansion that we projected in our updated outlook provided in August. And as Ron noted, that achievement was in spite of the $15 million in unforeseen cost headwinds overcome in Q3. In fact, underlying solid waste margins arguably expanded by 150 basis points year over year on a normalized basis. As headwinds from the incremental landfill cost in Q3 accounted for about a 30 basis point drag to reported margins.

As Ron noted that achievement was in spite of the $15 million in unforeseen cost headwinds overcome in Q3.

Mary Anne Whitney: In fact, underlying solid waste margins arguably expanded by 150 basis points year-over-year on a normalized basis as headwinds from the incremental landfill costs in Q3 accounted for about a 30 basis point drag to reported margins. Within solid waste, price-led organic growth drove margin improvement across many areas, with outsized improvement in third-party logistics and disposal and with offsets, most notably from higher recycling costs. Beyond solid waste, commodity impacts were a wash. 20 basis points benefit from higher E&P waste activity, plus another 20 basis points from lower fuel rates were offset by recycled commodity values, which, although improving, were still a 40 basis point drag to margins.

Speaker 2: transcript

Speaker 2: In fact, underlying solid waste margins arguably expanded by 150 basis points year over year on a normalized basis. As headwinds from the incremental landfill cost in Q3 accounted for about a 30 basis point drag to reported margins.

In fact underlying solid waste margins arguably expanded by 150 basis points year over year on a normalized basis as headwinds from the incremental landfill costs in Q3 accounted for about a 30 basis point drag to reported margins.

Mary Ann: Within Solid Waste, Price-led organic growth drove margin improvement across many areas, with outsized improvement in third-party logistics and disposal, and with offsets most notably from higher risk costs. Beyond Solid Waste commodity impacts were a wash, 20 basis points benefit from higher ENP waste activity, plus another 20 basis points from lower fuel rates were offset by recycled commodity values, which, although improving, were still a 40 basis point drive to margins. Net interest expense of $66.2 million reflects the weighted average cost of about 4% on a mix of approximately 80% fixed and 20% variable rate debt with an average 10 or over 10 years.

Speaker 2: transcript

Speaker 2: Within solid waste, price-led organic growth drove margin improvement across many areas.

Within solid waste price led organic growth drove margin improvement across many areas.

Speaker 2: transcript

Speaker 2: with outsized improvement in third-party logistics and disposal and with offsets most notably from higher risk costs.

With outsized improvement in third party logistics and disposal and with offsets most notably from higher risk costs.

Speaker 2: transcript

Speaker 2: Beyond solid waste commodity impacts were a wash. 20 basis points benefit from higher E&P waste activity, plus another 20 basis points from lower fuel rates, were offset by recycled commodity values, which although improving, we're still a 40 basis point drag tomorrow.

Beyond solid waste commodity impacts Worldwatch 20 basis point benefit from higher E&P waste activity plus another 20 basis points from lower fuel rates were offset by recycled commodity values, which although improving we're still a 40 basis point drag to margins.

Mary Anne Whitney: Net interest expense of $66.2 million reflects a weighted average cost of about 4% on a mix of approximately 80% fixed, and 20% variable rate debt with an average tenor of over 10 years. Leverage remained unchanged in the quarter at about 2.75x debt to EBITDA. Our Q3 tax rate was slightly lower than expected at 21.6% due primarily to the impact from lower foreign exchange rates for the Canadian dollar. Year-to-date, we have delivered adjusted free cash flow of $969.3 million or 16.2% of revenue. On track for our full year adjusted free cash flow outlook of $1.225 billion, excluding the ongoing landfill impacts Ron outlined earlier. I will now provide our outlook for the Q4 of 2023.

Speaker 2: transcript

Speaker 2: Net interest expense of $66.2 million reflects the weighted average cost of about 4% on a mix of approximately 80% fixed and 20% variable rate debt with an average 10 or over 10 years.

Net interest expense of $66 2 million reflects the weighted average cost of about 4% on a mix of approximately 80% fixed and 20% variable rate debt with an average tenure of over 10 years leverage remain unchanged in the quarter at about 275 times debt to EBITDA.

Mary Ann: Leverage remained unchanged in the quarter at about 2.75 times debt to eat it down. And our Q3 tax rate was slightly lower than expected at 21.6% due primarily to the impact from lower foreign exchange rates for the Canadian dollar. Year-to-date we have delivered adjusted free cash flow of $969.3 million, or 16.2% of revenue. On track for our full-year adjusted free cash flow outlook of 1.225 billion, excluding the ongoing landfill impacts wrong outlined earlier.

Speaker 2: transcript

Speaker 2: Leverage remained unchanged in the quarter at about 2.75 times debt to EBITDA.

Speaker 2: transcript

Speaker 2: And our Q3 tax rate was slightly lower than expected at 21.6% due primarily to the impact from lower foreign exchange rates for the Canadian dollars.

And our Q3 tax rate was slightly lower than expected at 21, 6% due primarily to the impact from lower current exchange rates for the Canadian dollar.

Speaker 2: transcript

Speaker 2: Year to date, we have delivered a adjusted pre-cash flow of $969.3 million or 16.2% of revenue. On track for our full year adjusted pre-cash flow outlook of $1.225 billion, excellent in the ongoing landfill impacts run outlined early.

Year to date, we have delivered adjusted free cash flow of $969 3 million or 16, 2% of revenue on track for our full year adjusted free cash flow outlook of one to two 5 billion, excluding the ongoing landfill impacts Ron outlined earlier.

Mary Ann: I will now provide our outlook for the fourth quarter of 2023. Before I do, we'd like to remind everyone once again that actual results may vary significantly based on risks and uncertainties outlined in our state harbor statement, and filings we've made with the SEC and the Securities Commission's are similar regulatory parties in Canada. We encourage investors to review these factors carefully. Our outlook assumes no significant change in underlying economic trends. It also excludes any impact from additional acquisitions that may close during the remainder of the year and extensive transaction related items during the period.

Speaker 2: transcript

Speaker 2: I will now provide our outlook for the fourth quarter of 2023. Before I do, we'd like to remind everyone once again that actual results may vary significantly, based on risks and uncertainties outlined in our State Harper statement, and filings we've made with the SEC and the Securities Commission's or similar regulatory parties in Canada. We encourage investors to review these factors carefully.

I will now provide our outlook for the fourth quarter of 2023 before I do we'd like to remind everyone. Once again that actual results may vary significantly based on risks and uncertainties outlined in our safe Harbor statement and filings we've made with the SEC and the securities commissions or similar regulatory authorities in Canada.

Mary Anne Whitney: Before I do, we'd like to remind everyone once again that actual results may vary significantly based on risks and uncertainties outlined in our safe harbor statement and filings we've made with the SEC and the securities commissions or similar regulatory authorities in Canada. We encourage investors to review these factors carefully. Our outlook assumes no significant change in underlying economic trends. It also excludes any impact from additional acquisitions that may close during the remainder of the year and expensing of transaction-related items during the period. Finally, it does not reflect the two landfill situations described earlier, which could result in impacts in the quarter of up to $20 million in revenue, adjusted EBITDA, and adjusted free cash flow. Revenue in Q4 is estimated to be approximately $2.04 billion.

We encourage investors to review these factors carefully.

Speaker 2: transcript

Speaker 2: Our outlook assumes no significant change in underlying economic trends. It also excludes any impact from additional acquisitions that may close during the remainder of the year and extension of transaction-related items during the period. And finally, it does not reflect the two landfill situations described earlier, which could result in impacts in the quarter up to $20 million in revenue, adjusted EBITDA, and adjusted free cash.

Our outlook assumes no significant change in underlying economic trend. It also excludes any impact from additional acquisitions that may close during the remainder of the year and expensing of transaction related items during the period and finally it does not reflect the two landfill situations described earlier, which could result in impacts in the quarter of up to $20 million in revenue.

Mary Ann: And finally, it does not reflect the two landfill situations described earlier, which could result in impacts in the quarter above to $20 million in revenue, adjusted EBITDA, and adjusted free cash flow. Revenue in Q4 is estimated to be approximately 2.04 billion. We expect core price of about 8.5 percent and total price plus volume of 5.5 to 6 percent. Recycle commodity values and rents are projected in line with recent levels, and adjusted EBITDA in Q4 is estimated at approximately 658 million or 32.3 percent of revenue.

<unk> adjusted EBITDA and adjusted free cash flow.

Speaker 2: transcript

Speaker 2: Revenue in Q4 is estimated to be approximately 2.04 billion.

Revenue in Q4 is estimated to be approximately $2 4 billion we.

Mary Anne Whitney: We expect core price of about 8.5% and total price plus volume of 5.5% to 6%. Recycled commodity values and RINs are projected in line with recent levels, and adjusted EBITDA in Q4 is estimated at approximately $658 million or 32.3% of revenue. Depreciation and amortization expense for Q4 is estimated at about 12.6% of revenue, including amortization of intangibles of about $39.5 million or about $0.11 per diluted share, net of taxes. Interest expense, net of interest income in Q4 is estimated at approximately $68 million. Finally, our effective tax rate in Q4 is estimated at about 23%, subject to some variability. Now, let me turn the call back over to Ron for some final remarks before Q&A.

Mary Anne Whitney: We expect core price of about 8.5% and total price plus volume of 5.5% to 6%. Recycled commodity values and RINs are projected in line with recent levels, and Adjusted EBITDA in Q4 is estimated at approximately $658 million or 32.3% of revenue. Depreciation and amortization expense for Q4 is estimated at about 12.6% of revenue, including amortization of intangibles of about $39.5 million or about $0.11 per diluted share, net of taxes. Interest expense, net of interest income in Q4 is estimated at approximately $68 million. Finally, our effective tax rate in Q4 is estimated at about 23%, subject to some variability. Now, let me turn the call back over to Ron for some final remarks before Q&A.

Speaker 2: transcript

Speaker 2: We expect core prices about 8.5%, and total price plus volume of 5.5 to 6%.

We expect core price of about eight 5% and total price plus volume of five 5% to 6%.

Speaker 2: transcript

Speaker 2: Recycle commodity values and rents are projected in line with recent levels. And adjusted EBITDA on Q4 is estimated at approximately 658 million or 32.3% of rents.

Michael commodity values in Rins are projected in line with recent levels and adjusted EBITDA. In Q4 is estimated at approximately $658 million or 32, 3% of revenue.

Mary Ann: Depreciation and amortization expense for the fourth quarter is estimated at about 12.6 percent of revenue, including amortization of intangibles of about 39.5 million, or about 11 cents per diluted share, net of taxes. Interest expense, net of interest income in Q4 is estimated at approximately $68 million, and finally, our effective tax rate in Q4 is estimated at about 23 percent, subject to some variability.

Depreciation and amortization expense for the fourth quarter is estimated at about 12, 6% of revenue, including amortization of intangibles of about $39 5 million or about <unk> 11 per diluted share net of taxes.

Speaker 2: transcript

Speaker 2: Depreciation and amortization expense for the fourth quarter is estimated at about 12.6% of revenue, including amortization of intangibles of about 39.5 million, or about 11 cents per diluted share, net of tax.

Speaker 2: transcript

Speaker 2: Interest expense net of interest income in Q4 is estimated at approximately $68 million. And finally, our effective tax rate in Q4 is estimated at about 23%. Subject to some variables.

Interest expense net of interest income in Q4 is estimated at approximately $68 million and finally, our effective tax rate in Q4 is estimated at about 23% subject to some variability.

Ron Mittelstaedt: And now, let me turn the call back over to Ron for some final remarks before Q&A. Thank you, Marianne. Again, we are extremely pleased with our year-to-date performance and our positioning for 2024, particularly given the strength of execution throughout 2023 and the improving dynamics in employee retention.

Speaker 2: transcript

Speaker 2: And now let me turn the call back over to Ron for some final remarks before Q&A.

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

Ronald Mittelstaedt: Thank you, Mary Anne. Again, we are extremely pleased with our year-to-date performance and our positioning for 2024, particularly given the strength of execution throughout 2023 and the improving dynamics in employee retention. Although we won't provide our formal outlook for 2024 until February, we are able to expand on the early thoughts we provided in August, assuming no change in the current economic environment. We continue to have visibility for outsized adjusted EBITDA margin expansion, resulting in expected high single-digit adjusted EBITDA growth in 2024 on expected mid- to high single-digit revenue growth, including price-led organic growth in solid waste, plus almost 2% from acquisitions signed or closed thus far in 2023, with the potential for that amount to grow by early next year based on our current pipeline.

Speaker 1: transcript

Speaker 1: Thank you, Marianne. Again, we're extremely pleased with our year-to-date performance and our positioning for 2024, particularly given the strength of execution throughout 2023 and the improving dynamics in employee retention. Although we won't provide our formal outlook for 2024 until February , we are able to expand on the early thoughts we provided in August , assuming no change in the current economic environment.

Thank you Marianne.

Again, we're extremely pleased with our year to date performance and our positioning for 2024, particularly given the strength of execution throughout 2023, and the improving dynamics and employee retention.

Ron Mittelstaedt: Although we won't provide our formal outlook for 2024 until February, we are able to expand on the early thoughts we've provided in August, assuming no change in the current economic environment. We continue to have visibility for outsized, adjusted the Bada Margin expansion, resulting in expected high single-digit, adjusted the Bada growth in 2024, unexpected mid to high single-digit revenue growth, including price-led, organic growth and solid waste, plus almost 2% from acquisition signed or closed thus far in 2023, with the potential for that amount to grow by early next year based on our current pipeline.

Although we won't provide our formal outlook for 2024 until February we are able to expand on the early thoughts we provided in August assuming no change in the current economic environment.

Speaker 1: transcript

Speaker 1: We continue to have visibility for outsized Adjusted the Badaa margin expansion, resulting in expected high single digits Adjusted the Badaa growth in 2024, unexpected mid to high single digit revenue growth, including price-led, organic growth and solid waste, plus almost 2% from acquisition signed or closed thus far in 2023. With the potential for that amount to grow by early next year, based on our current pipe.

We continue to have visibility for outsized adjusted EBITDA margin expansion, resulting in expected high single digit adjusted EBITDA growth in 2020 for unexpected mid to high single digit revenue growth, including price led organic growth and solid waste plus almost 2% from acquisition signed or closed thus far in <unk>.

'twenty three with the potential for that amount to grow by early next year based on our current pipeline.

Ronald Mittelstaedt: To the extent that we see further improvement in recycled commodity values or easing of inflationary pressures during the year, those impacts, along with additional acquisitions completed throughout the upcoming year, would provide upside to these preliminary thoughts, as would the benefit from RNG facilities coming online by 2024. Adjusted free cash flow conversion would be expected to remain in the current range of 45% to 50% of adjusted EBITDA, excluding the outlays for RNG projects described earlier. We look forward to having better visibility on the tone of the economy, the pace of acquisitions, expected commodity-driven activity, and the projected resolution timing of the landfill situation when we provide our formal outlook in February. As we continue to grow towards revenue of $10 billion and more, we maintain that our decentralized operating philosophy and therefore our people are our greatest differentiator.

Ron Mittelstaedt: Do the extent that we see further improvement in recycled commodity values or easing of inflationary pressures during the year, those impacts along with additional acquisition completed throughout the upcoming year, would provide upside to these preliminary thoughts, as would the benefit from R&G facilities coming online by 24. Adjusted free cash flow conversion would be expected to remain in the current range of 45 to 50% of adjusted EBITA, excluding the outlays for R&G projects described earlier.

Speaker 1: transcript

Speaker 1: to the extent that we see further improvement in recycled commodity values or easing of inflationary pressures during the year. Those impacts along with additional acquisitions completed throughout the upcoming year would provide upside to these preliminary thoughts as would the benefit from R&G facilities coming online by 24.

To the extent that we see further improvement in recycle commodity values or easing of inflationary pressures during the year those impacts along with additional acquisitions completed throughout the upcoming year would provide upside to these preliminary thoughts as would the benefit from R&D facilities coming online by 24 <unk>.

Speaker 1: transcript

Speaker 1: Adjusted free cash flow conversion would be expected to remain in the current range of 45 to 50% of adjusted EBITDA, excluding the outlays for RNG projects described earlier.

Adjusted free cash flow conversion would be expected to remain in the current range of 45% to 50% of adjusted EBITDA, excluding the outlays for R&D projects described earlier.

Ron Mittelstaedt: We look forward to having better visibility on the tone of the economy, the pace of acquisitions, expected commodity driven activity, and the projected resolution timing of the landfill situation when we provide our formal outlook in February. As we continue to grow towards revenue of 10 billion and more, we maintain that our decentralized operating philosophy and therefore our people are our greatest differentiator. Our results today and our outlook for 2024 are a reflection of their commitments and accomplishments.

Speaker 1: transcript

Speaker 1: We look forward to having better visibility on the tone of the economy, the pace of acquisitions, expected commodity-driven activity, and the projected resolution timing of the landfill situation when we provide our formal outlook in February .

We look forward to having better visibility on the tone of the economy, the pace of acquisitions expected commodity driven activity and the projected resolution timing of the landfill situation. When we provide our formal outlook in February.

Speaker 1: transcript

Speaker 1: As we continue to grow towards revenue of 10 billion and more, we maintain that our decentralized operating philosophy and therefore our people are our greatest differentiator. Our results today and our outlook for 2024 are a reflection of their commitments and accomplishments.

As we continue to grow towards revenue of $10 billion and more we maintain that our decentralized operating philosophy and therefore, our people are our greatest differentiator our results to date and our outlook for 2024 are a reflection of their commitment and accomplishments.

Ronald Mittelstaedt: Our results to date and our outlook for 2024 are a reflection of their commitments and accomplishments. We recently celebrated our 26th anniversary as a company and had the opportunity to be together as a team with our local leaders for the first time since the pandemic to renew the relationships that we know drive our results and to reinforce the vision and values that have guided Waste Connections since its inception. Safety, integrity, accountability, customer service, servant leadership, and being a great place to work. In short, it's about both relationships and results. We appreciate your time today. With that, I will now turn this call over to the operator to open up the lines for your questions. Operator?

Ron Mittelstaedt: We recently celebrated our 26th anniversary as a company and had the opportunity to be together as a team with our local leaders for the first time since the pandemic to renew the relationships that we know drive our results and to reinforce the vision and values that have guided waste connections since its inception. Safety, integrity, accountability, customer service, servant leadership, and being a great place to work. In short, it's about both relationships and results.

Speaker 1: transcript

Speaker 1: We recently celebrated our 26th anniversary as a company and had the opportunity to be together as a team with our local leaders for the first time since the pandemic to renew the relationships that we know drive our results and to reinforce the vision and values that have guided ways to enhance since its inception. Safety, integrity, accountability, customer service, servant leadership, and being a great place to work. In short, it's about both relationships and results.

We recently celebrated our 20 <unk> anniversary as a company and had the opportunity to be together as a team with our local leaders for the first time since the pandemic to renew the relationships that we know drive our results and to reinforce the vision and values that have guided waste connections since its inception safety integrity.

Accountability customer service servant leadership and being a great place to work in short, it's about both relationships and results.

Speaker 1: transcript

Speaker 1: We appreciate your time today and with that I will now turn this call over to the operator to open up the lines for your questions. Operator

Operator: We appreciate your time today, and with that, I will now turn this call over to the operator to open up the lines for your questions. Operator? Thank you. If you would like to ask a question, please press star than one on your telephone keypad. If your question has been addressed and you'd like to withdraw your question, please press star than two. Once again, that star than one of you have a question.

We appreciate your time today and with that I will now turn this call over to the operator to open up the lines for your questions operator. Thank you.

Operator: Thank you. If you would like to ask a question, please press star then one on your telephone keypad. If your question has been addressed and you'd like to withdraw your question, please press star then two. Once again, that's star then one if you have a question. Today's first question comes from Toni Kaplan with Morgan Stanley. Please go ahead.

Speaker 3: transcript

Speaker 3: Thank you. If you would like to ask a question, please press star and one on your telephone keypad.

To ask a question. Please press Star then one on your telephone keypad.

Speaker 3: transcript

Speaker 3: If your question has been addressed to you, and would like to withdraw your question, please press star then two. Once again, that star then one of you have a question.

If your question has been addressed I would like to withdraw your question. Please press Star then two once again Thats Star then one if you have a question.

Tony Kaplan: And today's first question comes from Tony Kaplan with Morgan Stanley. Please go ahead. Thank you so much. Very strong pricing quarter once again. I was hoping you could maybe give some initial thoughts on pricing in 2024, maybe just kind of ballpark. How should we think about the trajectory? Would you expect sort of price to come down as inflation comes down? Or are you not really expecting too much of a drop at all? Thanks. Thanks, Tony.

Speaker 3: transcript

Speaker 3: And today's first question comes from Tony Kaplan with Morgan Stanley . Please go ahead.

And today's first question comes from Toni Kaplan with Morgan Stanley. Please go ahead.

Toni Kaplan: Thank you so much. Very strong pricing quarter once again. I was hoping you could maybe give some initial thoughts on pricing in 2024, maybe just kind of ballpark, you know, how should we think about the trajectory? Would you expect sort of price to come down as inflation comes down, or are you not really expecting too much of a drop at all? Thanks.

Speaker 4: transcript

Speaker 4: Thank you so much. Very strong pricing quarter once again. I was hoping you could maybe give some initial thoughts pricing in 2024, maybe just kind of ballpark, how should we think about the trajectory? Would you expect sort of price to come down as inflation comes down or are you not really expecting too much of a drop at all? Thanks.

Thank you so much.

Mary Anne Whitney: Sure. Thanks, Toni. In terms of pricing, I'd start with, you'll recall that about 40% of our pricing is CPI linked, and therefore, there's that lagging impact. The CPI you see this year informs us about how to think about what that pricing looks like for next year. Beyond that, you know, we think in terms of that spread to drive margin expansion.

Very strong pricing quarter. Once again I was hoping you could maybe give some initial thoughts on pricing in 2024.

Ron Mittelstaedt: So in terms of pricing, I'd start with your recall that about 40% of our pricing is CPI linked, and therefore there's that lagging impact. And so the CPI you see this year informs us about how to think about what that pricing looks like for next year. And then beyond that, we think in terms of that spread to drive margin expansion. And so as Ron described, the preliminary thoughts for 24, saying mid to high single digits, including the 2% acquisition contribution, sort of informs you as how we're thinking about price plus volume, making up the other piece to get you to that mid to high.

Just kind of ballpark, how should we think about that trajectory.

Do you expect sort of price to come down as inflation comes down or are you not really expecting too much of a drop at all thanks.

Speaker 2: transcript

Speaker 2: Sure. Thanks, Tony. So in terms of pricing, I'd start with you'll recall that about 40% of our pricing is CPI linked, and therefore there's that lagging impact. And so the CPI you see this year informs us about how to think about what that pricing looks like for next year. And then beyond that, we think in terms of that spread to drive margin expansion.

Sure. Thanks, Toni so in terms of pricing.

Chart with you'll recall that about 40% of our pricing at CPI linked and therefore, there is that lagging imp.

Impact and so the CPI ASC this year informs us about how to think about what that pricing looks like for next year and then beyond that we think in terms of that spread to drive margin expansion and so and as Ron described the preliminary thoughts for 2000 and for saying mid to high single.

Mary Anne Whitney: As Ron described the preliminary thoughts for 2024, saying mid to high single digits, including the 2% acquisition contribution, sort of informs you as how we're thinking about price plus volume, making up the other piece to get you to that mid to high. In terms of the cadence during the year, the typical cadence, Toni, is that pricing on a reported basis is typically highest in Q1 and steps down over the course of the year because of the denominator growing. You know, but most of the pricing gets done early in the year, so we have good visibility by the time we report Q1.

Speaker 2: transcript

Speaker 2: And so, as Ron described, the preliminary thoughts for 24, saying mid-to-high single digits, including the 2% acquisition contribution, sort of informs you as how we're thinking about price plus volume, making up the other piece to get you to that mid-to-high.

You'll digits, including the 2% acquisition contribution sort of informed here's how we're thinking about price plus volume, making up the other piece to get you to that mid to high.

Ron Mittelstaedt: And then in terms of the cadence during the year, the typical cadence, Toni, is that pricing on a reported basis is typically highest in the first quarter and steps down over the course of the year because of the denominator growing. And so most of the pricing gets done early in the year, so we have good disability by the time we report Q1.

Speaker 2: transcript

Speaker 2: And then in terms of the cadence during the year, the typical cadence, Tony, is that pricing on a reported basis is typically highest in the first quarter and steps down over the course of the year because of the denominator growing. And so most of the pricing gets done early in the year. So we have good visibility by the time we report Q.

And then in terms of the cadence during the year. The typical cadence Tony is that pricing on a reported basis is typically highest in the first quarter and steps down over the course of the year because of the denominator growing and.

But most of the pricing gets done early in the year. So we had good visibility by the time, we report Q1.

Ronald Mittelstaedt: Toni, this is Ron. You know, what we strive for continually is to be about 150 to 200 basis point spread to the CPI on an ongoing basis. You know, sort of whatever you would assume is the CPI for next year. If you're assuming that's 3.5% to 4%, I would add 150 to 200 basis points, plus to that assumption for the price. As in this quarter, we did 250 basis points better than a cost spread. We certainly strive to be in that 150 to 200 at least on a regular basis.

Ron Mittelstaedt: And Toni, this is Ron. You know, what we strive for continually is to be about 150 to 200 basis point spread to the CPI on a ongoing basis. So, you know, sort of whatever you would assume is the CPI for next year, if you're assuming that's three and a half to four percent, I would add 150 to 200 basis points plus to that assumption for the price. As is this quarter, we did 250 basis points better than a cost spread, but we certainly strive to be in that 150 to 200 at least on a regular basis.

Speaker 1: transcript

Speaker 1: And Tony, this is Ron. You know, what we strive for continually is to be about 150 to 200 basis point spread to the CPI on an ongoing basis. So, you know, sort of whatever you would assume is the CPI for next year. If you're assuming that's three and a half to four percent, I would add 150 to 200 basis points plus to that assumption for the price.

And Tony this is Ron.

What we strive for continually has to be about 150 to 200 basis point spread to the CPI on a on a ongoing basis. So sort of whatever you would assume is the CPI for next year, if youre, assuming that's three 5% to 4% I would add 150 to 200 base.

Points.

<unk> to that assumption for the price as is this quarter, we did 250 basis points better.

Speaker 5: transcript

Speaker 5: As is this quarter, we did 250 basis points better than a cost spread, but we certainly strive to be in that 150 to 200 at least on a regular basis. our available expenses.

Then our cost spread but we certainly strive to be in that $1 50 to 200 at least on a regular basis.

Toni Kaplan: Terrific. Very helpful. I also wanted to ask, you did a nice job describing the issues that you're seeing with the landfills in California and Texas. You know, you talked about it being not recurring and site specific. I was just wondering, are there always issues like these, but these are bigger, so they have to be called out? Or is there a reason why there are a couple of issues at the same time? You know, just trying to figure out, you know, as we go forward, if we're gonna see, like, some additional issues. I know these are supposed to be sort of, you know, one time, but, you know, maybe just talk about if anything has changed.

Perfect very helpful.

Tony Kaplan: I also wanted to ask you to do a nice job describing the issues that you're seeing with the landfills in California and Texas. And you know, you talked about it being not recurring and site specific. I was just wondering are there always issues like these, but these are bigger so they have to be called out or is there a reason why there are a couple of issues at the same time. And, you know, just trying to figure out, you know, as we go forward, if if we're going to see like some additional issues, I know these are supposed to be sort of, you know, one time, but, you know, maybe just talk about if anything has changed.

Also wanted to ask you did a nice job describing the issues that youre seeing with the landfills in California.

Speaker 4: transcript

Speaker 4: describing the issues that you're seeing with the landfills in California and Texas.

In Texas.

Speaker 4: transcript

Speaker 4: You know, you talked about it being not recurring and tight specific.

You talked about it being not recurring and site specific.

Speaker 4: transcript

Speaker 4: I'm just wondering are there always issues like these, but these are bigger so they have to be called out or is there a reason why?

Just wondering are there always issues like these but these are bigger so they have to be called out or is there. A reason why there are a couple of issues at the same time and just trying to figure out as we go forward.

Speaker 4: transcript

Speaker 4: There are a couple of issues at the same time and, you know, just trying to figure out, you know, as we go forward if we're going to see like some additional issues. I know these are supposed to be sort of, you know, one time but, you know, maybe just talk about if anything has changed.

If we're going to see some additional <unk>.

Issues I know these are supposed to be sort of.

One time, but maybe just talk about if anything has changed.

Ronald Mittelstaedt: Sure. First off, Toni, nothing whatsoever has changed. First off, we have well over 100 landfills in the company. In 26 years, we have never once at any of our landfills had one of these elevated temperature events. That tells you know, how rare and how unique they are. They definitely happen within the industry. You know, at probably any given time, there's 5 or maybe 10 of these going on nationwide with various owners, but we have never had one before. That is unique. It is also in Southern California and Los Angeles, which makes it a little bit more complicated because of the density of the population. That's one. The second one, the Texas issue, and these are completely unrelated and coincidental in timing.

Ronald Mittelstaedt: Sure. First off, Toni, nothing whatsoever has changed. First off, we have well over 100 landfills in the company. In 26 years, we have never once at any of our landfills had one of these elevated temperature events. That tells you know, how rare and how unique they are. They definitely happen within the industry. You know, at probably any given time, there's five or maybe 10 of these going on nationwide with various owners, but we have never had one before. That is unique. It is also in Southern California and Los Angeles, which makes it a little bit more complicated because of the density of the population. That's one. The second one, the Texas issue, and these are completely unrelated and coincidental in timing.

Speaker 1: transcript

Speaker 1: So first off, Tony, nothing whatsoever has changed. First off, we have well over 100 landfills in the company. And in 26 years, we've never once, at any of our landfills, had one of these elevated temperature events. So that tells you how rare and how unique they are. They definitely happen within the industry. Probably any given time. And there's...

Sure So first off.

Ron Mittelstaedt: Sure. So first off, Tony, nothing whatsoever has changed. First off, we have well over 100 landfills in the company and in 26 years, we've never once at any of our landfills had one of these elevated temperature events. So that tells you, you know, how rare and how unique they are. They definitely happened within the industry. You know, probably any given time there's five or maybe ten of these going on nationwide with various owners, but we have never had one before.

Any nothing whatsoever has changed first off we have well over 100 landfills in the company.

And in 26 years, we've never once at any of our landfills.

Add one of these elevated temperature events.

So that tells you how rare and how unique they are.

They definitely happened within the industry.

Probably any given time, there's five or maybe 10 of these going on nationwide with various owners, but we have never had one before.

Speaker 1: transcript

Speaker 1: five or maybe 10 of these going on nationwide with various owners, but we have never had one before, and so that is unique. It is also in Southern California and Los Angeles, which makes it a little bit more complicated because of the density of the population.

Ron Mittelstaedt: And so that is unique. It is also in Southern California and Los Angeles, which makes it a little bit more complicated because of the density of the population. So that's one, the second one, the Texas issue and these are completely unrelated and coincidental and timing. The second one, the Texas issue was a slope failure. That was actually our error caused by us. We could have prevented that, but we missed a few things.

And so that is unique it is also in southern California in Los Angeles, which makes it a little bit more complicated because of the density of the population.

Speaker 1: transcript

Speaker 1: So that's one. The second one, the Texas issue, and these are completely unrelated and coincidental and timing.

So thats one the second one the Texas issue and these are completely unrelated and coincident, Illinois and timing. The second one the Texas issue was a slope failure that was actually our error caused by all.

Ronald Mittelstaedt: The second one, the Texas issue, was a slope failure. That was actually our error caused by us. We could have prevented that, but we missed a few things. We have only had two of those out of over 100 landfills in 26 years. One about 14 years ago and smaller, and we never needed to call it out or did call it out. The other reason we've called out these two is because there has been press coverage of these in the media, and because of that, we felt it would be inappropriate not to communicate it to investors and other listeners when it is in the press.

Speaker 1: transcript

Speaker 1: The second one, the Texas issue, was a slope failure. That was actually our error caused by us. We could have prevented that, but we missed a few things. And we have only had two of those out of over 100 landfills in 26 years.

Caused by US we could have prevented that.

But we missed a few things and we have only had two of those out of over 100 landfills in 2006 years, one about 14 years ago and.

Ron Mittelstaedt: And we have only had two of those out of over 100 landfills in 26 years, one about 14 years ago and smaller and we never needed to call it out or did call it out. The other reason we've called out these two is because there has been press coverage of these in the media. And because of that, we felt it would be inappropriate not to communicate it to investors and other listeners when it is in the press. So that's how I would characterize these two as to why they, you know, many would add these back is because of their non-recurring nature and we've really never had either of these before.

Speaker 1: transcript

Speaker 1: one about 14 years ago and smaller and we never needed to call it out or did call it out.

Smaller and we never needed to call it out or did call. It out the other reason we've called out. These two is because there has been press coverage of these in the media and because of that we felt it would be inappropriate not to communicate it to investors and other listeners when it is in the press.

Tony Kaplan: Super, thank you.

Speaker 1: transcript

Speaker 1: The other reason we've called out these two is because there has been press...

Speaker 1: transcript

Speaker 1: coverage of these in the media and because of that we felt that would be inappropriate not to communicate it to investors and other listeners when it is in the press. So that's how I would characterize these two as to why they you know many would add these back is because of their non-recurring nature and we've really never had either of these before.

Operator: Thank you.

Ronald Mittelstaedt: That's how I would characterize these two as to why they, you know, many would add these back is because of their non-recurring nature, and we've really never had either of these before.

So that's how I would characterize these two as to why they.

Many would add this back is because of the nonrecurring nature and we've really never had either of these before.

Toni Kaplan: Super. Thank you.

Super Thank you.

Operator: Thank you. Our next question today comes from Kevin Chiang with CIBC. Please go ahead.

Thank you and our next question comes from Kevin Chiang CIBC. Please go ahead.

Speaker 3: transcript

Speaker 3: Thank you. And our next question today comes from Kevin Chang with CIBC. Please go ahead.

Kevin Chiang: And our next question today comes from Kevin Chiang with CRBC. Please go ahead. Hi, thanks. Thanks for taking my question and good morning, everyone. I appreciate, I guess the uncertainty in how you're going to deal with some of these costs related to the landfill, both in, I guess, specifically in Q4. But if I look at Q3 and if I, and Mary, I mentioned it, if you back that, you know, you saw solid waste margin and expansion of about 150 basis points, does that change how you think about the launching point for 2024, you know, including these issues, or if we treat them as one time, it does feel like you're entering 24 maybe a little bit higher than maybe what we would have thought a quarter ago, not sure if you'd agree with that.

Kevin Chiang: Hi. Thanks for taking my question. Good morning, everyone.

Speaker 6: transcript

Speaker 6: Hi, thanks. Thanks for taking my question. Good morning, everyone. I appreciate, I guess the uncertainty and how you're going to deal with some of these costs related to the landfill, both in specifically in Q4. But if I look at Q3 and if I, and Mary, I mentioned it, if you back that, you saw solid waste margin expansion of about 150 basis points, does that change how you think about the launching point for 2024, excluding these issues, or if we treat them as one time, it does feel like you're entering 2024 maybe a little bit higher than maybe what we would have thought a quarter ago, not sure if you'd agree with that.

Hi, Thanks, Thanks for taking my question and good morning, everyone.

Ronald Mittelstaedt: Good morning.

Kevin Chiang: I appreciate the uncertainty in how you're gonna deal with some of these costs related to the landfill, both in, I guess, specifically in Q4. If I look at Q3, and Mary Anne mentioned it, if you back that out, you know, you saw solid waste margin expansion of about 150 basis points. Does that change how you think about the launching point for 2024? You know, excluding these issues or if we treat them as one time, it does feel like you're entering 2024 maybe a little bit higher than maybe what we would have thought a quarter ago. Not sure if you'd agree with that.

Yes.

I appreciate.

I would just say uncertainty in how youre going to deal with some of these costs relate to the <unk>.

Handful Bolton I guess, specifically in Q4, but if I look at Q3.

Ron Mittelstaedt: Yeah, I mean, I think Kevin, so number one, it does not change how we think about the launching point. You know, look, and it has been raised by, you know, some of your peers in conversation, look, we beat our guidance in Q3 and EBITDA, and we overcame 15 million, so we really beat, would have beat by 17 million. So some have said, hey, you know, this is up to $20 million in Q4, you know, why wouldn't you just not acknowledge that, and you could probably beat it.

And Maryann mentioned that if you back that.

You saw solid waste margin expansion of about 150 basis points.

Does that change how you think about the launching point for 2024, excluding these issues or.

If we treat them as one time it does feel like you're entering 'twenty, four maybe a little bit higher than that.

And then maybe what we would have thought a quarter ago I'm not sure if you agree with that.

Ronald Mittelstaedt: Yeah. I mean, I think, Kevin. Number one, it does not change how we think about the launching point. You know, look, and it has been raised by you know, some of your peers, in conversation. Look, we beat our guidance in Q3 in EBITDA, and we overcame $15 million. We really would have beat by $17 million. Some have said, "Hey, you know, this is up to $20 million in Q4. You know, why wouldn't you just not acknowledge that, and you could probably beat it?" You know, what we would tell you is, look, we didn't expect to beat Q3 by $17 million in EBITDA. You know, good things happen, rough things happen sometimes.

Speaker 1: transcript

Speaker 1: Yeah, I mean, I think Kevin, so number one, it does not change how we think about the launching point, you know, look, and it has been raised by, you know, some of your peers in conversation. Look, we, we, we beat our guidance.

Yes, I mean, I think Kevin So number one it does not change how we think about the launching point look and it has been raised by <unk>.

Some of your peers in conversation look we we beat our guidance in Q3 and EBITDA.

Speaker 1: transcript

Speaker 1: two, three, an EBITDA, and we overcame 15 million. So we really would have beat by 17 million.

And and we overcame $15 million. So we really would have beat by $17 million. So some have said hey.

Speaker 1: transcript

Speaker 1: So some have said, hey, you know, this is up to $20 million in Q4. You know, why wouldn't you just not acknowledge that and you could probably beat it? And you know, what we would tell you is, look, we didn't expect to be Q3 by $17 million in EBITDA. You know, good things happen.

This is up to $20 million in Q4.

Why wouldn't you just not acknowledge that and you could probably beat it and while we would tell you is look we didn't expect to beat Q3 by $17 million in EBITDA, good things happen rough things happen, sometimes so we're being transparent on the rough things we know.

Ron Mittelstaedt: And, you know, what, what we would tell you is, look, we didn't expect to beat Q3 by 17 million dollars in EBITDA, you know, good things happen, rough things happen sometimes. So we're being transparent on the rough things we know, and we do believe they're non-recurring completely. The Texas will be over in Q4. The California will not be over in Q4, but we believe it is still, will be non-recurring. And so, no, we don't think of a launch off point or the jump off point as any different with these than we had, which is why in our comments, we've said we have, you know, outsized margin expansion.

Speaker 1: transcript

Speaker 1: Rough things happen sometimes. So we're being transparent on the rough things we know, and we do believe they're non-recurring completely. The Texas's will be over in Q4. The California will not be over in Q4, but we believe it still will be non-recurring.

Kevin Chiang: Mm-hmm.

Ronald Mittelstaedt: We're being transparent on the rough things we know, and we do believe they're non-recurring completely. The Texas's will be over in Q4. The California will not be over in Q4, but we believe it still will be non-recurring. No, we don't think of the launch off point or the jump off point as any different with these than we had, which is why in our comments we've said we have, you know, outsized margin expansion. Look, we are now up 250 basis points between Q1 and Q3 in margin, okay?

And we do believe they are nonrecurring completely the taxes will be over in Q4.

California will not be over in Q4, but we believe it is still will be nonrecurring.

Speaker 1: transcript

Speaker 1: And so, no, we don't think of the launch off point or the jump off point as any different with these than we had, which is why in our comments, we've said we have, you know, outsized margin expansion. Look, we are now up 250 basis points between Q1 and Q3 and margin.

And so no we don't think of our launch off point or the jump off point is any different with these then we have which is why in our comments. We said we have <unk>.

Outsize margin expansion look we are now up 250 basis points between Q1, and Q3 and margin, Okay, and and we have just guided Q4 up substantially over last year's Q4. So the jump off point is clearly higher than.

Ron Mittelstaedt: Look, we are now up 250 basis points between Q1 and Q3 and margin, okay? And, you know, we have just guided Q4 up substantially over last year's Q4. So the jump off point is clearly higher than, you know, than it wasn't anticipated earlier in the year.

Kevin Chiang: Mm-hmm.

Speaker 1: transcript

Speaker 1: Okay, and, and you know, we have just guided Q4 up substantially over last year's Q4. So the jump off point is clearly higher than, you know, than it wasn't anticipated earlier in the year.

Ronald Mittelstaedt: You know, we have just guided Q4 up substantially over last year's Q4. The jump off point is clearly higher than you know was anticipated earlier in the year.

Then was anticipated earlier in the year.

Kevin Chiang: That's helpful. You know, when I think back to the Q2 call, you gave a lot of color on some of the stuff you're doing on addressing labor turnover. I think one of the comments you did make was, you know, as you get turnover lower, that could yield about 100 basis points of margin improvement over the next, call it 18 to 24 months. You called out about $9 million of severance costs that weren't expected in Q3. Does that change how you think about the margin opportunity that you laid out back on the Q2, whether it's the magnitude of the margin improvement or maybe the timing of realizing those?

Speaker 6: transcript

Speaker 6: That's helpful and then when I think back to the second quarter call, you gave a lot of color on some of the stuff you're doing on addressing labor turnover and I think one of the comments you did make was as you get turnover lower, that could yield about 100 basis points of margin improvement over the next call at 18 to 24 months. You called it about 9 million of experience costs that weren't expected in the third quarter. Does that change how you think about?

Ron Mittelstaedt: That's helpful. And then, you know, when I think back to the second quarter call, you gave a lot of color on some of the stuff you're doing on an underdressing labor turnover. And I think one of the comments you did make was, you know, as you get turnover lower, you know, that could yield about 100 basis points of margin improvement over the next, call it 18 to 24 months. You called about 9 million of experience costs that weren't expected in the third quarter.

Okay. That's helpful.

And then when I think back to the second quarter call. You gave a lot of color on some of the stuff youre doing them on.

On addressing labor turnover.

And I think one of the comments you did make was as you got turnover lower.

That could yield about 100 basis points of margin improvement over the next call. It 18 to 24 months.

You call that about $9 million of experienced costs that weren't expected in the third quarter does that change how you think about the margin opportunity that you laid out back on the second quarter, whether it's the magnitude of the margin improvement or maybe the timing of of realizing those.

Ron Mittelstaedt: Does that change how you think about the margin opportunity, you know, that you laid out back on the second quarter, whether it's a magnitude of the margin improvement or maybe the timing of realizing those? No, it really doesn't, Tony, excuse me, Kevin, I apologize. It really doesn't. And here's why. Because in the $9 million of incremental risk expense, that's really a one-time issue on prior claims, okay? A part of it is forward looking, but the smallest part of it is forward looking.

Speaker 6: transcript

Speaker 6: The margin opportunity that you laid out back on the second quarter, whether it's the magnitude of the margin improvement or maybe the timing of realizing those.

Ronald Mittelstaedt: No, it really doesn't, Toni. Excuse me, Kevin, I apologize. It really doesn't, and here's why. Because in the $9 million of incremental risk expense, that's really a one-time issue on prior claims, okay? A part of it is forward-looking, but the smallest part of it is forward-looking. The reduction in turnover and the improvements in labor and risk and other areas will offset that, will more than overcome that, and we stand by that margin impact. You know, one of the reasons we reiterated, hey, if you know, we just had a year ago commodities were already north of 33%, is to show you that with that 100 basis point improvement over a few years, the 34% EBITDA margin visibility is really pretty clear right now.

Speaker 1: transcript

Speaker 1: no it really doesn't uh... excuse me i haven't apologized it really doesn't and and here's why because in the nine million dollars of incremental risk expense uh... that's really a one-time issue on prior claims uh... a part of it is is forward looking but the smallest part of it is forward look

No it really doesn't Tony excuse me, Kevin I apologize, it really doesn't and here's why because in the $9 million of incremental risk expense.

It's really a one time issue on prior claims okay.

A part of it is forward looking but the smallest part of it is forward looking so the reduction in turnover and the improvements in labor and risk in other areas will offset that will more than overcome that and we standby that that margin impact.

Ron Mittelstaedt: So the reduction in turnover and the improvements in labor and risk and other areas will offset that, well, more than overcome that, and we stand by that margin impact. You know, one of the reasons we reiterated, hey, if you, you know, we just had a year ago commodities, we're already north of 33% is to show you that with that 100 basis point improvement over a few years, the 34% The other thing I would add is just to put some numbers around it.

Speaker 1: transcript

Speaker 1: So the reduction in turnover and the improvements in labor and risk and other areas will offset that, what more than overcome that, and we stand by that margin impact. You know, one of the reasons we reiterated, hey, if you, you know, we just had a year ago commodities, we're already north of 33% is to show you that.

One of the reasons, we reiterated hey, if you will.

Just had a year ago commodities were already north of 33% is to show you that with that 100 basis point improvement over a few years, the 34% EBITDA margin visibility is really pretty clear right now.

Speaker 1: transcript

Speaker 1: with that 100 basis point improvement over a few years, the 34% in the Dodd-Margin visibility is really pretty clear right now. that data.

Kevin Chiang: I-

Mary Anne Whitney: The other thing I would add, Kevin, just to put some numbers around it. When we think about the cost of risk and coming, you know, how it was playing out in 2023 and specifically in Q3, our expectation was that it was a headwind, it was just a greater headwind. It ended up being a 90 basis point headwind to reported margins. We had expected it to be a 40 to 50 basis point. My point is, that has been a factor throughout 2023, but it is one of those examples of as turnover goes down, the lagging benefits that should accrue to us over 2024 and 2025 potentially, that's one of the items that we'd expect to improve.

The other thing I would add Kevin is to put some numbers around it when we think about the cost of risk and coming how it was playing out in 'twenty three and specifically in Q3, our expectation was that it was a headwind. It was just a greater headwind. So it ended up being a 90 basis point headwind to reported margins.

Speaker 2: transcript

Speaker 2: Just to put some numbers around it, when we think about the cost of risk and coming, you know, how it was playing out in 23 and specifically in Q3, our expectation was that it was a headwind. It was just a greater headwind. So, so it ended up being a 90 basis point headwind to reported margins. We had expected it to be a 40 to 50 basis point.

Ron Mittelstaedt: When we think about the cost of risk and coming, you know, how it was playing out in 23 and specifically in Q3, our expectation was that it was a headwind, it was just a greater headwind. So it ended up being a 90 basis point headwind to reported margins. We had expected it to be a 40 to 50 basis point. So my point is that has been a factor throughout 23, but it is one of those examples of as turnover goes down the lagging benefits that should accrue to us over 24 and 25 potentially that's one of the items that we'd expect to improve.

We had expected it to be a 40% to 50 basis points. So my point is that has been a factor throughout 'twenty three but it is one of those examples of as turnover goes down lagging benefits that should accrue to us over 'twenty four and 'twenty five potentially that's one of the items that we would expect to improve.

Speaker 2: transcript

Speaker 2: So my point is that has been a factor throughout 23, but it is one of those examples of as turnover goes down, the lagging benefits that should accrue to us over 24 and 25 potentially. That's one of the items that we'd...

Kevin Chiang: Oh, that's great color. I'll leave it there. Thank you very much, and best of luck as you close out the year here.

Speaker 6: transcript

Speaker 6: Oh, that's great color. I'll leave it there. Thank you very much, and best of luck as you close at the year here.

Kevin Chiang: Oh, that's great color.

That's great color I'll leave it there. Thank you very much and best of luck as you closer to year on year.

Operator: I'll leave it there.

Operator: Thank you very much and best of luck as you close at the year here.

Ronald Mittelstaedt: Thank you.

Operator: Thank you.

Thank you.

Mary Anne Whitney: Thank you.

Operator: Our next question today comes from Tobey Sommer with Truist Securities. Please go ahead.

Jasper Bibb: The next question today comes from Toby Saldo with tourist securities, please go ahead. Hey, good morning.

Speaker 3: transcript

Speaker 3: And our next question today comes from Toby Saunders with Truer Securities. Please go ahead.

And our next question today comes from Tobey Sommer with tourists Securities. Please go ahead.

Jasper Bibb: Hey, good morning. This is Jasper Bibb for Tobey. Solid waste margins this quarter, obviously quite strong even with the unexpected costs. Also seems like cost inflation, particularly on the labor side is moderating a bit, but was hoping to get your preliminary expectations for how we should think about those main unit cost metrics tracking into 2024.

Speaker 1: transcript

Speaker 1: Hey, good morning. This is Jasper Bibbon for Tobii. Solid more solid waste margins a quarter, obviously quite strong, even with the unexpected costs also seems like cost inflation, particularly on the labor side is moderating a bit. But was hoping to get your preliminary expectations for how we should think about those main unit cost buckets tracking into.

Hey, good morning. This is Jasper bibb on for Tobey.

Ron Mittelstaedt: This is Jasper Bibb on for Toby. Solid waste margins of quarter, obviously quite strong, even with the unexpected costs. Also seems like cost inflation, particularly on the labor side is moderating a bit, but was hoping to get your preliminary expectations for how we should think about those main unit cost buckets tracking into 2024. Sure, so certainly start and welcome around input. You know, we look at a couple of key areas, one being wages and so wages in 23 coming into the year, we expected to be in the range of 6 to 8%.

Sorry.

Solid waste margins this quarter, obviously quite strong even with the unexpected costs also seems like cost inflation, particularly on the labor side is moderating a bit but was hoping to get your preliminary expectations for how we should think about.

Those main unit cost markets tracking into 2024.

Mary Anne Whitney: Sure, certainly start and welcome Ram's input. You know, we look at a couple of key areas, one being wages. Wages in 2023 coming into the year, we expected to be in the range of 6% to 8%. The increases, same employee increases starting at 8% and moderating maybe to that 6% or 6.5% over the course of the year. The update is that's happening. We're seeing those improvements in wages particularly. Then I'd say more broadly, the inflation we're seeing and that we've referred to in that price cost spread has stepped down over the course of the year from low double digits, from over 10% to now more like 5%, 5.5%.

Speaker 2: transcript

Speaker 2: Sure, so certainly start and welcome rums and put, you know, we look at a couple of key areas, one being wages and so wages in 23 coming into the year, we expected to be in the range of six to eight percent. The increases, same employee increases, starting at eight and moderating, maybe to that six or six and a half percent over the course of the year. And the update is that's happening. And so we're seeing those improvements.

Sure. So certainly start and welcome ramped input we look at a couple of key areas, one being wages and wages in 'twenty three coming into the year, we expected to be in the range of 6% to 8% the increases seen employee increases starting at eight and moderating maybe to that six or six 5% over the course of.

Ron Mittelstaedt: The increases, same employee increases starting at 8 and moderating maybe to that 6 or 6 and a half percent over the course of the year. And the update is that's happening. And so we're seeing those improvements in wages, particularly. And then I'd say more broadly, the inflation we're seeing and that we've referred to in that price cost spread has stepped down over the course of the year from low double digits from over 10% to now more like 5 and a half percent.

For the year and the update is that happening and so we're seeing those improvements.

Speaker 2: transcript

Speaker 2: in wages particularly. And then I'd say more broadly, the inflation we're seeing, and that we've referred to in that price cost spread, has stepped down over the course of the year from low double digits, from over 10% to now more like five and a half percent.

And in wages, particularly and then I'd say more broadly.

The inflation, we're seeing in that we've referred to in that price cost spread has stepped down over the course of the year from low double digits from over 10% to now more like 555%. So I would say the trajectory first of all it's playing out as we expected because the expectation was that for instance on the wage front the outsized.

Mary Anne Whitney: I'd say the trajectory, first of all, it's playing out as we expected because the expectation was that, for instance, on the wage front, the outsized increases we put in during the course of 2022, we knew would anniversary over time and not need to be put in at the same level in 2023. As we continue, that trajectory should continue to moderate. You know, I think what we've proven is that being in that 5% to 5.5% range, that should be, you know, we expect that's what we would see, and it's playing out largely as expected.

Ron Mittelstaedt: So I'd say the trajectory, first of all, it's playing out as we expected because the expectation was that, for instance, on the wage front, the outsides increases we put in during the course of 22, we knew what anniversary over time and not need to be put in at the same level in 23. So as we continue, that trajectory should continue to moderate. But you know, I think what we've proven is that being in that 5 to 5 and a half percent range, that it should be, you know, we expect that's what we would see and it's playing out largely as expected.

Speaker 2: transcript

Speaker 2: So I'd say the trajectory, first of all, it's playing out as we expected, because the expectation was that, for instance, on the wage front, the outsides increases we put in during the course of 22, we knew what anniversary over time and not need to be put in at the same level in 23.

<unk>, we put in during the course of 'twenty, two we knew would anniversary over time and not need to be put in at the same level in 'twenty three so as we continue that trajectory should continue to moderate.

Speaker 2: transcript

Speaker 2: So as we continue, that trajectory should continue to moderate. But I think what we've proven is that being in that five to five and a half percent range, that it should be, you know, we expect that's what we would see and it's playing out largely as expected.

But I think what we've proven is that being in that five to five 5% range that it should be we expect that's what we would see and it's playing out largely as expected.

Ronald Mittelstaedt: I would say, Jasper, that, you know, for 2024, you know, we're seeing, you know, CPI somewhere in that 3% to 4% range is what's being talked about or actually what's coming in now, actually in the low 3% range. I would expect wage increases to be in that 3.5% to 4.5% range, you know. Stepping down somewhat obviously from the high level of CPI in 2023. That would be sort of what I would expect for 2024 as we sit today.

Ron Mittelstaedt: And I would say just for that, you know, for 24, you know, we're seeing, you know, CPI somewhere in that 3 to 4% range is what's being talked about or actually what's coming in now actually in the low 3% range. I would expect wage increases to be in that 3 and a half to 4 and a half percent range, you know. So stepping down somewhat obviously from the high level of CPI in 23, but that would be sort of what I would expect from 24 as we sit today.

Speaker 1: transcript

Speaker 1: And I would say just for that, you know, for 24, you know, we're seeing, you know, CPI somewhere in that three to four percent range is what's being talked about or actually what's coming in now, actually in the low three percent range.

And I would say Jeff for that.

For 'twenty four.

We're seeing CPI somewhere in that 3% to 4% range is what's being talked about or actually what's coming in now actually in the low 3% range I would expect wage.

Speaker 1: transcript

Speaker 1: I would expect wage increases to be in that three and a half to four and a half percent range. You know, so stepping down somewhat, obviously from the high level of CPI in 23, but that would be sort of what I would expect from 24 as we sit today.

Increases to be in that three five to four 5% range.

So stepping down somewhat obviously from the high level of CPI in 'twenty, three but that would be sort of what I would expect <unk> 'twenty for us as we sit today.

Jasper Bibb: Thanks. That makes sense. Some of your peers have discussed project delays on their landfill gas build-out. Just hoping you could give some color on your experience getting these early projects off the ground. Are you seeing any of the timelines move to the right at all there because of permitting or utility issues?

Ron Mittelstaedt: Thanks. That makes sense. And then some of your peers have discussed project the ways on their landfill gas build out. It's just hoping you could get some color in your experience getting these early projects off the ground and are you seeing any of the timelines move to the right at all there because of permitting or utility. Yeah, well, our peers are not alone. You know, the reality is that the utility infrastructure for the most part in the country is not quite as ready as perhaps the producers like us are ready.

Speaker 7: transcript

Speaker 7: Thanks, that makes sense. And then some of your peers have discussed project delays on their landfill gas buildout. Just hoping you could get some color in your experience getting these early projects off the ground. And are you seeing any of the timelines moved to the right at all there because of permitting or utility issues?

So it makes sense and then some of your peers have discussed.

Project delays on their way on field gas build out just hoping you could give some color on your experience getting these early projects off the ground and are you seeing any of the timelines move to the right. It all there because of the permitting or utility issues.

Ronald Mittelstaedt: Yeah. Well, our peers are not alone. You know, the reality is that the utility infrastructure for the most part in the country is not quite as ready as perhaps the producers like us are ready. There is significant delays in them getting transmission lines and interconnects ready, and that is pushing projects out, you know, sometimes 6 to 12 months from expectation. We are also seeing some supply chain for transformers, generators, and other components that are needed be delayed, as well. Still very good visibility on the projects. Feel very comfortable with our $200 million by 2026. But can some projects move 3 to 9 months? Yeah, they can and yes they are. We are seeing that as well.

Ronald Mittelstaedt: Yeah. Well, our peers are not alone. You know, the reality is that the utility infrastructure for the most part in the country is not quite as ready as perhaps the producers like us are ready. There is significant delays in them getting transmission lines and interconnects ready, and that is pushing projects out, you know, sometimes six to 12 months from expectation. We are also seeing some supply chain for transformers, generators, and other components that are needed be delayed, as well. Still very good visibility on the projects. Feel very comfortable with our $200 million by 2026. But can some projects move 3 to nine months? Yeah, they can and yes they are. We are seeing that as well.

Yes, well they are.

Our peers are not alone.

Speaker 1: transcript

Speaker 1: The reality is that the utility infrastructure, for the most part in the country, is not quite as ready as perhaps the producers, like us, are ready. There is significant delays in them getting transmission lines and interconnects ready.

The reality is is that.

The utility infrastructure for the most part in the country is not quite as ready as perhaps the producers like us already.

Ron Mittelstaedt: There is a significant delays in them getting transmission lines and interconnects ready. And that is pushing projects out, you know, sometimes six to 12 months from expectation. And we are also seeing some supply chain for transformers, generators and other components that are needed, be delayed as well. So still very good visibility on the projects feel very comfortable with our 200 million by 26. But can some projects move three to nine months?

There is a significant delays in them getting transmission lines and Interconnects ready.

Speaker 1: transcript

Speaker 1: and that is pushing projects out, you know, sometimes six to 12 months from expectation. And we are also seeing some supply chain for transformers, generators, and other components that are needed be delayed as well. So still very good visibility on the project.

And that is and that is pushing projects out.

Sometimes six to 12 months from expectation and we are also seeing some supply chain for transformers generators and other components that are needed be delayed.

As well so still very good visibility on the projects feel very comfortable with our $200 million by 'twenty six but can some projects moved three to nine months, yes. They can and yes. They are and we are seeing that as well.

Speaker 1: transcript

Speaker 1: feel very comfortable with our 200 million by 26, but can some projects move three to nine months? Yeah, they can and yes they are. And we are seeing that as well.

Ron Mittelstaedt: Yeah, they can and yes they are. And we are seeing that as well. And that's one of the reasons as we think about our preliminary thoughts for 24, the projects coming online, the three that we anticipate by early next year will be additive to anything we've talked about for 24. Right, that's wonderful.

Mary Anne Whitney: That's one of the reasons as we think about our preliminary thoughts for 2024, the projects coming online, the three that we anticipate by early next year, will be additive to anything we've talked about for 2024.

Speaker 2: transcript

Speaker 8: And that's one of the reasons, as we think about our preliminary thoughts for 24, the projects coming online, the 3 that we anticipate by early next year will be additive to anything. We've talked about to 20 for 24.

And that's one of the reasons as we think about our preliminary thoughts for 2000 and for the projects coming online. The three that we anticipate by early next year will be additive to anything we've talked about to 20% for 2012.

Jasper Bibb: Right. That's super helpful. Thanks for taking the questions.

Alright, that's super helpful. Thanks for taking the questions.

Operator: Thanks for taking the questions.

Ronald Mittelstaedt: Of course. Thank you.

Michael Hoffman: Of course, thank you. And the next question today comes from Michael Hoffman with Steve Full. Please go ahead.

Of course, thank you.

Operator: Our next question today comes from Michael Hoffman with Stifel. Please go ahead.

Speaker 3: transcript

Speaker 9: And the next question today comes from Michael Hoffman with Steve Foll. Please go ahead.

And our next question comes from Michael Hoffman with Stifel. Please go ahead.

Michael Hoffman: Hi. Good morning, Ron and Mary Anne.

Michael Hoffman: Hi, good morning, Ron Marianne. Just a 24. Am I in the right neighborhood if I go twice, six to eight volumes, negative two and a fuel search, R zero, M and A's two. And I get you to that sort of six to eight. Is that mid upper organ? Or a top line? That's the right way to think about it. You know, clearly what what we've said implies price plus volume, probably mid single digits, right, to get to the mid to high.

Speaker 8: transcript

Speaker 10: Hi, good morning, Ron Marianne. Just a 24. Am I in the right neighborhood if I go price 68, volume's negative two?

Hi, good morning, Ron Maryanne.

Ronald Mittelstaedt: Morning, Michael.

Michael Hoffman: touch on 2024. Am I in the right neighborhood if I go price 6 to 8, volumes -2, net fuel surcharge 0, M&As 2, and that gets you to that sort of 6 to 8, is that mid to upper organic top line? Is that the right way to think about it?

Michael Hoffman: touch on 2024. Am I in the right neighborhood if I go price six to eight, volumes -2, net fuel surcharge 0, M&As 2, and that gets you to that sort of six to eight, is that mid to upper organic top line? Is that the right way to think about it?

Morning, Mike.

24 am I in the right neighborhood, if I go price six date volumes negative too.

Speaker 8: transcript

Speaker 11: and fuel search R0 emanates too and I get you to that sort of

And our fuel surcharge zero emanates too and that gets you to that sort of <unk>.

Speaker 8: transcript

Speaker 12: is that mid-upper top line? Is that the right way to think about it?

David is that mid to upper organic.

Offline, but the right way to think about it.

Mary Anne Whitney: You know, clearly, you know, what we've said implies price plus volume, probably mid-single digits, right, to get to the mid to high. Now, it's, is it 6 minus 2? Is it 5 and 0? Is it 5.5? You know, there's moving pieces in there, but we expect volumes to continue to be negative, and price needing to be more than that to get to that mid-single digit range.

Mary Anne Whitney: You know, clearly, you know, what we've said implies price plus volume, probably mid-single digits, right, to get to the mid to high. Now, it's, is it 6 minus 2? Is it five and 0? Is it 5.5? You know, there's moving pieces in there, but we expect volumes to continue to be negative, and price needing to be more than that to get to that mid-single digit range.

Speaker 2: transcript

Speaker 13: You know, clearly, what we've said implies price plus volume probably mid single digits, right, to get to the mid to high. Now, it is at 6 minus 2, is it 5 and 0, is it 5 and have you know, there's moving pieces in there, but we expect volumes to continue to be negative.

Clearly, what we've said implies price plus volume probably mid single digits right to get to the mid to high now is it six minus two is it is it five zero is at $5.

Michael Hoffman: Now, is it six minus two is it is it five and zero? Is it five and have you know, there's there's moving pieces in there, but we expect volumes to continue to be negative. And price needed to be more than that to get to that mid single digit range. And Michael, the way I you know, I think you should think out of it again, probably price and that six to seven range volume in that negative one range up to negative two probably starts a little higher just as comp.

Theres moving pieces in there, but we expect volumes to continue to be negative and price needed to be more than that to get to that mid single digit range and Michael the way I.

Speaker 2: transcript

Speaker 14: And price needed to be more than that to get to that mid-single-digit range.

Ronald Mittelstaedt: Michael, the way I you know, I think you should think about it, again, probably price in that 6 to 7 range, volume in that -1 range, up to -2. Probably starts a little higher, just those comps, and then improves throughout the year. Again, we don't have quite as many acquisitions this year as we did coming out of 2022 into 2023, so there'll be less shedding. I think you get to the same math, but there's just a little nuance on it.

Ronald Mittelstaedt: Michael, the way I you know, I think you should think about it, again, probably price in that six to seven range, volume in that -1 range, up to -2. Probably starts a little higher, just those comps, and then improves throughout the year. Again, we don't have quite as many acquisitions this year as we did coming out of 2022 into 2023, so there'll be less shedding. I think you get to the same math, but there's just a little nuance on it.

Speaker 1: transcript

Speaker 15: I think you should think out of it again, probably price in that 6 to 7 range.

I think you should think of it again, probably price in that six to seven range.

Speaker 1: transcript

Speaker 16: volume in that negative one range up to negative two, probably starts a little higher just as comps and then improves throughout the year. Again, we don't have quite as many acquisitions this year as we did coming out of 22 into 23, so there'll be less shedding. So, I think you get to the same math, but there's just a little nuance on it.

Volume in that negative one range up to negative two probably starts a little higher just those comps and then improves throughout the year again, we don't have quite as many acquisitions. This year as we did coming out of 'twenty two into 'twenty three so there'll be less shedding. So I think you would get.

Michael Hoffman: And then improves throughout the year. Again, we don't have quite as many acquisitions this year as we did coming out of 22 into 23. So they'll be less shedding. So I think you get to the same math, but there's just a little nuance on it.

Mary Ann: Okay, that helps a lot.

To the same math, but theres, just a little nuance on it.

Michael Hoffman: Okay. That helps a lot. Mary Anne, can you tell us what your year-to-date average commodity basket and year-to-date average RIN price is? What is the current number, so we can kind of figure out how to roll that into next year?

Speaker 8: transcript

Speaker 17: Okay, that helps a lot. And then, Mary Ann, can you tell us what your year-to-date average commodity basket and year-to-date average rent prices?

Okay that helps a lot and then.

Mary Ann: And then Marianne, can you tell us what your year-to-date average commodity basket and year-to-date average rent prices. And then what is the current number so we can kind of figure out how to roll by it in the next year. Sure. So for OCC, we're trending for the full year to about $80 a ton. And that's using Q4 being a current rate, which are closer to $100, and then Rins for the full year trending to about $2.60, Assuming Q4 is close to $3.00.

Maryann can you tell us what your year to date average commodity basket and year to date average RIN prices and then.

Speaker 8: transcript

Speaker 18: what is the current number so we can kind of figure out how to roll that in.

What is the current number so we can kind of figure out how to roll that into next year.

Mary Anne Whitney: Sure. For OCC, we're trending for the full year to about $80 a ton, and that's using Q4 being at current rates, which are closer to $100. RINs for the full year are trending to about $2.60, assuming Q4 is closer to $3.

Speaker 2: transcript

Speaker 19: Sure, so for OCC, we're trending for the full year to about $80 a ton.

Sure so.

OCC, we're trending for the full year to about $80 a ton.

Speaker 2: transcript

Speaker 20: And that's using Q4 being a current rate which are closer to $100.

And Thats using Q4 being at current rates, which are closer to $100.

Speaker 2: transcript

Speaker 21: and then rinse for the full year, trending to about $2.60, assuming Q4 is close to $3.00.

And then <unk> for the full year trending to about $2 60, assuming Q4 is closer to $3.

Michael Hoffman: Okay. All right. That's very helpful. Then, Ron, you've talked about the 34%, getting the whole company back to 34%. Everything I've heard so far, there's nothing that backs you off of that target and somewhere in the, you know, 2025 time zone.

Okay.

Alright, that's very helpful and then.

Speaker 8: transcript

Speaker 22: Ron, you've talked about 34% getting the whole company back to 34%. Everything I've heard so far, there's nothing that backs you off of that target and we're in the 25, 20, 20...

Mary Ann: Okay, all right, that's very helpful. And then, Ron, you've talked about 34% getting the whole company back to 34%. Everything I've heard so far, there's nothing that backs you off of that target and we're in the, you know, 2025, 2020, 2025 time zone. That's correct. Yeah, I think, you know, and Michael, I have said that we will get there, I believe we will get there. Again, depending on, I've also said that is with sort of 21 level commodities.

Ron you've talked about the 34% getting getting the whole company back to 34%.

Everything I've heard so far.

Nothing that back to you off of that target and somewhere in the.

25, 2000, 22025 time zone.

Ronald Mittelstaedt: That's correct.

Michael Hoffman: Let me rephrase the question.

Speaker 1: transcript

Speaker 23: That's correct. Yeah, I think, you know, and Michael, I have said that we will get there, I believe we will get there. Again, depending on, I've also said that is with sort of 21 level commodities, okay? So with that caveat, but that is also without RNG.

Ronald Mittelstaedt: Yeah, I think, you know, and Michael, I have said that we will get there or believe we will get there. Again, depending on, I've also said that is with sorta 2021 level commodities, okay? With that caveat, but that is also without RNG.

That's correct.

Yes, I think.

Michael I have said that we will get there I believe we will get there.

Again, depending I have also said that is with sort of 'twenty one level commodities, okay. So with that caveat, but that is also without RMG.

Mary Ann: Okay, so with that caveat, but that is also without RNG. Right, which is all tailwind at this point, if we're staying in a $2 to $3 range. Are we, can you remind us what your 2021 commodity basket was? It was probably right at about, we give us one second and we can, we're looking for that information. So, we are going to be for the year, Mary Ann just said, we'll exit the year at a blended 80, Michael, we'll exit the year about. Yeah, 150 and 150. So the basket was just a little lower. The 2021 was 150, is that what you said? That's right.

Michael Hoffman: Right, which is all tailwind at this point if we're staying in a $2 to $3 range. Can you remind us what your 2021 commodity basket was?

Right, which is all tailwind at this point.

Two to $3 range.

Speaker 8: transcript

Speaker 24: Are we, what, can you remind us what your 2021 commodity basket was?

Are we.

Can you remind us what your 2021 commodity basketball.

Ronald Mittelstaedt: It was probably right at about. Well, give us one second and we can. We're looking for that information. We are gonna be for the year, Mary Anne just said we'll exit the year at a blended 80, Michael. We'll exit the year about

It was probably right at about what.

Speaker 1: transcript

Speaker 25: It was probably right at about, well, we give us one second and we can. We're looking for that information. So we are going to be for the year. Mary Ann just said, well, exit the year at a blended 80 Michael will exit the year about.

Give us one second and we can.

Looking for that information. So we are going to be for the year Maryann just said, we'll exit the year at a blended 80, Michael will exit the year about.

Mary Anne Whitney: OCC was $150 in 2021.

Speaker 1: transcript

Speaker 26: Yeah, it was 150 and 150, so the basket was just a little lower.

So yes, it was $1 50, and $1 50, so the basket was just a little lower.

Ronald Mittelstaedt: Yeah. $150, so the basket was just a little lower.

Michael Hoffman: 2021 was $150. Is that what you said?

For 2021 was 150 is that what you said.

Mary Anne Whitney: That's right.

Ronald Mittelstaedt: Yes.

Mary Anne Whitney: OCC average $150.

Speaker 8: transcript

Speaker 27: That's right. Yeah. So at least the average, 160. OK. All right. And the last one, I mean, I get it. Your experience on elevated temperatures is there is none.

That's correct, Yeah, obviously average months, okay alright.

Michael Hoffman: Okay. All right. the last one, yeah, I mean, I get it. Your experience on elevated temperatures is none, because it hasn't happened to you. You did mention that this has been something in the modern era of landfill design we've been dealing with. What's the engineering department saying about the long-term outlook here? Do you actually reverse the temperature, or you stabilize it, and therefore that's what you're trying to get your hands around to talk to us about in February?

Ron Mittelstaedt: And the last one, I mean, I get at your experience on elevated temperatures, there is none because it hasn't happened to you. If you did mention that this has been something in the modern era of landfill design we've been dealing with. What's the engineering department saying about the long-term outlook here? Do you actually reverse the temperature or you stabilize it? And therefore that's what you're trying to get your hands around to talk to us about in February?

And then last one.

Yeah, I mean I get it your experience on elevated temperatures as there is none because it hasn't happened to you.

Speaker 8: transcript

Speaker 28: You did mention that this has been something in the modern era of landfill design we've been dealing with.

Did mentioned that this has been something in the modern era of landfill design, we've been dealing with.

Speaker 8: transcript

Speaker 29: What's the engineering department saying about the long-term outlook here? Do you actually reverse the temperature or stabilize it? And therefore that's what you're trying to get your hands around to talk to us about in favor of.

So what's the engineering department, saying about.

The long term.

Look here does this do you actually reverse the temperature or stabilize it and therefore thats what youre trying to get your hands around to talk to us about in February.

Ronald Mittelstaedt: Yeah. No, Michael, you actually reverse the temperature. As you reverse the temperature, which is what we are doing, we've added significant number of wells in this, late in Q3 and so forth through Q4. We have added over 50 new wells to pump out leachate and gas and reverse the temperature. As the temperature reverses and cools, the reaction stops, and the generation of water stops. That is the resolution.

Speaker 1: transcript

Speaker 30: Yeah, Michael, you actually reverse the temperature. As you reverse the temperature, which is what we are doing, we've added significant number of wells in this late in the third quarter and so forth through the fourth quarter. We have added over 50 new wells.

Ron Mittelstaedt: Yeah, no, Michael, you actually reverse the temperature. As you reverse the temperature, which is what we are doing, we've added significant number of wells in this late in the third quarter and so forth through the fourth quarter. We have added over over 50 new wells to pump out leachate and gas and reverse the temperature as the temperature reverses and cools. The reaction stops and the generation of water stops. And that is the resolution.

Yes, no Michael you actually reverse the temperature as you reverse the temperature.

Which is what we're doing we've added significant number of wells in this.

Late in the third quarter and so far through the fourth quarter, we have added over over 50, new wells.

Speaker 1: transcript

Speaker 31: to pump out leachate and gas and reverse the temperature. As the temperature reverses and cools, the reaction stops and the generation of water stops.

To pump out leachate.

And gas and reverse the temperature as the temperature reverses and cools the reaction stops and the generation of water stops and that that is the resolution.

Michael Hoffman: When it comes down, the leachate management costs, which are, you know, running somewhere $0.10, $0.15 a gallon, so it's a big number.

Speaker 8: transcript

Speaker 32: And when it comes down, the Leach 8 Management costs which are running somewhere 10, 15 cents.

Michael Hoffman: When it comes down, the leachate management costs, which are, you know, running somewhere $0.10, $0.15 a gallon, so it's a big number.

Ron Mittelstaedt: And when it comes down, the leachate management costs, which are run in summer, 10, 15 cents a gallon, so it's a big number. Yeah, there are actually 38 cents a gallon in LA because we're trucking it all off to POTW because of the magnitude right now. We cannot recirculate when it comes down. There's a partial of that that we can recirculate during times of the year. But yes, it comes down dramatically, Michael.

When it comes down the leachate management costs, which are running somewhere 10 to 15 cents a gallon. So it's a big number.

Ronald Mittelstaedt: Yeah. They're actually $0.38 a gallon in LA, because we're trucking it all off to POTW. Because of the magnitude right now, we cannot recirculate. When it comes down, there's a portion of that we can recirculate during times of the year. Yes, it comes down dramatically, Michael.

Michael Hoffman: Okay, thank you very much.

Speaker 1: transcript

Yeah, they're actually 38 cents a gallon in LA because we're trucking it all off to POTW because of the magnitude right now. We cannot recirculate when it comes down. There's a partial that we can recirculate during times of the year. But yes, it comes down dramatically, Michael.

Yeah, they're actually 38 cents a gallon in la.

Matt because we're trucking it all off to a totw because of the magnitude right now we cannot recirculation.

When it comes down there is a partial to that that we can re circulate during times of the year, but yes. It comes down dramatically Michael Okay. Thank you very much.

Michael Hoffman: Okay. Thank you very much.

Operator: Our next question today comes from Bryan Burgmeier with Citi. Please go ahead.

Brian Berngrener: And our next question today comes from Brian Berngrener with City. Please go ahead. Good morning. Thank you for making the question. Ron, you may have alluded to this earlier on. I think I have a question, I'm sorry, but you know, three, two, even though it was essentially in line with your guidance, it's quite these kind of unexpected results, you know, the possibility to say what was maybe better than expected that allowed you to get back to your guys.

Speaker 7: transcript

And the next question today comes from Brian Berngrunner with City. Please go ahead. Good morning. Thank you for taking the question.

And our next question comes from Brian <unk> with <unk>.

Please go ahead.

Bryan Burgmeier: Good morning. Thank you for taking the question. Ron, you may have alluded to this earlier on, I think, Kevin's question, and sorry if I missed this, but you know, Q3 EBITDA was essentially in line with your guidance. Is it possible to say what was maybe better than expected that allowed you to get back to your guide?

Yeah.

Good morning, Thank you for taking the question.

Ron.

Earlier, I think Kevin's question.

Question I'm sorry.

Right.

Speaker 7: transcript

with you, even though it was essentially in lines with your guidance with both these kind of unexpected low-fill costs, you know, the

<unk> EBITDA was essentially in line with your guidance.

Kind of unexpected.

Possibly.

What was maybe better than expected that allowed you to get back to you guys.

Ronald Mittelstaedt: Is it possible to say what would be better? Is that what you said?

Brian Berngrener: Is it possible to say what would be better? Is that what you said? Yeah. Yeah, yeah, good, you know, 15 million and kind of all of a whole Bancroft in the corner, but you still kind of met your guy. What made you came in above your expectations that met it out to your guys?

Is it possible to say what would be better is that what you said.

Speaker 1: transcript

Is it possible to say what would be better? Is that what you said?

Bryan Burgmeier: Yeah. Yeah. If you had, you know, $15 million in kind of unexpected landfill costs in the quarter, but you still kind of met your guide, what maybe came in above your expectations that netted out to your guide?

Speaker 7: transcript

Yeah, yeah, good, you know, 15 million and kind of landfill costs in the order, but you're still kind of met your guide. What maybe came in above your expectations that

Yes, yes.

$15 million and kind of volatile.

Low cost quarter.

Still kind of met your guy.

<unk> came in above your expectations.

Got it.

Mary Anne Whitney: Sure. I'd say, you know, what we'd say is it's really the execution, the delivery in Q3. As I described, the margin expansion comes from lots of small improvements within the P&L. Within solid waste, we did a little better than expected. I'd say arguably we had a little assist from E&P Waste, which did step up sequentially in Q3. It was largely execution.

Got it.

Speaker 2: transcript

Sure, so I'd say, you know, what we say is it's really the execution, the delivery in Q3. And as I described, the margin extension comes from lots of small improvements within the P&L. And so within solid waste, we did a little better than expected. And then I'd say arguably we had a little assist for me in P-wates, which did step up sequentially. Thank you, three.

Sure.

Ron Mittelstaedt: Sure. So I'd say, you know, what we say is it's really the execution, the delivery in Q3. And as I described, the margin extension comes from lots of small improvements within the PNL. And so within solid waste, we did a little better than it could be. So it's very effective. And then I'd say arguably we had a little assist for me in P weights, which did step up sequentially. Largely execution and generally in P does step down some in Q4 Brian.

I'd say.

What we would say is it's really the execution the delivery in Q3 and as I described the margin expansion comes from lots of small improvements within the P&L.

And so within solid waste, we did a little better than expected and then I'd say arguably we had a little assist from E&P waste, which did step up sequentially in Q3 largely execution yes.

Ronald Mittelstaedt: Yeah. Generally, E&P does step down some in Q4, Bryan, so you know that might not be the same assist that it was in Q3. You know, you had a little assist from RINs elevating at the end. That, you know, right now appears to be holding, but we certainly can't project that to hold. And then you know, you have, as we said, special waste was a little better than we had projected. It was up in the quarter. You know, whether or not that comes through in Q4 'cause you start to get into the winter weather, you know, that is. Those are things we're not projecting, but, and some are weather dependent. Those are the kinds of things that could make that come through.

Speaker 1: transcript

And generally ENP does step down some in Q4, Brian . So that might not be the same assist that it was in Q3. You know, you had a little assist from RIMS elevating at the end. So that, you know, right now appears to be holding, but we certainly can't project that to hold.

Generally E&P does step down some in Q4.

Ron Mittelstaedt: So, you know, that might not be the same assist that it was in Q3. You know, you had a little assist from rims elevating at the end. So that, you know, right now appears to be holding, but we certainly can't project that to hold. And then, you know, you have, as we said, special waste was a little better than we projected. It was up in the quarter, you know, whether or not that comes through in the fourth quarter, because you start to get into the winter weather, you know, that is so those are things we're not projecting, but and some are weather dependent. Those are the kinds of things that could make that come through. Understood. Thanks for the detail.

Ryan so that might not be the same assist that it was in Q3.

You had a little assist from rens elevating at the end.

So that Ah right now appears to be holding but we certainly can't project that too old.

Speaker 1: transcript

And then you have, as we said, special waste was a little better than we projected. It was up in the quarter, whether or not that comes through in the fourth quarter because you start to get into the winter weather. So those are things we're not projecting, but and some are weather dependent. Those are the kinds of things that could make that come through.

And then you have as.

As we said special waste was a little better than we had projected it was up in the in the quarter, whether or not that comes through in the fourth quarter, because you start to get into the winter weather that so those are things, we're not projecting but and some are weather dependent those are the kinds of things that could.

Make that come through.

Bryan Burgmeier: Understood. Thanks for the detail. Last question from me. I'm just wondering if you can provide an update on truck orders. You know, the data and some of the comments from your peers seems pretty positive. You know, do you have a sense for maybe what percent of your 2023 orders are going to come in or have come in this year? And as we start to look out to 2024, does it seem like backlogs are maybe shrinking or expanding?

Understood. Thanks for the detail.

Speaker 7: transcript

Understood. Thanks for the details and last question to me. I'm just wondering if you think provide an update.

Brian Berngrener: And last question to me, I'm just wondering if you think provide an update truck order, some of the data, some of the comments from your peers seems pretty positive. Do you have a center? Maybe what percent of your 23 orders are going to come in this year? And if you start to look out the 24, it seems like backlogs are going to be shrinking or expanding. Yeah, you know, our experience is a little bit different than at least our large public peer.

Last question for me just wondering if you can provide an update.

Speaker 7: transcript

truck orders, the data, some of the comments from your peers seems pretty positive. Do you have a sense for maybe what percent of your 23 orders are going to?

Quarter to date comments from your peers seems pretty positive.

For.

Maybe what percent of your 'twenty three.

We're going to come in.

Speaker 7: transcript

and this year, and if you start to look out the point forward, and it's being like backlogs are going to be a trend.

This year and you start to look out to 'twenty four.

Logs or may be shrinking.

Shrinking or expanding.

Ronald Mittelstaedt: Yeah. You know, our experience is a little bit different than at least our large public peer. That may be due to their buying power 'cause of their size. You know, we are being told and we are planning that we'll get somewhere in the high 80s to almost 90% of our chassis and bodies, therefore the full units delivered this year. We expect somewhere in that 10 to 12% to push or roll into 2024. By the way, that is a little less than what rolled into 2023 from 2022. In that way, it has improved. The manufacturers, particularly on the body side, not the chassis side. The chassis side we can get right now, which is opposite of last year.

Brian Berngrener: That may be due to their buying power because of their size, but, you know, we experience, we are being told and we are planning that we'll get somewhere in the high 80s to almost 90% of our chassis and bodies. Therefore, the full units delivered this year, we expect somewhere in that 10 to 12% to push or roll into 24. By the way, that is a little less than what rolled into 23 from 22.

Speaker 1: transcript

Yeah, you know, our experience is a little bit different than at least our large public peer. That may be due to their buying power because of their size.

Yeah.

Our experience is a little bit different than at least our large public peer that may be due to their buying power because of their size, but.

Speaker 1: transcript

But, you know, we experience, we are being told, and we are planning that we'll get somewhere in the high 80s to almost 90% of our chassis and bodies, therefore the full units delivered this year. We expect somewhere in that 10 to 12% to push or roll into 24. By the way, that is a little less than what rolled into 23 from 22, so in that way it has improved.

We experienced a we're being told.

And we are planning that will get somewhere in the high eighty's to almost 90% of our chassis and bodies. Therefore, the full units delivered this year, we expect somewhere in that 10% to 12% to push or roll into 'twenty four.

By the way that is a little less than what rolled into 'twenty three from 'twenty. Two so in that way it has improved but the manufacturers, particularly on the body side not the chassis side. The chassis side, we can get right now which is opposite of last year, but the manufacturers on the body side are still <unk>.

Brian Berngrener: So in that way, it has improved, but the manufacturers, particularly on the body side, not the chassis side, the chassis side we can get right now, which is opposite of last year. But the manufacturers on the body side are still saying there should be some delays through 24 and it would be normalized in early to mid 25. Say. Got it, thanks a lot, I'll turn it over.

Speaker 9: transcript

But the manufacturers, particularly on the body side, not the chassis side, the chassis side we can get right now, which is opposite of last year, but the manufacturers on the body side are still saying there should be some delays through 24, and it would be normalized in early to mid 25. That that is what we're hearing and experiencing.

Ronald Mittelstaedt: The manufacturers on the body side are still saying there should be some delays through 2024, and it would be normalized in early to mid-2025. That is what we're hearing and experiencing.

There should be some delays through 'twenty four and it would be normalized in early to mid 'twenty five that that is what we're hearing and experiencing.

Bryan Burgmeier: Got it. Thanks a lot. I'll turn it over.

Got it thanks, a lot I'll turn it over.

Operator: Our next question today comes from Tyler Brown at Raymond James. Please go ahead.

Speaker 3: transcript

And our next question today comes from Tyler Brown and Raymond James. Please go ahead.

Tyler Brown: And our question for a comes from Tyler Brown and Raymond James, please go ahead. Hey, good morning. I'd more than Tyler. Hey, Ron, so I want to come back to turnover. So I think you guys gave some great statistics in the ESG report. You talked about voluntary turnover. I think in 22 correct me if I'm wrong, but it was circa 21%. You mentioned that here in recent quarters you have improved, but can you tell us where that number is today?

And our next question today comes from Tyler Brown of Raymond James. Please go ahead.

Tyler Brown: Hey, good morning.

Tyler Brown: I think you said it was down 20%. So is it basically already back down to that mid to high teams, kind of where we were pre-COVID? Yeah, to 17 for right now. Okay, and so the whole idea here is that leads, but the benefits are a bit lag. So that's what's really going to help us in 24 likely off into 25. Yeah, that's right. You know, our objective is to continue to drive that voluntary down further.

Ronald Mittelstaedt: Hi. Good morning, Tyler.

Good morning.

Speaker 10: transcript

Hi, Marty Tyler. Hey, Ron. So I want to come back to turnover. So I think you guys gave some great statistics in the report. You talked about voluntary turnover, I think in 22 correct me if I'm wrong, but it was circa 21%. You mentioned that here in recent quarters, you have improved, but can you tell us where that number is today? I think you said it was down 20%. So is it basically. Already back down to that mid to high teams kind of where we were pre coven. Yeah, it's a 17.

Tyler Brown: Hey, Ron. I wanna come back to turnover. I think you guys gave some great statistics in the ESG report. You talked about voluntary turnover. I think in 2022, correct me if I'm wrong, but it was circa 21%. You mentioned that here in recent quarters you have improved, but can you tell us where that number is today? I think you said it was down 20%. Is it basically already back down to that mid to high teens, kind of where we were pre-COVID?

Hi, Good morning, Tyler Hey, Ron So I want to come back to turnover. So I think you guys gave some great statistics in the ESG report you talked about voluntary turnover I think in 'twenty two correct me, if I'm wrong, but it was circa 21% you mentioned that here in recent quarters, you have improved but can you tell us where that.

Tyler Brown: You know, our involuntary meaning us making a proactive decision will run higher for a little while, because we accepted, you know, employees that were probably a little more marginal than we would have otherwise. And maybe a little more risk. And so as voluntary comes down, we'll be more active on the involuntary. And then that will fall too as we restaff with a little bit more of a higher caliber employee in those. So that's how that will flow.

Ron Mittelstaedt: Okay, perfect.

Number is today I think you said it was down 20%. So is it basically already back down to that mid to high teens kind of where we were pre COVID-19.

Ronald Mittelstaedt: Yes, it's 17.4 right now.

<unk> 17 for right now.

Tyler Brown: Okay. The whole idea here is that leads, but the benefits are a bit lagged. That's what's really gonna help us in 2024 and likely off into 2025.

Okay, and so the whole idea here is that leads but the benefits are a bit lag. So that's what's really going to help us in 'twenty, four and likely off into 'twenty five.

Speaker 10: transcript

Okay, and so the whole idea here is that leads, but the benefits are a bit lagged. So that's what's really gonna help us in 24 and likely off into 25.

Ronald Mittelstaedt: Yeah, that's right. You know, our objective is to continue to drive that voluntary down further. You know, our involuntary, meaning us making a proactive decision, will run higher for a little while because we accepted, you know, employees that were probably a little more marginal than we would have otherwise and maybe a little more risk. As voluntary comes down, we'll be more active on the involuntary, and then that will fall too as we restaff with a little bit more of a higher caliber employee in those. So that's how that will flow.

Speaker 1: transcript

Yeah, that's right. Our objective is to continue to drive that voluntary down further. Our involuntary, meaning us making a proactive decision.

Yes, that's right.

Our objective is to continue to drive that voluntary down further.

Our involuntary, meaning us, making a proactive decision will run higher for a little while because we accepted.

Speaker 1: transcript

will run higher for a little while because we accepted employees that were probably a little more marginal than we would have otherwise and maybe a little more risk. And so as voluntary comes down, we'll be more active on the involuntary and then that will fall too as we restaff with a little bit more of a higher caliber employee in those. So that's how that will flow.

Employees that we're probably a little more marginal than we would have otherwise and maybe a little more risk and so as voluntary comes down we'll be more active on the involuntary and then that will fall to us.

As we re staff with.

A little bit more of a higher caliber employee in those so that's how that will flow, okay, perfect and I wanted to kind of come at the landfill developments here a little bit different way.

Tyler Brown: Okay, perfect. I wanna kinda come at the landfill developments here a little bit different way. Typically, how long would it take to rectify a slope failure? And typically, how long does it take to remediate one of these elevated temperature events? I mean, I appreciate maybe if you're somewhat new to some of it, but I think I heard you said that the slope event maybe is a 1- to 2-quarter issue, but the temperature remediation could definitely take longer since it's, you know-

Tyler Brown: Okay, perfect. I wanna kinda come at the landfill developments here a little bit different way. Typically, how long would it take to rectify a slope failure? And typically, how long does it take to remediate one of these elevated temperature events? I mean, I appreciate maybe if you're somewhat new to some of it, but I think I heard you said that the slope event maybe is a one- to two-quarter issue, but the temperature remediation could definitely take longer since it's, you know-

Speaker 10: transcript

I want to come at the landfill developments here a little bit different way. Typically, how long would it take to rectify a slope failure? Typically, how long does it take to remediate one of these elevated temperature events? I mean, I appreciate maybe if you're somewhat new to some of it. But I think I heard you said that the slope event maybe is a one to two-quarter issue, but the temperature remediation could definitely take longer since it's in the land.

Ron Mittelstaedt: And I want to kind of come at the wind, so development's here a little bit different way. So typically, how long would it take to rectify a slope failure and typically how long does it take to remediate one of these elevated temperature events? I mean, I appreciate maybe if you're somewhat new to some of it, but I think I heard you said that the slope event maybe is a one to two quarter issue, but the temperature remediation could definitely take longer.

So typically how long would it take to rectify and slope failure.

Typically how long does it take to remediate one of these elevated temperature events I mean, I appreciate maybe if you're somewhat new to some of it but I think I heard you said that the slope of that maybe is a one to two quarter issue, but the temperature remediation.

Could definitely take longer since its.

Ronald Mittelstaedt: Yeah.

Tyler Brown: affecting the landfill. Is that right?

Ronald Mittelstaedt: Yeah. We'll try to provide you as much clarity as we have and our experience. The slope event, we will have remediated in the quarter, so that will be a under 90-day. When I say remediating solved, we will have the landfill reopened and the slope stabilized and begin backfilling into a new area. In that way, the event will be contained within the quarter. There will still be waste we have to relocate in the Q1 of next year, but that's not really anything you would see. That's just sort of using lateral airspace, and then we will go up later. That one's relatively simplistic to do. This was not a large failure. There was no equipment, no personnel, no anything involved.

Yes in Atlanta.

Ron Mittelstaedt: So yeah, we'll try to try to provide you as much clarity as we have and our experience. So the slope event, we will have remediated in the quarter. So that will be an under 90 day, and when I say remediating salt, we will have the landfill reopen and the slope stabilise and begin back filling into a new area. So in that way, the event will be contained within the quarter. There will still be waste, we have to relocate in the first quarter of next year, but that's not really anything you would see.

Yeah, we'll try to try to provide you as much clarity as we have and our experience so so the slope of it. We will have remediated in the quarter. So that will be a under 90 day. And when I say remediate.

Yes, we will try to try to provide you as much clarity as we have and our experience. So so the slope event.

We will have remediated in the quarter, so that will be a under 90 day and when I say remediate remaining salt, we will have the landfill reopened and the slope stabilized and began back filling into a new area. So in that way the event will be contained within.

Speaker 1: transcript

Remediting salt we will have the landfill reopen and the slope Stabilize and begin backfilling into a new area So in that way the event will be contained within the quarter There will still be waste we have to relocate in the first quarter of next year But that that's not really anything you would see That's just sort of using lateral airspace and then we will go up later So that one's relatively simplistic to do and this was not a large failure. There was no equipment, no personnel, no anything involved This was really a side slope failure with waste moving laterally some

In the quarter, there will still be waste, we have to relocate in the first quarter of next year, but that's not really anything you would see.

Ron Mittelstaedt: That's just sort of using lateral airspace, and then we will go up later. So that one's relatively simplistic to do, and this was not a large failure. There was no no equipment, no personnel, no anything involved. This was this was a really a side slope failure with ways moving laterally some. It would just happen to be near our road, which is one of the reasons we close the site on a temporary basis.

That's just sort of using lateral aerospace and then we will go up later, so that one's relatively simplistic to do.

And this was not a large failure there was no no equipment no personnel know anything involved. This was this was really a side slope failure with waste moving laterally sub.

Ronald Mittelstaedt: This was you know really a side slope failure with waste moving laterally some. It just happened to be near our road, which is one of the reasons we closed the site on a temporary basis. The elevated temperature event is a little bit harder to predict right now, Tyler, but here's what I will tell you. We've been monitoring this since March or April of this year as temperatures were rising. We really didn't start seeing any significant generation of additional leachate or odors until really August is when that occurred. So now as we sit here at almost the end of October, we believe that we're just probably about a month away from being at the fulcrum point and starting to come down in some of the certainly at least the odor component.

Speaker 9: transcript

It just happened to be near our road, which is one of the reasons we closed the site on a temporary basis.

Just happened to be near our road, which is one of the reasons, we closed the site on a temporary basis.

Speaker 9: transcript

The elevated temperature event is a little bit harder to predict right now, but here's what I will tell you. We've been monitoring this since March or April of this year as temperatures were rising. We really didn't start seeing any significant generation of additional lead shade or odors until really, really August is when that occurs.

Okay elevated the elevated temperature event is a little bit harder to.

Ron Mittelstaedt: The elevated temperature event is a little bit harder to predict right now, but here's what I will tell you. We've been monitoring this since March or April of this year as temperatures rising. We really didn't start seeing any significant generation of additional leachate or odors until really really August is when that occurred. And so now as we sit here at almost the end of October, we believe that we're just probably about a month away from being at the full component and starting to come down.

Predict right now Tyler, but here's what I will tell you.

We've been monitoring this since March or April of this year as temperatures were rising we really didn't start seeing any significant generation of additional leachate or odors until really really August is when that occurred and so now as we sit here.

Speaker 9: transcript

And so now as we sit here at almost the end of October , we believe that we're just probably about a month away from being at the full-crumpoint and starting to come down in some of the, they certainly at least the odor component, the leachate generation will go on for a while. But I think we'll have a lot better, we will have a lot better clarity in February . You know, these events, these reactions can go on for some period of time. So sort of think of it as, you know,

At almost the end of October we believe that we're just probably about a month away from being at the fulcrum point and starting to come down in some of the.

Ron Mittelstaedt: In some of the certainly at least the odor component, the leachate will generation will go on for a while, but I think we'll have a lot better. We will have a lot better clarity in February, you know, these events, these reactions can go on for some period of time. Sort of think of it as, you know, it's going to go on and it takes time for the temperature to come down as it comes down.

But certainly at least the odor component the leachate will generation will go on for a while but I think we will have a lot better we will have a lot better clarity in February.

Ronald Mittelstaedt: The leachate generation will go on for a while. I think we will have a lot better clarity in February. You know, these events, these reactions can go on for some period of time. Sort of think of it as, you know, it's gonna go on. It takes time for the temperature to come down. As it comes down, the leachate generation comes down. As it comes down, the odor comes down, and it just sorta continues to diminish until it stops. It's a matter of getting both the leachate and the methane out to slow the reaction fully, 'cause it's an organic reaction. But it should, you know, sort of peak at some point, we believe, here in the first quarter or early next year.

These events. These reactions can go on for some period of time.

Ron Mittelstaedt: Leachate generation comes down as it comes down, the odor comes down and it just sort of continues to diminish until it stops. So it's a matter of getting both the leachate and the methane out to slow the reaction fully, because it's an organic reaction. But it should, you know, sort of peak at some point we believe here in the first quarter or early next year.

Sort of think of it as you know.

Speaker 9: transcript

It's going to go on and take time for the temperature to come down as it comes down. The leachate generation comes down as it comes down. The odor comes down and it just sort of continues to diminish until it stops.

It's going to go on it takes time for the temperature to come down as it comes down the leachate generation comes down as it comes down the odor comes down and it just sort of continues to diminish until it stops. So it's a matter of getting both the leachate and the methane out.

Mary Ann: Okay, perfect.

Speaker 9: transcript

So it's a matter of getting both the leachate and the methane out to slow the reaction fully because it's an organic reaction.

Too slow the reaction fully because it's an organic reaction so.

Speaker 9: transcript

But but it should, you know, sort of peak at some point, we believe here in the first quarter or early next year.

But it should sort of peak at some point, we believe here in the first quarter or early next year.

Tyler Brown: Okay, perfect. Mary Anne, a couple modeling questions. I may have missed it, but what was the average commodity price in Q3?

Speaker 10: transcript

And then Mary and a couple of modeling questions. So I may have missed it, but what was the average commodity price in Q3?

Okay, perfect and then Maryann a couple modeling questions. So I may have missed it but what was the average commodity price in Q3.

Mary Ann: And then Mary and a couple of modeling questions, so I may have missed it, but what was the average commodity price in Q3? So, Q3 OCC average was $88. Perfect. And then I appreciate the margin walk, but was emanate diluted? I would have thought that arrowhead would be diluted, just given all the transportation revenue flowing there. So, emanate was not diluted. It was came in in line in the aggregate. And the aggregate, yeah, there's a nominal dilution, you are correct on the margin for arrowhead because of the transportation at this point, as we march forward, that will reverse. Okay, so we should expect some dilution. I would tell you, de minima, say, you know, if it's 10 bits, that, you know, that's probably a fair number. Okay, perfect.

Mary Anne Whitney: Q3 OCC average was $88.

Speaker 2: transcript

So Q3 OCC average.

So Q3 OCC average was.

$88.

Tyler Brown: 88. Perfect. I appreciate the margin walk, but was M&A dilutive? I would have thought that Arrowhead would be dilutive, just given all the transportation revenue flowing there.

Speaker 10: transcript

Perfect. And then I appreciate the margin walk, but was M&A dilutive? I would have thought that Arrowhead would be dilutive just given all the transportation revenue flowing there.

Perfect and then I appreciate the margin walk was emanated dilutive I would've thought that arrowhead would be dilutive just given all the transportation revenue flowing there.

Ronald Mittelstaedt: Yes.

Mary Anne Whitney: No. No. M&A was not dilutive. It came in line in the aggregate.

Speaker 9: transcript

Yeah, so M&A was not diluted. It was came in in line in the aggregate. In the aggregate? Yeah, there's a nominal dilution. You are correct on the margin for arrowhead because of the transportation at this point as we march forward that will reverse.

So M&A was not dilutive came in in line in the aggregate and the aggregate, yes, there was a nominal dilution.

Ronald Mittelstaedt: In the aggregate, yeah. There's a nominal dilution. You are correct on the margin for Arrowhead because of the transportation at this point. As we march forward, that will reverse.

You're correct on the margin for Arrowhead because of the transportation.

This point.

As we March forward that will reverse.

Tyler Brown: Okay. We should expect some dilution.

Okay. So we should expect some dilution.

Ronald Mittelstaedt: I would tell you de minimis.

Speaker 10: transcript

I would tell you, de minimise, say, you know, if it's 10 BIPs, that, you know, that's probably a fair number. Okay. Perfect. And then what is the revenue contribution in Q4 from M&A, if I could? 50 million dollars.

I would tell you de minimis.

Mary Anne Whitney: Yes.

Ronald Mittelstaedt: You know, if it's 10 bps, that, you know, that's probably a fair number.

It's 10 bps that that's probably a fair number okay.

Mary Anne Whitney: Yeah.

Tyler Brown: Okay, perfect. What is the revenue contribution in Q4 from M&A, if I could?

Okay Perfect and then what is the revenue contribution in Q4 from M&A if I could.

Tyler Brown: And then what is the revenue contribution in Q4 from M&A, if I could? $50 million. Perfect. Okay, thank you guys so much. Thanks Tyler. Thank you.

Mary Anne Whitney: $50 million.

$50 million.

Tyler Brown: Perfect. Okay. Thank you guys so much.

Okay. Okay. Thank you guys so much.

Ronald Mittelstaedt: Sure. Thanks, Tyler.

Speaker 11: transcript

Thank you. And our next question today comes from Nook with Oppenheimer. Please go ahead. Hey, good morning. Thanks for taking the questions. So I'm asking to help clarify this by investors. So I just want to make sure we're all clear. Please, can you clarify that the outlook for 24 is based off of the current FY23 guidance which does not include the 20 million potential impact for 4K? That's correct. That's consistent.

Thanks Tyler.

Operator: Thank you. Our next question today comes from Noah Kaye with Oppenheimer. Please go ahead.

Thank you and our next question today comes from Noah Kaye with Oppenheimer. Please go ahead.

Noah Kaye: And our next question today comes from NOAAK with Oppenheimer. Please go ahead. Hey, good morning. Thanks for taking the questions. So I'm asking to help clarify this by investors. So I just want to make sure we're all clear.

Noah Kaye: Hey, good morning. Thanks for taking the questions. So I'm asking to help clarify this for investors, so I just wanna make sure we're all clear. Please, can you clarify that the outlook for 2024 is based off of the current FY 2023 guidance, which does not include the $20 million potential impact for Q4?

Hey, good morning, Thanks for taking the questions.

So I'm asking to help clarify this by investors. So I just want to make sure. We're all clear. Please can you clarify that the outlook for 'twenty. Four is based off of the current FY 'twenty <unk> guidance, which does not include the $20 million potential impact for <unk>.

Mary Ann: Can you clarify that the outlook for 24 is based off of the current FY23 guidance, which does not include the 20 million potential impact for 4Q? That's correct. That's consistent with the way we've approached it. Yes. All right, appreciate that. Maybe if you can put some color around the RNG capital outlays, you said 125 to 150 million for 24. You would call that previously a total CAPEX spend of 200 million through 26.

Mary Anne Whitney: That's correct. That's consistent with the way we've approached it, yes.

That's correct, that's consistent with the way we've approached it yet.

Noah Kaye: All right. Appreciate that. Maybe if you can put some color around the RNG capital outlays. You know, you said $125 to 150 million for 2024. You had called out previously a total CapEx spend of $200 million through 2026. A, making sure there's no change there in the total expected spend. B, remind us what you're tracking to spend in 2023, and then maybe confirming the implication that you expect to be most of the way through that spending program exiting next year.

Speaker 11: transcript

Alright, appreciate that. Maybe if you can put some color around the RNG capital outlays, you said 125 to 150 million for 24, you would call that previously a total cap expend of 200 million through 26. So, A, making sure there's no change there in the total expected spend.

Alright, I appreciate that.

Maybe if you can put some.

Color.

Around the Orange capital Outlays, you said $125 million to $150 million for 2004.

You had called out previously a total capex spend of $200 million through 2006. So.

Mary Ann: So A, making sure there's no change there in the total expected spend. B, remind us what you're tracking to spend in 2023. And then maybe confirming the implication that you expect to be most of the way through that spending program makes hitting next year.

Making sure there's no change there and the total expected spend.

Speaker 11: transcript

B, remind us what you're tracking to spend in 2023, and then maybe confirming the implication that you expect to be most of the way through that spending program exiting next year.

Ron Mittelstaedt: Sure. So for 23, maybe 35 or 40 million is the way to think about the spend. And so that tells you the vast majority that is next year in 24. All right, excellent.

B remind us what youre tracking to spend in 2023.

And then maybe confirming the implication that you expect to be most of the way through that spending program exiting next year.

Mary Anne Whitney: Sure. For 2023, maybe $35 or 40 million is the way to think about the spend. That tells you the vast majority of it is next year in 2024.

Sure. So for 'twenty, three maybe 35 or $40 million is the way to think about the spend.

Speaker 2: transcript

Sure, so for 23, maybe 35 or 40 million is the way to think about the spend. And so that tells you the vast majority that is next year.

And so that tells you the vast majority of it is next year in 'twenty four.

Noah Kaye: All right. Excellent. Last question. We've gotten this from folks that the volumes associated with shedding seem higher relative to the level of M&A than perhaps, you know, if you look back four or five years in the past. Wondering if that is a function of just a lot of the legacy contracts in these acquisitions you're doing recently being underpriced for the inflationary environment. Is there something else we should read into? Then really, I guess the question is, at what point in the future would you expect the shedding associated with some of this M&A to start to abate?

Alright excellent.

Speaker 11: transcript

All right, excellent. Last question. We've gotten this from folks that the volumes associated with shedding seem higher relative to the level of M&A than perhaps, you know, if you look back four or five years in the past. And wondering if that is a function of just a lot of the legacy contracts and these acquisitions you're doing recently being underpriced for the inflationary environment. Is there something else we should read into? And then, really, I guess the question is...

Ron Mittelstaedt: Last question, we've gotten this from folks that the volumes associated with shedding seem higher relative to the level of M&A than perhaps, you know, if you look back four or five years in the past. And wondering if that is a function of just a lot of the legacy contracts and these acquisitions you're doing recently being underpriced for the inflationary environment. And is there is there something else we should read into and then really I guess the question is at what point in the future would you expect the shedding associated with some of this M&A to start to abate?

Last question.

We've gotten this from folks that the volumes associated with shedding seem higher relative to the level of M&A than perhaps.

If you look back four or five years in the past and wondering if that is a function of just a lot of the legacy contracts and these acquisitions Youre doing recently being under priced for the inflationary environment is there is there something else we should read into and then really I guess the question is.

Speaker 11: transcript

At what point in the future would you expect the shedding associated with some of this M&A to start to obey?

At what point in the future would you expect the shedding associated with some of this M&A to start to abate.

Ronald Mittelstaedt: Yeah. Well, first off, Noah, when you're doing M&A, there's always going to be some level of shedding. So, because when you're acquiring a private company that's, I'm just gonna use, it's got $40 million of revenue, they probably have somewhere between $4 million and $8 million that is gonna come up in a 1 to 3-year period that you're probably gonna bid to lose or keep at a margin that you want. So, you know, you start doing $200, $400, $500 million, as we've done per year over the last several years, 2021, 2022 especially, a fairly large year already this year. You know, that's gonna. You're gonna have some of that for a period of time. You know, we are still, believe it or not, right-sizing Progressive.

Speaker 1: transcript

Yeah, well, first off, Noah, the...

Ron Mittelstaedt: Yeah, well, first off, no of the When you're doing M&A, there's always going to be some level of shedding. Because when you're acquiring a private company that I've just going to use, it's got 40 million of revenue, they probably have somewhere between 4 and 8 million, that is going to come up in a 1-3-year period that you're probably going to bid to lose or keep at a margin that you want. So you start doing 200-500 million as we've done per year over the last several years, 21-22 especially a fairly large year already this year, you're going to have some of that for a period of time.

Yes, well first off.

The.

When you're doing M&A, there's always going to be some level of shedding so.

Speaker 9: transcript

When you're doing M&A, there's always going to be some level of shedding. So because when you're acquiring a private company that I've just going to use it's got 40 million of revenue, they probably have somewhere between four and eight million that is going to come up in a one to three year period that you're probably going to bid to lose or keep at a margin that you want.

Because when you're when you're acquiring a private company that I'm, just going to use as Scott $40 million of revenue that probably have somewhere between four and $8 million that is going to come up in a one to three year period that youre, probably going to bid to lose or keep out of margin that you want.

Speaker 9: transcript

So you start doing two, four, 500 million, as we've done per year over the last several years, 21, 22, especially a fairly large year already this year, that's gonna, you're gonna have some of that for a period of time. We are still, believe it or not, we are still right sizing progressive. We acquired that.

So you start doing.

You start doing two for 500 million as we've done per year over the last several years 'twenty one 'twenty two specially.

Fairly large year already this year that's gone.

Youre going to have some of that for a period of time.

Ron Mittelstaedt: We are still, believe it or not, we are still right-sizing progressive. We acquired that in 16. Several of the larger contracts that we have lost in 23 came out of progressive in both Canada and Florida. They were 10-year agreements that we lived with till expiration and we bid them to either keep them and make money or happily walk away. Obviously, we've done that, I would tell you, that type of shedding is effectively probably done from that footprint.

We are still believe it or not we are still right sizing progressive way.

Ronald Mittelstaedt: We acquired that in 2016. Several of the larger contracts that we have lost in 2023 came out of Progressive in both Canada and Florida. They were 10-year agreements that we lived with till expiration, and we bid them to either keep them and make money or happily walk away. You know, obviously we've only done one Progressive over time. That is, you know, that I would tell you that type of shedding is effectively probably done from that footprint. There's gonna be some. You know, we think of the negative volume as probably, you know, roughly about 0.75 to 1 point related to shedding and about up to 1 point, maybe a little less for a conscious price-volume trade-off in competitive commercial markets. I mean, that's the way we think of that.

We acquired that in 16.

Speaker 9: transcript

Several of the larger contracts that we have lost in 23 came out of progressive in both Canada and Florida. And there were 10 year agreements that we lived with till expiration and we bid them to either keep them and make money or happily walk away.

Several of the larger contracts that we have lost in 'twenty three.

Came out of progressive in both Canada, and Florida, and where they were 10 year agreements that we lived with Tel exploration and we bid them to either keep them and make money or happily walk away.

Speaker 9: transcript

And so, you know, obviously we've only done one progressive over time. So, and that is, you know, I would tell you that type of shedding is effectively probably done from that footprint.

So.

Obviously, we've only done one progressive over time, so and that is that I would tell you that type of shedding is effectively probably done from that that footprint, but there's going to be some.

Speaker 9: transcript

But there's gonna be some, you know, we think of the negative volume as probably roughly about three quarters to a point related to shedding and about up to a point, maybe a little less for a conscious price volume trade off in competitive commercial markets.

Ron Mittelstaedt: But there's going to be some, we think of the negative volume as probably roughly about three quarters to a point related to shedding and about up to a point, maybe a little less for a conscious price volume trade-off in competitive commercial markets. That's the way we think of that. Obviously, we have comfortably led the entire sector in 22 in price, comfortably led it again in 23 in price. We are happy to take that price volume trade-off as I think you're seeing it show up in the pace of the margin acceleration.

We think of the negative volume as probably roughly about three quarters to a point related to shedding and about up to a point, maybe a little less for a conscious price volume trade off in competitive commercial market I mean, thats the way, we think of that and obviously.

Speaker 9: transcript

That's the way we think of that. And obviously, we have comfortably led the entire sector in 2022 in price, comfortably led it again in 23 in price. And we're happy to take that price volume trade off as I think you're seeing it show up in the pace of the margin acceleration.

Ronald Mittelstaedt: Obviously, you know, we have comfortably led the entire sector in 2022 in price, comfortably led it again in 2023 in price. We're happy to take that price-volume trade-off as I think you're seeing it show up in the pace of the margin acceleration.

Ali we have comfortably led the entire sector in 'twenty, two and prize comfortably led it again in 'twenty three in price.

And we are happy to take that price volume trade off as I think you're seeing it show up in the pace of the margin acceleration.

Mary Anne Whitney: No, the other observation I would make, and offer is that, if the observation is, hey, it looks like there's more shedding with these recent acquisitions. I'd say, no, we don't see a material difference. I think what's different is that the underlying economy isn't generating more volumes, and so it's more pronounced for ourselves and others in the industry. I think it's always going on, but there's generally a base of positive volume to offset it.

Speaker 2: transcript

No, the other observation I would make an offer is that if the observation is, hey, it looks like there's more shedding with these recent acquisitions. I'd say, no, we don't see a material difference. I think what's different is that the underlying economy isn't generating more volumes, and so it's more pronounced for ourselves and others in the industry. And so I think it's always going on, but there's generally a base of positive volume to offset it.

Ron Mittelstaedt: No, the other observation I would make and offer is that if the observation is, hey, it looks like there's more shedding with these recent acquisitions. I'd say, no, we don't see a material difference. I think what's different is that the underlying economy isn't generating more volumes and so it's more pronounced for ourselves and others in the industry. And so I think it's always going on, but there's generally a base of positive volume to offset it. Yep, that's great context. Thank you, Bill.

The other observation I would make an offer is that if the observation is hey, it looks like theres more shedding with these recent acquisitions I would say no. We don't see a material difference I think what's different is that the underlying economy isn't generating more volumes and so it is more pronounced for ourselves and others in the industry.

Jerry Roberts: Thank you.

And so I think it's always going on but there's generally a base a positive volume to offset it.

Bryan Burgmeier: Yep, that's great context. Thank you both.

Yeah, that's great context, Thank you bill.

Operator: Thank you. Our next question today comes from Jerry Revich with Goldman Sachs. Please go ahead.

Speaker 3: transcript

Thank you. And our next question today comes from Jerry Revitch with Goldman Sachs. Please go ahead.

Thank you and our next question comes from Jerry Revich with Goldman Sachs. Please go ahead.

Mary Ann: The next question is from Jerry Roberts with Goldman Sachs. Please go ahead. Yes, hi. Good morning, everyone. Good morning, Jerry. Ron Marriott. I'm wondering if you just talk about the margin trajectory in the core business. You folks sequentially posted margins that were point better than normal personality, you know, the guidance, excluding the noise, suggests another 60 base points improvement versus normal in poor queue.

Jerry Revich: Yes. Hi, good morning, everyone.

Yes, hi, good morning, everyone.

Ronald Mittelstaedt: Good morning, Jerry.

Speaker 12: transcript

I'm wondering if Ron Marriott, I'm wondering who you just talk about, the margin trajectory in the core business.

Jerry Revich: I'm wondering if, Ron, Mary Anne, you could just talk about the margin trajectory, you know, in the core business. You know, you folks sequentially posted margins that were a point better than normal seasonality. You know, the guidance, excluding the noise, suggests another 60 basis points improvement versus normal in Q4. Does that momentum continue into Q1, or are we getting caught up on price-cost from here? Or will you be at the appropriate run rate exiting Q4?

Good morning Jared.

Yeah.

Ron Maryann I am wondering if you can just talk about the margin trajectory in the core business.

Speaker 12: transcript

You know, you folks sequentially posted margins that were point better than normal humanity, you know, the guidance, excluding the noise.

Folks sequentially posted margins over a point better than normal seasonality the guidance excluding the noise.

Speaker 12: transcript

Suggest another 60 basis points improvement versus normal in poor Q. Does that momentum continue into the first quarter? Are we getting caught up on price cost from here? Or will you be at the appropriate run rate?

Suggests another 60 basis points improvement versus normal in <unk> does that momentum continue.

Mary Ann: Does that momentum continue into the first quarter or are we getting caught up on price costs from here or will you be at the appropriate run rate So I'll start with just keep in mind that Q3 is the seasonally strongest, you know, margin contributor in the across the industry for ourselves. And so that's important to put it in context. And remember, that's the starting point that you're going from right now. So I'd say there is normal seasonality which impacts the degree to which, you know, that impacts reported margins.

Through the first quarter or are we getting caught up on.

Price cost.

From here or will you be at the appropriate run rate.

Exiting <unk>.

Mary Anne Whitney: Sure. I'll start with just let you know, keep in mind that Q3 is the seasonally strongest, you know, margin contributor across the industry for ourselves. That's important to put it in context to remember that's the starting point that you're going from right now. I'd say there is normal seasonality, which impacts the degree to which, you know, that impacts reported margins. We've also had the changing dynamics of recycled commodities and RINs, which of course were the big headwind going into the year that's waning and becomes a tailwind. I'd say within that context, are we still encouraged by the trajectory of margins? Yes. It's for the reasons that we've described, you know, the opportunity for outsized price cost spread.

Speaker 2: transcript

So I'll start with just keep in mind that Q3 is the seasonally strongest, you know, margin contributor in the across the industry for ourselves. And so that's important to put it in context. And remember, that's the starting point that you're going from right now. So I'd say there is normal seasonality, which impacts the degree to which, you know, that impacts reported margins. We've also had the changing dynamics of recycled commodities and rins, which of course, were the big headwind going into the air that's waning and becomes the tailwind.

Sure. So I'll start with just let you keep in mind that Q3 is the seasonally strongest.

Margin contributor in the across the industry for ourselves and so that's important to put it in context to remember that's the starting point that you are going from right. Now. So I'd say, there is normal seasonality, which impacts the degree to which that impacts reported margins. We've also had the changing dynamics of recycled commodity.

Mary Ann: We've also had the changing dynamics of recycled commodities and rims, which of course were the big headwind going into the year that's waning and becomes the tailwind. So I'd say within that context, are we still encouraged by the trajectory of margins? Yes. And it's for the reasons that we've described, you know, the opportunity for outside price cost spread. You know, we've pointed to that as a driver of the potential for outside margin expansion in 24.

He is in <unk>, which of course, where the big headwind going into the year, that's waning and becomes the tailwind. So I'd say within that context are we still encouraged by the trajectory of margins, yes, and its for the reasons that we've described.

Speaker 2: transcript

So I'd say within that context, are we still encouraged by the trajectory of margins? Yes, and it's for the reasons that we've described, the opportunity for outside price cost spread. We've pointed to that as a driver of the potential for outside margin expansion in 24, and then the follow on benefits from the improving retention that we've described. So no change in the way we're thinking about those things and yes, that is positive in terms of the trajectory.

The opportunity for outsized price cost spread.

Mary Anne Whitney: You know, we've pointed to that as a driver of the potential for outsized margin expansion in 2024, and then the follow-on benefits from the improving retention that we've described. No change in the way we're thinking about those things. Yes, that is positive in terms of the trajectory.

Pointed to that as a driver of the potential for outsized margin expansion in 'twenty four and then the follow on benefit from the improving retention that we've described so no change in the way, we're thinking about those things and yes that is positive in terms of the trajectory.

Mary Ann: And then the follow on benefits from the improving retention that we've described. So no change in the way we're thinking about those things. And yes, that is positive in terms of the trajectory. And it sounds like the momentum is continuing to the first quarter, just to be clear, Maryanne. Or at least the expected to continue. Yeah, nothing we've seen with department. As I said, those tailwinds on the commodities, for instance, are positive. And we haven't seen incremental cost pressures. So we're encouraged by the trends.

Jerry Revich: It sounds like the momentum is continuing into Q1, just to be clear, Mary Anne, or at least expected to continue.

Speaker 12: transcript

And it sounds like the momentum is continuing to the first quarter just to be clear Marian or at least

And it sounds like good momentum is continuing into the first quarter just to be clear Mario.

Or at least.

Okay.

Mary Anne Whitney: Yeah. Nothing we've seen would depart from that. As I said, those tailwinds on the commodities, for instance, are positive, and we haven't seen any incremental cost pressures, so we're encouraged by the trends.

Yes, nothing we've seen would depart from that as I said those tailwind that commodities for instance are positive and we haven't seen any incremental cost pressures. So we're encouraged by the trends.

Speaker 2: transcript

Yeah, nothing we've seen would depart from that. As I said, those tailwinds, the commodities, for instance, are positive. And we haven't seen any incremental cost pressures. So we're encouraged by the

Jerry Revich: Okay, super. In terms of, you spoke to D3 RINs, just, you know, mathematically given where pricing is now, that suggests 2024 versus 2023 will be, you know, about a $50 million tailwind if current spot prices hold, given the supply issues we've been talking about. Anything that would preclude you from realizing that benefit if the spot rate holds? Do you have any contracts in place? I just want to confirm, if spot prices do hold, it would be additive to the guidance or preliminary outlook that you shared.

Mary Ann: Okay, super. And in terms of, you spoke to D3 Rins, just, you know, mathematically given where pricing is now, that suggests 24 versus 23 will be, you know, about a $50 million tailwind if current spot prices hold, give them the supply issues we've been talking about. Anything that would preclude you from realizing that benefit if the spot rate holds, do you have any contracts in place? And I just want to confirm if spot prices do hold, it would be additive to the guidance or preliminary outlook that you shared.

Speaker 12: transcript

In terms of you spoke to D3 Rinse just mathematically given where pricing is now, that's just 24 versus 23. D3 will be about a $50 million tailwind of current spot prices.

Okay Super.

In terms of you spoke to <unk> just.

Mathematically given where pricing is now that's just 24 versus 23 will be about a $50 million tailwind of current spot prices.

Speaker 12: transcript

hold, given the supply issues we've been talking about, anything that would preclude you from realizing that benefit if the spot rate holds? Do you have any contracts in place? And I just want to confirm, if spot prices do hold, it would be additive to the guidance or preliminary outlook that you shared?

Given the supply issues, we've been talking about.

Anything that would preclude you from realizing that benefit if the spot rate holds do you have any contracts in place and I just wanted to confirm if spot prices do hold it would be additive.

Guidance.

Our preliminary outlook that you shared.

Mary Anne Whitney: A couple of things. One, whenever the guidance we've given is basically marking to market commodity values. What we've said is continued movement in commodities would be upside along with the new projects coming online. We've already factored in some tailwind from RINs as well as recycled commodities. The other comment, Jerry, would be I never think in terms of that spot price because, as you know, that's not indicative of where you actually sell RINs even in the current environment. Rather than picking a point like $3.40, I'd say we're probably in that range of $3 to $3.25 is the way we've thought about it.

Mary Ann: So a couple of things. One, whenever the guidance we've given is basically marking the market commodity values. And so what we've said is continued movement in commodities would be upside along with the new project coming online. So we've already factored in some tailwind from Rins as well as recycle commodities. The other comment, Jerry, would be I never think in terms of that spot price, because as you know, that's not indicative of where you actually sell Rins, even in the current environment. So rather than picking a point like 340, I'd say we're probably in that range of $3 to 325 is the way we've thought about it. Yeah, thank you.

Speaker 2: transcript

So a couple of things. One, whenever the guidance we've given is basically marking to market commodity values. And so what we've said is continued movement in commodities would be upside along with the new project coming online.

So a couple of things one the guidance, we've given is basically marking to market commodity values and so what we've said it continued movement in commodities would be upside along with the new projects coming online.

Speaker 2: transcript

We've already factored in some tailwind.

We've already factored in some tailwind from from Rins as well as recycled commodities. The other comment Gerry would be I never think in terms of that spot price because as you know that's not indicative of where you actually sell brands even in the current environment, so rather than picking a point like 340, <unk> I'd say, we're probably in that range of $3.

Speaker 2: transcript

from RIMS as well as recycled commodities. The other comment, Jerry, would be, I never think in terms of that spot price, because as you know, that's not indicative of where you actually sell RIMS, even in the current environment. So rather than picking a point like 340, I'd say we're probably in that range of $3 to 325, is the way we've thought about it.

325 is the way we've thought about it.

Jerry Revich: Got it. Thank you. Can you just update us on the timing of CapEx related to these projects? What are you expecting in 2024 and 2025 on the projects where you are putting capital to work?

Speaker 12: transcript

Yeah, thank you. And can you just update us on the timing of CAPEX related to these projects? What are you expecting in 24 and 25 on the projects where you are putting capital?

Got it. Thank you and can you just update us on the timing of Capex related to these projects what are you expecting in 'twenty four.

Mary Ann: And can you just update us on the timing of CAPEX related to these projects? What are you expecting in 24 and 25 on the projects where you are putting capital to work? Right. So that would be that 125 to 150 million in CAPEX associated with the RNG projects that we said will impact 24, that when that's the vast majority of the 200 million in outlays that we'd expect for all those projects to generate that 200 million in EBITDA by 26.

<unk> 25 on the projects, where you're putting capital to work.

Mary Anne Whitney: Right. That would be that $125 to 150 million in CapEx associated with the RNG projects that we said will impact 2024. That, when that's the vast majority of the $200 million in outlays that we'd expect for all those projects to generate that $200 million in EBITDA by 2026.

Speaker 2: transcript

Right, so that would be that 125 to 150 million in capex associated with the RNG projects that we said will will impact 24 that when that's the vast majority of the 200 million in outlay is that we'd expect for all those projects to generate that 200 million in EBITDA by 24.

Right, so that would be that $125 million to $150 million in capex associated with the R&D projects that we said will impact 'twenty four.

Mary Ann: Super. And then just a clarification, the 200 million, I believe when you had set that target, the three RIN prices were in the low twos, correct? Can I get you to fact check that for me, please? I think what we talked about was the five year average. And so I think it's north of that. That gets 250 to 270. Thank you.

The vast majority of the $200 million in outlays that wed expect for all of those projects to generate that $200 million and EBITDA by 26.

Jerry Revich: Super. Just a clarification, the $200 million, I believe when you had set that target, D3 RINs prices were in the low 2s, correct? Can I get you to fact check that for me, please?

Speaker 5: transcript

Super and then just a clarification the 200 million I believe when you had set that target D3 rent prices were in the low twos correct to you can get you to fact check that for me please I think what we talked about was the five year average and so I think it's north of that It's 250 to 270

Super.

Just a clarification the 200 million I believe when you had set a target <unk> RIN prices were in the low twos correct.

Did you in fact check that for me. Please I think what we talked about was the five year average and so I think it's north of that $2 50 to $2 70.

Mary Anne Whitney: I think what we talked about was a 5-year average, and so I think it's north of that.

Mary Anne Whitney: I think what we talked about was a five-year average, and so I think it's north of that.

Ronald Mittelstaedt: It's $250 to 270.

Jerry Revich: Okay. Super. Thank you.

Okay Super Thank you.

Operator: Thank you. Our next question today comes from Stephanie Moore, Jefferies. Please go ahead.

Speaker 3: transcript

Thank you and our next question today comes from Stephanie Moore Jeffries. Please go ahead.

Thank you and our next question today comes from Stephanie more Jefferies. Please go ahead.

Stephanie Moore: And our next question today comes from Stephanie Moore Jeffries. Please go ahead. Hi guys. I appreciate the time. It'll keep it to just the one here. We talked a little bit about the volume environment and your own actions with shedding accounts. But could you maybe talk a little bit about the strengths in the underlying environment, what you're seeing on both the commercial and residential side? I know you called out specialty being stronger, but that can be kind of all though, but let's just give you your overall view.

Stephanie Moore: Hi, guys. Appreciate the time. I'll keep it to just one here. You talked a little bit about the volume environment and your own actions of shedding accounts, but could you maybe talk a little bit about the strength in the underlying environment, what you're seeing on both the commercial and residential side? I know you called out specialty being stronger, but that can be kind of volatile. Would love to just get your overall view. Thanks.

Speaker 13: transcript

Hi guys, I appreciate the time. It'll keep it to just the one here. We talk a little bit about the volume environment and your own actions with shedding accounts, but could you maybe talk a little bit about the strengths in the underlying environment, what you're seeing on both a commercial and residential side? I know you call about specialty being stronger, but that can be kind of volatile, but I'd love to just give your overall view. Thanks.

Hi, guys I appreciate the time I'll keep it to just one here.

You talked a little bit about the volume environment and your own actions upsetting account, but could you maybe talk a little bit about the strength in the underlying environment, what youre seeing on both the commercial and residential side I know you called out specialty being stronger, but that can be kind of volatile.

Just to get your overall view thanks.

Ronald Mittelstaedt: Well, I would tell you overall, Stephanie, that the economy is okay. I wouldn't say it is by any means strong. I would say it's sort of a flattish environment from a growth standpoint. You have pockets of strength. I wouldn't really say there's too many pockets of weakness, just flatness. Year to date, our new business sales through our sales force activity is 102% of what it was year to date last year. Better than last year, but, you know, 2% in terms of new sales. Overall, I would say you've seen a little improvement over 2022, but really pretty flat.

Stephanie Moore: Thanks. Well, I would tell you overall, Stephanie, that the economy is okay. I wouldn't say it is by any way strong. I would say it's sort of a flatish environment from a growth standpoint. You have pockets of strength. I wouldn't really say there's too many pockets of weakness, just flatness. And we looked at, you know, so year to date our new business sales through our sales force activity is 102% of what it was year to date last year.

Speaker 9: transcript

Well, I would tell you overall, Stephanie, that the economy is okay. I wouldn't say it is by any way strong. I would say it's sort of a flatish environment from a gross standpoint.

Well I would tell you overall definitely that the economy is okay I wouldn't say it is by any way strong.

I would say, it's sort of a flattish environment.

From a from a growth standpoint.

Speaker 1: transcript

you have pockets of strength. I wouldn't really say there's too many pockets of weakness just flat.

You have pockets of strength I wouldn't really say theres too many pockets of weakness just flatness and we looked at so year to date, our new business sales through our sales force activity is 102% of what it was year to date last year.

Speaker 9: transcript

And we looked at, you know, so year to date, our new business sales through our Salesforce activity is 102% of what it was year to date last year.

Stephanie Moore: So better than last year, but you know, 2% in terms of new sales. So overall, I would say you've seen a little improvement over 22, but really pretty flat. And I think you know, you saw that in our comments that in Q3, you know, roll-off polls were up 1%. You know, price on purple was quite strong, but roll-off polls were up 1%. So I think that's indicative with our footprint being as large as it is.

Speaker 9: transcript

So better than last year, but 2% in terms of new sales.

So better than last year, but 2%.

In terms of new sales so overall.

Speaker 9: transcript

So overall, I would say you've seen a little improvement over 22, but really pretty flat.

I would say <unk> seen a little improvement over 22.

But really pretty flat.

Ronald Mittelstaedt: I think you know you saw that in our comments that in Q3 roll-off pulls were up 1%. You know, price per pull was up quite strong, but roll-off pulls were up 1%. I think that's indicative with our footprint being as large as it is, I think that's indicative of what's going on in the economy. It's you know sort of appears to be a soft landing scenario. But there's certainly you know no underlying real growth in the economy. Not at this point. If some of the infrastructure spending occurs the way it is planned to occur in 2024 and 2025, then I think that could certainly accelerate you know development.

Speaker 9: transcript

uh... and i think you know you you saw that in our comments that in q3 you know roll-off polls were up one percent you know price on purple was up uh... quite strong but roll-off polls were up one percent so i think that's indicative uh... with our footprint being as large as it is i think that's indicative of what's going on in the economy uh... and and it's that it's you know

And I think.

You saw that in our comments that in Q3 roll off polls were up 1% price on purple was up quite strong, but roll off pulls were up 1%. So I think thats indicative with our footprint being as large as it is I think that's indicative of what's going on in the economy.

Stephanie Moore: I think that's indicative of what's going on in the economy. And it's sort of appears to be a soft landing scenario, but there's certainly no underlying real growth in the economy. Not at this point. Well, if some of the infrastructure spending occurs, the way it is planned to occur in 24 and 25. And I think that could certainly accelerate, you know, development. What I'd add to that, Stephanie, is just that that's not a material change from what we've been saying really for the past six quarters or so.

And then it's.

Sort of.

Speaker 9: transcript

appears to be a soft landing scenario. But there's certainly no underlying real growth in the economy.

Peers to be a soft landing scenario.

But there are certainly no underlying real growth in the economy.

Speaker 2: transcript

not at this point. Well, if some of the infrastructure spending occurs, the way it is planned to occur in 24 and 25, and I think that could certainly accelerate development. What I'd add to that, Stephanie, is just that that's not a material change from what we've been saying really for the past six quarters or so. There's just not been a lot of movement.

Not at this point or if some of the infrastructure spending occurs the way. It is planned to occur in 'twenty four 'twenty, five and I think that could certainly accelerate.

Mary Anne Whitney: What I'd add to that, Stephanie, is just that that's not a material change from what we've been saying really for the past six quarters or so. There's just not been a lot of movement.

Development, what I'd add to that Stephanie it's just that that's not a material change from what we've been saying really for the past six quarters or so theres just not been a lot of movement.

Ron Mittelstaedt: There's just not been a lot of movement. Thank you.

Stephanie Moore: Thank you.

Operator: Thank you. Today's final question comes from Stephanie Yee with J.P. Morgan. Please go ahead.

Thank you. Thank you.

Speaker 3: transcript

Thank you and today's final question comes from Stephanie Yee, with JP Morgan. Please go ahead.

Thank you.

Stephanie: And today's final question comes from Stephanie. You would JPMorgan, please go ahead. Hi, good morning. I was wondering if you can give us some color on what you're seeing in the M&A market. Just who you're coming up against is that other strategic for financial players and how our valuation levels funding. And just any color on where you're doing the acquisitions, maybe the geography or type of business that you've been acquiring.

Final question comes from Stephanie Yee with Jpmorgan. Please go ahead.

Stephanie Yee: Hi, good morning. I was wondering if you can give us some color on what you're seeing in the M&A market, just who you're coming up against. Is it other strategics or financial players? How are valuation levels trending? Just any color on where you're doing the acquisitions, maybe the geography or type of business that you've been acquiring.

Speaker 4: transcript

Hi, good morning. I was wondering if you can give us some color on what you're seeing in the M&A market, just who you're coming up against. Is it other strategics or financial players and how our valuation levels, funding, and just any color on where you're doing the acquisitions, maybe the geography or type of business that you've been acquiring.

Hi, good morning.

And I was wondering if you can give us some color on what youre seeing in the M&A market.

You're coming up against the other strategic or financial players and how our valuation level.

<unk>.

Just any color on where youre doing the acquisitions, maybe geography or a type of business that you've been acquiring.

Ronald Mittelstaedt: Well, let's start with the last one, the easiest. I mean, the geography is throughout the US and Canada. You know, we've had a little more focus on the West Coast over the last 18 months or so. Of course, we're acquiring our typical solid waste disposal, collection, and transfer type companies. You know, who do we compete with? We obviously compete with you know, the other public companies, and we certainly compete with some regional private equity-backed companies and then private mom-and-pop companies executing their own growth strategy.

Speaker 9: transcript

Well, start with the last one, the easiest, I mean, the geography is throughout the US and Canada. We've had a little more focus on the West Coast over the last 18 months or so.

Ron Mittelstaedt: Well, start with the last one and easiest. I mean, the geography is throughout the US and Canada. You know, we've had a little more focus on the West Coast over the last 18 months or so. And of course, we're, you know, we're acquiring our typical solid waste disposal collection and transfer type companies. You know, who do we compete with? We obviously compete with, you know, the other public companies. And we certainly compete with some regional private equity back companies and then private mom and pop companies executing their own growth strategy.

Well, let's start with the last one and easiest I mean, the geography is is throughout the U S and Canada.

We've had a little more focus on the west coast over the last 18 months or so.

Speaker 9: transcript

And of course, we're acquiring our typical solid waste disposal collection and transfer type companies.

Of course, where we're acquiring are typical solid waste disposal collection and transfer.

Type companies.

Speaker 9: transcript

Who do we compete with? We obviously compete with the other public companies, and we certainly compete with some regional private equity-backed companies, and then private mom-and-pop companies executing their own growth strategies.

Who do we compete with we obviously compete with the <unk>.

Other public companies.

And we certainly compete with some.

Regional private equity backed companies and then private mom and pop companies executing their own growth strategy.

Ronald Mittelstaedt: You know, as far as valuations, we've seen valuations probably over the last four months or so, probably pull back about a turn to maybe two turns of EBITDA from where they sort of peaked in, I'd say, late 2022. You know, we would probably expect that to continue to tighten a little bit as interest rates have continued to rise, and are expected to perhaps have another adjustment or so, and being in a relatively flat economic environment. That's, you know, hopefully would be the answer to those questions you had, Stephanie.

Speaker 9: transcript

So, as far as valuations, we've seen valuations probably over the last four months or so. Probably pull back about a turn to maybe two turns of EBITDA from where they sort of peaked in, I'd say, late 22. And we would probably expect that to continue to tighten a little bit as

Ron Mittelstaedt: So, you know, as far as valuations, we've seen valuations probably over the last four months or so, probably pull back about a turn to maybe two turns of EBITDA from where they sort of peaked in, I'd say, late 22. And, you know, we would probably expect that to continue to tighten a little bit as interest rates have continued to rise and are expected to perhaps have another adjustment or so and being in a relatively flat economic environment. So, hopefully it would be the answer to those questions you had.

So.

As far as valuations, we've seen valuations probably over the last four months or so of a pull back about a turn to maybe two turns of EBITDA from where are they sort of peaked in I'd say late 'twenty two.

And okay.

We would probably expect that to continue to tighten a little bit as.

Speaker 9: transcript

as interest rates have continued to rise and are expected to perhaps have another adjustment or so and being a relatively flat economic environment. So that hopefully would be the answer to those questions you had.

As interest rates have continued to rise.

And are expected to perhaps have another adjustment or so.

And being in a relatively flat economic environment. So.

That hopefully would be the answer to those questions you had Stephanie.

Stephanie Yee: Yeah, no, that is very helpful. Thank you.

Ron Mittelstaedt: Yeah, no, that is very helpful. Thank you. And I just one follow up just on the intention for share repurchases. I know you renewed your issue of bid, but I guess just in terms of how you're thinking about MNA versus share purchases. It sounds like MNA is still in your view the best piece of capital. Is that correct? Well, that makes me changing rapidly, but yes. Yes, no, is clearly MNA is still our best use of capital on any long term basis and how we should create the most value, but we clearly are opportunistic in the share repurchase and will continue to stay opportunistic in that way. Okay, sounds good. Thank you so much, Ron.

Speaker 14: transcript

Yeah, no, that is very helpful. Thank you.

Yes, no that is very helpful. Thank you.

Ronald Mittelstaedt: You're welcome.

Stephanie Yee: Just one follow-up. Just on the intention for share repurchases. I know you renewed your issuer bid, but I guess just in terms of how you're thinking about M&A versus share purchases, it sounds like M&A is still, in your view, the best use of capital. Is that correct?

Yeah.

Speaker 14: transcript

I just, one follow up, just on the intention for share repurchases. I know you renewed your issue of bid, but I guess just in terms of how you're thinking about M&A versus share repurchases, it sounds like M&A is still in your view the best piece of capital, is that correct?

And then just one follow up just on the <unk>.

Thompson for share repurchases and I know you renewed your issuer bid, but I guess just in terms of how you're thinking about M&A versus share repurchase it sounds like M&A is still.

The best use of capital is that correct.

Ronald Mittelstaedt: Well, that may be changing rapidly, but yes. Yes. No. It's clearly M&A is still our best use of capital on any long-term basis, and how we should create the most value. We clearly are opportunistic in the share repurchase and will continue to stay opportunistic in that way.

Speaker 9: transcript

Well, that makes me changing rapidly, but yes. Yes, no, is clearly M&A is still our best use of capital on any long-term basis and how we should create the most value. But we clearly are opportunistic in the share reproaches and will continue to stay opportunistic in that way. Okay, so...

Yes.

That may be changing rapidly, but yes.

Yes.

It's clearly M&A is still our best use of capital on any long term basis.

And how we should create the most value, but we clearly are opportunistic in the share repurchase and we'll continue to stay opportunistic in that way.

Stephanie Yee: Okay. Sounds good. Thank you so much, Ron.

Okay sounds good. Thank you so much Ron.

Operator: Thank you. Ladies and gentlemen, this concludes your question and answer session. I'd like to turn the conference back over to the management team for any closing remarks.

Ron Mittelstaedt: Thank you, and ladies and gentlemen, concludes your question and answer session. I'd like to turn the conference back over to the management team for me closing remarks. Okay, thank you, operator. Well, if there are no further questions on behalf of our entire management team, we appreciate your listening to an interest in the call today. Mary Ann and Joe Box are available today to answer any direct questions we did not cover that we are allowed to answer under regulation FD, regulation G and applicable securities laws in Canada. Thank you again. We look forward to seeing you at upcoming investor conferences or hearing from you on our next earnings call. Thank you.

Thank you and ladies and gentlemen. This concludes our question and answer session I would like to turn the conference back over to management for any closing remarks.

Speaker 3: transcript

Thank you. I'm Lady New Zealand. This concludes the question and answer session. I'd like to turn the conference back over to the men and compete for me closing remarks.

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

Okay. Thank you operator, well if there are no further questions on behalf of our entire management team. We appreciate your listening to and interest in the call today Maryanne and Joe box are available today to answer any direct questions. We did not cover that we're allowed to answer under regulation FD regulation G and applicable securities laws in Canada. Thank you again, we look.

Speaker 9: transcript

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

Forward to seeing you at.

Upcoming investor conferences or hearing from you on our next earnings call.

Operator: Thank you. Ladies and gentlemen, this concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Speaker 3: transcript

Thank you. Ladies and gentlemen, this concludes today's conference call. We thank you all for attending today's presentation. You may now describe how it's never a wonderful day.

Thank you ladies and gentlemen. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Operator: Ladies and gentlemen, this concludes today's conference call. We thank you all for attending today's presentation. You may now describe your audience and have a wonderful day. Thank you so much.

Q3 2023 Waste Connections Inc Earnings Call

Request a DemoDemo

WCN

Waste Connections

Earnings